Jason Seiler for the New Statesman
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Cool Britannia: where did it all go wrong?

Twenty years after Labour's landslide win, did the patriotism and triumphalism of 1997 sow the seeds of Brexit?

“Move it along, Granddad, you’re getting in the way of The Scene! The London Scene, that is! From Soho to Notting Hill, from Camberwell to Camden Town, the capital city of Dear Old Blighty pulses anew with the good vibrations of an epic-scale youthquake!” The words come from the March 1997 issue of Vanity Fair, which was built around a 25-page account of what the magazine called Swinging London Mark II. Its cover featured Liam Gallagher and his soon-to-be wife, Patsy Kensit, reclining on a bed done out with Union Jacks; inside, there were tributes to the Conran family, Alexander McQueen, the Spice Girls, an array of restaurateurs and models, and the then leader of the opposition.

Tony Blair was pictured on page 143. His portrait had been taken using the vogueish cross-processing technique, which saturated everything in colour and made people look as if they were giving off incandescent light. Blair’s huge smile looked positively electrified, and so did the headline. Here, apparently, was “The Visionary”: a man who had led his party to the dizzying position of being 21 points ahead of the Conservatives, and who supposedly embodied a new British optimism. “Say hello to shirtsleeved, smiling Tony Blair, the leader of the ascendant Labour Party,” said the surrounding editorial. “The Right Honourable Tony is just 43 years old and has an outlook to match.”

Notwithstanding that its US edition relegated coverage of London to the inside pages and featured Julia Louis-Dreyfus from Seinfeld on the cover, what Vanity Fair was so frenziedly celebrating was much the same vision of the UK as Blair had been selling for the previous three years. Just as Bill Clinton had framed his challenge to George Bush, Sr in terms of a watershed generational shift, so Blair and his people portrayed New Labour as the epitome of everything fresh and new, fully in tune with a popular culture that was suddenly brimming with infectious confidence. Blair habitually talked about his wish to re-create Britain as “a young country”. He laid claim to being “a member of the rock’n’roll generation”. And as London swung and self-consciously British music became the “in” thing, he built himself in to the giddy cultural fantasia that became known as Cool Britannia.

The term had originated in 1967, as the title of a minute-long song by the Bonzo Dog Doo-Dah Band, set to the tune of “Rule Britannia”: “Cool Britannia, Britannia you are cool/Take a trip!/Britons ever, ever, ever shall be hip.” In 1995 it had been chosen as the name of an icky variety of ice cream – which mixed vanilla, strawberries and “fudge-covered shortbread” – by Ben & Jerry’s. And in November 1996, two days after the publication of a Newsweek piece by Stryker McGuire which explained “Why London rules”, the phrase was taken up by John Major’s decaying Tory government. “London is universally recognised as a centre of style and innovation,” said a press release issued by the Department of National Heritage, which was then led by Virginia Bottomley. “Our fashion, music and culture are the envy of our European neighbours. This abundance of talent, together with our rich heritage, makes ‘Cool Britannia’ an obvious choice for visitors from all over the world.”

But the Conservative Party had never been much good at allying itself with cutting-edge pop culture and the Major government was close to being a national joke – and besides, Blair had got there first. In the summer of 1995, he had sipped gin and tonic with Damon Albarn of Blur at the House of Commons, and turned up – for the second consecutive year – to the annual awards ceremony organised by Q magazine. A few months later, he made an appearance at the 1996 Brit Awards, to pay tribute to Oasis, the Stone Roses and the Clash and present a lifetime award to David Bowie.

Seven months on, his speech at the Labour party conference drew on the optimism kicked up by that year’s Euro football championships – which, with perfect synchronicity, had been staged in England – and the summer’s chart-topping anthem “Three Lions”. “Seventeen years of hurt ­never stopped us dreaming,” he said. “Labour’s coming home.” After the party won its landslide the following year, there was even
a brief spurt of enthusiasm for something called “The Rebranding of Britain”, which entailed the Foreign Office convening a task force chosen, according to the BBC, “to help give Britain a ‘cool’ image abroad”.

How far away it all seems from 2017. Labour now trails the Tories by close to the same margin by which Blair once led them. And if Britain ever had any hope of being recast as a “young country”, that is surely now a forlorn hope. Brexit, as the writer Anthony Barnett recently pointed out, amounts to “government of the old, by the old, for the old”. Columns in the Daily Telegraph advocate the return of imperial measures; the kind of patriotic iconography that Nineties musicians drenched in irony and playfulness now adorns the right-wing press every day, played completely straight. The kingdom itself is under threat from the exit of Scotland. Britannia does not seem cool, but rather angry, panicked – and, to cap it all, hideously square.

The Cool Britannia moment – and a moment is really all it was – was rooted in three things: rock music, an economic boom and a London that, perhaps for the last time, was both culturally thriving and a viable home to the kinds of creative people who made everything happen. Twentysomethings who worked for record companies, magazines and design houses could still live amid the action (in retrospect, I marvel that the monthly rent on my two-bed flat off Westbourne Grove gave me change out of £1,000). Better still, most of the Western world was still locked in to the decade-long spell of carefree optimism that had begun with the fall of the Berlin Wall and would end with the events of 11 September 2001. A kind of giddy optimism was in the air; once the recession of 1991-92 was out of the way, London pulsed with a sense of possibility.

