How Rotten Deals Are Done

After the nightmarish Euro Summit talks between the leaders of the Greek government and representatives of its creditors on the 12^th July 2015, a seven-page document emerged that outlined the price of Greece’s future as a eurozone member: the Syriza government’s ‘red lines’ on pension, VAT and privatisations would be trashed, deeper austerity would be introduced, and the government would have to create a €50 billion fund which would channel the proceeds of privatisations towards its loan repayments and the recapitalisation of its now-bankrupt banks. The contents were a democratic scandal, especially given the government’s recent victory in a referendum which rejected the creditors’ bailout terms. The Greek authorities were now obliged to ‘legislate without delay’ - and so they did.

Two votes were held in the Greek Parliament – one on 15^th and the other on 22^nd July – which passed the so-called ‘prior actions’ in full. The government and its creditors had worked quite successfully together to make speed the enemy of dissent. In a total of ten days, the bulk of Greece’s public sector assets had been mandated for privatisation. Moreover, a left-majority parliament had somehow passed the largest austerity commitments in the country’s history. In the two votes, Syriza left-wingers and some moderate dissenters voted against the deal (39 and 36 deputies respectively), but that was not enough to prevent the package passing with opposition support. By holding the votes at the earliest possible date, the government and its creditors had ensured that the measures would receive the least possible scrutiny. The deadlines also left very little time for dissent of either left or right to really organise itself. For their part, the Syriza left were disoriented by the speed with which the successful referendum result had been converted into enthusiastic support for austerity by the Tsipras leadership.

The new laws did eventually split the party, with the Left Platform breaking away from Syriza to form the ill-fated new party, Popular Unity. At exactly the point of the breakaway’s formation, however, Tsipras pulled the same stunt again: not wanting formal opposition to emerge to his left, he called a snap election with just six weeks’ notice. Popular Unity was still-born. Syriza was re-elected on a wave of popular abstention. It was a grim denouement to a tumultuous nine months of ‘radical left’ government.

There are not many similarities between this and the British case: Greece wanted to remain a eurozone member but renegotiate some of its prior bailout commitments. The British government, on the other hand, wants to negotiate exit from the EU on relatively favourable terms. The structural position of the UK is very different to that of Greece, not least in terms of its currency arrangements. The Brexit negotiations now pivot on a matter of geopolitics – the Irish border question – that was entirely absent in the Greek case. Nevertheless, the story of Syriza’s capitulation in 2015 is a good example of how rotten deals are done.

Reports have recently surfaced that Theresa May is hoping to rely on opposition votes to pass her own deal. The bait here is naturally different to that of the Greek deal: some leave-supporting Labour MPs will see May’s deal as the only way to secure Brexit, while some Remainers way even see it as preferable to a hard Brexit. Her gambit is likely to be similar to Tsipras’s: that she can secure an outline of a deal at such a late date, and with a no deal exit looming so close, that many unsympathetic MPs feel obliged to vote with her. If she can rush the vote, she can avoid a protracted build up of opposition on her own benches and avert some defections. The government will be hoping to once again make speed the enemy of dissent. This may sound ironic-bordering-on-the-absurd, given the length of the fruitless negotiations to date, but the key decisions are all yet to happen. The news now is that leaders of the EU27 have decided to shelve the November Brexit summit that was supposed mark a turning point in the negotiations. This may, perversely, work to May’s advantage. The incompetence and failure of the government may not be ‘deliberate’ in any obvious sense, but in the final weeks of the negotiations the lack of progress – of concrete shape to the deal – will be the one card they hold.

If a deal emerges at the last minute, what will it look like? You can expect a ‘fudge’, but that doesn’t tell anyone anything. A fudge will conceal a certain balance of interests. My feeling is that the EU and UK government will reach some kind of ugly last minute compromise on the question of the backstop for Northern Ireland (a way of avoiding trade disruption between Irish Republic and Northern Ireland in the event of stalling transition or a no deal Brexit ). Extensive recourse to legal and technical contortions (‘a backstop to the backstop’) aside, what will it all mean? Right now the DUP doesn’t want any form of backstop or backstop-to-the-backstop that will only apply to Northern Ireland (thus imposing some kind of customs border between NI and the UK). Theresa May doesn’t want that either and needs the DUP’s support. It’s unlikely that the Irish Republic would support the kind of exit that would see a hard border imposed between it and Northern Ireland because of the way it would jeopardise the Good Friday Agreement (which is one of the things that makes a backstop so important). Because of May’s abhorrence of a customs border in the Irish Sea (basically partitioning the UK), she is now seeking temporary customs union membership for the entire UK as an alternative to a NI-only backstop. Michel Barnier, the EU’s Chief Negotiator, has said he wants to ‘de-dramatise’ the Irish border question by avoiding actual border checks while ensuring that the backstop only applies to Ireland. Tory Brexiters who will be crucial in getting the plan through the Commons don’t want an indefinite commitment to remain in the UK after the transition because Customs Union membership means no new trade deals with states outside the EU. It may be the case that the EU can be persuaded to accept some formal commitment to the temporary UK customs membership ending at an unspecified definite point. It may also be the case that some Brexiters can be bought off by May’s assurances that the UK will definitely leave the Customs Union even if she ultimately gets no formal date. Of particular significance will be May’s few key Leaver allies – people like Michael Gove, who has argued that any deal will be up for some sort of later revision – in encouraging pro-Brexit Tory MPs that this is the only way they can get Brexit done and is only for the short term. It won’t convince everyone, but it may work for some.

