David Cameron: The Verdict

After six years of being Prime Minster, the former leader of the Conservative party has resigned. His resignation was an inevitable consequence of failing to win the EU referendum in favour of Remain, which will be the biggest highlight of his legacy. Whether that highlight will be deemed a positive or negative for the country is something that can only be determined over the next couple of decades at the very least. What is certain is that his failure condemned him to resign his position about four years earlier than he anticipated.

David Cameron promised that his government would be a compassionate conservative in it’s approach, with the inclusion of the Liberal Democrats in the coalition government that Cameron presided over most, you’d have thought this branding may have been more than rhetoric. Likewise Cameron promised to rebalance the economy in the wake of the 2008 financial crisis, while cutting the deficit. Cameron also promised to implement the “Big Society”, the idea that voluntary community work would help the most needy in society. Every single one of these ambitions have not been realised.

David Cameron can be proud of one thing in particular, the introduction of gay marriage. It is a progressive cause that even Labour couldn’t and didn’t attempt to introduce during its 13 years in power. It demonstrates that Cameron did have some modernising tendencies within the Conservative movement, that he, or rather George Osborne, recognised the future of conservatism would imply preserving a more open conception of marriage. The institution of marriage as a respectable public institution needed preserving rather than its traditional conception as a bond between a man and a woman.

Sadly David Cameron wasn’t able to modernise the party further. Take cutting the deficit for instance. Cameron could have used the Liberal Democrats to claim impetus that conservatives could be social justice warriors, that helping the lot of the poor and disenfranchised wasn’t Labour’s responsibilities. Economic liberalism need not imply that the poor be left to fend for themselves, but instead it implied enabling the poor to help themselves. A synthesis essentially of one-nation conservatism and the libertarian tendencies of the Thatcherite wing of the party.

To accomplish such ambitions would need successful reform of the welfare state to make it simpler but also less punitive to those who become successful while on welfare. Such reforms were never carried out and the agenda to cut the deficit ended up being a regressive economic agenda that didn’t attempt to self-help the poor to improve themselves but make it a lot harder for those people to tread water, if not sink in many cases. The unemployed were victimised as scroungers, despite the fact that many tirelessly seek jobs of their own but the economic climate doesn’t allow them to. They were also victimised despite the fact that jobseekers allowance consists of only a small percentage of the welfare state. The state pension and tax credits, i.e. benefits to those who had worked hard all their lives and those that are working hard but find ends can’t meet up, are the benefits the state spends most of its money on.

David Cameron willingly allowed George Osborne to politicise welfare cuts which only helped prosper the image that they were still the “nasty party”. Cuts to those with disabilities is the best example of this. Welfare reform ended up being synonymous with punishing those on undesirable forms of benefits, which appealed to the basic instincts of a significant amount of voters. It was a basic instinct that a good Prime Minister would avoid, a good Prime Minister would have used the public angers to make the welfare state work for all instead of being negligent to those who couldn’t qualify, yet may deserved it even if they didn’t want it, and a necessity to those who were receiving welfare, i.e. the welfare trap.

Such attitudes to those on welfare also contradict the sentiment surrounding the Big Society, people are less likely to help those who they perceive as being responsible for their predicament. Human altruism has a rather restrictive set of limits, someone as intelligent as Cameron should understand the importance of that point. Even though he killed of the Big Society, he’d have hoped it emerged anyway. To be fair a Big Society would be emergent in nature, which is why its frustrating Cameron kept undermining the conditions needed to allow such a society to emerge without it being a cover for an attack on the welfare state and the poor.

Cameron also promised to rebalance the economy, George Osborne proposed the Northern Powerhouse to do precise that. After six years nothing substantial has emerged, let alone a powerhouse. Rebalancing the economy would have helped the Conservatives implement structural reforms to the economy which would have helped them implement cuts better equipped to cutting the deficit while allowing the country. The Conservative-Liberal coalition had to significantly slow down the pace of cuts in 2012-13 to ensure the economy started growing before the 2015 General Election. As a result the deficit remains high increasing the burden of public debt on the country to very high levels.

The Northern Powerhouse would also have helped detoxify the Conservatives image in Labour’s urban heartlands. The Tories destroyed the communities in the 80s only to fix them in the 10s. Even though some would still hate the Tories for it, others may have put renewed hope above a bleak past. In the meanwhile, Labour just took their votes for granted with little concern to improving economic conditions in the North. Such ambition would have been worthy of a great Prime Minister. Not so David Cameron.

David Cameron’s time as Prime Minister was one that failed to live up to its ambition, it failed to simplify the welfare state or cut the waste out of the NHS. It has failed to cut the deficit and failed to fight for social justice. It didn’t expand liberty, hope or prosperity to many. It was only component relative to the level of competence seen within the Labour party.

 

The Huge Risk the PLP are taking in Disposing Corbyn in this Fashion

Since the referendum, Labour spent the following week doing its best to implode. Members of the shadow cabinet resigned en masse, only to be replaced by other shadow ministers who then resigned their post not too long after. This is done in the name of bringing down the leader Jeremy Corbyn, who many in the PLP feel isn’t fit to lead the Labour party to a general election. A significant number of Labour voters are not too appetised by Corbyn’s reign as leader either. Yet Corbyn remains entrenched as leader of a party that in any other circumstance have seen its leader resign. His position is untenable, but he’s holding on to dear life.

He’s holding onto dear life because he knows he can mobilise enough support among Labour members to vote for him in a leadership election bid. Such a victory would keep him in control of Labour even though the PLP would most likely split between the party. The PLP is deciding to not challenge Corbyn’s position until he either resigns or becomes a certitude loser to whoever his challenger would be (most likely Angela Eagle). As a strategy to dispose Jeremy Corbyn without splitting the party, this may be the most effective.

The PLP are taking a huge risk though. The general public probably won’t see this as a clever strategy being implemented to ensure the survival of HM Opposition from perpetual Tory government. Instead the public are likely to think the PLP is not only full of bland and boring politicians, but incompetent ones who can’t even dispose of their own leader quickly despite being very unpopular. Simply put the PLP don’t look in charge of their own party, rather than tolerating a pariah as leader they are being held hostage to him. Now who’d want these hostages to negotiate Britain’s withdrawal from the European Union? Aren’t they meant to representing us? Aren’t they meant to leading us through these uncertain times?

