The slogan ‘For the Many not the Few” looked for a while as if it was a winning popular campaigning position. But in the end its resonance has been shallow and Labour positioning of itself as fighting for the masses against the rich and powerful has turned out to be a losing position. In a society with such stark inequality and where the rich just keep getting richer while ever more homeless sleep rough in our streets why doesn’t this sort of positioning work as well as many of the Left expect it should? Part of the problem is that underlying a lot of Left thinking is strong belief that in advanced capitalist economies the fundamental divide is between capital and labour, and it is this divide around which politics pivots.
The idea that the fundamental dynamic driving politics in the advanced capitalist democracies (ACDs) is the conflict between capital and labour is very persistent on the Left. In fact the persistent success of the ACDs (as both long term stable democracies and successful capitalist economies) is built on the alignment of interests between the capitalist economy and large sectors of skilled workforce in the most advanced sectors of the economy, as well as the aspirational voters who seek to join the skilled workforce. Large blocks of the workforce have a great deal invested in the success of the capitalist economy, they don’t want to overthrow the system, they don’t feel in perpetual opposition to capital, they want the capitalist economy to thrive so they can thrive.
Crucially governments pursue policies supporting advanced capitalism in the nation-state because the electorate, or at least the decisive voters, punish governments which don’t. They do so because a large number of voters see themselves as benefiting from advanced capitalism, whether directly as employees or as aspirational voters: thus they take the opposite position to the standard view of Leftist political economy, that the interests of workers are always opposed to those of capitalists, in fact for large blocks of workers their interests coincide with that of the needs of the capitalist economy. Within advanced capitalist democracies, political parties and their leaders need to build up reputations among decisive voters as effective economic managers to be electable: that is to say, they need to build up a reputation for maintaining and, where necessary, changing the product and labor market rules, and the public infrastructural investments (education, skills, research, universities, utility networks, etc) necessary for successful innovation-oriented capitalism to thrive. We can think of these as electable parties. An important question is what ensures a majority, or decisive vote, for these policies and parties. Who are the decisive voters?
First, there is a large vote from employees in the advanced enterprises and sectors. Advanced capitalism has required since the second (or scientific) industrial revolution, from the last third of the nineteenth century, a large skilled and educated labor force, organically attached too, and colocated with the technology of the enterprise. It is often wrongly thought that the knowledge of the company is a technology which can be codified and patented; but technology is almost always umbilically connected with the tacit skills of the workforce. The level of skills and education is relative to the prevailing technology, but management in the advanced sectors has always had to secure the cooperation and motivation of the labor force, because of the significant costs of hiring, firing, retraining, and integrating new workers into complex production systems all of which disrupts the smooth flow of production and value creation. This is as true of semiskilled workers under Fordism as of contemporary software engineers. Fordist workers could easily stop the line, and replacing them involved both strikes and significant retraining costs, especially if training new workers required the tacit cooperation of existing semiskilled workers. In the modern high value added knowledge economy assembling and retaining teams of highly educated workers with very finely nuanced skill sets is absolutely key to enterprise success. Thus we can think of this skilled workforce as gaining rent from advanced capitalism above the competitive market value of their skills. In one form or another this aligns the interests of the skilled worker with advanced capitalism. Because advanced capitalism is skill-intensive, this electorate is very large. Second, the aspirational vote has a particular relevance in relation to advanced capitalism, where growth in the demand for skilled and educated labor is a core byproduct of advanced capitalism as a result of technological change. Hence, while aspirational individuals, parents, and families have always existed to some extent, it is particularly associated with advanced capitalism. Even if parents may not themselves be skilled they can aspire to their children becoming skilled, which is equivalent to upward intergenerational mobility. Thus the aspirational voter has interests aligned with the success of advanced capitalism. This analytic approach explains why advanced capitalism must grow, since growth is needed to provide the new jobs for aspirational voters and/or their children. It also explains why the financial crash, Great Recession and prolonged period of slow growth was such a political shock, because it dislocated and blocked aspirational pathways.
When some families are blocked from experiencing upward mobility they tend to react politically against the system, which is the root cause of modern populism. The transition to the modern knowledge economy and the decline of the Fordist economy has produced blockages, generated new tensions between sectors of the population and created the terrain for new populist political movements. These new populist movements are not yet a serious threat to the democratic system not least because those benefiting from the knowledge economy have an obvious incentive to make sure that a solid majority will continue to feel included in, and benefit from, the knowledge economy in the future. However the necessary level of inclusiveness needs to be politically articulated by political parties and leaders, and the generation of political support for inclusion need not come just from the Left, it can equally come from the Right (the Law and Justice party in Poland is a good example).
Crucially the necessary degree of inclusiveness required to stabilise the democratic system does not preclude the the abandonment of significant fraction of the population. There are huge political and social challenges that result from creating a potentially large left-behind minority who feel alienated from society and democratic institutions. Even if populist parties will never attain majority status, populist appeals could prove a destabilising force in democracy (as they arguably have in the United States and in Britain), and the social costs of large minorities losing hope in the future and turning to drugs or crime as a consequence are very great. This is a serious problem for democracy, even if it is not a serious threat to democracy (or advanced capitalism, or the nation-state).
So if the decisive block of voters want governments which are competent in managing the capitalist economy how does that work in practice in the UK? If you look at the broad pattern of politics in recent decades you can see a pattern emerge which is that a governing party can lose its reputation for economic competence through some sort of crisis or catastrophic event, is ejected from office, and once the competence reputation is lost it is very hard to regain it. Usually the reputation for competence only really shifts back to the opposition when the incumbent governing party itself goes through a crisis of competence. So one, very broad brush, way to look at recent British political history is as a process of key moments when political parties lost competence reputation and were then punished by long periods in opposition and only returned to power when the incumbent party suffered it’s own crisis of competence. So by the end of the 1970s Labour had lost its reputation for competence and the Tories won. It took until Black Wednesday on the 16th September 1992, when the British government was forced to withdraw the pound sterling from the European Exchange Rate Mechanism under conditions of stupendous chaos, for the Tories to lose their reputation for economic competence. Labour won the next election and maintained a reputation for competence in power until the great financial crash in 2008, Labour lost the next election. It is arguable that Labour politically mismanaged the financial crisis and its aftermath by not resolutely blaming and punishing the bankers, and by Ed Milliband trying to distance himself from New Labour by refusing to defend its reputation, but that’s all water under the bridge. The fact is that Labour came out of the financial crash with it reputation for competence in tatters. The Tories have not yet suffered an economic crisis that has damaged their reputation for economic competence (a hard Brexit might damage them but that seems less likely now Johnson has such a large majority) and it is clear that a lot of voters simply did not trust Labour’s ability to deliver it’s ambitious program without damaging the economy. Regaining a reputation for economic competence is going to be very hard for Labour especially if it doubles down on proposing it can implement a transformative radical economic program while the Tories manage to avoid an economic crisis, a situation where Labour could look like the reckless party and a dangerous option for those who want above all stability and prosperity.
Quite a lot of thinking in this article was informed by “Democracy and Prosperity: The Reinvention of Capitalism in a Turbulent Century” by Iversen and Soskice
