Deluded centrists

The Labour right seem to think the financial crisis is irrelevant. This is the inference we might draw from Chris Leslie’s pamphlet, Centre Ground (pdf). 

Pretty much the only reference he makes to the crisis is the claim that it “fuelled cynicism about government and politicians”. Nowhere doe he even acknowledge the possibility that the crisis might undermine New Labour’s thinking about the relationship between the state and capitalism. The crisis – and the subsequent decade-long stagnation in real wages and productivity – shows for me that a stable policy framework is not sufficient for economic stability or growth; that economic growth might need greater state intervention than New Labour offered; that severe recessions can originate not merely from bad economic policy or macroeconomic shocks but from the failure (pdf) of key firms; and that the vast incomes and power of a tiny minority are not benign. In other words, social democrats need to rethink. The great virtue of Corbyn and McDonnell is that they see this.

Leslie, however, does not.  Instead, he seems stuck in a 1990s mindset. This, for example, could have been said by Tony Blair in 1997:

It is the precipitous rate of technological development and globalisation that have churned the nature of employment and production, from what were rates of transformation that once occurred inter-generationally to now intra-generational change.

But this doesn’t seem to be true. Job-to-job flows are lower than they were before the crisis, suggesting that there’s less churn than there used to be. And of course stagnant productivity suggests the rate of technological development is much less than precipitous. The challenge for policy-makers is not to deal with the fall-out from economic dynamism, but to restart that dynamism.

This blindspot to the changed nature of capitalism is not an idiosyncrasy of Leslie’s. Only a few weeks ago Ian Austin complained that Corbyn has taken Labour out of the mainstream without even mentioning the crisis, and without even considering the possibility that a changed capitalism requires a changed Labour party.

Herein, though, lies a delightful irony. Although he’s oblivious to the nature of post-crisis capitalism, Leslie claims that the centre ground “is grounded in the real world as it is today” and is “focusing on 21st century challenges – not 20th century nostalgia.” One of the “core values” of centrism, he says, is “evidence not ideology.”

The cognitive dissonance here is astounding.

What does this tell us? It might be corroboration of Karl Pahlman’s point, that politicians who claim to be evidence-based in fact have a “hierarchy of knowledge” and evidence that capitalism is dysfunctional comes well down this hierarchy. He writes (pdf):

Not all evidence in the policy process is equal…The types of evidence that are used and valued in the process represent important power dynamics in policymaking…Often, they support the dominant and prevailing ways of thinking about the world, rarely challenging the distribution of power.

I suspect, though, that there’s something else. Leslie is playing a common self-serving trick among centrists – of pretending that they are moderate, rational and evidence-based whilst their opponents (on both sides) are unreasonable ideologues. As Leslie says, centrists are “choosing an evidence-based rather than ideologically-driven approach to the world.”

This, of course, is a fiction. What you believe and how you believe it are two different things. As I’ve said, extremism and fanaticism are distinct: you can be a fanatical centrist and (albeit less commonly I fear) a reasonable, sceptical extremist. Centrism is an ideology just like any other. Perhaps if centrists were to realize this they might acquire the self-awareness that is a necessary starting point for engaging intelligently with both Corbynism and capitalism.

Comments

[TickyW]

Leslie is a PITA

[Francesco]

Dear Chris,

Old reader but first-time commenter here.

Your posts are as engaging as usual. But I can't shake a thought when you ask for more state intervention.

I come from a country, Italy, where wages and production have been stagnating for long before the crisis; the state intervention in Italy has always been quite strong: the problem lies that Italy (much like Greece) was based on a weak social pact: tax evasion was (is) tolerated for those who could do it, taxes were (are) extremely high for those who pay them and whatever expense the state needed could (can't anymore!) have been covered in deficit (even around 10% in the late 80s). This deficit went to cover current expenses instead of investments.

What's impressive is to see the debt/gdp skyrocketing in the 80s: from 40% to 60% between 1960 to 1980, and from 60% to 120% in the following twenty years. One has to wonder where all that money went.