The PLP may save Labour, but it will be a pyrrhic victory. The waiting game will only help the Tories. Would that constitute saviour?

Brexit! What now for the Left?

By a margin of 52-48, Britain decided to leave the European Union. The Mutualist’s author decided to vote Remain, primarily due to the fear that Brexit would lead to a big shift towards the right on the political spectrum. So far the Left have done little to encourage me that my fear was wrong. Unless Jeremy Corbyn resigns before a leadership contest is held, the Labour party will split in two. Progressives outside of Labour have also essentially stated that the referendum result should be ignored. Both of these situations the left find themselves in are highly damning.

Let’s start with Labour. The EU referendum result offers the first major chance the Left has had to realign the political spectrum since the Second World War. The political system is in chaos at the moment with a very nervy population that seeks to gain control over their own lives. Many have not seen wages rise for over a decade, mass unemployment exists within the North and those among the working classes don’t feel proud to either being working class, or British/English. Even though the left has never had a good reputation for stoking up patriotism in this country, it can be good at promoting prosperity for those struggling in society.

If you’re on the left thinking about the scenario we find ourselves in, there are opportunities to overturn the political orthodoxy by giving Leave voters (particularly those in the North East) the ability to Take Control of their lives through a more left wing economic agenda tackling both inequality but also the dearth of investment in the North to the scale needed to make the region prosperous. This could be done while remaining socially liberal, demonstrating the people’s socially conservative attitude towards immigrations in a symptom of the economic hardship they’ve faced, rather than because a significant amount of the population are racists looking to come out of the closet.

The party you’d expect to represent the left is not only in disarray, but lacks the necessary leadership to do the stuff mentioned above. It’s leader barely has a Shadow Cabinet, yet no alternative leader is offering a vision on how to make the Labour heartlands prosperous. It was clear throughout the reign of Miliband, that Labour lacked leadership throughout the party. There wasn’t a single politician that looked capable of setting the agenda, this despite the publication of the popular and flawed study of inequality by Thomas Piketty’s in his book Capital. The Parliamentary Labour Party seems devoid of the talent necessary to do for the left what Thatcher did to the right in the 80s.

Jeremy Corbyn had the right idea in allowing a team of experts to heavily influence his economic policy, yet such ideas haven’t took off and neither does Corbyn look like someone who could demand obedience from his fellow MPs. Yet those MPs have little appreciation for the scale of ambition needed to ensure their party survive. They think they do, but everyone thinks they’re capable of surviving until its too late. This is the sorry state of not only the Labour party but the left as a whole. Those with washy washy ideas about how to improve things, like Ed Miliband, lack the leadership calibre to make those ideas turn into reality, likewise those with the ideas also lack that exact calibre needed. This is what will kill of the left and progressivism in this country.

If you still think that a future exists for the left and progressivism in 21st century Britain, then you’ll be pleased to know that some progressives want to reject the result of the referendum. The referendum itself was advisory so it is technically possible to do this, especially given that Leave only won by a narrow margin.

Politically it would be a disaster. First the right could legitimately claim to be on the side of the people, ensuring their vote gets put into action. It will be right-wing parties like UKIP that will benefit electorally, it will be left-wing parties like Labour that will lose out. UKIP will be the one’s in touch with the working classes, listening to them and acting on what they want.

Second there is no reason to think that the EU would take Britain, or the left, seriously at future negotiating conferences, etc. We would be the divorcee who can’t be arsed to move out into a new home, to file the divorce papers and expect the partners flow of funds to keep coming. Is that the vision of Britain progressives have in mind? It is a sickening vision that will only turn the country away from those who espouse such a picture, or to be fair those who espouse a picture that implies the picture just laid out. We’ve made our claim to divorce, let’s do it honourably seek to ensure the future ends up being good for us and who knows in the future we may want to remarry.

The referendum result will not only highlight frailties in the British economy, but it will highlight how the left has had little contribution to the mainstream economic debate in a very long time. It has not built a movement of think tanks, etc., like the right did with the Mont Pelerin Society, the IEA and across the Atlantic the Cato Institute. Those that have been set up don’t look like they’ll be called upon.

The situation we face should be an opportunity for any set of ideologies to come and form new electoral coalitions that will shape British politics for the next generation. The left though don’t seem intent on either espousing an ideology with conviction or forming a coalition that is workable. It looks like the right will win the next political realignment, just like it did with the last one in the 80s.

The Troubles Facing Labour Moderates

Pursuing a left-wing agenda in a mainstream political party is so difficult in the United Kingdom that a flawless political strategy is necessary to make sure a really embarrassing defeat, like in 1983, doesn’t occur. When the leader of the party is incompetent, like Jeremy Corbyn, it is next to impossible. Simply put for Labour to win an election on a left-wing platform it must have one of the greatest political leaders of all time captaining the boat through the inevitable storm that waiting for them. Labour moderates ought to have a really job easy in comparison, present an alternative and sensible path to power while waiting for the left wingers in the party to implode.

Labour moderates have had more than their fair share of plights as well. The truth is they are responsible for their plight, they are responsible for Labour’s plight, they are responsible for the dissatisfaction with centre-left politics in general, they are responsible for Labour’s demolition in Scotland, they are partially responsible for what happened in 2008 and they are responsible for the dim-witted philosophy behind the desire for power and management. Underlying all this is the manner in which they have pursued a centrist agenda. It’s not the pursuit of centrism itself which is their problem, but how they have gone about. When moderates realise why this is the case, they’ll have somewhere to start in building up a Labour party that has a long-term future in 21st century British politics.

Moderates have this insistence in the necessity for a centrist agenda to achieve winning the next, or any for that matter, election. Even though this isn’t necessarily true (cf. Margaret Thatcher’s reign of power),  in most cases it is. However, it is folly to think of the centre as a place you want to go. Great politician’s know that the centre isn’t a place you go towards, but one you pull towards yourself. Labour moderates ought not to be seeking out the political centre, which is already occupied by the Conservatives, but changing it to suit the ideals of the left and Labour. Shaping the political zeitgeist is only possible if you know the art of influencing the centre ground to come closer to you, while knowing which policies you have to meet half way with those you wish to substantiate your centre ground.

