DAMN her eyes! I took over as Bagehot only the other day, on April Fools’ Day, having not focused on British politics since 1993. I was gently easing myself into my new job—getting my parliamentary pass, having lunch with MPs who happened to have been at Oxford with me, planning a trip out to the mysterious North. And now I have an election to cover!
Theresa May’s decision to call a general election has been thoroughly chewed over by now. This was obviously a good call. Labour is as weak as it has ever been; Mrs May will be able to stamp her own authority on her party; shifting the next general election from 2020 to 2022 means that she won’t be negotiating with the EU against the sound of a ticking clock. I also sense that this could be a highly significant election. Mrs May is hardly an electrifying politician—she’s a competent grind with an unpleasant willingness to play to the Daily Mail. But she’s operating in electrifying times—and she has an interesting sense that something has gone wrong with globalisation and that we need to reach back into our national traditions, our sense of ourselves as a community, to fix it.
This is the first election to be called in the post-globalisation era. British politics since the 1980s has been dominated by liberal globalisation: dismantling the corporate state at home; pushing for a single market in Europe; championing global integration around the world. Britain was the poster-boy of this creed. It created the most liberal market in corporate control in the world; sucked in more immigrants in 20 years than it has in a thousand; and, in London, created the world’s most global city.
The champions of liberal globalisation (ie anybody with any power) argued that their project was in everybody’s interests, poor as well as rich. Globalisation might produce disruption and kill off old industries. But the economy as a whole would be healthier. And the political elites knew how to manage all this disruption. They understood enough about the workings of the economy to limit the turbulence caused by free flows of money and goods across borders—indeed they were so good at economic management that they had abolished the boom-bust cycle. They could compensate the losers with training and welfare benefits. Gordon Brown, Tony Blair’s chancellor, became adept at skimming off some of the City’s profits and recycling it in the form of new schools and doctor’s surgeries for the Labour Party’s heartland constituencies in Wales and the North.
Globalisation was a wonderful thing for the global economy in general. Hundreds of millions of people have been lifted out of poverty. I recently visited Qingdao in China, a second-division city that I’d barely heard of, which was full of sky-scrapers, brand-new cars and self-confident and optimistic people. The benefits haven’t been so obvious in Britain. We got the challenge and disruption but many people got stagnation rather than rapidly rising living standards. The financial crisis demonstrated the power of financial globalisation to destroy wealth as well as create it. Even without the crisis problems were accumulating. Productivity growth has been significantly lower during the globalisation era (1980-present) than it was during the post-war years (1950-1970). The easy money policies that helped to cause the financial crisis were partly driven by worries that the advanced economies were falling into the Japanese deflation trap.
Low productivity growth inevitably poisons politics: it becomes a struggle over who gets what proportion of a fixed pie. Interest group politics becomes more brutal. Generations face off against each other. To make things worse, even more than other Western countries Britain has added two new elements to the problem of stagnation: huge increases in inequality and mass immigration. Inequality has reached levels that haven’t been seen since the 1920s as a tiny elite of superstar individuals and companies accounts for a growing proportion of what productivity growth there is. Immigration has taken place at a speed and on a scale that has only been tried once before—by 19th century America when the country was expanding at break-neck speed and the government accepted virtually no responsibility for social welfare. It is impossible to understand the populist anger that is seizing so much of the West (and which has fundamentally changed Britain’s relationship with the European Union) without understanding the gap between what the elites promised and what they delivered.
Theresa May will put two questions at the heart of her campaign: “Will you give me the authority I need to negotiate with Brussels to get the best deal possible for Britain (and, by implication, to prevent foreigners from doing us down)?” And, “Do you trust a hard-leftist such as Jeremy Corbyn to run the country?” I don’t have much doubt about what answer people will give. There are also more general questions floating in the background about the state of Britain’s economy. Jeremy Corbyn, for all his faults, made quite a good speech about people who got rich by breaking the rules and hiding their money in the Cayman Islands. I suspect that Mrs May will also use this election as a chance to fashion an economic policy that, in the long term, breaks with some of the most fundamental tenets of Thatcherism (for example about corporate control and corporate social responsibility) and a social policy that puts more emphasis on challenging the power of Britain’s emerging oligarchy.
Here and back again
The start of an election campaign is a good time to take a general look at the state of the nation. I’ve been out of the business of thinking about the land of my birth for a long time. I spent 1993-97 and 2010-2016 writing about global business in an ultimately futile attempt to understand capitalism. I lived in Los Angeles in 1997-2000 and Washington, DC, in 2000-2010 and, like many self-satisfied ex-pats, I wore my ignorance of the motherland as a badge of pride. I missed the Blair years entirely (I still think of Mr Blair as an eager-to-please shadow home secretary who always answered my phone calls). I missed the Tory years in the wilderness and the triumphant rebranding that followed (the last time I met David Cameron he was passing through LA as a PR man for Carlton television). Most political correspondents can give you a blow-by-blow account of the goings-on in the Westminster village going back decades. I get confused between Damian Green and William Hague. Perhaps I should write as Rip Van Winkle rather than Bagehot.
