Stumbling and Mumbling

Author: chris dillow   |   Latest post: Thu, 10 Jun 2021, 2:45 PM


The economic base of culture wars

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The long boom of the post-war period gave us trades union militancy, "women's lib", the Black Panthers, the gay rights movement and the legalization of abortion and homosexuality. Our recent stagnation has given us Trump and Brexit - and of course the economic crisis of the 1930s yielded much worse.

Which is another way of saying what Ben Friedman wrote in The Moral Consequences of Economic Growth - that economic growth gives us liberalism and demands for equality whilst stagnation and regress give us political reaction.

This, I fear, helps explain something that is otherwise odd - that the Tory party has pretty much renounced economics. As Stian Westlake has said, "the Tories, both in government and more generally, seem to have stopped talking and thinking about economics." Evidence for this is of course abundant. We see it in reports that Sunak is worried about government debt despite the fact that the Bank of England is buying it and gilt yields are negative; in the failure to address the fact that job creation has plummeted; in Johnson's "fuck business" remark; and in the reckless pursuit of Brexit.

The traditional party of capital no longer has much interest in capitalism - and indeed, as David Edgerton has said, has lost its links with much of capital.

This, however, is a feature not a bug. If economic stagnation promotes populism and reaction - and history shows that it does - then a lack of growth actually serves Tory interests, because it will further bolster social conservatism. In politics, failure can sometimes work better than success. There can be positive feedback loops.

For this to work, though, requires that the culture war shifts onto fronts beyond Brexit. Hence concocted rows about the last night of the proms or the teaching of critical race theory.

This is not to say that the Tories are smart enough to be deliberately pursuing this strategy. Politics is sometimes like natural selection in biology, where the environment selects in favour of some random unintended mutations. The Tories' lack of interest in economics is one such selected-for mutation. Suntzu

Nor is it to deny that some sections of capital do benefit from stagnation. Those with close connections to government profit from outsourcing and from political favours. And the low interest rates that are the product of stagnation enrich rentiers (pdf). The more progressive sections of capital, however suffer - such as exporters who'll be clobbered by red tape or innovators who are hindered by weak demand and an unavailability of finance (cheap money needn't mean plentiful credit). Stagnation favours those who'd otherwise suffer from creative destruction and hurts those who'd otherwise gain.

It is silly to pretend that Brexit is the result of a few disaster capitalists seeking to profit from hardship. It is the case, however, that such hardship can benefit social conservatives, spivs and rentiers.

All this is a way of saying that the left must be in favour of economic growth - albeit as green as possible. The great thing about growth isn't that it makes us richer so much as that it promotes tolerance and egalitarianism. (Using "economicky words" also promotes an image of serious technocracy, and there might be a gap in the political marketplace for this.)

This is not a left-right matter. Yes, the left might rightly point to the need for expansionary fiscal policy, a national investment bank, more worker ownership or community wealth-building. But the right might say it's a case for Labour being pro-business. And they'd have a point. New Labour made the mistake of equating being pro-business with being pro-boss. But this needn't be the case. Being pro-business entails helping small business get access to finance, and shifting the tax base from profits to land.

All this, though, means something else. And it's something I'm not comfortable saying. It means the left must be very wary of getting involved in culture wars. Of course, it is morally right to assert the case for equal rights for minorities and women (BLM and MeToo are not just leftist causes but libertarian ones) and we must resist the historic tendency of many white male leftists to prioritise economic issues over others. But such fights are ones the Tories want, so the left must pick them carefully. We must heed the advice of Sun Tzu. "He will win who knows when to fight and when not to fight" he said. "Do not swallow bait offered by the enemy." Sometimes, there's a distinction between what is morally right and what is tactically right.

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