Stumbling and Mumbling

Author: chris dillow   |   Latest post: Fri, 20 Apr 2018, 01:48 PM


The Tories' structural problem

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Martin O'Neill says the Tories have forgotten to offer voters anything other than austerity. For me, this poses a question. Is the Tories' disarray simply because of the profound mediocrity of its personnel - a malaise so great there's talk of them having to recruit their next leader from the 19th century? Or is there instead a structural problem?

To see my point, let's think in terms of a paradigm proposed by James O'Connor in The Fiscal Crisis of the State. The state in capitalist society, he argued, must fulfill two functions: legitimation, or keeping the people happy; and accumulation, promoting profits growth. Successful political parties will achieve both, albeit perhaps to different degrees.

Sometimes, these two functions go together. For example, post-war social democracy did both, until the 1970s. Sometimes, they conflict. Thatcherism, for example, was about increasing profits by bashing the working class - which was good (temporarily) for accumulation but less so for legitimation. Brexit is an example of them conflicting; it's OK for legitimation as it gives voters what they want, but it's bad for accumulation.

We now have a problem of legitimation. Voters are only lukewarm about the merits of capitalism, and workers of most ages voted Labour. People are "increasingly fed up of a dog-eat-dog society in which they see reward and opportunity cluster around the already privileged" says Phil. And Jonn writes:

Today's kids, after all, are facing a world in which wages have been flat for a decade, jobs are increasingly insecure, and home ownership is basically off the table. Most of their parents may not have had university educations - but they did have access to decent jobs and secure housing and at least some sense that if they worked hard they could have nice things.

That link between effort and reward has been broken for some time - yet successive governments have ignored the fact.

In this sense, Simon is right - neoliberalism has over-reached itself. The rich have forgotten that successful parasites must not make their host too ill.

But there's also an accumulation crisis. Productivity has flatlined for ten years: it's this that underpins the discontent identified by Jonn. And for years capitalists haven't been investing their retained profits.

Labour is offering reasonable answers to these twin problems. Ending austerity would raise growth. Socialized investment (via a National Investment Bank and infrastructure spending) would raise capital spending, and perhaps the spread of worker coops would raise productivity.

But what's the Tories' answer? Ms May, to her credit, identified the legitimation crisis in her "burning injustices" speech on becoming Prime Minister. But as Eddie Mair helpfully pointed out, the Tories have ditched plans to address them.

And whilst many Tories see a case for lessening austerity, they do so from the point of view of legitimation rather than accumulation. They cannot argue that less austerity would raise growth, because to do so would be to admit that the last seven years have been counter-productive.

Nor have they any other answers to the accumulation problem. A big reason why they have for years blamed poor economic performance upon immigrants, big government or the EU is that they cannot see that capitalism itself might be at fault. Which is why I suspect the Tories' weakness might be more profound than the perhaps temporary one of inadequate leaders. They are, at least for now, constitutionally unable to see that our problems stem in large part from dysfunctional capitalism.

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