While Italy is a country with probably unique problems in Europe (I'm thinking to the diffusion of criminal organisations), I need to ask what do you think is necessary to ensure, as far as possible, that the state intervention goes to productive investments and not wasted who knows where.

[Luis Enrique]

some of the 'changed nature of capitalism' stuff that's going on - rising market power, lower rates of firm entry, digital giants etc. - seems to me unrelated to the crash. I still thing of the crash as bad economic policy (towards banks) resulting in a major macroeconomic shock. Coincidental with the other stuff. Maybe I am wrong.

I know I am going to get roundly mocked for this, but I still can't help feeling there's some validity to the idea of non-ideological centrism (even if individuals like Leslie do not exemplify it) which has to do with not having strong views on e.g. min wage, PFI, job guarantees etc. which might otherwise split on ideological lines.

[Phil]

There was a genuine dynamism to New Labour - all the 'what works' stuff, the emphasis on driving change through state/private, state/third sector and for that matter state/state partnerships - but there was also a fundamental lack of curiosity. Blair & co believed that the fundamental questions about how to run an advanced capitalist economy had been answered, and that the Left had simply been ignoring the answers out of ideological blindness; all that we needed to do was listen to the 'wealth creators', make sure they got what they needed, and then pressure them to show a bit of social responsibility. There was no need to learn from changing conditions; businesses knew what worked, and there was no need to suppose that what worked wouldn't go on working forever. Apparently the likes of Leslie and Austin are still living in that world - which is impressive, in the light of all that's happened.

One particularly glaring example of Leslie's lack of intellectual curiosity: among the many good things that 'centrists' stand for, apparently, is a 'mixed economy'. When did we last have one of those? State involvement in industry was moderate, centrist common sense at one time; for a long time it was the only way we were going to keep up with the Germans (or was it the Japanese?). In 2018 it isn't even on Momentum's wishlist.

[e]

@ Luis Enrique But Leslie does exemplify Centrism. He wants to be believed, trusted, and left alone to do the job of coming to agreements with Conservatives. Left alone to run on a conservative ideology while pretending not to notice that today's Conservatives have long since set aside conservatism in favour of what's personally more rewarding – state funded, yet privately owned, essential services for example.

[Luis Enrique]

e depending if we're using word to identify a zone in some ideology space or a group of British politicians who claim that space.

I reckon it's possible to have by some lights quite a radical take on things (e.g. on banks, monopoly power, redistribution etc.) yet find yourself being called a centrist by true believers to left and right.

[Phil]

Issue-based polarisation - and hence centrism in the sense Luis describes - will always depend on the prior status quo, though. The idea of the state provided and should continue to provide a non-means-tested, unconditional 'safety net' benefit - so that nobody would actually starve - was completely uncontroversial through the 1970s, with hardly any ideologically-motivated dissent from that consensus. 40 years on, the consensus starting-point is that the state doesn't and shouldn't provide such a benefit. If centrism can mean diametrically opposed things within an adult lifetime, I'm not sure how useful a concept it is.

[Nanikore]

Great post.

[Dipper]

Excellent post.

All the centrists are absolute EU disciples too, probably because they think they get a seat at the table with all the other centrists in Europe. Their complete religious devotion to the EU can be seen from the fact they never discuss what terms they would be prepared to accept to re-enter the EU, just EU membership under any terms and at any cost.

[marshall]

In 2008 a medium-sized American bank went bust. Had central bankers around the world gone collectively mad, a lot of the world’s banking system would have collapsed too. Needless to say they didn’t but lent a lot of money to a lot of banks to keep them afloat. This was followed by a medium-sized recession which would probably have happened anyway sooner or later, & from which everyone has now recovered except for countries mistaken enough to join Europe’s single currency. Why all this continues to be written up as one of the most apocalyptic events in the history of the world is something that mystifies me. As you say, productivity growth in the West was slowing down well before the crisis, which merely exposed what was going on. Nor does it have any lessons, outside one very untypical industry – banking – for capitalism. Chris Leslie is not a historian and is quite right not to spend much time on it in his excellent pamphlet.

