It seems to me that there is bound to be an existential crisis in politics very soon. The question so long suppressed of what the state is for is going to have to be addressed.
Since the takeover of politics by neoliberal thinking began in 1979 in the UK and 1980 in the USA it has become an object of faith amongst most, if not all, who have held political power that the organisation that they have apparently fought so hard to lead is itself secondary in society. The state, in the commonly accepted narrative, is but a servant to the market, which is the predominant creator of value and arbiter of the dissemination of well being in society.
That support role for government is, according to that same narrative, best served by the state absenting itself from interference in market mechanisms to the greatest possible degree, whether that be by minimising regulation so that unfettered competitive pressure may supposedly be brought to bear in the allocation of economic resources, or by minimising tax so that consumers can exercise their right to choose within the market to the greatest possible degree. The transfer of services from state to provide suppliers is an extension of that same logic.
That this was never true was always apparent to those willing to look beyond dogma. Time and again the claims made by those promoting these ideas proved to be false. When they went looking for waste to be eliminated they could not find it. When they sought to find activities undertaken by the state that could be eliminated they only found essential services whose removal would result in hardship. But this did not diminish their ardour. The result was that the state was suppressed instead and those who relied upon it most were oppressed. But even so, the means to eliminate it could not be found in forty years of searching.
And now everything has changed. A virus may have changed our relationship with the state forever.
The most right wing government elected in the UK in a lifetime has used the power of the state to close most markets.
What they have discovered is that far from the state being limited in its capacity to spend by available tax income, it can in fact spend without apparent limit by using the power its own central bank has always had to create money at will, shattering their own austerity narrative in the process.
And those services that it has so long sought to undermine, not least by seeking to reduce the wage rate of those working in them to make them unattractive to able recruits, turn out to be essential after all.
But most shocking to many, I suspect, is that it turns out that far from there being markets operating free of the state, the reality is that markets are now entirely dependent upon capital provided by the state for their survival. The notion that the providers of equity capital to companies are the ultimate risk takers in society, and worthy of both considerable economic favour and low taxation as a consequence has been proven to be untrue. It is the state that has borne the risk in this crisis and the vast majority of businesses are now surviving only because the state has taken on the role of being their real provider of risk capital.
Instead of markets being primary and states secondary what we suddenly see is that the reverse is true. The state is the greatest risk taker and the underpinner of markets, and therefore the ultimate source of our wellbeing in all aspects of life. It alone can get us through troubled times. And it alone has the means to deliver essential services, which are of much broader variety than we might ever have imagined. The narrative of the last forty years was wrong, as some of us always thought.
But three questions follow.
First, what does this mean for your relationship to the state?
Second, what does this mean for the state?
And their, how is this communicated?
Thoughts are welcome.
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Timely question and one that has already been answered in Reclaiming the State by Mitchell & Fazi and The Courageous State by someone nearer to home. It’s an asymmetric battle though. The neolibs have a bigger army, they’re in power and all the forces of the media are behind them. They won’t give up without one helluva fight so expect enormous expenditure to be invested in beefing up the police state and introducing control laws.
I can’t add to the above but I am willing to predict that enormous Tory efforts are going to be put into denying every word of this – indeed they are already beginning. Yesterday I saw a tweet from Dan Hannan bemoaning the impact of lockdown on the “private sector” in comparison with the public sector. The same old dreary rhetorical battle lines.
The government will be under huge pressure to return to pre Covid “normality”. There perhaps is one sliver of hope – yesterday Johnson did go out of his way to slap down the hard Right “lockdown sceptics” who’ve made hay in his absence. Something might have changed in him given his awful experience with this virus.
Let’s see.
In a single word “taxing”
“by minimising tax”
Haven’t done a very good job of that have they? The tax burden in the UK is now at a 50-year high: taxes having reached 34.6 per cent as a proportion of GDP in 2018-19, the highest level since 1969-70.
How much higher would you like to see them?
Quite probably lower
We will need all the stimulus possible for the time being
Net tax increases are not on my agenda
A major redistribution of tax due by taxpayer is
The wealthy are saying way below what they really owe
Are you disputing that?
If Council Tax is a tax – which I believe it is, it will more likely than not rise, not fall. The wealth always win with this particular tax. It needs to go and a fair wiser system put in place.
“Never fail to take advantage of a crisis”. The history of the UK since the 1980’s has been largely the continued centralisation of power (with devolution a small fig leaf granted on very limited terms). So more of the same. We should not ignore the impact of Brexit which I am sure will also be used for centralizing initiatives. Happy days for the democrats amongst us.
