However, there is absolutely no evidence that Europe is the most important issue to Corbyn supporters; it was never the central issue on which he campaigned. Still, there is a real dilemma here. In the first instance, there is the question whether to move to the right to win over Tory voters. Chris Williamson, a Corbynite MP elected to Derby North thanks to a vigorous Momentum campaign, argues against it:
If you trim and start going down the road of triangulating and trying to be all things to all people in order to win over some Tories, what you’re gonna end up doing is piss off and effectively disenfranchise a lot of people who have been inspired and got involved for the first time in many years and given the political process a chance. You’ll just lose them at the other end. We are never going to win an argument, nor should we even try to win the argument, by trying to out-UKIP UKIP or out-Tory the Tories.39
Most of those close to the Corbyn leadership would agree, but that doesn’t mean there isn’t a problem. There is no doubt that Labour would be able to stack up many more votes if another election was called tomorrow, but a first-past-the-post system has distorting effects – one has to pick up the extra votes from among a small number of geographically decisive voters. Some of those are the ‘skilled manual’ workers identified by Corbyn’s critics.
Trying to reach out to such voters on a right-wing basis would be totally unconvincing, but how does one reach them? What can Labour offer to people who are not exactly affluent, but not doing too badly either? It may well be the case that some of them can be convinced of the left-wing programme. It may be that the fearmongering about the IRA, Hamas, and nukes will be less effective against a party that isn’t as openly divided as before. The stigma against Corbyn has certainly been diminished. It may be that the abysmal Tory performance will lead to a collapse in the turnout of their vote. It is even possible that Labour could pick up more seats by extending the Corbyn effect to Scotland.
Ultimately, the party’s best resource may not be a tempting new policy offer, or a neat triangulation, but the fact that there are still, even now, millions more potential voters who have not been drawn to the polls – in part because politicians haven’t really paid attention to them for years. In this respect, in preparation for a new election before 2022, ‘permanent campaign mode’ might be the answer Labour is looking for.
Governing from the Left
Ironically, it was Harold Wilson who expressed most concisely what left-wing critics such as Ralph Miliband have long said about the British state: ‘Whoever is in office, the Whigs are in power.’
In the now highly plausible event that a Corbyn-led Labour Party won a general election, how is it possible in the twenty-first century to govern from the left? It is not encouraging that the only major examples of relatively successful left-wing government in the twenty-first century are all from the ‘pink tide’ countries in Latin America, as the circumstances enabling those experiments to broadly work will not be repeated in Britain. The oil boom of the last decade, concurrent with years of high economic growth, was a crucial factor in funding the social programmes of the ‘pink tide’ governments. It gave them a vital space in which to experiment with ways of redistributing power, progressively reforming the state and engaging in economic intervention.
The point doesn’t have to be limited by its parochial frame of reference, however. Radical parties across the Continent, most recently Syriza, have discovered to their cost that to take office is not necessarily to take power. It is not just that there is something about states, senior civil servants, military leaders, Treasury advisors, Bank of England governors, and so on that makes them resistant to radical change. It is not just that to govern effectively requires a minimum of cooperation on the part of businesses and investors, as well as international trade institutions, ratings agencies, treaty organisations, and other powerful economic actors, who use what clout they have to veto reforms implemented by national governments. It is that there is an almost seamless circulation of power between them all. A radical government finds it difficult to wield power precisely because, if left to itself, it is rapidly encircled by those who actually hold power and who are accustomed to exercising it. Should it find a way to win time and space for its own agenda, the next obstacle it faces is that it somehow has to administer capitalism, while making it work for reform. That is, it has to find a formula that makes capitalism grow, and profitably, while also transferring wealth and power to workers and the poor. In the twentieth century, the solution to this dilemma was a ‘mixed economy’, with public ownership, price and incomes policies, and a mildly redistributive welfare state. But that solution, insofar as it ever worked for radical ends, no longer works at all.
A Corbyn-led government would be in the far less enviable situation of having to create the growth from which it could fund and possibly expand its programmes. And it would have to do so at a time when businesses are still hoarding hundreds of billions of pounds rather than investing. And, crucially, it would have to do so in the context of Brexit, with business jittery about the possibility of lost trade. The discussion of Brexit has been dogged by extraordinary hyperbole on all sides, additionally complicated by an increasingly unavailing jargon of ‘hard’ and ‘soft’ Brexit. What all sides are missing, crucially, is that the shape of any divorce settlement depends on what the EU is prepared to offer, not mainly on what British politicians would like, and the EU’s red lines are already restrictive.