Still, ignorance can sometimes make the big things clearer. A number of things strike me as Britain goes into its third national vote in two years.
The first is that the British political establishment is as feeble as I’ve ever seen it. The House of Lords is an absurdly over-crowded House of Cronies, a gilded cattle-car stuffed to bursting point with has-beens, bag-carriers, time-servers and fixers; we seem to have succeeded at the almost impossible task of reforming a hereditary chamber and making it even worse. The United States Senate has 100 senators. The British House of Lords has eight times as many members. The House of Commons is quiescent. The combination of the all-consuming Brexit negotiations and the Corbyn-castrated Labour Party means that it’s becoming part of Bagehot’s “dignified” rather than “efficient” part of government (meaning it’s there for show rather than to make real decisions). The Foreign Office has been hollowed out thanks to a combination of confusion about Britain’s role in the world and desperate virtue-signalling (spending 0.7% of GDP on the Department for International Development).
Whitehall has been subject to a malign combination of business-worship (of the sort that only people who don’t know anything about business can be guilty of), management-speak and political correctness. I learn that the Department of Education is now the Department for Education (take that, Pisa rankings!). The universities are now overseen by the Department of (sorry for) Business, Innovation and Skills. The Treasury has gone open-plan. The most dangerous thing for institutions (including media institutions) is to lose their sense of identity, by which I mean not just their sense of their distinct identity but also their confidence in that distinct identity. That seems to have happened to our public administration.
Britain has seen two promising premierships end in disaster—Mr Blair’s because of Iraq and Mr Cameron’s because of the European referendum. It is hard to decide who was the bigger bungler. Mr Cameron’s referendum decision was the product of cowardice and slickness. Cowardice because he did it to solve a short-term political problem. Robert Peel destroyed his career and split his party in order to do the right thing—abolish the Corn Laws that subsidised the agricultural interests (the backbone of the old Tory Party) at the expense of everybody else. He is remembered as a political giant. Mr Cameron destroyed his career for the sake of party management. He would have been better to damn the consequences and defend the principle of representative government against the Brexit right. Slickness because he structured the referendum so badly. A glance at other countries, not least Canada, might have suggested that, if you are going to use this dubious mechanism, you should at least take the precaution of hedging it with super-majorities and two-stage votes. Yet people might not have been so keen to vote against the establishment if they hadn’t had their faith in government destroyed by the Iraq debacle. Blair sowed and Cameron reaped.
The second is that political life in the broadest sense is increasingly driven by the quest for a sense of community and belonging: by a sense that globalisation and technology has atomised society and that we need to recreate a sense of belonging if we’re not to fall apart completely. One of the most striking changes in Britain during my Rip Van Winkle years is that it has become, like America, a land of flags—though in America everyone displays the same flags whereas in Britain the people of these increasingly fractious isles display the Saltire in Scotland, the dragon in Wales and the Cross of St George in England. The appearance of the Cross of St George is particularly striking. I don’t recall seeing it at all before I moved to America in 1993. Now even my local village church flies the English flag.
This sense of lost community is particularly sharp among Leavers. Many Leavers felt that they had lost something more important than material living standards in the era of globalisation: they had lost a sense of belonging and self-respect. Even when it worked, the Blair-Cameron formula—compensate the losers from the taxes of the winners—created simmering discontent in the provinces. People who had once made things didn’t like being treated as wards of the state. When the formula faltered with the global economic crisis, resentment turned into contempt for the political establishment.
It is not clear what this means in terms of policies. Britain hasn’t seen much interesting thinking on this subject since Michael Young’s Institute of Community Studies in the 1950s and 1960s. This is partly because “community” is such a woolly term and partly because the great ideological currents of recent decades have been about dismantling community. The permissive society enthusiastically dismantled old-fashioned prohibitions. Thatcherism cheerfully dismantled mining communities in the name of economic efficiency. Messrs Blair and Cameron fused social liberalism and economic liberalism together and then added managerialism to the mixture; organisations such as the Audit Commission applied the green eyeshade to the various instruments of the welfare state in a way that would have made Mr Gradgrind proud.