It is (to me, at least) self-evident that neo-liberal thinking is wrong…. but I have thought that since 1979. Indeed I have predicted collapses/changes of the system at least twice before and been wrong…. and I am cautious to predict too much now – although we really do need a change.
Asquith/Lloyd George or Chamberlain/Churchill comparisons don’t help because neither had an 80 seat majority in a highly partisan House of Commons. Also, with “democratisation” of the Tory party (members voting for their leader) I suspect that the “men in grey suits” don’t have the power to change things they way they once did…. unless the “party faithful” really lose faith in Boris (which, given the bubble they live in, is unlikely). Whatever change we get will have to wait until a General Election in 2024 and a lot can happen between now and then.
Expectations about what the State can and should do have been dramatically changed. Ideas about what jobs really are “key” have changed. And, I hope, ideas about what is REALLY important in life have changed (ie. not money/wealth etc).
The key questions are;
(1) Will the “small state” Tories can wrestle back control of the party and create a narrative for the next three years of “let’s get back to normal” (with all the ugly austerity that this will require).
(2) If they do, will Labour articulate a real alternative from a credible “government in waiting”?
(3) What will voters choose?
Personally,
(1) I think the neo-liberal view runs very deep in the Tory party and that by the end of this year we will already start to see the “who pays?” question re-emerge as a way to roll back state involvement.
(2) The current shadow cabinet DOES have what it takes. However, my fear is that 2024 might be a re-run of 1997 where Labour offers a cautious manifesto (remember 1997 and its commitment to Tory spending caps?). Whereas hindsight suggests that Labour were going to win whatever the policy platform and should have been bolder. The Tories will implode in 2024 so, I think the battle is to keep the right policies (Green Deal, MMT faier taxes etc.) in the limelight so that they APPEAR less radical and then get adopted by Labour. (So, Richard, 4 more years of blogging, speaking etc lie ahead!!)
(3) Voters WILL choose change.
Thanks Clive
I hope your conclusion is right
A really good question.
As a public sector worker I have already been redeployed doing other things thank you Mr Hannan, emptying bins whereas previously I did desk bound work. I wonder how our MPs and ex MEPs have been filling their time eh, whilst the lock down is on? BTW I volunteered, as have many of us.
Hannan needs to shut his potty mouth and stop using BREXIT type divide and conquer tactics on people. I can just see what is going to happen – public sector workers versus those who are furloughed or made redundant. Yep, it’s coming even though I know my colleagues and I have diversified and are doing other things in care homes to bin collection (the team I am part of has been out delivering PPE to care homes when it gets delivered). I expect to have my teeth kicked in by this nasty Government when it is all over.
Onto the question:
First of all, the State has to somehow wrestle its sovereignty back from the markets and reassert that it rules for all. It does this by printing its own real cash and regulating the delinquent and degenerate financial industry.
Secondly, the State has to get away from its love of big numbers that it sees in the financial sector that contribute to GDP. All working people contribute to GDP and their activities also add to the tax take. This unhealthy obsession with quantity over quality has got to end. It will reassert the economic value of everyone in our society.
The State and the citizen also have to realise that it is their fellow citizens who fight the wars, police the streets, make the NHS work, fight our fires and look after each other.
Helping citizens to sustain this help through decent, even generous basic incomes and excellent public services in the realisation that this makes for a more robust society, (rather than using it as an excuse for State withdrawal) would be nice to see, in fact would be essential.
What might emerge from this is more trust between the State and the citizen, an acceptance of their mutuality. We will ever have this whilst the State is infiltrated and inculcated with Neo-liberal thinking as it is now that basically represents money as power and dances to that tune.
As an HMRC employee PSR, I couldn’t agree with you more. Both about the right wing idiot Hannan, who as an MP is a public sector employee himself (is he too stupid to realise this?), and the lack of thanks we’ll get from this government for the work the public sector has done in keeping the economy and society going.
HMRC has received plenty of praise for getting the JRS up and running so quickly and effectively, and we’re all working hard to get the similar scheme for the self-employed up and running ASAP, but are we subsequently going to get recognition in the form of a large pay rise to make up for 10 years of wage freezes and below inflation pay rises?
About as likely as councils such as yours receiving adequate funding from Central government to cope with C-19 and its aftermath. Plenty of cost free praise, but as the old saying goes, ‘warm words butter no parsnips’.
Ageeed, entirely
I think something which will be interesting will be how the NHS (and other key essential workers) are seen and portrayed.
