WHEN Tory ministers start quoting Marxists, you know something strange is happening. In his Ditchley speech at the weekend the de facto Deputy Prime Minister, Michael Gove, invoked the Italian communist, Antonio Gramsci. Imprisoned by the fascists in 1926, Gramsci wrote that “the old is dying, but the new cannot be born”. In the meantime “a great variety of morbid symptoms appear”. One of which was fascism in Europe.
Mr Gove argued that the recent rise in right-wing populism, from the Alternative fur Deutschland to Matteo Salvini’s Lega in Italy, are similarly morbid symptoms of today’s socio-political interregnum. However, while the post-war era of American-led globalisation may well be coming to an end, it’s not entirely clear what Antonio Gove envisages as the new society that’s meant to be being born. Not communism, certainly. Not even the left believe in Marxism-Leninism any more.
The core of the Gove-Cummingsism appears to be the New Deal of Franklin Delano Roosevelt, the Democrat President credited with ending the Great Depression in 1930s America. Boris Johnson echoed Roosevelt in his speech yesterday, promising to “build build build” our way out of the Covid recession.
Actually, there’s some dispute about whether Roosevelt really did end the Great Depression, since US unemployment was still 20 per cent as late as 1938. As Keynes pointed out, it was the Second World War and armaments production that really ended mass unemployment.
But let’s not quibble. For Conservatives to be embracing the New Deal, hitherto the ideological property of the Labour Party, is a big change.
However, it has to be said that Mr Johnson’s offering yesterday was small beer by Rooseveltian standards – not so much a new deal as a reshuffling of his last election deal. Bringing forward £5 billion spending isn’t going to build many Hoover Dams. “Jet zero” and simplifying planning regulations is hardly transformative.
“It wasn’t much of a deal,’’ as Labour’s Sir Keir Starmer put it. Mr Johnson lacks both the fluency and the authority to make a high-flown speech like yesterday’s work without actually delivering anything concrete. We’d heard about the “burning injustices” from Theresa May four years go.
Perhaps the Chancellor, Risi Sunak, will put some flesh on the bones in his forthcoming speech. He is the first Chancellor in history to start paying private sector wages on a mass scale - actually surpassing anything Roosevelt did. No one has ever increased public borrowing on his scale before – £55bn in May alone. UK public debt is now nearly £2trillion.
So, I think this does mark a significant historical moment. A blue line has been drawn a line under the ideological Conservatism of Margaret Thatcher. Her idol was the American economist Milton Friedman, who loathed the New Deal.
Friedman didn’t object so much to Roosevelt’s unemployment relief programmes – he actually supported a Universal Basic Income. But like most academic economists he thought borrowing would wreck the nation’s finances and that state spending would “crowd out” private investment. Bureaucrats would take over, tax revenues would be wasted, and the productive economy would collapse.
Aversion to New Deal “tax and spend” has dominated Conservative thinking for nearly half a century. Mrs Thatcher went the other way. She cut spending, privatised industry and let manufacturing industry go to the wall.
Free market dogma underpinned the austerity programme of the Tory Chancellor George Osborne after the financial crisis. He said the Government had to balance the books and in 2010 introduced the greatest programme of government spending cuts since the “Geddes Axe” of 1922. The Osborne axe led to the longest period of UK wage stagnation since the Napoleonic Wars, imposed draconian cuts in benefits and undermined public services like the NHS.
The extraordinary thing, though, is that the Conservatives were re-elected – not once but three times after 2010. In part, this was because the Bank of England compensated for Government cuts by printing money through quantitative easing. That stopped lots of businesses and banks collapsing.However, QE inflated asset values such that the top 10% now own 45% of British wealth; the bottom half 9%.
So far so predictable. Tories always look after the rich, don’t they? So, why is Mr Johnson suddenly wrapping himself in the language of the left and promising jobs jobs jobs?
Well, partly because intellectuals like Mr Gove and Dominic Cummings realised that this was unsustainable. Brexit and the rise of Corbynism – Labour ran the Tories within 2% in the 2017 General Election – demonstrated that Conservatism had to change.
The “left-behinds”, as metropolitan liberals call inhabitants of small-town England, were revolting. Their response to dwindling wages, dead end jobs, collapse of services was to blame globalisation and immigration. Brexit was essentially a nationalist culture war with internationally-minded metropolitan elites. The left-behinds wanted a leg up and to feel good about being British.
The writer David Goodhart, who has been a huge influence on Mr Gove and Mr Cummings, called it a divide between “Somewheres” and “Anywheres”, between nationalists and globalisers. The American academic Michael Lind called it a “New Class War” in his book of the same name published this year.
Mr Gove and Mr Cummings believe that by invoking the New Deal, which was a nationalist response to a global economic depression, Mr Johnson is removing the ground from the “morbid” far right nationalists like Nigel Farage. It is a nativist programme that does not simply demonise immigrants.
Whether it works is another matter. The Brexit war may be over, but Mr Johnson has yet to win the peace. Mass unemployment is coming, for the first time since the Thatcherite 80s. Tax revenues are likely to fall dramatically too, putting pressure on spending.
The abandonment of free market thinking is an opportunity for Sir Keir. Many elements of Labour’s 2019 economic manifesto were popular – it was Corbynism that lost the election. He should dust down the Green New Deal and promise to double Tory spending plans.
When it comes to tax and spend, no one does it better than Labour. If Sir Keir can ditch Labour’s obsession with identity politics, and reconnect with working class voters, he could, to use Gramsci’s language, exert “hegemony” over the economic future.
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