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The decline of the ‘state effect’

Published by Anonymous (not verified) on Mon, 21/12/2020 - 10:37pm in

In the space of four years, the institutions of British liberalism suffered a triple-whammy which may ultimately turn out to be fatal. The 2016 referendum was a full-on assault on the democratic credentials and constitutional pre-eminence of parliament. The resulting wreckage produced the conditions for the Johnson leadership, that would have been scarcely thinkable under any different circumstances. Then, almost as if the Gods wished to teach Britain some brutal lesson about the consequences of sacrificing competence for entertainment, a pandemic arrived.

To grasp how much has changed in this short historical window, consider it as follows. A core driver of that 2016 rupture was a profound, and in many ways understandable, alienation from the democratic and bureaucratic institutions that make up the British state, though this was cynically reframed by the right-wing press and prominent Brexiteers as a cultural failing of specific ‘elites’. Either way, it is now clear (and should have been much earlier) that large swathes of British, and especially English, society felt unrepresented and lied to.

A little over four years later, however, and the problem is quite different. A mentality of suspicion and disillusionment, that once would have been witnessed amongst those furthest from power, is now being expressed by the ‘liberal elites’ themselves. The worry that the ‘official’ version of events conceals something else altogether is no longer the preserve of the disenfranchised or the conspiracy theorist, but is spreading amongst those in positions of influence and cultural privilege. The infamous tweet that appeared briefly on the official civil service account in May, asking “can you imagine working with these truth twisters?” spoke of how the crisis of credibility was now internal to the machinery of government, rather than external.

Permanent Secretaries have departed their posts, as it becomes clear that their political independence is no longer accepted. City Mayors and MPs have been aghast to discover that lockdown plans for the regions they represent are disseminated anonymously to journalists, before being discussed with political representatives. Anecdotally, I’ve been struck by how many people – who would never entertain typical conspiracy theories – refuse to download the NHS COVID-19 app, on the basis that it isn’t all that it seems. The way the NHS brand is being instrumentalised (a tactic that Vote Leave pioneered with impunity) is indicative of how people’s trust and solidarity is being used against them. This isn’t a process that can be simply reversed.

For the many people, on both the left and the right, who never felt duped by the integrity of liberalism in the first place, these developments might appear like a healthy disillusionment. What, after all, are people really trusting when they place trust in ‘the state’? The pandemic has cast a fresh and unforgiving light on Britain’s vast and lucrative out-sourcing industry, but the reach of Serco et al is far from new. It was back in the early 1990s that many social scientists proposed that ‘the state’ was merely a metaphor or effect, that concealed a web of interlocking contracts and providers. One of the leading scholars in this regard was political scientist Rod Rhodes, author of a 1996 paper with the prescient subtitle, “governing without government”.

Be that as it may, the mass confidence that there is such a thing as a ‘nation state’, with generally recognised legitimacy, is a powerful illusion that allows us to be governed as we do. Antonio Gramsci’s notion of ‘hegemony’ implies that the modern state will seek to govern via consent as much as possible, which is established with the aid of the media, civil society and a socially acceptable form of economic regulation. What we’re witnessing in Britain today is the disintegration of ‘the state’ as we previously imagined it (not least, in a geographic sense, as policies splinter region by region) and a crumbling of the conditions of any possible hegemony. For better or worse (and many of us fear the latter), this will alter how power works.

How has the Brexit, Boris, Covid triple-whammy combined to achieve this? When Rhodes and others were analysing decentralised networks of ‘governance’ in the 1990s, this coincided with the surge of public sector marketization that was built on the foundations laid by Margaret Thatcher. PFI, outsourcing and targets permeated the public sector with a logic of efficiency and return on investment. The ideology known as ‘neoliberalism’ sees politics (its rhetoric, modes of judgement, rituals and so on) ousted by economics. But in its ecstatic refusal of any economic rationality, Brexit punctured the credibility of this programme.

