Saving the Liberal Party, at a price By Dan Hind

29 May 2011 — The Return of the Public

The 2010 election gave no party in Britain an outright majority.

The Conservatives won 306 seats, Labour 258, and the Liberal Democrats 57. Smaller parties took 29 seats.

The Conservatives and the Liberal Democrats formed a Coalition and promised to govern in the national interest.

This government needs 326 seats to maintain a majority. At the moment the Conservatives and Liberals have 363 votes. The Conservatives would start to need the support of the smaller parties – the Democratic Unionists, say – if 38 of the 57 Liberal Democrats refuse to support the Coalition. It is difficult to see the remnants of the Liberal Democrats remaining in a government depending on the support of the Democratic Unionists, but stranger things have happened.

Anyone concerned about the growing social and economic crisis in this country must seek, as a priority, the end of the Coalition.

It is assumed in what follows that a rejection of the Coalition by a substantial minority of Liberal MPs would cause the government to fall and that an election would then follow.

It is further assumed that an election in which the country’s acute social and economic problems played some part in framing debate is an urgent necessity.

The Prime Minister and Chancellor of the Exchequer said nothing about the dangers of a financialised economy when they were in opposition. They watched placidly as a bubble inflated in the credit markets in general and in the housing market in particular.

Nothing they have done since securing office suggests that they have the remotest idea how to govern in the national interest. They are using the powers of the state to insulate the financial sector from the damage it caused. Their watchword is audible to anyone with ears to hear: those responsible for the financial crisis – and the ensuing recession – must be protected at all costs.

A handful of Liberals are as passionate as they are about the need to serve finance, a few have always had their doubts.

But most seem to lack any convictions on the matter. This larger group presumably appreciate that they are implicated in a deeply unpopular project. After all, they provide the votes that the servants of the financial sector must have if they are to govern. To the extent that they think about it all, they calculate that their best bet is to hang on and that something turns up before they face the electorate in 2015.

I repeat, these Liberal MPs are the key to ending the Coalition and beginning a process of economic reform that safeguards the interests of the majority.

The Current Economic Situation

Ignorance of political economy is not normally a serious impediment to a career in politics, but Liberal MPs who want to stay in Parliament after the next election need to figure out what’s going on, and fast. They could start by listening to what Vince Cable is telling anyone who will listen:

You have a model of economic growth that has broken down, comprehensively broken down. We had personal debt, which was unbelievably high, and this means you have an overhang debt on houses.

You’ve got a property bubble, where property prices went out of control, and so now you have households worrying about falling house prices. Businesses that can’t use their property as security. We’ve got this long-term, systemic neglect of key productive sectors, including manufacturing, because the exchange rate was overvalued. We’ve got the hollowing out of industry: we now don’t have the skills. And then we have the deficit, which was the consequence of the bank collapse.

Cable has started to echo the critique of the British economic settlement offered by Ann Pettifor and others. Credit expansion fueled a boom in construction and consumption; credit expansion also created financial sector profits and asset price increases that could be taxed and channeled into the public sector. The triumph of the financial sector was accompanied by a spectacular maldistribution of capital and talent.

This was the essence of Brown’s economic miracle. The stockbrokers Tullett Prebon provide a summary of the consequences of this miracle here. I suspect that Cable has been reading it, or something like it.

And as Cable well knows, the economy cannot turn round in a few years. The Conservatives do not have a coherent plan to deal with the mess they inherited from Labour. They know that the economy cannot deliver broadly based private prosperity and public goods in its current form. They are hoping to reconcile us to lower living standards as the price of maintaining the existing structure of power.

(That the economic system is failing will come as no great surprise to the millions of people in Britain who don’t somehow profit from the City’s ingenious schemes for the upward distribution of wealth. The sluggishness of the response by the political nation broadly defined to our economic problems can be explained in large part by the fact that the powerful are the last to be affected by developments that cause widespread dislocation and discontent elsewhere. MPs note that they have become much more like social workers and then support policies that bring ever more distressed constituents into their offices.)

The reorganization envisaged by the Coalition precludes any shift in the balance of power between capital and labour, it precludes any meaningful reform of the structure of finance and the institutions of private enterprise. Public services, already undermined by the introduction of private sector values and incentives, are to be opened up further to market forces. The government’s failure to explain what it means by the Big Society and its reluctance to give up on the concept suggest that they can see how their plans entail widespread social change. But the Conservatives cannot say out loud that a Victorian distribution of wealth should be accompanied by a Victorian mixture of mass deference and elite impunity.

Labour are happy to wait

The Labour party would like the more trusting Liberal Democrats to marinade in an Orange sauce for the full term of this Parliament, until they can be wiped out in the next election. They would much rather alternate with the Conservatives in electoral contests that offer more or less socially conservatives variations on a neoliberal theme. Politics can settle down into a proper profession that offers its practitioners opportunities to develop highly portable skills in public relations, brand management, and related fields. Then politics can be glamorous, like advertising, like America.

The last thing the Labour leadership wants right now is the bother of governing. Its messaging is all over the place. It doesn’t have any more of a clue about what to do than the Coalition does. Some of them perhaps recognise that something was badly wrong with the New Labour project but they are reluctant to risk civil war in the party for something as vague and insubstantial as the common good.

A Labour government created the current economic situation and its leaders need both the passage of time and the Coalition’s headline-grabbing vandalism to shift attention from their own record. Ed Miliband will then be able to pose as the candidate of Hope and Change in 2015. After that he will aim to govern competently in the New Labour style – Ed Balls as Chancellor will take up the work of his former patron Gordon Brown.