If all this sounds confusing, that also works in May’s favour. The very complexity of it means that different interests can take what they want from it. The alternative needs to look just bad enough – and the time to seek an alternative just slim enough – to get a majority to vote for it. Nevertheless, this might not save May. Tsipras got his deal and won his snap election, but at the cost of his party. May would probably not survive even a small Tory defection. She might get the deal through parliament with some opposition support only to be turfed out of office in the ensuing months. That would see either a Tory leadership election or a general election or both. May’s legacy could ultimately be securing a deal to which her successor – whoever that may be – is committed.

For those on the Labour side there is little solace in May’s impending downfall. Most MPs want the softest of all Brexits – Brexit in Name Only – followed, presumably, by re-entry at some later date. The Labour leadership wants a permanent Customs Union. Were it in power, a Labour government would very much be at risk of two outcomes: either being bounced into membership of the EEA (or the Single Market for both goods and services) or being bounced into exactly the kind of backstop for Northern Ireland that the EU would like. In the former case, the few left-wing benefits of Brexit become impossible. EEA membership means accepting neoliberal EU policy on state aid, competition rules and procurement policy. It is better to remain in the EU than wind up in the EEA but without full EU membership. Exit minus the EEA but with a new Customs Union (Labour’s current position) would no doubt require an Irish backstop of the kind proposed by Michel Barnier. There is nothing in principle wrong with that – but imagine the political opposition to a Corbyn government that imposes a border between the UK and Northern Ireland. Corbyn, who has historically supported a united Ireland, would be accused of creating a de facto united Ireland. It is not necessary to be a full-throated Remainer to see that some thought needs to be given to how a workable Brexit agreement can be secured. It is still not entirely clear how Labour would make that work in practice and avoid its own defections. Principled socialist opposition to the EU has rarely coalesced into a meaningful path to exit. This is not to say that Labour should have all the answers by now, but it should at least have grappled with the political realities of it.

In the real world, the Labour leadership is likely to whip its MPs to vote against May’s deal. If it wants to win that vote – essentially by ensuring its MPs actually vote with the whip – it has to make its alternative clear. The more confusing and complex May’s deal looks, the clearer Corbyn’s alternative should be. This means ditching the ambiguity about a People’s Vote and making clear what its deal would look like. Above all, somebody needs to explain what the solution to the Irish border question is.

A left case for Brexit?

A new book by Philip B. Whyman, Professor of Economics at the University of Central Lancashire, makes the case for the potential benefits of a left (or alternatively ‘progressive’) Brexit. Yet The Left Case for Brexit (2018), published by the think tank Civitas, only makes the deep quandary of Brexit clearer. Whyman is a former researcher and European officer for the USDAW union as well as author of copious studies of UK-EU relations. He is the advocate of the kind of beefy, corporatist Keynesianism favoured by the Nordic economies – one that tends towards euroscepticism of the patriotic, democratic, and socially egalitarian kind. 

Perhaps unsurprisingly, Whyman begins from broadly Keynesian premises. It is, he argues, government’s job to ensure socially progressive outcomes from seismic events like Brexit. He makes a good point: it is hard to disagree with the view that much of the conversation around Brexit – both on the left and right of politics – has been deeply counterproductive. Whyman defines a left Brexit as one which would be of benefit to ‘all’ – that is, ‘for the many and not just the few’, as the phrase goes. The argument about state policy will be uncontroversial in Keynesian circles: the UK economy is afflicted by deep woes. A productivity crisis means that UK workers are on average 30 percent less efficient than their German counterparts. Chronic underinvestment combines with dampened demand to produce an economy that favours income to capital, rent extraction, social inequality, and stressed living standards. Employment may be high, but the share of income that goes to the working class is stagnating. Insecure, low-paid jobs in the ‘casualised’ or ‘precarious’ sector are the result of decades of economic policy that has favoured ‘supply-side’ reforms (tax cuts and so on) while failing to encourage real productive investment, innovation, productivity growth, and wage increases. Whyman argues that a progressive government should spur domestic consumption by using fiscal policy to boost demand, while avoiding the perils of inflation by boosting productivity and improving the competitiveness of the economy overall. So far, so conventional. 

Whyman believes the UK can easily afford to end austerity – whether it is in the EU or out. The UK is not a member of the eurozone and has its own central bank. Therefore, it has greater room for manoeuvre on fiscal matters than other eurozone states. But he also wants to see a thoroughgoing ‘transformation’ of the UK economy. A strategic industrial policy would target investment projects through a beefed up investment bank, thus incentivising innovation and productivity growth. New decentralised public procurement policies would localise the provision of services and boost spending in crisis-stricken regions.