There have been a number of reasons why Labour have failed to attract the centre to it. It has failed to communicate a coherent vision that empathises with your average voter demonstrating that Labour do in fact share their concerns, even if they don’t agree with the instinctive action the public would want implemented to solve them. It has been incompetent in governing throughout the country. Safe competent government is a notion the electorate don’t associate with the Labour party. Incompetence is the reason the nation as a whole doesn’t trust Labour with the leverages of power, it is why Labour got annihilated in Scotland.  They never looked after their allies enough in the good times so in  the bad times they’ve changed their allegiances, whether that be to Jeremy Corbyn, UKIP, the Greens or the Conservatives.

How do the Labour moderates turn this around to make Labour an electable party again? First they must identify with left-wing principles again of liberty, equality and social justice. Second they must realise they were in fact right to embrace markets, but the type of the markets they embraced were not necessarily compatible with left-wing principles. The necessity for modernisation within the Labour party during the 80s and 90s is a statement not worth undermining. That doesn’t mean it is the end goal of the modernisation project though. Third they should find a way to reconcile all these points. Alienating your core support for long periods of time only hurts the health of the Labour party in the long-term, even if it greatly helps in the short and medium term when facing the travails of government.

Let’s take the first two together. My analysis rests upon the assumption that markets ought not be an anathema to the left. New Labour was right to criticise the anti-market tendencies of those on the hard left of the party. New Labour thought this could be accomplished by trying to make Thatcherite capitalism more humanistic by providing basic welfare to the unemployed, those in low paid work, to children and to the disabled. By making capitalism compatible with the philosophy of humanism, New Labour hoped to have found a way to reconcile left-wing principles with the economic realities that the left needed to address.

What New Labour got wrong is for the desire to humanise capitalism, rather than humanising markets. Markets in themselves are neutral to the concerns of the agents operating within them. Economists value markets though because on average the utility of market agents both in terms of welfare and liberty are expanded. But markets needn’t be capitalism. Capitalism as an ideology also makes an assumption about how companies ought to be organised (the essential role of investors) and what the nature of property rights are (in particular a very strong form of private property). Such assumptions though are not even supported empirically as being necessary for the existence of a functioning market, in our market economies many different form of ownership structures exist such as cooperatives and they succeed very well.

Why is this important? The assumption I made above particularly about property rights heavily favours a market based upon right-wing principles, rather than left-wing principles.  New Labour’s humanising of capitalism ended up painting over the cracks rather than truly trying to make society more equal. Social mobility in the UK is in a worse state now than during anytime during the 80s. In a more equal society, defined as equality of opportunity, this shouldn’t be the case. Simply blaming the Conservatives doesn’t cut it. There was talk during Miliband’s reign as leader of utilise policies that predistribute wealth, rather than redistribute wealth. Nothing has come of it though.

John Maynard Keynes once said:

The ideas of economists and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist.

Labour moderates have espoused pragmatism for so long that they have becomes Keynes’ practical men. This has blinded them to alternative ways of seeing things, ways that if spun correctly could very well move the centre ground towards the left.

The trouble the moderates have though is that isn’t clear which thinkers offer a holistic philosophy and programme which is both pro-market and egalitarian. This is the result of the stagnation of the intellectual left which it would be unfair to hold the Labour moderates responsible for. Most MPs are lawyers, not economists and most certainly not political philosophers. So how can we expect this off Labour MPs? We can’t expect it, but the political outlook in the short, medium and long term for Labour is so bleak that it is demanded of them. MPs need to go out of their comfort zone and confront long held beliefs if they are to stop digging Labour into its grave.

Take Piketty’s Capital which asserts the need to implement a global wealth tax to tackle inequality. Piketty is in fact a supporter of egalitarian capitalism, or egalitarian markets, not a socialist like Jeremy Corbyn or Owen Jones.  The empirical research in Capital is to be highly commended, but it is thoroughly impractical. How are you going to implement a global wealth tax? Who’s going to do it? The UN? The US? The UK? Wont influencing the tax rate turn into some geopolitical game to see which superpower has the biggest mojo when it comes to promoting their national interests? Thomas Piketty attempt to provide a solution to his analysis on the source of inequality is an example of the failure of mainstream left-wing thinkers to give an alternative to what we have which is workable.

In turn that means heterodox groups are flourishing. We have advocates of Modern Monetary Theory, such as Steve Keen, who flat out rejects the economics of austerity as being wrong. Austerian economics simply doesn’t understand how money is created (mainly through lending from private banks) and that the worth of currency is guaranteed by the state. Georgists support the introduction of a land value tax  to promote land justice and tackle the UK’s housing problem, particularly in London. Most Georgists tend to be on a progressive-libertarian spectrum, some like Michael Hudson are progressives while Fred Foldvary is a geolibertarian. We then have your more traditional socialists who have nostalgia for the post-war consensus. Finally we have mutualism, or a form of left-libertarianism which supports both market and socialist economy all in one. All these ideologies are radical, with the first two and last one having the advantage of being compatible with free market enterprise.

In their current form, these ideologies will be too radical for the general populace to accept. The role of the centre-left, or radical centrists, is to take the really good ones and moderate the ideas so they become acceptable to the populace then ensure the centre grounds moves towards promoting those ideas. Some of these ideas, such as Georgism and mutualism, have support among those on the right of the spectrum as well. Milton Friedman thought that a land value tax would be the least bad tax. Red Tories have supported consumer-owned cooperatives in the past, the Conservative-Liberal Coalition government oversaw the mass mutualisation of some public services. Even though these groups have not necessarily taken on board the ideology of Georgism and Mutualism as a whole, they have taken on board some of the general premises which is the least the centre-left should be doing. Leave it for the left to move the centre-left more to the left to move the centre even further towards left that it once was. New Labour ironically did that with Thatcherism when it supported a mass privatisation of public services.