The ‘global-trader’ idea of the Brexit Right, wherein an emancipated Britannia will be able to strike lucrative deals in a global market, is a fantasy. It’s true that the EU has been in relative global decline for some years, despite stabilising the eurozone crisis (at the significant expense of its poorer countries). It’s also true that this has resulted in losses in the City, where, for example, the euro currency is traded. The EU may turn out to be unsustainable in the long term, at least in its present format. However, British capitalism, and the City in particular, still gain enormous benefits from EU membership. The ability of financial firms located in the UK to sell their services throughout the EU, likely to be at the very least curtailed after withdrawal from the EU, is one of the sources of the City’s current global power. The strongest likelihood is that parts of the City will break off and defect to Dublin, Luxembourg, and Paris. There will be a significant lag in negotiating a new set of trading arrangements with the EU: the two-year Article 50 negotiations are to finalise the terms of divorce, with the real negotiations on a new set of relationships coming afterwards. And even if Britain achieves tariff-free trade with the rest of Europe, which EU negotiators insist will only be possible if the UK remains in the single market, there are likely to be some costs in terms of non-tariff barriers. Most forecasts expect some costs even if Britain were to remain within the European Economic Area and be subjected to single-market rules, with the Treasury estimating that the UK would lose about 3.8 per cent of GDP.40
At the same time, the forecasts of doom, where they are not outright false (Owen Smith wrongly claimed that a ‘no-deal’ Brexit would cost Britain £45bn in terms of GDP), are necessarily tendentious because they depend on all other things being equal. And yet, of course, all other things cannot remain equal. The UK will have to find another growth formula, whatever deal it ultimately strikes. The Conservatives have looked to the Commonwealth to help with this, in keeping with a certain colonial residue in ‘global-trader’ thinking; the Commonwealth, especially India, has politely looked the other way. They have looked to Donald Trump, artist of the deal, to offer Britain a quick trade pact, perhaps based on the same hawkishly neoliberal terms as the TTIP. But they are dissembling when it comes to how quickly this can be negotiated and how much of a difference it will make. Beyond this, the Tories have opted for what Labour are calling ‘bargain-basement capitalism’ – rolling back exiguous European constraints on labour and environmental protections, driving down wages and cutting corporation taxes to rock bottom.41
Labour is
now in a realistic position to offer something else. McDonnell’s first post-Brexit speech addressed the future of British capitalism outside the EU, emphasising the need for an industrial growth strategy backed by an ‘entrepreneurial state’. The key lever for generating growth would be a National Investment Bank, a Bank of the North, and other regional investments totalling £500bn. This involves the state getting a lot more directly involved in shaping the future of British capitalism and, in particular, shaping it in a way that diminishes the influence and power of the financial sector. It would emphasise targeting investment in infrastructure improvements and in the development of high-technology industries. This can be understood as, in part, an answer to the likely loss of investment coming from the EU’s investment bank in Luxembourg.
Can this work? Can it make up for potential losses to trade? Would it, for example, give space for Corbyn and McDonnell to turn down the single market, with its restrictive rules on state aid, given an estimated £6bn a year extra costs to exporters? Would it allow Labour to opt out of any TTIP deal, with all of TTIP’s negative consequences for public ownership, worker protections, environmental legislation, and democracy, without it making British capitalism less competitive? Is it, in fact, even radical enough, given the huge investment gap that, uncontroversially, has opened up in the British economy in the years since 2010? Not to mention the chronic shortfall of investment in research and development in the UK, as well as a long-term productivity crisis.42
The important thing about the £500bn investment is that it is not free money. Although the idea was initially cast as a People’s Quantitative Easing, an alternative to the current framework wherein the Bank of England just prints money and floods it into the financial system, this is mostly borrowed money. Creating a public promotional bank allows one to borrow money off the balance sheet, but it has to be repaid (even if at very low rates of interest). That means the government has to help create viable projects that the money can be invested in, whether it’s a new railway line or a digital technology firm. In principle, there’s no reason why this can’t work: it has been done before. The usual way in which it has been done has been by allowing big centralised banks to channel credit to other banks which handle applications for credit to fund socially beneficial projects. The credit is marginally cheaper than that available in the private sector – but only marginally, in order not to ‘distort the market’. But otherwise the bank has little contact with the projects concerned, and little local or specialist knowledge. What Labour is talking about is not all that dissimilar. The National Investment Bank would use a network of local, publicly owned banks, with specific local knowledge, to distribute credit to useful projects. They would not directly compete with existing banks, which puts a limit on how much they can cut credit. Labour is, to be fair, also talking about proactively creating investment projects, and seeking out corporatist partnerships with ‘entrepreneurs’. By and large, you could argue that the policy is a shift in the right direction after years of austerity, and yet if it is run like the standard public promotional bank it will be too mild a step.43
The policy is also linked to a moderate but nonetheless important tilt toward democratising ownership. Labour’s paper on ‘Alternative models of ownership’, drafted by researchers and presented to McDonnell in early 2017, argues for giving people a ‘right to own’ that is not Thatcherite or ‘free-market’ in principle, but collective and democratic. It looks, broadly, at three ways of achieving this. The first and most obvious is nationalised ownership where there is a natural monopoly, in order to deliver services most efficiently (hence the renationalisation of rail and mail). Of course, there is nothing intrinsically democratic about nationalised industries other than that they are accountable to elected governments. This is why Tony Benn used to advocate some share of workers’ control in publicly owned industries. The second is local and community forms of ownership, which is what is proposed for energy firms: that a network of locally owned companies, with a green mandate, be implemented instead of a national monopoly. In these cases, profits would be wholly or partially reinvested in the local community. And the third is the cooperative, owned by its workers. Here, the idea is that the state can make it easier for workers to take control of a firm when its owners try to shut it down, by making available cheap credit, among other things. The total effect of this would hardly be revolutionary, but it can be seen as Labour’s attempt to develop its own distinctive answer to Thatcherite ideas of ownership – the ‘property-owning democracy’ – which ultimately speak to a popular desire to have a real stake in the economy, however small.