It is in this area that Whyman’s policy proposals come into conflict with the thrust of EU integration since Maastricht: EU competition laws limit the scope for local authority action on public procurement; its state aid laws make ‘picking winners’ more difficult; the so-called ‘four freedoms’ of capital, goods, labour and services proscribe policies that aim at domestic development and enhancing competitiveness. Controversially, for the ‘progressive’ side of UK politics, Whyman would also like to see an ‘independent’ UK free to levy its own tariffs on imported goods as well as to set its own parameters for inward migration. Naturally, if the UK is to have such ‘independence’ it will need quite a sharp break from the EU. Whyman’s solution is for the UK to seek a Free Trade Agreement (FTA) along the lines of the deal negotiated between Canada and the EU (CETA). 

What precludes closer integration of the UK and the EU? Whyman offers brief but insightful explanations of the various options the UK could pursue. Membership of the European Economic Area (the so-called Norway option) is rejected for familiar reasons: the UK would become a de facto member of the European Free Trade Associationcustoms union and single market, subject to its rules without a say in determining them. On the other hand, signing up to a new customs union (advocated by the Labour Party) would mean that the UK could not negotiate its own bilateral trade deals, would still have to make a financial contribution to the EU, and would probably have to impose a common external tariff on all non-EU member states in order to avoid ‘tariff-jumping’ (whereby third countries would export to the lower-tariff UK in order to re-export to the EU, thus avoiding the latter’s common external tariffs). A customs partnership or indeed the deal proposed by the current Tory government is unappealing to the EU negotiators precisely because it relies on technical border fixes to the question of external tariffs, mandating that the UK conform to EU goods regulations whilst maintaining the freedom to set its own rules for external trading partners. 

Whyman settles on what he calls a ‘shallow’ free trade deal, one which would cover only goods and some services in its initial negotiations but could be extended in future. Whereas a single market and customs union membershipimply regulatory identity, a free trade deal only stretches to regulatory equivalence (achieving the same outcomes by different means). What this means in practice is that the UK could significantly diverge from EU rules on state aid, competition, procurement, and industrial policy whilst still benefiting from a high degree of access to the EU Single Market. 

The glaring problem with such an arrangement is that it would create a customs border between the Republic of Ireland and Northern Ireland. The May government has rejected a Canada style deal precisely because it would make a hard border unavoidable. The hated Chequers Deal proposed by May executed all kinds of verbal acrobatics to muffle the border issue.  In essence it proposes a ‘common rulebook’ for goods travelling between the EU and UK that would avoid any need for a so-called ‘hard border’ in Ireland. Under May’s Chequers plan the UK would be free to diverge from the EU in some areas while conforming on anything that can cross a physical border. The EU has rejected May’s proposals on the basis that it would undermine the EU Single Market. What is presumably meant by this is that the arrangement could lead to ‘tariff jumping’ by third parties seeking to exploit the regulatory alignment between the UK and the Single Market by exporting to a lower-tariff UK before exporting into the EU.Michel Barnier, the EU’s chief negotiator, has long suggested that a Canada style trade deal is the only option if the UK wishes to diverge significantly from the EU. But Barnier knows full well how unpalatable such a deal would be for any government that wishes to preserve the Good Friday Agreement. He has recently suggested that the EU would come forward in talks in October with a new proposal on the border question. Thus far the EU has suggested that Northern Ireland remain within the Customs Union in order to provide a so-called ‘backstop’ to the border question. For the Unionist government in Westminster, such an idea threatens the integrity of the UK itself, imposing a border in the sea between Ireland and the UK. 

Whyman’s own proposal accepts that a de facto border would appear in Ireland, but that so-called ‘smart’ border technology could reduce disruption. The tech-utopian overtones of such a proposal aside, it fails to take account of the complex political economy of Brexit – that is, the balance of interests among the various actors in the negotiations. Even if a technical fix to the border question is theoretically possible, in practice the entrenched positions around the negotiations make such an outcome highly improbable. If a government were to announce its intention to seek a free trade deal, it would immediately raise the spectre of a hard border. While hardline Brexiters and some members of May’s cabinet rally in support of Boris Johnson’s ‘Super Canada’ deal, the Tories’ Parliamentary lifeline, the DUP, have rejected a ‘vague’ sounding free trade deal. It is not clear that there is any kind of Parliamentary majority support for such a distant relationship and it would also seem that large sections of Britain’s capitalist class prefer a softer rather than harder Brexit. Whatever the merits of a free trade deal (and there are obvious reasons why the left should not put its faith in a Tory-government negotiated deal), it remains politically a non-starter.