With the addition of the Johnson-Cummings leadership, government is now just as reliant on the private sector as it ever was, only now without that veneer of economic rationality or justification. It is almost as if, following thirty years of rampant de-politicisation of public service delivery, we are now seeing a sudden jolt of re-politicisation, but with the requisite politics being fidelity to Brexit and Downing Street. As the neoliberal mantra of ‘transparency’ (typically meaning value for money assessments) collapses, we increasingly fall back on our own personal suspicions, especially those of us who are paying close attention.

Then take the extraordinary political challenge presented by the coronavirus itself, which is one vast collective action problem. Nation states can be understood as solutions to such problems, to the extent that they achieve peace within their borders and mobilise people en masse towards war. To the great surprise of many behaviorists advising the government, this residual power of state enforcement and national mobilisation was witnessed over the spring, as people dutifully put their lives on hold for weeks on end. The state ‘effect’ had one last hurrah.

But as details have emerged regarding individual restrictions and policy measures, suspicions have flourished. Where exactly is the evidence for why certain parts of the country are suffering stricter rules than others? What does it mean, that certain cultural pass-times or venues are rescued, while others are abandoned or forced to close? What has been the public benefit of all the money thrown at Nightingale Hospitals, PPE and ventilator contracts and data analysis? Johnson is left making half-hearted appeals to a spirit of national solidarity, while being one of the major reasons collective action is breaking down.

Unable to govern via consent, Johnson will inevitably become more reliant on force and secretive decision-making instead. But perhaps the biggest factor in that relates back to Johnson’s lifelong weakness: the lure of tomorrow’s newspaper headline. The thread running through this generalised crisis of trust is a political coterie that believes all problems can be solved by storytelling and distraction, regardless of consistency. Rather than using the media to manufacture consent (as the title of the famous Edward Herman and Noam Chomsky book had it), Johnson uses it to manufacture confusion – an effective way of getting through the day, but a disastrous way of getting through the winter.

Thatcherism has long been accused of weakening the bonds of society through shrinking the state. Johnsonism could produced further fragmentation, but via different means. It’s not the size of the state that is shrinking (certainly not as a proportion of GDP), but its integrity and credibility in the eyes of the public. And a state that no longer appears like a single unified entity, but rather a set of private contractors, anonymous briefings and political strategies, is no longer an effective modern state at all.

Originally drafted 16th October 2020

The post The decline of the ‘state effect’ appeared first on Political Economy Research Centre.

What was Corbynism?

Published by Anonymous (not verified) on Thu, 26/11/2020 - 2:47am in

Much has been written about the accidents of Jeremy Corbyn’s astonishing rise to the the Labour leadership in the summer of 2015 (Ed Miliband’s reforms to the party’s leadership election rules, the famous last-second nomination that got him onto the ballot), but perhaps less about the social forces that actively enabled it and explain it. Corbyn was announced as the winner of the leadership ballot in September of that year, taking nearly 60% of the vote, and seeing off three established Labour politicians in Andy Burnham, Yvette Cooper and Liz Kendall. More than five years on, and nearly a year since Labour’s disastrous election performance spelled the end of Corbyn’s leadership, it’s now possible (and arguably desirable) to speak of Corbynism in the past tense, notwithstanding the ongoing rows surrounding Corbyn’s own position vis a vis the Labour Party and the EHRC report on anti-semitism.

Fiscal genesis

Labour had lost the 2015 election somewhat unexpectedly, with most polls suggesting a hung parliament. The central dilemma that the party had found itself in over the previous five years was over its fiscal policy, with Neo-Keynesians led by Ed Balls arguing (correctly) in favour of additional stimulus to arrest what turned out to be one of the longest economic slumps on record, but Miliband and others sensing (also correctly) that this was a political trap laid for them by George Osborne, who relished every opportunity to present the economic crisis as the consequence of Labour’s earlier spending and borrowing. Labour were damned if they did, and damned if they didn’t, and in the end Osborne’s cynicism won the day, resulting in a Tory majority.