Will there be greater investment in the NHS – the facilities, the training required? Or will budgets be cut because of austerity?
Will the NHS get a significant pay rise of over 20%? Or will they get a collective medal and carry on as before?
Will there be an increase in studying medicine at university? Or will levels fall away (as they have done with the army after the Iraq war)?
If these are each answered in the former then there is hope that there will be a greater State and people move to understand and accept that. If the latter (as I fear) then it’ll be back to same old same old.
I don’t disagree with the thrust of this. But perhaps an addition?
For some time our relationship with the state has been marked by an ever-quickening globalisation. A belief in free movement of money, people etc. We’re seeing the limit of that now in grisly detail.
The impending deglobalisation I think will be a big issue in our relationship with the state. That of course will just not be in the UK. But I think we’ll expect international relations to look very different.
I’ll address that another day…
Breaking news
“The provisional number of deaths registered in England and Wales in the week ending 17 April 2020 (Week 16) was 22,351; this represents an increase of 3,835 deaths registered compared with the previous week (Week 15) and 11,854 more than the five-year average; this is the highest weekly total recorded since comparable figures begin in 1993.”
https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/deaths/bulletins/deathsregisteredweeklyinenglandandwalesprovisional/weekending17april2020
It is telling that it has taken me 20 mins of digging to get that basic fact from the ONS website – there is a lit more flak and smoke about care home figures and covid numbers to HIDE the above damning sentence.
My opinion – nearly 12k more than average; ‘only’ nearly 4k more than the previous week – imagine what they would be without the quarantine self isolation since 20 March in the coming weeks? Given that most of these Excess deaths to the 17/4 would have involved infection by the time the lickdiwn measures were introduced on 20/3.
Will they stop rising next week? That’s the real question
I am suspecting a plateau at best
I agree the plateau phase is approaching and then the down slope. However it is going to take as long as it took on the up-slope – which implies at least 5 weeks from the friday just passed.
I’ll get round to looking at the ONS’new geographical stats at some point – which are obviously there to start easing restrictions by areas where the virus is largely eliminated while keeping stricter enforcement in areas with R-naught still above 1.
So London obviously remains in quarantine longest with self management if moving out of the City. Some regions will fare better for now – but of course the second wave is going to be deadlier. And we damn well better follow German and EU protocols – testing & tracing included – hell we could do better following Kerala standards! We certainly can’t do worse than both these, it’s not about how rich the stat.
——
There ia active propaganda and agitation going on to make this epidemic a ‘conspiracy’ in both the msm and some of the supposed ‘alt media antiestablishment’ sites. They are also coincidentally very brexitty…
(One of them actually Implied you were just a dodgy accountant and financial management advisor or some such, recently in ad-hominem attack.)
My suspicion us that the plateau will be just that and the down turn will take some time
The State is the people..the people ultimately decide if they want a free market, or should i say the extent to which they want a free market economy. We live in a democracy and Governments are elected by the people. The extent of state intervention in “normal” times has evolved not through some “illuminati type conspiracy” but through the behaviour of elected Governments of both Labour and the Tory party. Of course, some people feel that the electorate are “their own worse enemy” but that is the attitude of an authoritarian and i’m sure its not what you advocate. So naturally campaign and try and influence as you do with decent effect…my sense is in times of emergency like a war, pandemic, being hit by a meteor etc when peoples lives cant function then it is inevitable the elected government with assume more control and when people can go about their business then that control will loosen. That is what i sense and probably represents the thoughts of many.
I do not believe in Illuminati
I do believe in malicious thinking spread by some with wealth
The virus may prove to be a game changer like WW2. The massive collective effort of the war disproved all the pre war rhetoric that the markets know best and the state cannot interfere. The consequence was the period of greatest equality albeit imperfect known in U.K. history and an acceptance by both main parties that the state had a duty to help all its citizens including an involvement in the economy. The ‘successful involvement’ of the state in this crisis and it’s continued involvement need to be brought up constantly.
Agree with your conclusion
Labour should be yelling it now
Agree that Labour ought be yelling, but just thought I’d add about the post war settlement, about it being based on redistribution of surpluses from the US economy via (among other items) the Bretton woods agreement (if I understood Yanis Varoufakis correctly), and after that, the recycling of everyone else’s surpluses via Wall St until the 2008 crash. And then the crash which wasn’t really resolved, but papered over via a massive/global QE central bank operations. So that now, with C19, many things are simply broken and won’t go back – e.g. the funding model for Higher Education (where I work) is kaput (as noted on this blog) as foreign students won’t be back in the same numbers anytime soon, many HEI’s are loaded up with debt they acquired to build the halls where those students would live etc etc; the high street – done for it looks like.