The central weakness of Whyman’s book – as with so many of the idealist ‘plans for Brexit’ that have circulated since 2016 – is its failure to confront these intractable political obstacles. Without a proper confrontation with the Irish border question, such proposals remain simply utopian. As a Keynesian, Whyman has a tendency to treat the UK economy in isolation – as a single economic unit which must improve its performance relative to the rest of the world. Such propositions will be familiar to anyone who has read Keynes or expended much thought on the nature of Keynesian economic policy. Along with Costas Lapavitsas on the Marxist left, he is a contributor to the revival of national-popular economic sovereignty on the left. There are certainly virtues to such a revival, which provide a corrective to overused and simplistic formulations of ‘globlaisation’. Yet it also has weaknesses. Whyman has a questionable commitment to the view that ending free movement of people will be good for the UK labour market (which he advocates ahead of ending ‘flexible’ working conditions) as it means we can specify the skill sets required. The revival of industrial policy to build about the UK’s economic capacity after Brexit would, if anything, require greater immigration not less. Whyman wants a Brexit that will work for ‘all’ - indeed, this is what his claim to advance a ‘left’ Brexit vision rests on. But there is no such thing as a Brexit that works for all: some classes will benefit more than others. Some groups – the oppressed, the poor, the excluded – are more likely to suffer from one form of Brexit than another. While any left economic policy should focus on the revival of state capacity at the national level, we shouldn’t think this means we need to be more ‘nationalist’ in our thinking. By failing to take account of the diverging political interests at stake in the Brexit negotiations, Whyman risks painting too simplistic a picture of the kind of Brexit that could benefit ‘all’.

Lest Remainers take undue heart at the failure of the Brexit project, there is still no majority either in Parliament or in the country to reverse it. Amid the endless arguments about the vote to leave and its consequences, there are very few voices on the left seriously grappling with the realities of actually leaving. If the likely outcome of the October negotiations is a fudge (on the question of the border and on the degree of future regulatory alignment), then there will be much to argue about even after March 2019. Although no one can predict exactly what is coming, it seems the any government will want to avoid a so-called ‘no deal’ exit. If this remains the case, then a long, protracted war of attrition seems likely. The exact balance of the outcome remains to be determined. Whyman’s book is a first attempt to outline how the UK’s post-Brexit economy could be shaped to left-wing ends. It is inevitably flawed, but it should be taken as a spur to further work.  

The way we use social media is becoming more like old media

This is just an intuition - I’ve got nothing but anecdotal evidence for it - but social media doesn’t seem particularly social. In fact, it’s as if genuinely communicative activity peaked a couple of years ago and is now waning.

Think about it yourself: unless you’re a really dedicated poster, when was the last time you got into a real spat? And the time before that? My (unfounded) sense is that the frequency of what experts call ‘horizontal interactions’ (between normal people rather than from the top down) relative to the number of participants is falling. Even if the number of social media users is growing in absolute terms, interactions ‘per capita’ must surely be in decline. Or at least it seems that way among my cohort. 

Moreover, there is surely an increasing passivity. When media experts talk about social media, they normally talk about Twitter. They talk about the democratisation of communication, how anyone can now ‘have a go.’ Aside from the fact that, for the vast majority of its users, Twitter can be a lonely, almost silent place, most people aren’t even on Twitter. A million people have left it this year. Its share price is plunging. The media experts are always careful to mention Facebook - where most of us really reside in some permanent sense - but even there people don’t talk to each other very much. If you want to talk to someone, you use messenger or Whatsapp. If you want to tell someone about something, you post. But you do it in a way that suggests you want likes, not a long conversation.

The way experts often talk about and think about and even see the internet is as a potentially wonderful, often dangerous, horizontal, participatory democratisation of communication. But that’s a view based solely on status. It is the instinctive ideology of the influencer. It’s not that everyone is having more and greater communicative interactions, sharing (real or invented) knowledge, correcting or deforming the old information channels.

Instead, for most people, social media looks increasingly like, well, media. Yes, the sources of production are relatively decentralised. Yes, it’s sort of personalised. Never mind the selective algorithms (which are designed to reproduce the popularity of the already popular), the extremely constrained process of discovery is pre-tailored. We are exposed to a curated feed of information - call it, I don’t know, a channel - to which we passively display approval by rewarding it with views. The nature of the user’s activity is increasingly familiar - because it’s precisely what people used to do in front of the telly.

Twitter gets talked about a lot by a certain kind of journalist and media expert, Instagram less so. Ask yourself when was the last time you met someone under the age of twenty-five - even thirty - who uses Twitter. And then recall all the times you’ve watched - perhaps bemused - as you’ve seen people double-tap their screens to like content on Instagram. It might even be you doing it. On Instagram no one really talks. I asked several groups of young-ish students over summer how often they talked on social media (rather than just liking) and the answer was unanimous: almost never.