The overwhelming sense one gets from Labour’s policy agenda right now is that it is both very radical and very mild and commonsensical. It represents a shift in priorities and a break from the existing neoliberal policy framework, and just as importantly it represents a shift in rhetoric. It abruptly reverses course on years of underinvestment and dysfunction, and on the ideology justifying it, but it only takes short, baby steps in the opposite direction. It’s likely that, in government, to really get to grips with the British disease, it would have to find ways to be more radical, and perhaps this is one reason why McDonnell has spoken of Brexit being an opportunity, since it could increase the freedom of manoeuvre for the government. There also remains the prospect that, despite Corbyn’s project being perfectly commensurable with long-term capitalist success, there will be investor resistance. It is a matter of simple sociological realism that left-wing governments are as susceptible to the pressures of trying to wield governmental power as anyone else, and that considerable institutional pressures can be brought to bear to limit one’s scope for action. Corbyn has already been compelled to compromise with his own backbenchers and trade union allies over Trident, NATO, and other issues. In government, he would have to compromise with business leaders, civil servants, the media, international institutions, and of course his own parliamentary colleagues. Even if their persuasive powers are ultimately ineffective, Corbyn and McDonnell still face the problem that they cannot force businesses to invest. They can make up for the lack of investment with government-funded projects only up to a point. They are still in the same bind as previous social-democratic governments, which is that they aim to represent workers and the poor while necessarily, desperately, needing the cooperation of business.
Should Corbyn inherit an economy going into recession, perhaps precipitated and made worse by a bad Brexit, and with worsening public finances, he would face some difficult choices. Either he would have to radicalise his policy of public investment, or he would have to break Labour’s borrowing rules (McDonnell has, in an effort to bypass investor resistance, committed not to borrow to support day-to-day spending), or he would have to contemplate austerity and fiscal orthodoxy while trying to humanise its worst effects. The strongest pressure on him and the government would be to do the latter. It is probably for this reason that McDonnell is placing more emphasis on ‘flexit’ than Corbyn is – keeping the UK’s options open is essential to a government’s ability to pay the bills.
The term for a defeat inflicted by capitalist dysfunction and the cold pressure of neoliberal institutions, following on from ‘Pasokification’, is ‘Syrizafication’.
Syriza was swiftly chewed up and metabolised by the institutions it sought to govern, becoming in effect an instrument of the neoliberal centre that it was elected to displace. Labour’s leadership is, of course, far more intensely historically aware, far more realistic about the powers that it faces, and far more serious about confronting them, than most governments would be. This is the ‘subjective factor’ which has got Labour quite far despite unpromising circumstances. Yet the pressures of government would be something else, and the only possible counterpoint to potential Syrizafication, and the inevitable unedifying cries of ‘betrayal’ that it would precipitate, would be a vibrant and mobilised grass-roots Left in the unions and beyond – a political subjunctive that is in no way also an indicative.
Hopes of the Left
So what can Corbyn realistically do with this unexpected windfall? What would it mean for him to succeed? If it is no longer obvious that the old metrics of success hold true, how do we judge whether Corbyn can win?
These questions can only be answered in relation to Corbyn’s project, and the wider historical framework. We now know that Corbyn and his allies have been able to rebuild and rejuvenate Labour, from the Left. We also know that they have converted this new strength into electoral power faster than one would have expected. It is also increasingly clear that the Labour Party and its excited periphery are teeming with ‘bright young things’, filled with ideas about movement-building, organisation, policy, trade unions, and so on. This is beginning – but only beginning – the job of reversing a long course of decline in the size and activity of the union movement, and the organised Left, as well as the ideological profile and resonance of left-wing ideas. None of this was going to be reversed in one miraculous breakthrough. The course of history may be punctuated, as the late Daniel Bensaïd said, by ‘Leaps! Leaps! Leaps!’ but no single leap does the job. There remains a generation of work of rebuilding, recomposition, and regeneration. To put it like this is to intentionally take the focus away from the customary short-termism of political analysis, in which the horizon of analysis is always this movement, this party conference, this election. The meaning and final success or failure of Corbynism will disclose itself in relation to that longer-term objective, as much as in relation to electoral outcomes, headlines, and polls.
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