What does this mean for the state – my take on this is that the current incumbents are learning (well, maybe they are) just how far they can take things given the pretty consistent support of MSM – note I view them all as utterly in service to self and wealth, as they have all been to the same set of schools and HEI’s, including many in Labour etc – and that if they can they will try to impose an authoritarian regime via I would guess a ‘Little Englander’ hegemonic narrative.
What does this mean for my relationship to the state: I have a natural propensity to catastrophisation, my daughter recently pointed out to me, but I anticipate the policing of dissent will continue to grow, and that at some point Johnson, Trump, Bolsinaro etc will unleash the patriotic to do their dirty work.
How will this be communicated: I would expect ‘respectable’ and loved public figures equivalent, say, to David Attenborough, would be used on our screens everyday to pump the message…. once the 2nd Coronavirus wave hits, as it surely will given the incompetence shown so far.
The alternative, what would bring us out of this? Hmm. Well, as also noted on this blog, food shortages would quickly spin things out of control – and I’m thinking not just of the fragility of supply chains, but more the likelihood of climate induced crop failures (note the move of the Polar Vortex from the north pole to Greenland, locust swarms etc) , plus the implosion of Europe following their inability to come up with an equitable mechanism to recycle surpluses throughout the EU.
You make me seem positively optimistic!
Personally I don’t believe the pandemic will act as a catalyst for any short/medium-term change in the way the population as a whole views ‘the state’ in the political/philosophical sense. It will simply be relieved that the threat has been ‘managed’ and that gradually their lives will have returned to a similar pattern as before. The Tories, meanwhile, will double-down on whatever tactics they consider necessary to obfuscate the government’s short-comings and the rhetoric explaining how well they managed the crisis. With loyal MSM support it will successfully play to people’s emotions. That’s a given. And it will work. Classic Dom.
The government’s Achilles’ Heel is the economy, which will have been damaged beyond immediate repair, especially for SMEs and sole traders. Although the majority of those employed by larger corporations will have been able to weather the storm, many will surely be questioning the financial aspects of the crisis, asking themselves and their friends ‘where did the money come from’. I see that as the best ‘entry point’, so to speak, for long-term change. That coupled with a well-orchestrated attack on the government’s well documented management incompetence; the electorate has invariably been seduced by the claim that only the Conservatives really know how to manage.
Once we’re out of immediate clinical danger, the political gloves must come off. Keir Starmer has to step up to the plate and adjust his mind-set as if he was prosecuting a serial killer (which in fact he is). The facts speak for themselves. He just has to channel them clinically, relentlessly and effectively over the course of the next couple of years, as a platform for selling to the nation the necessity and benefits of a GND — cooperating with the other progressive parties. I hope he has a strategy team that’s up to the challenge because it’s a ‘once-in-a-generation’ opportunity (more so than the 2007 financial crash). Covid-19 opens the door for all the big pressing socio-economic issues — public finances, inequality, housing, social & individual well-being, etc. etc. and, of course, the environment.
If Labour fail this challenge then the future of the country will be in serious jeopardy — possibly even leading to violent revolution which only a few extremists would want.
I guess our new relationship will be much the same as ever. The goalposts will continue to move to favour those with money and power, but as ever they will move slowly. We won’t appear to look like Hungary nor Poland, but nonetheless we will continue in some of those directions. The Gov’t haven’t forgotten Lady Hale and are keen to exercise political control/influence over the judiciary. Command/control mindset will continue in the name of ‘strong government’. Contracts will continue to be awarded to Amazon (their web services apparently makes much more dosh than selling dodgy goods to all of our doorsteps), and the like.
I had better stop now – I am making myself moody..
“Instead of markets being primary and states secondary what we suddenly see is that the reverse is true. The state is the greatest risk taker and the underpinner of markets, and therefore the ultimate source of our wellbeing in all aspects of life. It alone can get us through troubled times. And it alone has the means to deliver essential services, which are of much broader variety than we might ever have imagined. The narrative of the last forty years was wrong, as some of us always thought.”
I think that is an excellent statement of the basic reality. The ideologists of neo-liberalism actually believe in self-supporting free markets; they never use the term “perfect free markets”, because thay know that gives away the truth that markets are never, ever perfect in their operation anywhere, anywhen, anyhow. Real markets only work in quite restricted frames of reference, and often only if benefiting from some form of protection. Then they work very well, within these quite narrow, precious, precarious parameters, yet are still easily blown off course; with huge adverse effects in ‘boom-bust’ cycles.