Communication has retreated to various private and semi-private, semi-public spheres. The utopia of the smooth, undifferentiated, universal public sphere - still being debated on my university course last year - is long dead. It never existed. Because communication needs a channel and a prescribed audience or it just becomes shouting into the void. Social media, just like old media, is structured by power relations that exclude some voices and include others. But that’s not the interesting thing. What’s interesting are the private, semi-private and semi-public spaces people build where they can be heard (even if not always safely): from family Whatsapp groups to large Facebook groups of tens of thousands. The interesting thing to think about is what new configurations of the relation public/private (which are always mutually constitutive and produce each other in the very process of their differentiation) are emerging.

The US State After Trump

In the strange stasis that characterises US domestic politics, it can often seem that nothing really changes. There may be  changes in personnel, but none that threaten the state’s higher, imperial purpose. Yet, some things have changed in the wake of the Trump ascendancy. The tone of US politics has irrevocably shifted. There is now an unavoidable intensification of political competition, even if establishment Democrats would like to fight on the old, more technocratic terms. Insurgents on the left, in multi-ethnic urban centres, are having a genuine electoral impact, while the dinosaurs of the old Right are having their way with the judiciary. Trump is less the manager of this process than a peculiarly omniscient observer, maintaining a constant, hyperventilating stream of consciousness whose effect is not to assert control, but merely to nudge the colossus this way or that.

Still, there has been little evidence of a legislative drive behind the bluster. No major new laws have been passed. No grand authoritarian initiatives have begun to restructure the state apparatus. There is no visible loss of civil liberties (unlike the Bush era), nor any large restructuring of welfare to make it more coercive and punitive (unlike the Clinton era), nor any marked intensification of technological warfare (unlike the Obama years). If Trump is more openly authoritarian than his predecessors, he is largely reliant on a state structure inherited from them. 

Take the case of Brett Kavanaugh. Distinguished only by his extreme odiousness, Kavanaugh is an exemplar of the princeling status of the US capital class. From an elite all-boys prep to law at Yale, Kavanaugh appears to have left a trail of sexual abuse and personal trauma on his way to the pinnacle of conservative lawmaking. His appointment to the Supreme Court in the face of extraordinary civil opposition marks a turning point for conservative politics. As with so much in US politics, the initiative is not in the traditional legislative centres - the House of Representatives and the Senate - but in the complex web of interlocking state institutions. The Supreme Court is where the real initiative lies: a lifetime seat endows its members with power over the most contentious constitutional and social issues in the US. Now with a conservative majority, abortion rights, LGBT rights, and environmental rights are all under severe threat.

It is being heralded as a rare victory for Trump, but this project to overturn hard won social rights stretches back long before him. Indeed, US conservatism has long recognised the de facto discretionary power of the US legal system and made it - rather than Congress - the focus of its activities. This may be canny strategising by the right, but it highlights the extent to which the US diverges from the norm of a functioning congressional democracy. For those who care about such things (and they may be few), it is increasingly difficult to argue that the future decisions of the Supreme Court will be in any sense democratic. In what sense is its composition representative? How do its decisions command consent? What is the mechanism by which they can be held to account? Mouldy US constitutionalists will talk of the division of powers, but this is - now more than ever - a shibboleth. There is no effective division of powers if the legislature ceases to function and power is concentrated in an unaccountable judiciary with a job for life. 

It must by now be clear to all but his most fervent supporters that there will be no draining of any swamps under Trump’s watch. Only, at best, a stirring up of its fetid contents. What goes too often unacknowledged is the broader lineage of the US state that led to Trump. There has been for a long time a general retreat of US democracy. Although there has always been a marked degree of corporatism - of binding big interests into a cumbersome, bipartisan stasis - the transfer of power between the two parties meant real alterations to policy. There was a genuine, if attenuated representative link at work: Democrats for organised labour, liberal capitalists, urbanites, universities and civil liberty interest groups; Republicans for big capital, the military, the petty bourgeoisie, and all forms of white, religious conservatism. Republican strategy was, from the 1960s, the more dynamic: the Southern Strategy saw poor whites move over to political conservatism in the face of civil rights victories. The relocation of capital from the high-wage, unionised north to the non-unionised, low-skilled, low-paid and still largely racially segregated South created fresh, exploitative opportunities for US domestic capital. Although technically a demographic minority, the Republican coalition has benefited from progressive disenfranchisement, gerrymandering, and demobilisation. 

It shouldn’t be thought that the increasing prominence of non-democratic bodies like the Supreme Court or, in monetary policy, the Federal Reserve is simply an effect of the famous ‘partisan gridlock’ that afflicts Congress. As if alternative, technocratic or legalistic state institutions merely compensate for the failures of the more overtly politico-representative state. Such a functionalist view would merely oppose the ‘political’ state to the ‘administrative’ state. There is no such real distinction. Rather, the state itself has been adapted so as to administer an altered economy. It is the state’s job to manage the reproduction of the distinctive social relations of particular phases of the development of capitalism. To do this, the whole edifice of the state must be converted so it is fit for the task.