The most significant catalyst for Corbynism was the introduction in July 2015 of a welfare bill, that proposed limiting tax credits to just two children. The timing of this bill was opportunistic, seeking to exploit Labour’s already crushed morale, and unsettle its leadership contest. The interim Leader, Harriet Harman, announced that Labour would “show it was listening” by not voting against the bill. Accepting Osborne’s framing of the previous five years, she said that “We cannot simply say to the public you were wrong at the election”. Corbyn, crucially, was the only one of the four leadership contenders who broke the whip to vote against the bill, and within two months was Leader of the Opposition.

It had become traditional for Labour to welcome a figure from the hard left of the party on to its leadership ballots, to broaden the debate. Diane Abbott had stood in 2010. John McDonnell might have stood in 2015, but suggested Corbyn instead. In that sense, Corbyn might be viewed as just another representative of the Bennite wing of the Parliamentary Labour Party. But this is to obscure what was so distinctive about Corbyn as a figure, and to misunderstand both his timeliness and eventual failure as a leader. Corbyn was primarily an anti-War activist, whose central vocation was towards the moral denunciation of Western foreign policies, especially in the Middle East. What was distinctive about Corbynism as a phenomenon was how this political mission was wedded to a widespread sense of public fury with the social consequences of George Osborne’s fiscal policy. In sum, Corbynism was a temporary and surprisingly potent alliance between anti-imperialism and anti-austerity.

Punitive neoliberalism

There has been far, far too much psychological discussion and speculation regarding the moral character and prejudices of Jeremy Corbyn as a person. And yet on one particular matter, his supporters and foes seem to be agreed: he is energised by taking principled opposition to things, but shies away from inter-personal conflict. To put that another way, he is a devoted activist and moralist, but a poor political leader and strategist. He is quick to declare that policies and actions are ‘wrong’, but reluctant to impose his will upon others. It is scarcely surprising that someone of this character would feel more comfortable on the back benches and at protests than in high office.

Yet it is interesting to consider why such a figure was, in many ways, peculiarly well-suited to the conditions of 2015-19. First of all, there is the obvious sense in which an ‘anti-politician’, an outsider, held appeal at a time when professional, mainstream politicians appeared to have become riddled with cynicism. Labour’s inability to defend the interests of poor families in July 2015 looked like evidence of what happened when ‘politics’ trumped basic morality, and made the case for electing a moralist as a leader instead.

But there’s a more general sense in which the time was ripe for Corbyn, which relates back to what I’ve termed the ‘punitive spirit’ of neoliberalism that emerged following 2008. The aftermath of the financial crisis witnessed a resurgent politics of guilt, in which authority derived from its capacity to mete out punishment to those who had allegedly had it too good. As Lazzarato, drawing on Nietzsche’s Genealogy of Morals, argues very well in The Making of Indebted Man, debt occasions a brutal morality of unrelenting self-flagellation, that may be unrelated to any utilitarian calculus of efficiency or progress.

So it turned out with austerity. Devastating cuts to the welfare budget and to local government (which is responsible for so much of what holds society together, via social care and children’s services) were notionally justified on a nonsensical macroeconomic pretext that they would generate growth and balanced budgets, but morally and psychologically justified on the basis that someone needed to suffer. George Osborne lost credibility in the eyes of the economics profession, but gained it in the eyes of baby-boomer middle-England, who were happy to hear that allegedly work-shy families in the inner cities and the younger, softer generation, had had it too good. Meanwhile, with all responsibility for macroeconomic stimulus pushed towards the monetary authorities, those same baby-boomers saw their house prices and pensions continue to grow, thanks to an abundance of cheap credit pushing up asset prices ever further.

The point is that, several years before an unlikely figure from the Stop The War coalition became Leader of the Opposition, austerity had already been waged as a moralistic program based around a logic of innocence, guilt and punishment, overlayed on to a financialised economy divided (as Adkins, Cooper & Konings identify) according to a logic of assets and debt. The most egregious manifestations of this were sadistic in nature: benefit sanctions, the bedroom tax and the Work Capability Assessment drove people to despair and beyond. As symptoms of the ‘punitive logic’ of neoliberalism, many of these policies were later found to produce more health problems and costs than they alleviated, just as Osborne’s attempt to eradicate the deficit by cutting public spending frequently had the opposite effect. Public sector pay-freezes contributed to both macroeconomic and psychological depression.