As this piece has argued though, taking ideas from other ideologies simply isn’t enough. A coherent set of principles must underlie why you chose those ideas. This is to allow a coherent narrative and picture to be established. Empathising with the electorate is necessary, but in order for you to persuade them of your perspective. It’s time for Labour moderates to ditch the moderate label and espouse something closer between the centre-left and radical centrism. A party on the left side of the spectrum shouldn’t behave as if it is a small-c conservative party, but should be radical in its own right. It’s the centrists jobs to find out where that lies on the political map.

The Mistakes of the Liberal Democrats

After the rise of Cleggmania, the aim of the Liberal Democrats ought to have been to put themselves in a place where they could effectively become the opposition party (i.e. the second party) in the near electoral future. In May 2010, it seemed that entering a coalition to demonstrate to the public was the right coarse of action to take to demonstrate to the electorate that it was a party capable of running the country rather than protesting it’s incumbent government would be a good idea.

In hindsight it would have been better and easier for the Liberal Democrats to have been a critical party of the Conservatives economic plan yet vote through key amendments necessary to keep the government stable, this would have had a number of benefits.

First, the Liberal Democrats could have done a lot more to preserve their liberal ideology, hence their identity, unlike when being a coalition partner to an illiberal political party. They could have been the party airing the view that liberalism does have sensible and practical things to at about modern day British life. The Liberal Democrats would have had more time to oppose the snooper’s charter, oppose secret courts and fight for digital rights to be incorporated into human rights while not being constrained by cabinet collective responsibility. As key figures of the Liberal Democrats were constrained by such responsibility, the rest of the party ended up being constrained to ensure that the coalition didn’t split apart.

On the economy, they could have argued with the Conservatives about the need for fairer cuts to be implemented, in which structural reform of the labour market was necessary in order for the cuts to work in the first place. Downright idiotic policies like the bedroom tax could have been flatly avoided. Yet the Liberals would support the cuts in the name of the national interest, or in some cases abstain so it was a straight Conservative Labour fight in terms of winning the vote (which the Tories would have won).

At the same time promoting the national interest would have been a more resounding message because the public would realise they were voting for policies that they didn’t necessarily agree to help balance the national finances. Principled anti-Tory voters would still have found this problematic but it would warm up to more centrist voters who’d be attracted to the moderating force the Liberal Democrats had in government.

The damage to Nick Clegg’s reputation has been monumental, yet back in 2010 there was enough popularity for him to have been the figurehead of the opposition. He’d been in the ideal place to criticise the Conservatives unsympathetic instincts to the vulnerable while having the luxury to criticise Labour’s previous record in government. With the failings of Ed Miliband as leader of Labour, Clegg could have positioned himself as a genuine alternative to both the Conservatives and Labour. Nicola Sturgeon would call this being the true party of opposition despite only having 50 MPs in the Commons.

Finally, the Liberal Democrats managed to finish in second place in a lot of constituencies back in 2010. Spending time being the effective, thereby de facto, main opposition to the government could very well have given the Liberal Democrats the credibility they needed and wanted to be a party on the national stage. One of the reasons Clegg went into coalition was to show the electorate that the Liberal Democrats were not a bunch of idealists who had little prospect or desire of actually influencing modern Britain.

To look at this from a purely counterfactual perspective would be wrong, they are decisions that could have been made in the early days of the coalition that would have seen better outcomes for the Liberal Democrats. Here is a list of things they could have done, not necessarily implemented, that may have helped their fortunes:

  • Either oppose any raising of tuition fees, or ensure PR was at the heart of the electoral reform referendum instead of AV. If one of these had to be sacrificed to achieve the other then so be it. Personally I’d think not raising tuition fees was a higher priority for the long term success of the Lib Dems.
  • Not be seen to be too friendly with the Conservatives. The early days of the coalition was almost like long lost friends who’d forgotten each other finally reuniting, rather than being a working relationship to aid the country at a desperate time. It gave the impression that yellow wasn’t all that dissimilar to blue.
  • Been more vocal about implementing progressively, rather than regressively, minded cuts to public services and the benefit system.
  • Been opposed to cuts to investment that ended up needing to be reserved to stop the detrimental effect on the “recovery” those cuts were having.
  • Talked much louder about the Liberal Democrat influence on the coalition while respecting the desire for the Conservatives to do the same. It was too late in the coalition life span that Clegg tried to find ways of differentiating the Lib Dems from the stories, despite the differences being obvious to those in the know.

These points are meant to address the fundamentals problems the Lib Dems faced in the coalition: the loss of the student vote and the assimilation of the Liberal Democrats into a light blue party (deep blue for those on the left), not a golden-yellow one, in the minds of the public.

In hindsight it would have been better for the Liberal Democrats to have been the opposition party. They would have gained further from the detachment the electorate has had over the last five years with the establishment. They would have been better positioned to achieve the aims they desired. Alongside that but the curse of the being the junior party in a coalition would have been avoided. The Liberal Democrats were dealt a terrible hand after the 2010 general election, they did an even worse job of making the most of it.

The Election Aftermath

Those seeking drama on election night certainly got it. The exit poll signalled what was to come when it underestimated a prediction that the Conservatives would not only be the major party but well ahead of a Labour Party facing decimation in Scotland while their former coalition partners getting annihilated across the country.

Not only that but their were seven Portillo Moments alone in this election. The Shadow Chancellor of the Exchequer Ed Balls, the Shadow Foreign Secretary and chief campaign strategist Douglas Alexander, Chief Secretary to the Treasury Danny Alexander, key coalition negotiator David Laws, Business Secretary Vince Cable, Energy Secretary Ed Davey and former Liberal Democrat leader Charles Kennedy all lost their seats. The loss of the Ed Balls is the biggest shock, for unlike Douglas Alexander and the Liberal Democrats among that list, it had nothing to do with the SNP surge north of the border, or a violent swing away from the Liberal Democrats. Meanwhile we weren’t far away from including a clearly despondent Deputy Prime Minister Nick Clegg on this list as well. The Liberal Democrats are back to the position they were in the 1970s, with a great deal of distrust and irrelevance gloomily hovering over the parties fortunes.