If this is all very abstract, what it means in the current case is that congressional democracy as it existed in the US was not a suitable political form of the state for the type of neoliberal economy that emerged there. The irony of neoliberalism was that the implementation of a superficially ‘small state’ ideology by a motley cast of Mont Pellerin Society survivors, Chicago School ex-Keynesians, anti-communist cranks and failed actors, actually necessitated the growth of every coercive aspect of the state. Neoliberalism responded to the successive shocks of the 70s (the end of Bretton Woods, the oil price shock, the fiscal drag of Vietnam and the Great Society) by embarking on a project to restructure the relationship of the state to the individual. It would do so of course by fundamentally statist means: the expansion of state-subsidised outsourcing; the semi-privatisation of the government-sponsored enterprises which managed mortgage credit; the implementation of central bank independence; the massive expansion of administrative oversiggt entailed by a financialised economy; the growth of the punitive and carcarel functions of the state; the emergence of spiralling public sector fiscal deficits through endless tax cuts, military spending and clientelism. All this supposedly in the name of ensuring that individuals were not reliant on state patronage and that government would not patronise minority interests.

Congressional democracy of the type that openly advocated for certain social interests - minorities, unionised workers, small businesses - was not a useful system for such a project. But more than this, a certain ‘independence’ from popular pressures was necessary to secure the expansion and reproduction of this system. Neoliberalism in international relations theory (as distinct from the actual economic project of the 1980s and 1990s) advocates a system of institutional managerialism. So-called ‘public choice theory’ reduced political economy to a theory of the unreliability of democratically elected politicians who were biased in favour of a short-termist public. This was an academic fluff job for the complete privatisation of political decision making.  

Although there have been legislative achievements in the last decades - Clinton’s demolition of the welfare system and the increase in policing of insubordinate populations; Bush’s implementation of the Patriot Act, with its erasure of civil liberties and expansion of mass surveillance - these have been developed entirely from above, lacking any popular mandate or initiative, and have swum with rather than against the tide. For much of the activity of the US state, not even this shallow assent has been necessary. The massive project of drone warfare undertaken by Obama received scant public scrutiny. If the migrant deportation regime has intensified in brutality under Trump, it has done so from an already high base. In foreign policy, the tradition of unanimity around the President has continued. 

Trump himself may mark a sea change in the public role of President. Now a vocal, stridently partial commentator on events within the state from which he seems strangely detached, the current President only makes explicit these longer term post-democratic trends. Trump is quite literally beside his own administration, reduced to the same impotent social media carping that one finds among his millions of supporters. But if many who work within the state - including many conservatives - will not miss his verbal incoherence, in substance he has not proved harmful to the conservative project. Trump may ultimately prove little more than the enduring effectiveness of this project. Certainly, institutionalised conservatism will finish his presidency in a stronger position than when it began. But the weakened elite hold over the two parties - as grassroots right and left insurgents grasp onto the hollowed out party structures - could yet lead to future challenges. 

What to expect if Labour comes to power

The Labour party has recently finished its annual conference and, unacknowledged by most major Brexit-obsessed news outlets, it’s unveiling a very radical plan for government. The party leadership has been advancing a series of proposals that would see British capitalism re-oriented towards working-class income and democratic control. Worker shares in companies; workers on company boards; democratised forms of public ownership; a financial transactions tax; a clampdown on tax avoidance; increases in corporate tax rates. All are massively popular and all are likely to be in a forthcoming Labour manifesto. This is in the context of a government floundering over Brexit negotiations and desperate for a way out. The one thing standing between us and another general election is the disaster that befell the Tories the last time they tried it. If there were an election, there is a good chance Labour could become the largest party and maybe even snatch a small governing majority.

Naturally, people are wondering what awaits Britain if the most left-wing leader of any major party in the UK’s history becomes prime minister. The World Transformed - the annual get together of the Party’s new radical left - has rippled with concerns about how the establishment might try to stop or water down the programme. What’s the likely reality facing an incoming Labour government?

Some people have talked about Labour needing a massive governing majority to implement its programme and a much more left-wing parliamentary party rooted in local struggles in working class communities. If there’s an election imminently, that is not going to happen. Efforts to reform candidate selection and to build the party’s local institutions are yet to get off the ground. So let’s assume the most favourable possible election outcome is a Labour majority of one composed of the current orthodox parliamentary party and a few new left-wingers. Let’s also assume that the SNP and even some Lib Dems will back some aspects of Labour’s social and economic programme to offset the most right wing Labour MPs and the obvious uniformity of Tory opposition.

In this - not impossible but far from certain - scenario, Labour could feasibly hope to run a functioning government, at least when it came to passing some moderate reforms. But of course what happens in parliament is only part of the story. What can be expected to take place in wider civil society - one marked by long decades of class war waged by the rich against the organised working class?