Osborne seized and channeled the moralism of debt-led neoliberalism with gusto, and it won him and Cameron a Parliamentary majority (which they got to enjoy for all of 13 months), but it unleashed a kind of legitimacy crisis that ultimately engulfed them. Whether expressed via Brexit (for which austerity carries not insignificant responsibility) or via Corbynism, political reactions to the new moral economy of punishment were expressed in similarly moralistic and punitive terms. As ever with rage and resentment, the targets were not always the most appropriate ones: Brussels, welfare-claimants, immigrants, universities and Israel are all potential scapegoats under these conditions. Underlying all of this is a break-down of the basic liberal compact of society (accelerated by events such as the 2011 expenses scandal), that reward is vaguely related to effort, and punishment to crime.

There was evident relief for the Left and Labour members in having a leader who was, at the very least, willing to denounce the policies that had visited such pain upon people, purely due to accidents of birth, disability and class. In many ways, the senseless violence of austerity’s sharper edges called precisely for a spokesperson who had spent decades denouncing senseless violence abroad. Osborne encouraged the zero-sum (and ultimately, with Brexit, negative-sum) conditions of British politics over the last decade, in which all parties (with the possible exception of asset-rich Remainers) come to view society as a domain of acute unfairness. British capitalism’s crisis, post-2008, could be measured in terms of slumping productivity, wage and GDP growth; but it was also an acute moral crisis, in how reward was earned (or not) and how punishment was earned (or not). This produced an overwhelming desire for this to be voiced, including amongst the young, whose rent and student debt were escalating.

Aftermath

Whether he meant to or not, Corbyn stole the political limelight in 2015 at a time when society was already being forcefully split into the guilty and the innocent. Corbyn was no more morally divisive a force than the man who sought to divide society into “strivers” and “skivers”, accusing the latter of “sleeping off a life on benefits”. What Corbyn seemed to offer his followers was a chance to draw that line differently, such that the young, the distressed and the weak were no longer deemed responsible for their own fate, meaning that culpability lay elsewhere. We now know that some sought it via terrible conspiracy theories, and that Corbyn lacked the stomach to confront this adequately.

Being more moralist than politician, Corbyn and his most loyal fans have often seemed unable to distinguish between his personal virtues (“kind”, “decent”, “principled”) and the broader consequences of his leadership. An unhelpful aspect of all this is the Christ narrative that has attached to the man himself, in which the more the press and establishment insist on his guilt, the more a section of his fanbase asserts his perfect innocence, whilst any kind of realism between the two becomes impossible. Something about the cocktail of righteousness and weakness that characterised the Corbyn leadership makes it very difficult to draw a line under.

What deserves focusing on now is not an individual backbench MP but the conditions that were already firmly in place in 2015, and have deepened ever since. Had Harman whipped Labour to vote against the welfare bill in 2015, or had McDonnell stood instead of Corbyn, things would have worked out differently, but the background constraints would have been the same. Corbyn’s mild-mannered pacifism, activism and sense of ordinary decency were certainly an especially effective vessel for expressions of deep social injustice, but those sentiments (and their causes) would have existed regardless. Labour cut through effectively as an anti-austerity party in 2017 (the year of Theresa May’s excruciating “there is no magic money tree”), but equally effectively as an anti-imperialist party in 2019, for which read ‘soft on national security’. The unlikely achievement of a pacifist leading a major political party was remarkable (as I discussed here), but ultimately was what did for him, as this account from a Momentum activist attested.