It’s safe to say that Labour and the Liberal Democrats are in a complete state of utter shock. Both of their respective leaders are due to resign anytime soon. Far more worrying for both isn’t what just happened but what’s about to come. Labour can be expected to have a nigh on impossible situation to contend with made more difficult as the Tories consolidate their power with electoral boundary changes that will heavily favour the Conservatives at the 2020 election. Labour have lost their Scottish heartlands, most likely for a generation, and the Tories are now the party of the south given the Lib Dems wipeout plus UKIP’s failure to turn votes into seats. The challenge now is finding a way to enter deep into Tory, and former Liberal Democrat, heartlands. Failure to do so will result in Labour becoming irrelevant at the national level all together.

Both parties have deep existential questions to ask and answer quickly. With the obstacles now facing Labour, it has no choice but to redefine the left and carve a new identity which southerners and northerners alike can find appealing. Social democracy has limited appeal in the south, the Labour comfort zone must be abandoned. Yet a return to Blairism will only alienate Labour voters in the areas Labour still have strong majorities in, increasing the popularity of UKIP up north. The working classes no longer share the values of Labour and many young people don’t know what a trade union even is. In the long term it looks very bleak for Labour. It could easily take a decade for Labour to carve an identity, let alone exploit it to win a general election.

The Liberal Democrats face a more immediate threat to their survival. The new leader, most likely to be Tim Farron, will have to evaluate what they stand for post-coalition. Will the Lib Dems become a fringe protest party again or will they take some of the experiences of coalition and try be an opposition voice to the current government. The biggest threat to the Liberals isn’t finding a new identity as such, but ensuring they don’t cross the fine line between survival and extinction. The Liberals have the benefit of a rich tradition that could appeal more progressive inclined southerners. Some of they key seats the Liberal Democrats lost were close enough that with the right strategy and vision in place they could regain them potentially, especially if the Tories lurch too far to the right, getting them back into double figures. This alongside Labour ruthlessly exploiting the rebellious nature of the Tory right could in fact save both parties.

Meanwhile the Conservatives will lead a majority government unhampered by any pesky Liberal Democrat MPs. The biggest threat to Cameron now is if the 1992 election repeats itself for ill for the Tories, while avoiding the collapse of the Union and economic uncertainty resulting from an EU referendum. Having such a small majority made John Major vulnerable to the eurosceptic “Tory Bastards” that made that administration dysfunctional. If a repeat were to occur, the natural advantage the Conservatives now have over Labour could dissipate. To preserve the union David Cameron must lead the nation as a whole, despite a negligible presence in Scotland and the North of England. Devo-max must be granted to Scotland, the emphatic result of the night is the Scottish people voting for their autonomy. The Tories ran on a Thatcherite-lite platform in the election campaign, but run the country like a one-nation Tory. Is it possible for him to accomplish this?

For the Liberal Democrats and Labour introspection is needed to assern who they are and how they wish to appeal to voters. Yet the Tories have a key weakness, the potential for government instability. Both parties causing as much trouble as possible can give both parties a significant tactical advantage while granting time for both to determine what they want to be. The aim for the Tories is to be competent in government and stable, if it can achieve this it can shut Labour out for a considerable length of time.

Verdict on the Election Campaign

This general election has a fundamental paradox to it: it has been both incredibly exciting and boring at the same town. The excitement though is more focussed on how complicated it will be to predict who will form the next government, if one can be formed at all. In that sense, the best of the election campaign will arrive after 22:00 tonight. 

The campaigns have been so heavily scripted that they have been boring, it has also made it nigh on impossible for the parties to appeal to anyone but those already decided on who they want to vote for. The targeting of core voters and a bland appeal to centrist voters who have decided who they’d most likely vote for explains why neither the Conservatives or Labour have seen any dramatic shift in their polling ratings. There has been no game changing moments be that a major policy announcement, a gaffe or major event that could influence the result. The TV debates were laboured and only served to put the SNP’s Nicola Sturgeon into the public spotlight. The rise of the SNP, since last years independence referendum, has been the biggest game changer. If not for that then the electoral boundaries would have heavily favoured Labour to be the biggest party in terms of the number of seats in the Commons. 

The paradox is the result of a rare occurrence in politics: a predictable monumental shift in the dynamics of voting. Usually monumental shifts leave us with crazy events like the Portillo Moment, or the election of Clement Atlee over and above a victorious war time Prime Minister. Such moments may yet occur, but most of them have already occurred. The rise of UKIP and the SNP (essentially the rise of rift and left wing nationalism) with the rapid decline of the Liberal Democrats have already made their appearance in the opinion polls. 

There has been no game changing moment like the first time the electorate saw the confident, articulate and unknown leader of the Liberal Democrats back in the 2010 debates. To a degree Nicola Sturgeon had this effect, though everyone knew the SNP we’re going to take almost all the Scottish seats anyway. Everyone knows about Nigel Farage. Plaid Cymru have limited appeal compared to the SNP. The only leader that could have benefitted from a Cleggmania-like phenomena is Natalie Bennett for the Greens, who botched up her moments to make the Greens a more visible and influential force in the election. The Greens should be regretting not having Caroline Lucas as their leader, she was the ace in the hole the Greens  needed to make their breakthrough.

An election this close with so many fringe parties holding influence has never happened before in a UK General Election, perhaps FPTP will provide the yawners some much needed drama. Unless some big events happen tonight and in the early hours of tomorrow morning, this will be remembered as the most exciting and undramatic election ever to be held. That’s what those in the media yawning at all of this have failed to grasp. 

General Election 2015 Endorsement

At the previous election in 2010, the author of the Mutualist endorsed the Liberal Democrats primarily due to ideological sympathies alongside a desire for a freshness to be brought about in British politics. The hope for the Liberal Democrats was for them to become the party of opposition, relegating the Labour Party to third party status. Alas, such hopes were based on political fantasy rather than a realistic expectation that Cleggmania would result in a significant increase in the number of seats held by the Liberal Democrats. Since then they have been the junior partner in a Conservative led coalition government in which they betrayed the student vote, while the author was a student at the University of Nottingham, and many anti-Tory protest voters. They have seen a humongous drop in their support, which is deserved in terms of betraying the student pledge.

The dismissal of the student pledge was concerning for two reasons. First, it signalled that the Liberal Democrats weren’t going to refresh politics by making it more transparent and honest. Breaking the pledge ensured they weren’t being honest and coalition negotiations behind doors could hardly be called transparent. Instead they did what Labour and the Conservatives have mastered, just in the plain idiotic fashion of doing it in the public light with many opponents gladly looking for the kill.