1. Expect the pound to weaken

As the Labour party arrives in government, foreign investors will switch from holding sterling to euros and dollars. Even before Labour comes to power, the richest, most mobile (and - to be honest - least productive) rentier capital will flee. Anticipating inflation and a more interventionist government, others will rapidly dump the pound once Labour is in power. Labour could introduce capital controls to prevent the most egregious forms of this. But its unlikely to be able to do this given the current balance of political forces. Much will therefore depend on the speed and persuasiveness of the Bank of England’s response. The Bank of England can sell its own foreign currency reserves and buy up sterling in order to defend the pound’s value (perhaps letting its slide somewhat to boost export competitiveness). If these interventions are not definitive, however, markets may attempt to game the Bank, anticipating a lack of future commitment to the pound. A fall in itself is not disastrous: it makes imports more expensive, but accompanied by the right stimulus can also boost exports. Any initial slide will have to be accompanied by immediate stimulus to the productive, exporting sector of the UK economy. At first there will need to be a focus on industries with a comparative export advantage. Later this can spread to a more comprehensive, state-backed revival of productive capacity. What needs to be avoided is a downward spiral in the early days. This might be why Shadow Chancellor John McDonnell has been relatively emollient towards the Bank’s Governor Mark Carney. The left should not anticipate full, unquestioning support from the ‘independent’ Bank, which has its own mandate and a political culture quite divorced from that of the Labour party. 

2. There may be a spike in the yield on British government debt

The British government partly funds itself through tax income and partly through issuing debt. It was controversy around the growth in public sector debt during the financial crash that led the Tory party to embrace austerity - as so called automatic stabilisers (the fall in government tax income and the rise in unemployment spending that take place in a recession) kicked in, government borrowing rose. The deficit was the difference between what the government was bringing in in tax income and what it was spending during the recession. Cuts to spending during a weak recovery helped prolong the agony of the crisis and did little to reduce the rate of public debt growth, since lower income led to lower tax returns. Labour will be seeking to boost government spending. But it isn’t this alone that will drive up the yield (or interest rate) paid on public sector debt (or bonds). Bond yields may rise where investors anticipate inflation and a depreciation in the currency in which public sector debt is denominated. Once again, the central bank can intervene to bring yields back down by buying up government bonds in secondary markets, which supports the face value of the bonds and drives down the yield. Once again, events will turn on the decisions of the Bank of England and the emerging political relationship between it and the new government. There is talk of altering the mandate of the Bank, if not of ending outright independence (instituted by Gordon Brown during the first Blair government). Central banks from the US Federal Reserve to the European Central Bank have emerged as possibly the central actors in the global economy in the era of financialisation. They can be relatively open to unorthodox policy, but are nevertheless the apex of the financial pyramid of advanced capitalism. There is no guarantee that a lack of haste or truly persuasive intervention in bond markets or the exchange markets couldn’t place huge pressure on the government.

3. Inflation will rise

Just as inflation rose following the Brexit vote as imports became more expensive due to the massive drop in the value of the pound, inflation is bound to rise in the wake of a Labour election victory. One of the spectres that haunts the left is a currency run combined with runaway domestic inflation. The French Socialist government of Francois Mitterrand is supposed to have been brought down by just such pressures. In truth that government chose to defend an uncompetitive currency peg to the Deutschmark as a member of the Exchange Rate Mechanism rather than press ahead with its domestic agenda. A Labour government will be defending no such currency peg. Yet it will likely still be forced to defend itself by largely conventional means. As Simon Wren-Lewis has pointed out, if inflation rises due to domestic growth, an interest rate rise will follow. Indeed, given the low interest rates elsewhere, international  finance may even respond positively to such a rate rise. Anticipating rising interest rates, international finance could even seek out sterling assets in search of higher yields. 

So far I’ve listed the almost ‘automatic’ market conditions that a Labour government will precipitate and suggested the kind of elite political relationships that will have to hold for the government to avoid collapse in its opening weeks. With a responsive central bank, the government can probably afford to reverse the worst effects of austerity - lifting the public sector pay cap, raising public investment through new borrowing and increased corporation tax, new welfare measures for early years education, putting extra money into most public services - especially the NHS, maybe even saving some money by ending the costly, inefficient welfare assessments. There is some degree of consensus in the party around these measures and they are widely popular. The SNP might support a Labour minority government on some of these measures - resisting them would certainly hurt SNP and, to a lesser extent, Lib Dem support. If decisive action is taken in the opening weeks of the government, there need not be any long-term investment strike - with capitalists postponing investment decisions due to uncertainty about future growth, interest rates and profit margins. Signs of a fiscal expansion - convincing signs - can encourage preemptive activity - so long as markets buy it.