Labour must be forced into government in an early election, preferably this year, and preferably in coalition, before it has a chance to re-organize itself on neoliberal and technocratic lines as an alternative to the Coalition. Blue Labour or something similar is being cooked up to win over the party’s base in the trade unions but it is sentimental mood music – on a par with Philip Blond’s ineffectual musings about the need to smash monopoly capitalism.

Ending the Coalition means splitting the Liberal Democrat vote in Parliament. That is, those Liberal MPs who aren’t ideologically committed to the Coalition project need to be convinced that their best hope of political survival is to be found in an early election.

The forty-odd Liberals needed to finish off the Coalition need to come up with a platform of sensible reforms, to ensure that their distance from maniacs like Clegg and Laws is duly noted by the electorate. And they need a nationally recognised leader to articulate their position.

An Alternative Platform

We already know in outline what a meaningful response to the crisis looks like.

The large concentrations of capital will have to take a fair share of the costs of cleaning up after the banking crisis, ie all of them. The offshore system will, therefore, have to be dismantled. The tax burden will have to shift away from income and onto land values, and so on. We don’t have enough public housing. The National Health Service needs to be effectively re-nationalised, as a matter of urgency, and the odious debts generated under PFI will have to be cancelled.

The British public need to be offered a plan for economic rehabilitation that makes some kind of sense and that offers the prospect of gainful employment and reasonable living conditions for the majority who have to live here. A model of economic growth based on credit expansion and property bubbles has indeed broken down. We need to shift the economy away from private consumption and financial engineering towards investment in industry and the efficient provision of public goods. But the readjustment can only be made on the basis of a more equitable division of resources.

Only employee-owned and managed enterprises, backed by an accountable system of credit, will be able to compete in global markets and secure the conditions for both an improved balance of trade and higher productivity growth. To put it another way, Britain’s economic malaise can only be cured by a social transformation.

(It would be worth including some meaningful reform of the very restrictive laws governing trade unions, by the way – then the unions can explain to their members why they are continuing to support a Labour party that is intent on giving them nothing.)

How do we break the Coalition?

The Liberal MPs who aren’t Orange Book headbangers will only bolt if they think it offers them their best hope of saving their political careers. If they are doomed anyway, then they might as well hold on for as long as they can.

They need to be persuaded that an early election, fought on a sensible platform, offers them their best chance of survival. Those campaigning to stop the re-structuring of the NHS, and who have Liberal MPs, could do worse than write to them and set out the conditions on which they will be successfully re-elected. Indeed the broad-based opposition to the Coalition can achieve real political leverage if it commits itself to promote a platform along the lines set out above.

If Liberal MPs break with the Coalition and accept this alternative platform they will then be given the backing of the Anti-Cuts Movement. They will become, in effect, delegates of a program, rather than representatives of a party. Others can contest the election on the same Alternative Platform – greens, socialists, and so on, though priority will be given to sitting MPs who accept it. The aim is not a change of personnel so much as a transformation of program.

So this is not about personality, much less leadership. The MPs that sign up to a program that secures the interests of the majority need to know they have the backing of a substantial and energetic movement. The more people that write to their (Liberal) MPs, the more likely it is that these MPs will see an early election as a way to save their skins.

Those who can’t bear to support a bunch of dim and opportunistic careerists might want to ask whether they are letting the colour and noise of personality to obscure the facts of structure. Politics will always be dominated by dim opportunists. The job of citizens is to ensure that these shifty rascals act in our interests. It is a kind of deference to expect our representatives to act more nobly that we do. Ask yourself whether you would prefer to see Liberal MPs lose their seats in four years time, or to see the beginnings of a sensible and just political settlement this year. Because in my view you can’t have both. It is helpful to consider the distinction between milieu and structure in this context.

To put it another way, to campaign for people who make you feel warm and fuzzy is to set yourself up for disappointment and betrayal. Both Blair in ’97 and Obama in ’08 offered voters the satisfactions of unfocussed optimism and went on to govern in the interests of the established powers.

Our task now is to convert representatives into delegates. They have office but no program. As the price of retaining the former they must accept our demands on the latter.

This is to reject the redemption fantasies and marketing campaigns of modern politics and to apply the cold logic of the lobbyist to the business of securing the common good.

1908 Liberalism

And how is this Liberal revolt against the Coalition to style itself?

The Coalition is planning to repeal section 23 of the 1908 Smallholdings and Allotment Act, which requires local authorities to provide sufficient allotments to meet local demand. The law is already something of a dead letter. There are long waiting lists for allotments.

Those Liberal MPs that want to save themselves and their party should go and sign up for an allotment. Their supporters can sign up for an allotment at the same time.

Liberal MPs can then demand urgent action to compel local authorities to obey the law and provide everyone who wants to grow their own food with the means to do so. 38 Degrees and other coordinating movements in civil society will surely back their campaign, as they backed efforts to protect Britain’s woodland. Even Jamie Oliver might add his considerable weight to their cause.

The message will go out, that the Liberals are not prepared to throw away their radical heritage and conform with the Conservatives’ finance-friendly agenda. It will also signal their willingness to take up the great unfinished business of the Liberal Party in its heyday – land reform.

Vince Cable can then lead the 1908 Liberals into an election on a program that includes serious financial sector reform, greater industrial democracy, constitutional reform and sensible measures to reform the media – another chance to stop Murdoch. Not only that, he will have a fighting chance of becoming the Chancellor of the Exchequer in coalition with a Labour party that has been compelled to give up on the Brown-Balls-Osborne model.

No one likes Nick Clegg. He and his colleagues in the Orange wing of the party can fight on as the Liberal Democrats, if they wish, or merge with the Conservatives.

The rest of the Liberals are in a hole – what else can they do but dig?

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