Except when breaking in to a new market as a young idea (often assisted by public sector grants because risk capital follows opportunity, but rarely leads), the essential fact is businesses do not like risk, or take risks. They are risk avoiders, and if they can do it, natural monopolists (Adam Smith knew this); indeed much of the modern ideas of ‘intellectual property’ are just a modern take on old-fashioned monopolism. It never goes away. This is never adequately explained by neo-liberalism, but it is a function of the fragility of the intellectual edifice of neo-liberalism, that has required a larger and large co-option of the public communication space in the press and media, increasingly more extreme and hyterical, to control the narrative and the political agenda, and therefore stifle the intrusion of the real world and their deep and lasting failures. They can do this becaase they have already captured virtually all the executive levers of power, and all the financial resources; turning politics into their virtually exclusive fiefdom and mouthpiece.
I say this because it is now clear to many, many people through COVID-19 ripping away the phony trappings of markets; that the equilibrium of markets is not natural, their status is not robust, but fragile. Under real duress businesses operating in these markets, on which we all depend, only too quickly throw up their hands, and turn to the State for immediate rescue and support; the State they have disparaged for decades, as an intolerable burden on their freedom. This blinkered dogma is a function of the ideology of markets, the short-termism intrinsic to the standard financial model, or ‘just-in-time’ operational logic of business; in short, their status as exemplars of the inherent vulnerability of neo-liberal ideology. The irony should not be lost.
The whole ideology of neo-liberalism is false, but this is where we are, and the neo-liberal ideologues, who run virtually everything just now, will not be giving up anything significant anytime soon. What they will do is what they have been doing over the last few days with MMT. Concede much of the case, cling to a few threadbare vestiges of their discredited ideology that they think can fit with MMT somehow, and then – and this is the important element – take over the opposition; claim MMT was always what they knew and thought (we have seen this laid out already), and then say it is pretty much what they are doing (MMT is descriptive after all); therefore they do not need to change anything. Nothing has changed, nothing needs to change. They are totally transformed, without changing anything. Problem solved. Just leave them in charge, they do it so well.
What have I just described? Not really MMT, but the methods of political survival, no matter what. Over three hundred years these methods have been used by the Conservative Party, that allows it to remain in power most of the time, whatever happens and however catastrophic their leadership. We have been warned; over and over again.
It is now down to – all of us, to do something about it.
Thanks
The message has to be:
– the market could not have saved lives during the pandemic. Without Govt intervention and the lockdown there would have been hundreds of thousands more deaths. Without a NHS many more ordinary people would have died.
– the market, through globalisation and austerity made the pandemic worse than it should have been, by taking resilience out of the system and weakening Health & Social Care services.
This message needs to be strong to counter the line that things were fine (however unreal) until Big Govt closed businesses and ruined us all.
Much depends on what happens with the Tory ranks. The populists are in charge now and will be pragmatic about state intervention, but there seems to be a resurgence of neo-liberal Tories, eg Philip Hammond who will push against it. The Telegraph and FT oddly seem to supporting the populists, but expect the Murdoch press to back the neo-libs and push government criticism.
Ironically for the left too much Tory bashing, by supporting an anti-Govt message, will aid the neo-libs.
Thanks
Many of us in Scotland, 50% I believe, have been desperate for a new relationship with the state for many years now since the welfare state has been replaced by neoliberal (rabid capitalism) orthodoxy. Having realised that voting numbers in Scotland cannot compete with the english population, which seems determined to continually vote in ever increasing numbers for the tories and desires Brexit, that there was nowhere left to go in seeking an egalitarian society, a non war and arms mongering society, a society free from fear and free from subjugation from the ultra wealthy corporate class.
Dissolving or ending of the union is the only hope. Reform is impossible. Federalism is impossible. The Uk is an absurdly extreme and complex society, with all established power within the City of London.
I believe England has a more difficult job on it’s hands in forming a new relationship with itself, even with Scotland still a part of the UK. An independent Scotland would provide a new perspective on English political reality.
How does England (the English people) within the UK, or an Independent England deal with Westminster, a morally corrupt tory part, an opposition led by a knight of the realm, The House of Lords, The City of London, The Monarchy and the military and arms industries, that all reside in London.
Decision making needs to be decentralised to the lowest practical level. This would be “wasteful” in terms of time spent but would be “efficient” in terms of addressing the real concerns of people on the ground and exposing the vested interests that are guilty of pushing short term solutions (often for personal gain) to fundamental problems.