Dealing with this quest for community will require a profound recalibration of public policy: much less Audit Commission and much more Institute of Community Studies. Politicians need to think about self-respect as well as value-for-money. The BBC needs to cease being a monopoly of the metropolitan elite and anchored more in the provinces. Power needs to be transferred to local mayors and local communities. Handled properly, the quest for community can revive a provincial Britain that had been drained of purpose and pride. Handled badly, it will further entrench the politics of resentment and cultural despair.
Which brings us to Brexit.
1642 all over again
I think that Brexit was the worst political mistake since Suez. Britain’s choice in the referendum was a tragic one rather than an easy one: there are plenty of things wrong with the EU, from the euro to the notion that Europe is an embryonic state rather than a trading arrangement. But we made the wrong choice: engaging in an acrimonious divorce from your biggest trading partners is bound to be messy. The opportunity cost of devoting years of British politics to divorce proceedings rather than addressing, say, productivity or poverty, will be huge. The irony is that being a semi-detached member of a poorly-conceived union wasn’t such a bad deal, certainly compared with being a fully detached neighbour of the same union; the commonly voiced argument on the Thatcherite right, that Britain’s EU membership prevented it from exploiting global opportunities, was stuff and nonsense. At the heart of Germany’s newly-mighty economy sit Mittelstand companies that serve highly specialised global markets.
The EU referendum did nevertheless illuminate British politics like nothing else: it revealed a country far more divided along regional and class lines and far more disillusioned with the establishment than almost anybody had realised. Offered a chance to vote about Brussels, many British people took the opportunity to vote about London. Told that voting “out” would ruin the economy they replied that, as far as they were concerned, the economy was already ruined. The “out” vote was not really proof that “the deplorables” believed claims about an extra £350m a week for the National Health Service. It was proof that, after the global financial crisis, they no longer believed what the Treasury and the Chancellor of the Exchequer were saying.
One popular view of what went on with the referendum sees a struggle between “globalists” (people who want to build bridges) and “localists” (people who want to build walls). There is obviously some truth in this. There is also a good deal of self-flattery posing as analysis. There are plenty of free-traders in the Leave camp. These are the heirs of Cobden and Bright who see the EU as the Corn Laws writ large and the open sea as Britain’s natural metier. And the EU was profoundly shaped by Europe-first protectionism (even if it was reshaped by Anglo-Saxon economics in more recent years). By its nature the EU regards unskilled workers from Poland as more desirable citizens than brain surgeons from Nigeria. Many self-styled cosmopolitans are just as tribal as their nativist opponents. They only mix with their own kind and spend more time in New York than old York.
For my money the best analysis of what happened was inadvertently penned by Hugh Trevor-Roper in his 1967 essay on “The Crisis of the 17th Century”. Trevor-Roper argued that the mid-17th century saw a succession of revolts, right across Europe, of the “country” against the “court”. The court had become ever more bloated and self-satisfied over the decades. They existed on tributes extracted from the country but treated the country as collection of bigots and backwoodsmen. Many members of Europe’s court society had more to do with each other than they did with their benighted fellow-countrymen. The English civil war, which resulted in the beheading of a king and the establishment of a Republic, was the most extreme instance of a Europe-wide breakdown.
The parallels between the civil war and the referendum hold true of everything from geography to rhetoric. The Cavaliers control the cities. The Roundheads control the countryside. The Cavaliers boast of their superior civilisation. The Roundheads complain about blood-suckers. Trevor-Roper described the Civil War as a “revolt of the provinces not only against the growing, parasitic Stuart Court, but also against the growing ‘dropsical’ City of London; against the centralised Church, whether “Anglican’ or ‘Presbyterian’; and against the expensive monopoly of higher education by the two great universities”. Substitute the corporate oligarchy for the monarchy and the BBC for the Church and you have a reasonable description of the revolt of the Leavers. Trevor-Roper rightly concedes that, had the courts been capable of reforming themselves and moderating their arrogance and appetites, a great deal of needless bloodshed would have been avoided, and the path from the Renaissance to the Enlightenment would have been a lot easier.
The mid-17th century saw a huge amount of history compressed into a short period, so much that it has obsessed great historians like Trevor-Roper ever since. The same thing is happening in Britain at the moment. The next few weeks will see a lot of silly name-calling. It will see a lot of exciting political manoeuvrings. Political campaigns are blood sports not philosophical debates. But there are also huge issues that will dominate the coming years: can Britain negotiate a deal with Europe that preserves the advantages of globalisation while protecting people who worry about too much disruption? Can it address the longing for community without giving way to people who think that you can’t have “ins” without also having “outs”; can Britain renew its political institutions without giving in to McKinseyism or political correctness? And can Britain address the problem of low productivity which is poisoning our politics and turning political life into a struggle of each against each?