In policy terms, Corbynism offered to abandon the instruments and the decisions that had heaped stress and punishment upon those who deserved neither: tuition fees, public sector pay-freezes and benefit freezes would all be scrapped. Other instruments that caused stress to public sector workers, such as OfSted, would be abolished. In that sense, Corbyn offered a kind of mass ‘pardoning’ of all those on the receiving end of ‘punitive neoliberalism’. But despite the impressive range of economic thinkers that assembled around McDonnell, and the flowering of heterodox economic thinking on the Left during this time, it remained unclear how – if at all – the broader structural problems of rentier capitalism, asset price inflation and private sector wage stagnation could begin to be reversed, other than via a more active public sector. Ed Miliband’s slightly ill-fated 2011 dichotomy of ‘predators vs producers’ remained (and remains) the problem, and – until the furlough scheme was unveiled this year – there is still no mainstream vision of a welfare and labour market policy that provides genuine security to people, without accompanying distress. Many of the policies put forward by economists of inequality, such as Thomas Piketty and Tony Atkinson, are far more radical in terms of weakening the power of inherited wealth and targeting rent-seeking, than anything that appeared in Corbyn’s two proudly socialist manifestos. There is no reason why 2017 should be viewed as the high water-mark for the Left.

Corbynism helped politicise the economy and mobilise people accordingly, raising public consciousness of intergenerational injustices and the extent of unhappiness with the status quo. What Keir Milburn refers to as ‘Generation Left’ outlives Corbynism and continues to expand with each passing year, and the problem of acute poverty will become exacerbated by Brexit and the pandemic. The shape of British capitalism is not morally acceptable. It shouldn’t be like this, and there are more people willing to stand up and say this in mainstream public life than there were five years ago. The Conservatives have grown fearful of appearing like George Osborne, if only as a reputational problem. The question is what, if anything, is to be done next.

The post What was Corbynism? appeared first on Political Economy Research Centre.

Recoding capital: how transforming the law is vital for a green recovery

Published by Anonymous (not verified) on Tue, 22/09/2020 - 6:18pm in

Capital dominates economic co-ordination under capitalism. The deep inequalities in power and resource this monopolisation of decision-making rights generates is codified by the law. A vast social coding system, the law is therefore fundamental to our intersecting economic and environmental crises. As a unique party conference season begins amid profound uncertainty, one thing is therefore clear: securing the deep decarbonisation and democratisation of our society we urgently need will require a profound reimagining of the law.

Hitherto, debate around a green and just recovery to Covid-19 has rightly centred on the need – and historic opportunity given the ultra-low cost of public borrowing – for a transformative, debt-financed increase in public investment to stabilise and restructure the economy and drive a decade of decarbonisation. But unless this is accompanied by a similarly ambitious reordering of the UK’s legal architecture to rewire behaviours and outcomes and generate a new purpose and governing logic for the economy, then a just and green transition will inevitably – and dangerously – fall short.

Transformation will depend on challenging the dominant Anglo-American legal ideology and practice under neoliberalism: the “law and economics” school of jurisprudence. As the emerging “law and political economy” movement argues, this approach has resulted in two profound shifts that have facilitated the growth of inequality and accelerating climate damage in recent decades.

First, the legal treatment of “the economy” has increasingly centred narrow definitions of ‘competition’ and ‘efficiency’ as guiding legal principles, limiting the scope for democratic participation, co-operation, and the public good to regulate economic activity. Second, in more “political” domains, the capacity of formal political institutions to contest and reorder economic power has been progressively neutered, the operation of the economy increasingly insulated from democratic intervention. The neoliberal turn in the law and legal institutions has in turn been fundamental to neoliberalism’s ‘disenchantment of politics by economics’, shielding the ‘market’ and market-mediated inequalities from political reconstruction, privileging capital’s right to coordinate economic activity, and defining and policing the boundaries of what is deemed public and private spheres.

The result: law codes capital and stacks bargaining power in favour of employers, managers, and asset-owners against labour, creating and consolidating structural inequality and stark asymmetries in economic power. Our inequality crisis is inseparable from how the law structures the economy. And it decisively defines the terms of our encounter with the environment, enabling and rewarding behaviours that are driving the accelerating nature and climate emergency. Law also ensures that younger generations, marginalised economic and social communities, and vulnerable nations, which are and will continue to suffer the worst consequences of climate damage despite being least responsible, have no representation in economic management that is driving breakdown, while protecting those whose actions are accelerating the crisis. The UK’s legal framework defines who has voice and agency in shaping the speed and nature of decarbonisation, in the UK and beyond, as well as who bears the costs and reaps the benefits, both socially and environmentally. As Jedediah Britton-Purdy explains, then, the law does not just manage a pre-existing and untouched nature, but is itself a mechanism for active world-making.