Second, it meant that the Liberal Democrats abandoned a long term aim to get young voters in the habit of voting for them by given them a mightily good reason to be pissed off (unlike the other bloc of voters just referred to). Evidence suggests it just takes three consecutive votes at a young age for the voter to become aligned to a particular party in the long term. Keeping hold of this bloc would have given the Liberal Democrats the foundations to use the coalition as a opportunity to become influential enough to be deemed a satisfactory contender to be the official opposition, and eventually the sole party of government. Instead they are now a bland centrist party hated by many but hoping to have enough seats to still be parliamentary kingmakers over and above the SNP.

Politically, the Mutualist couldn’t care less if anti-Tory protest voters got pissed off for voting for a party that “enabled” them in government. Those who vote to stop someone else coming in deserve to be pissed off at the very least when their vote doesn’t have the desired effect. Such forms of voting create information disformation in which it becomes unclear whether an electoral “victor” actually has an endorsement from the public (which the winner is gladly willing to claim to have been granted to serve their own interests), in the same way market liberals deem price controls a distortion of the information prices tell us about the market.

The Liberal Democrats are not as liberal minded as the Mutualist would like them to be, Political Compass has shown they’ve moved into the lower echelons of the right authoritarian quadrant rather than the right libertarian quadrant they occupied in 2010. They sacrificed a bloc that could have given them a big long term support boost. They have watered down their principles in the name of pragmatism. The defining attribute of liberalism is its basis in ideas and principles, to water them down is to water down the identity of the party.

The rich liberal tradition of the Liberal Democrats matches the core principles of the Mutualist position. The Mutualist deems the Liberal Democrats the best major platform in which its ideology can be promoted within overall. Entering power has had the negative influence of letting the party’s identity wane, yet the party has much more steel which can be used to implement the identity in actual terms. The Liberal Democrats are no longer a protest party.

The Liberal Democrats have shown they can be a responsible party of government. Their political immaturity has cost them dearly in terms of vote, but based on a purely centrist agenda the Mutualist would not consider any government that didn’t contain the strong influence of the Liberal Democrats. The deficit would be cut in a responsible way, while acknowledging that tax rises would be necessary to help cut the deficit. Further moves would be made to make Britain greener would be implemented ensuring influential climate sceptics in the Tory party are more muted. A coalition with Labour would result in a green government for sure.

The Mutualist, however, doesn’t accept the terms of the political debate from any point of the political spectrum; whether that be the left, the right or the centre. The focus on the nations balance sheet over structural reforms to the economy alongside the pressing need to get a green economy to help tackle climate change shows how out of touch the whole nation is to solving the problems of the two biggest problems facing us in the early 21st century: what a post-2008 financial crisis economy should like and anthropogenic-caused global warming. Despite the positive track record in government and natural sympathies the Mutualist at core has to the Liberal democrats, they do not get our endorsement.

Likewise the Mutualist can declare my lack of enthusiasm in both the Conservatives, Labour and UKIP. All the parties share this problem facing the Liberal Democrats, making pledges based on the wrong premises of the political debate. Though each one shares in its unique deficiencies.

Beginning with the Conservatives, they are the party that set up the political debate within the terms I find disagreeable. The focus on the deficit rather than the causes of the mess we are in (even to the point of stating that the mess we’re in was caused by the deficit) just had never computed with me since 2008. The agenda for the Tories is fundamentally regressive at heart, the implementation of further welfare cuts will only increase the number of people who’ll enter structural poverty in the UK. Welfare “cuts” are best implemented through the systemic reform of the market so as to make th underlying forces provide better standard of living so that significantly less need exists for the welfare. Cutting the welfare state doesn’t count as a systemic reform to the market mechanism as lack of will power has little to do with why so many workers are on low incomes, or why they can’t get a job in areas of the country still depressed from the crisis. Systemic reforms that undermine the necessity of such a large welfare state due to a rise in affluence for those on low incomes is the superior way of slashing the welfare bill than simply cutting it.

Far more concerning is the general lack of empathy many of their MPs have to those who end up being worse off due to the cuts. The story of an MP scoffing at a struggling disabled person hungry on the streets for not finding any work underlies that fact. The Conservative party cannot be trusted to look after the vulnerable in society, an economy in which we all are increasingly vulnerable.

Labour face the problem of being an old fashioned progressive party with a gaping hole in their agenda. Promoting predistribution during a time of austerity seems Ed Miliband’s ambition. By shaking up monopolies, Miliband would like to make the markets suitable for a fairer capitalism. Capitalism for the people is the goal for Ed Miliband, but I have no clear vision of this other than a hyperactive state willing to unwisely interfere in markets the wrong way. Rent controls and energy price fixes are not the way to go to reform markets. Admittedly the energy price freeze is a stop gap for a much broader reform within the energy markets, to help bring competition within the trouble. Alas, trying to make a natural ogliopoly a competitive market is a sure fast way to fail to deliver a capitalism for the populace.

The same applies to rent controls. Rents are too high because the value of land and housing throughout the country is too high. This is down to two factors: lack of supply for housing and, more importantly, the widespread phenomena of rent seeking in the economy. Rent controls will do nothing to change either of those two factors, instead they will distort prices in a dysfunctional market. Distorting prices when they’re already distorted is one thing, but not when they’re communicating valuable and correct information (that the housing market in the UK is fucked).

The Mutualist favours liberalising trade union regulation to help give workers more bargaining power in the labour markets. Labour are not a vehicle for that any more. The Coop party is in favour of mutual organisations but are far too socially democratic minded, rather than liberal minded, for the Mutualist’s liking.

I take the label of left libertarian because the label left liberal wouldn’t accurately describe my beliefs. Too call yourself a left wing market liberal lacks a certain elegance the position deserves. Yet I’m not opposed to state interference when it is deemed necessary and done in a compotent manner. In the case of the energy and housing markets Labour are right to think interference is necessary. Labour though want to interfere too much and in an incompetent fashion.

