Has the crisis “confounded the left”?
Phillip Stephens in today’s FT argues that because capitalism has not collapsed and parties of the left did badly across the EU last week that the left has lost the argument. He says:
As for the predicted lurch to the left, it has not materialised. I have not seen anyone rushing to imitate the Russian model of state capitalism. “
But this is a classic case of setting up a straw man to knock it down. The truth is that if policy makers had followed a neo-liberal free market response to the credit crunch we would now be in the depth of a world slump.
Of course he is right that in Europe parties of the left have not reaped any electoral reward. That is hardly the case in the US. It was precisely the onset of the recession that turned Obama into an election winner, and while US politics doesn’t fit neatly into European measures, he is certainly the most social democratic US President since Lyndon Johnson.
But what about the ideas of the left?
Stephens starts his article by saying:
Portraits of Adam Smith made way for freshly-burnished busts of John Maynard Keynes. Popular rage against greedy bankers promised to restore politics to parties of the left.”
An interesting diversion could be had by discussing Adam Smith’s place on the modern political spectrum but I leave that to the more qualified. But it cannot be denied that governments across the political spectrum have dusted down their Keynesian toolkits.
From a UK perspective, governments of the nominal right in countries such as Germany and France have always been hard to square with our domestic political spectrum. Here the leaderships of both major parties have accepted the dominant anglo-saxon neo-liberal consensus of the last few decades. Despite twelve years of a left of centre government, we still have a more unequal society than most European countries mainly held by the right.
Unions too know that the UK are rarely allies in European negotiations, while the French frequently are. Germany was attacked for not stimulating its economy, yet it has genuine automatic stabilisers through a much more generous benefits system for the unemployed and is providing much more help for manufacturing.
Europe’s right wing parties have kept in power as Stephens concedes by acting left.
Socialists and social democrats have been outflanked as their opponents have moved quickly to occupy political space that might have been claimed by the left. Why should voters turn leftwards when Ms Merkel and Mr Sarkozy have sounded as indignant as any about the shenanigans of “Anglo-Saxon” capitalism?
Despite its deficiencies the G20 summit communique was quite different from its predecessors.
So Stephens can argue that left wing parties have failed to benefit from the recession in Europe, if not in the USA.
But the ideas he associates with the left – total opposition to globalisation, abolitions of markets and economic nationalism – are not actually what the mainstream left supports. The solutions that have worked have been drawn from the stimulus and regulatory policies associated with social Europe and the very broadly-defined left.
Of course he would be right to say that the revolutionary left, long salivating for the final crisis of capitalism, had got it wrong. But that hardly seems such a surprise that it needs a major piece in the FT.