The way in which existing legal infrastructures drive the interlinked inequality and climate crisis is arguably most clear in the operation of the firm. As Gareth Dale points out, ‘the relentless increase in global resource throughput and environmental despoliation is not principally the result of states aspiring to a metric – higher GDP – but of industrial and financial firms, driven by market competition to expand turnover, develop new products, and increase profits and interest.’ The dominant model of the firm – organised to maximise shareholder wealth, with coordination rights held exclusively by capital and management – limits workplace democracy, generates steep inequality, and in aggregate drives the economy to operate beyond environmental limits.

This is not a ‘natural’ or inevitable outcome but instead legally and politically constructed. As Sanjukta Paul argues, the public through the law already allocates economic coordination rights in notionally wholly private spheres such as the firm – but does so in ways that currently work against the possibility of democratising production and provision through forms of economic democracy. We can reimagine this. But currently company law generates and sustains unequal distributions of political-economic power and erodes the capacity of democratic power to order our common life in ways that support mutual flourishing.

Any effort to restructure our economy toward justice and sustainability must then have a plan for legally reimagining the firm: how it is governed, how it operates, in whose interest, and for what purpose.

Common Wealth’s proposed Green Recovery Act 2020 offers a blueprint for such a transformation – an intervention that seeks to rapidly decarbonise economic activity, democratise economic decision-making, and fairly wind down the fossil fuel industry for workers and frontline communities while simultaneously scaling up a post-carbon economy of shared prosperity. The Green Recovery Act requires change as fast as technologically practicable, not distant target dates, and does so by rewiring the law to effect change.

The Green Recovery Act reflects a key insight: neither the firm nor the economy is a fixed, ‘natural’ institution, but instead is constituted by politics and law, where rights and powers are publicly granted, legally defined, and capable of being transformed. The market is not a space of private contract and property that precedes social action, but rather one made possible by public power, both a product of and subject to democratic intervention and reordering. There is not one inevitable ‘market’, but many market possibilities, depending on how the rules are defined and the resources with which participants are endowed. These can be redefined and reallocated to hardwire sustainability and shared prosperity into the economy, democratising governance rights and decarbonising economic activity.

In contrast to the concentration of coordination rights among property-holders, a deep legal turn must disperse and democratise economic control and association both within and beyond the firm. Against the naturalisation of inequality and unequal power, the law should open up the space for democratic ordering of and participation in economic and social life, including through the progressive extension of decommodified forms of ownership and provision. And instead of enabling activity that is driving us deeper into crisis, it must approach environmental law as a means to securing the conditions we all need to thrive, treating ecological and social functions and needs not as external to the economy, but central to its operation and purpose.

Law, of course, has an ideological character of its own, one that often has ingrained biases toward an existing and unequal status quo. This can preclude its progressive repurposing, placing limits on how far it can recodify and construct a democratic and sustainable economy. But if the Covid-19 crisis, like so many crises before it, has underscored the inseparability of economics from politics and the deep plasticity of our institutions, our response must be to transform the economic rules to reflect this in ways that build a more equitable commonwealth. Such a transformation will require more than a step-change in public investment, vital and affordable as that is; we also need a reimagining of the law. In place of supporting extractive economic institutions, the law should nurture a new economy: one that is purposeful, sustainable, and democratically governed, where all its stakeholders have a stake and a say in the wealth we create in common, infusing rights and collective rule into relations previously defined by unequal power and subordination. As the Covid-19 crisis deepens, securing a recovery rooted in the deep democratisation and decarbonisation of society will require a transformative reimagining of the law.

Mathew Lawrence is founder and director of Common Wealth, a think tank that works on ownership for a democratic and sustainable economy.

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