The Mutualist doesn’t question the heart of Ed Miliband; but he hasn’t got the analysis, vision and plan to address the concerns that should worry us all. Labour need to become the spearhead of a new left, Ed Miliband hasn’t done that. Alas, in taking Labour closer to their traditions he has helped resurrect the spirit of statism.

UKIP are a xenophobic party that cater to the ignorance of those hit hard by the financial crisis. Improving the lot of reactionary white working class men may disgust some on the left, if a progressive social outlook in which xenophobia and homophobia are to see there fires extinguished the source of their anger must be dealt with. Improving the economy so it works for them is a must. If after all this is accomplished and their bigotry still is hyperactive, then fuck them. The focus on the EU and immigration are red herrings in the election debate. They deserve to be treat as such.

Given the lack of interest in nationalist policies, this leaves us with the Greens. Like Labour they are statists when it comes to the economy, even more so. Rent controls seem to be fetishised by some on the left as the Greens wrongly think they can help. The revival of council housing, though, seems to be the primary weapon the Greens wish to launch in the war against unaffordable housing. This policy is attractive though I’d prefer a more mutual solution in which emphasis on common/shared, rather than state, ownership of such houses existed. Likewise I think mutualising, rather than nationalising, the railways is the way forward.

Yet the Greens wish to tackle anthropogenic global warming head on while wanting to introduce the Land Value Tax. Sadly the implementation of the tax is in addition to the income tax rather than its replacement as the primary form of taxation. The Greens are the only major party that also propose a Universal Basic Income, which is a fantastic policy to simplify the welfare state while providing the means for people to have a sufficient basic standard of living. The Mutualist also share the convictions of civic libertarianism that many Green members support.

With reservations the Mutualist would recommend, out of all the “major” parties, the Greens in the 2015 General Election. Key policies the Mutualist deems essential to the future prosperity of the country are advocated by the Greens. Yet they lack the conviction in the theoretical benefits policies like the land value tax can provide overall to the economy. This is a consequent of being too drawn to a face value analysis as to why markets fail to deliver equality, resulting in a party that is not as economically literate as it should be to solve the problems the Greens rightly see as being important in the current scheme of things.

The Freedom Party, the Pirate Party, the Liberal Party and the Young’s People Party would all have been strong contenders for our endorsement if they were national parties, i.e. they had candidates competing for almost every constituency. If any of their candidates are up for election in your constituency, though, give them your vote. We are particularly attracted to the Liberal Party which offers a more centrist version of what the Mutualist would like to see a political party offer while in government. The others are all great choices as well, though we have reservations about the YPP’s stance on climate change. The Freedom party supports a basic income scheme and the Pirate Party is strong in wanting to reform copyright law while protecting civil liberties. The YPP is a geolibertarian party that wants to tackle the housing and land crisis many are afflicted with.

Otherwise, the Mutualist recommends either spoiling the ballot paper for those more repelled by the Greens statism, those completely sceptical about the democratic process, or for those that see nothing but malovence in the existence of a state. The Mutualist advises spoiling the ballot as it is a proactive, rather than apathetic, form of protest.

Will a Land Value Tax stop Boom and Bust?

One of the most convincing arguments in favour of an adoption of an Land Value Tax is that it will stop, or make it difficult, for credit booms to occur. By stopping such booms from occurring, it can help ensure that the economy, especially the financial system, doesn’t become to indebted and thereby come unstable enough that a crash will ensue. If a LVT could have such an effect on the economy, then a LVT would go a long way in not only funding government activities but also ensure that there is less a need for governments to run deficits to alleviate the economic condition that result from a crash.

The benefits that a Land Value Tax could give to the economy in the wake of what recently happened in 2008 should be very appealing, if true. Such a benefit should make anyone support a land value tax, even if they don’t agree with the philosophical principles of Georgism in regards to the nature of land and its appropriation.

What is it that causes boom and busts? This question is a very theoretical and abstract question, primarily because it makes no specific reference to any specific economic event. Many different theories exist why booms and busts exist from the belief that government interference in the economy causes such phenomena to the view that too much money or too little money exists within the money supply.

The Georgist’s theory relates the phenomena of credit formation with the appropriation of land and its resultant speculation afterwards. Booms occur because far too much credit exists within the financial system, making the economy too indebted. Such levels of debt make the economy unstable as far too much income ends up being spent of deleveraging rather than economically productive activity. Which is what happens in a bust: debt deflation. Georgists will hold similar views on the cause of economic depressions as Hyman Minsky and Irving Fischer.

So what has a land value tax got to with the credit cycle? Georgists go a step further than Minsky and Fischer and try find the cause of the credit cycle in the first place. It all has to do with the price of land and how it is acquired. Land speculation is a phenomena in which land is treat as an asset to gain money from without doing any productive work on such land. Essentially, the value of land increases making the cost of owning a home more expensive. This increases the overall size of mortgages, which are deemed assets to the banks. As the rise in asset value occurs due to inflating prices of mortgage loans and the security asset that underpins them, the bank has a greater amount of assets on its side of the balance sheet, Selling such mortgages to other financial institutions gives the bank ability to expand its reserves, which gives the bank a greater ability to issue more loans elsewhere in the economy. Whether that be business loans, takeover loans, home loans or even further mortgages. Such an expansion of reserves is made possible due to the fractional reserve banking our financial industry operates.

Such land speculation, which can also be called rent-seeking, is the root cause of how credit expansion forms. Credit expansion leaves us with more money to buy stuff thereby inflating the economy. Greater levels of credit fuel more land speculation which fuels the credit boom even further and further. More credit will mean more money floating around making it easier to conduct other forms of economic activities that may, or may not, be productive. This cycle exists until the system becomes too unstable and destabilises due too much leverage within the economy, causing a spell of deleveraging causing a recession/depression.

The land value tax is designed to tackle land speculation by enforcing the principle that when such speculation occurs you pay a larger amount of money in tax, offering you a disincentive to raising the value of land. As no such incentive exists to speculate on land, the value of land will not increase at dramatic rates ensuring that a quick rise in the asset value of the banks wont occur. This makes it harder for the bank to build up reserves so that it can issue credit. Indirectly, the land value tax imposes a discipline to the creation of credit that wouldn’t exist if we didn’t tax land values, such as we don’t nowadays.