But there are formal and informal political mobilisations which will emerge as obstacles to the government in the first few weeks:

4. The state will seize up

There’s a bit of a cliche on the left that the ‘bureaucracy’ of the state will undermine socialists in government. It’s easy to demonise the civil service - whether reactionary or merely patrician. But this thinking - which leans towards conspiracy - neglects state structure. Power in the capitalist state can relocate. From being relatively concentrated under a Tory government, it can appear to disperse across a range of institutions when a radical government comes to power. This goes beyond the Sir Humphreys of English legend to the outsourced, semi-privatised provision of public services, the imbrication of the Treasury with the expertise of the major banks, the hybrid ‘independence’ of the Bank of England, the revolving door between conservative media, government and even some aspects of academia. A multi-leveled intersection of institutions - from local government to the lords to NGOs, pressure groups, and organised representatives of international capital - extends the material power of the state out into civil society. In normal times, this hodgepodge assemblage is dysfunctional and conflictual, but never fatally so. The state crystallises and materialises the complex struggles between social groups in society at large. It is deeply imbricated with the workings of the wider economy, but the nature of the ‘interventions’ of the capitalist state in the economy are necessarily limited - the state institutions are simply not well-equipped to defy capital too directly. This is a major threat. A radical government will profoundly disturb the delicately arranged balance or ‘hegemony’ that operates across state and civil society institutions. In other words, they will seize up, move at a snail’s pace, lack coherence and coordination. This will make passing legislation slower and will be discouraging for more conventional politicians in the government. Defections, resignations, and rebellions will follow. Leaks to the right-wing press will be constant. The left’s response has historically been based on the concept of working class ‘counter power’ - there currently isn’t much of that, but some forms of organised working class power do still exist. The question of big institutional support from trade unions will be crucial here.

5. Civil society mobilisations will apply pressure through organised and disorganised ‘spectacles’ 

We are likely to learn quickly that it is not only the radical left that can organise a protest - think of the Tea Party or the pro-EU demos, at different ends of the spectrum. We can brush aside the march of landowners and street thugs alike, but when it’s small business owners, ‘pro-business’ students, or the offended middle classes, an air of chaos will descend on the government. This will, to some extent, be a PR battle: who is acting in the broader interests of society? And as the Thatcher government knew, we cannot govern purely by consensus. Though a radical Labour government won’t resort to the state authoritarianism of the Blair or Thatcher governments, it will need to be resourceful in how it fights these challenges. The worst - but most likely - outcome is a tactical retreat to the formal confines of respectable, technocratic government - striking a moderate, reasonable pose in the face of relentless opposition. Counter-mobilisations will be important if the PR war is to be won.

If this all sounds depressing and dispiriting, that’s because it will be. Who on the left wants to mobilise to defend the very modest programme of a social-democratic government? We all want to push it ‘further’ left. We want to stop it ‘backsliding.’ This view fundamentally misunderstands the dynamic of the left in power. Our mobilisations will be exhausting, unrewarding media spectacles designed to offset the most visible opposition to the government. By nature, this sort of activity is unsustainable.

When the Attlee government came to power in 1945, it won a huge parliamentary and popular majority. The trade unions were powerful and the population had high expectations - even if there was little in the way of a combative popular movement against capitalism. There was a high degree of policy consensus on the left and in liberal circles about the need for a welfare state and the creation of a national health service. The party and especially the leadership had been integrated through the joint war effort into the respectable apparatus of the state. Though far from united, the parliamentary party formed a much more coherent bloc than today. Still, the government was exhausted by its third year. Despite considerable achievements, it was ejected from power after just six years (although it won the popular vote in 1951).

An incoming Labour government will have none of these advantages. This perhaps is why McDonnell is placing so much emphasis on the first hundred days of its tenure. Without significant, popular achievements, it will be exhausted far sooner than the Attlee government. It also needs to publicly sell what it does and explain clearly what it is trying to do and who is trying to prevent it. It needs to name and own its successes as well as naming its enemies.

There is a lot of talk on the left about the need for a ‘mass movement’ to support or to push the government where necessary. Yet it isn’t always clear what - practically - a mass movement can do. In the face of tedious call outs to hold placards in Parliament Square and oppose the constant dull drumbeat of opposition, burnout is an inevitability. For what little leverage it gives, it will fruitlessly consume energy, emotion, and time. As I suspect many in the movement already realise, the mass movement would be better off building its own, durable institutions that will outlast the beleaguered government.

The reforms enacted by the Labour government should be treated as an opening to build up leftist resilience. A prime example is the unions. If the government can repeal anti-union legislation, we should take it as a spur to renew union activism and to expand union membership. Once reforms are embedded, new intellectual and academic work can build and promote new policies. Community activists and worker cooperatives can take advantage of the funding opportunities that come from public investment. Ideologically, we can argue that the government’s policy successes show that real wage increases and a rejuvenated public sector are good for the country, not just a drag on private enterprise. We can demonstrate that livelihoods don’t have to fall in order for the country to ‘pay its way’.

None of this is to foreclose the possibility that the government could come through on some of its more radical policies - in particular, the democratisation of the economy. It could also be pushed to the left on prison reform, immigration, security, foreign policy and policing (on which it is frankly inadequate). Early victories could create leeway. A serious economic crisis could widen the space for improvised, emergency measures to reform the economy and demoralise capital in the process. One reason we can expect such bullishness from organised capital is that it escaped 2008 unencumbered by reform. It likes this feeling of invulnerability. Disciplining it will be that much harder. 

But these are hopes, not expectations. There are things that the left can do regardless of the pace of change at the level of central government.