[Dipper]

@ marshall. I think you underplay what happened.

My view is that the economies of the west were becoming increasingly non-competitive against the east. Politicians, seeing this and wanting to be elected, stoked a massive boom in debt to fund increasing living standards that were not justified by the economics. When there was no-one left to lend money to, the banks, as always the bearers of economic messages, started to go bust. When a banking crisis happens there is only one way to stop it, which is for governments to stand behind the banks and guarantee their debts, which is what happened.

But the origin of the crisis was not banks but the unsustainable debt levels in USA which had been transferred, through banks, to most of the west.

[e]

@ luis Its possible, but our current crop of believers in centrism don't seem to want to recognise democracy's obvious ups and downs are obvious: built in, not hidden, and available for all to act upon. Its as if they believe democracy is something they embody, as opposed to something all sides must work for.

[e]

@ Marshall You're right, in so far as we're back to grotesquely unbalanced relationships, which enables grotesquely unbalanced individuals to trade at the highest table on ignorance and suspicion. But recovered? No. We're only ten years in on history's rewrites; as a politician Leslie surely knows to heed the first draft; and ask what therefore has he to offer the party he currently represents? Perhaps new media is causing him to be off his game...

[Peter K.]

In the U.S. the most bizarre phenomenon is happening. As the right captures the Supreme Court and will be able to undo all sorts of progressive reforms and economic regulations going back decades, the centrists running the Democrats appear somewhat at a loss. 2020 frontrunners all make noises like Bernie Sanders but lack his authenticity and still come from a more centrist background.

And then a 28 year old democratic socialist - like Sanders and Corbyn to the left of the Democrats - crushes a somewhat centrist 10-term incumbent Democrat in a heavily blue district, which is tough to do in the best of circumstances. She was outspent 10 to 1 and her opponent was rumored to be next in line for the Speakership/leadership in the House.

The centrist pundits' reactions are dizzying and all over the place but still doesn't look like they're ready to engage with reality seriously.

The socialist's message was simple: in a nation as wealthy as the U.S. everyone deserves dignity. We should be able to get everyone a good job who wants one and house the homeless. We shouldn't have poverty. Abolish ICE which under Trump has become like the Gestapo for immigrants. Free healthcare for all.

Her opponent's message was that we'll return you to the status quo pre-Trump accompanied by the usual platitudes that people don't believe anymore.

[Nanikore]

"While Italy is a country with probably unique problems in Europe (I'm thinking to the diffusion of criminal organisations), I need to ask what do you think is necessary to ensure, as far as possible, that the state intervention goes to productive investments and not wasted who knows where."

You need proper research into the relationship between the size of a state (and especially a state which gets directly involved in the distribution of resources - ie it directly involved in the allocation of capital) and productivity and high growth. Some countries do it well, others don't. But don't rely on the economics profession, who will use a lot of meaningless econometrics and other questionable methodology, to do this work. It requires skills like that of a good historian, with the conclusions built up carefully from primary documentation, much of which will be unquantifiable.

[Dipper]

Nanikore

"It requires skills like that of a good historian, with the conclusions built up carefully from primary documentation, much of which will be unquantifiable."

What you really need here are the skills of a good goat's-entrails reader. Only someone trained and experienced in the art of reading the entrails of a freshly killed goat can properly predict the future.

[Jonathan Monroe]

Another factor behind the wrongness of people like Leslie is excessive cosmopolitanism in general and a tendency to assume that the UK is basically the same as the US but with an NHS in particular.

Globally, the big picture is that the pie is getting bigger, but the super-rich are getting a disproportionate share of it. In America, the big picture is that the rich are getting richer and the poor are (probably - you can quibble) getting poorer. In the UK the big picture is that the pie shrank dramatically after 2008 and neither the working-age rich nor the working-age poor have recovered yet.

If your centre-leftness lives in a US-dominated media bubble, then the main thing the centre-left need to do to save capitalism from itself is convincing the middle class that capitalism is still working for them. If you live in the UK as it actually is, then the main thing you need to do is to make capitalism work again by restarting productivity growth.