There are three principles objections to this argument. First, that land is not the principle cause of the vast amount of credit being formed in the economy. Second,  the argument ignores the fact that Minsky argues that credit formation is inherently unstable.

First, there are two ways in which land speculation can lead to an expansion of credit. We have the initial act of the issuing of a mortgage which accounts for land and house price [as the former helps determine the latter] by a bank placing such an act onto the asset of the bank, thereby the bank issues deposits as a liability which is a form of credit. This is the immediate way in which credit expansion.

We then have the issuing of mortgage backed securities [MBS], home equity asset backed securities and collatarised debt obligations [CDO]. These are financial instruments used to help finance particular activities which using conventional forms of finance couldn’t occur within the market. Such instruments can help provide greater market liquidity than would otherwise exist due to the type of asset, i.e. mortgages, in question. It’s this greater liquidity to help finance other ventures which helps create even more credit than would otherwise exist. These instruments themselves are forms of credit so the natural use of such instruments expands the quantity of credit. These instruments, especially CDO’s and home equity asset backed securities, are based upon high risk mortgages assets.

Take MBS’s leading to the financial crisis, they were used to finance subprime mortgages. Subprime mortgages were loans to allow those who could not normally afford a home to go and buy one. The introduction of such mortgages what Minsky would call Ponzi finance, primarily due to the entirely speculative nature as to whether the mortgage would get paid off. The introduction of Ponzi finance into the financial system is what ensures such systems become unstable.

So what has a land value tax got to do with this second way in land prices affect the formation of credit? These securities tend to be very risky assets. If the housing and land markets are booming though, with little empirical evidence plus market euphoria, what Keynes would call ‘animal spirits’, to point to prices not to drop, then financiers will calculate the risk of defaults in the collateral of what structures such instruments to be low. Thereby making such securities seem safer to trade. This is acknowledged by the use of credit agencies foolishly given out AAA rating to CDO’s.

The theory of the land value tax tells us though that such booms in land prices would not occur, so such animal spirits could not develop for financiers to think that these instruments were much less riskier than they actually were. The risk of default in a market in which land prices were more stable would increase due the dynamism of the market meaning home owners would not necessarily to be able to finance their mortgage increasing the probability of default.

Some Georgists will find such reasoning problematic because the implementation of a land value tax would need reforms to the land market, meaning no mortgages could exist to finance such land as land would be a commonly owned asset. The tax would be a rent paid to society for the exclusive usage of commonly owned. Due to this, the mentioned securities and financial instruments could not exist as there would be no mortgages to secure them. Such concerns are worth noting primarily due to the fact the implementation of the land value tax will obviously shape the overall economic structure, specifically in the land market.

To answer the objection directly, the size of the market of mortgages, subprime mortgages and financial instruments tells you that a large part of the financial sector is heavily and directly related to the land market. It would take a thorough investigation on the dynamics of the financial system to see how far land speculation accounts for the tolerance of the financial system to create so much credit. In other words, the land value tax will go a long way in reducing the size of credit formation in the financial system. The usage of other taxes may be needed, but we are not arguing for a single tax.

IMF Diagram on the Theory of CDO's
IMF Diagram on the Theory of CDO’s



Third,  it is true the argument fails to take on board that fact. However, the implementation of a land value tax should reduce the amount of credit than can be formed by a significant factor in the economy. This should mean that when busts occur, they will also be significantly smaller in size. They’ll be more manageable for the market and state to respond to the challenges that busts provides. So the land value tax would act as a regulation on the scale of boom and busts rather than a device to eliminate. Mitigating busts is a good reason to implement the land value tax.

The Shadow Bench’s Stupidity

The Guardian has reported today that twenty shadow ministers are prepared to dislodge Ed Miliband as the leader of the Labour party if Alan Johnson, who successfully managed the job of shadow chancellor for quite a time, were to put his name forward for becoming Labour leader. Such an act is utterly stupid. The electorate don’t rate Labour because it doesn’t offer an entising vision for the future of the UK. This is the fault of not only Ed Miliband, but the shadow ministers themselves whose performance as the Opposition has been lacklustre.

With such a lacklustre attmept to oppose the action’s of the coalition government, why the hell should the British public believe that the replacement of Ed Miliband as leader with anyone would change the perception of Labour in the public’s eye? The British public have no reason to think that a new leader has better ideas and plans for the country than Miliband. A coup will only demonstrate that victory and defeat matter for Labour, not proving to be a choice that voters may find appealing. A choice that suggests Labour can take the initiative in setting the political agenda.

If Labour wish to change the leader of the party, it must do so because it wishes for a differing vision of how to achieve victory at the election than Miliband. No one though is providing such a vision, a sense of charisma, of how the party will be taken forward. How the country will be taken forward? How the economy will be taken forward?

This is the problem Labour face. They have no vision, no coherent set of values to guide the party. The website of Labour doesn’t even contain a values page. Instead, meaningless phrases as branded about which are meant to reflect upon what Labour stands for: nothing. One-nation Labour is meant to represent what? A belief that Labour should be the Wet Tories rather than the Dry Tories? In what way can we become a united nation with such large geographical and socioeconomic divides existing within our country?  Without such basic and foundational institutions, the party has little hope of leading the country into any direction whatsoever.

In the wake of Labour’s crushing defeat in 2010, Ed Miliband was gifted the opportunity to shape Labour into a party that could enact a vision, an ideal, for a new way to do economics. Ed Miliband has failed to provide such an ideal. His shadow cabinet have done just as well at not bring a vision to the table. Eventually what follows is that coherent plan, or any sort of a plan at all ca be drawed out and presented to the electorate.

Labour lack their priorities. Go to www.labour.org.uk/people. The Shadow Chancellor, the shadow minister specialising in the most important issue that will occur in the election, is hidden out of the way. Considering the Home Office are meant to tackle issues like immigration, another big issue, Labour feel the Deputy Leader of the Party and the Foreign Secretrary are deserving of more notice.

Everything points to Labour being a directionless party under Ed Miliband, but who else is there? Alan Johnson, who quickly got replaced by the maligned Ed Balls? The timing is such that even if Alan Johnson did have the vision and ideals, he has little time to implment them into a narrative. Labour make no sense, it would be an act of stupidity to find a new leader at this time.