In the spring of 1993, as the domination of rock music by the “grunge” bands led by Nirvana reached its peak, the music press began to frame a new crop of groups in terms of a playfully patriotic British renaissance. “Yanks go home!” said the cover of the April 1993 issue of Select magazine, which superimposed Suede’s Brett Anderson on a Union Jack. His band, many of whose songs celebrated what one lyric called “the love and poison of London”, was one crucial element of the new British wave: another was Suede’s arch-rivals Blur, whose more playful but equally romantic visions of the capital defined their Modern Life Is Rubbish album, released that May. The two groups’ rivalry was given a titillating aspect by their respective lead singers having vied for the affections of Justine Frischmann, who had left Anderson for Albarn, and then formed her own group – Elastica, whose artful, extremely English music began to appear at the year’s end. The bands and their courtiers defined a social milieu centred on Camden Town, and a range of very English musical touchstones: Bowie, the Kinks and the more art-school end of 1970s punk rock.

Then, in early 1994, Oasis hit town and Blur had someone else to compete with. With horribly perfect timing, Nirvana’s frontman, Kurt Cobain, killed himself on 5 April 1994. The first Oasis single was released less than a week later; Blur’s hugely successful album Parklife came out the same month. By 1995, the “in” word was “Britpop”, and a whole set of signifiers had come into play. Oasis’s Noel Gallagher took to playing an Epiphone guitar decorated with the Union Jack; twentysomething fashion mixed the dress codes of Eighties football casuals and Sixties mods. And everything was about success: huge outdoor concerts, chart-topping singles, the imperative to appeal to as many people as possible. “Who wants to be an indie noise-freak, alienating everybody?” Albarn asked. “We want to make music our grandmothers like.” Gallagher boasted of a song he had written – “All Around the World”, which was eventually released in 1997 – which he thought could win the Eurovision Song Contest.

A lot of what happened was about avenging the Eighties. Outside the south-east of England, that decade had been defined largely by rupture and division. The left was marginalised both culturally and politically: Labour had lost election after election, and for most musicians who saw themselves as part of the opposition, life revolved around the limited success afforded by the university circuit and late-night radio. Just as the political left was held back from achieving meaningful power, so a thriving musical and artistic counterculture – the shorthand term for which was “indie” – never really threatened the musical establishment against which it positioned itself. Even the Smiths, who repeatedly made it on to Top of the Pops, had only two Top Ten hits, and they never made it anywhere near the summit of the singles charts.

In any case, success was often considered suspect, if not dangerous. I began my career as a music writer towards the end of the Eighties: if I was despatched to interview a group that had signed to a major record label, my first question was always about what had happened to their all-important “indie credibility”. To be raging from the sidelines sometimes seemed to be the chosen fate of people who wanted no part of the mainstream. As the DJ and music writer Steve Lamacq later told me, “We all believed quite strongly in certain things: we all voted Labour, we were all anti-apartheid, we were pro the miners’ strike, we were anti major record labels.” And for most of the Eighties, “we” lost.

As it turned out, many musicians who cut their teeth during this period hated being so marginalised. “I resent the Eighties,” said Pulp’s Jarvis Cocker. “I’d been born in the Sixties, and you’d see stuff on telly about how great it was, and by the time it comes to your formative years, where you’re thinking, ‘Come on then, let’s have a bit of that,’ it’s all going in the opposite direction. I often said I wanted a refund on my adolescence.”

The Nineties presented an opportunity to dive head first into what the Thatcher era had kept at arm’s length: acclaim, hedonism, money. Pretty quickly, Britpop’s early bohemianism was replaced by an emphasis on conspicuous consumption: high-end casual wear, Paul Smith suits, members-only clubs (the Groucho reached its peak of vogueishness circa 1994; Soho House opened the following year). At the end of 1995, Noel Gallagher’s record company presented him with a chocolate brown Rolls-Royce; in April 1997 he moved into a house in Belsize Park he named Supernova Heights. Its bespoke interiors included a 14ft fish tank, pink leather chairs originally designed for the Swedish royal family and a circular, red-white-and-blue “target bath” adorned with Venetian tiles.

This last item highlighted another big part of how the Nineties overturned much of the received wisdom of the previous decade. During the Thatcher years and beyond, Union Jacks, RAF targets and the merest whiff of patriotism were enough to prompt instant exclusion from “indie” circles. When Morrissey danced around with a Union Jack on stage in 1992, the NME’s headline was: “Flying the flag or flirting with disaster?”

A year later, Blur heralded the release of Modern Life Is Rubbish with a promotional picture titled British Image 1, featuring the group clad in skinhead-style attire and posing with a threatening-looking dog, and some writers on the same paper, where I worked before I became the editor of Select, were equally irate. But then, almost without warning, there was a sea change. By 1995 the very word “Britpop” crystallised the sense of newly acceptable – albeit camped-up – patriotism, as did Noel Gallagher’s guitar. At the 1997 Brit Awards, Geri Halliwell wore a Union Jack minidress and no one raised a murmur of complaint.

Just as old sensitivities about expressions of nationhood seemed to bite the dust, so, rather more questionably, did large elements of what was then called sexual politics. Loaded magazine – strapline: “For men who should know better” – was launched in April 1994 with a cover featuring Gary Oldman and the tag “super lads”. Its tone had a knowing sense of self-parody, but once the basic idea of “laddism” went overground, any nuances inevitably fell away. The result was a kind of unapologetic boorishness, which the post-feminist invention of the “ladette” (defined in the Concise Oxford Dictionary as a term for “young women who behave in a boisterously assertive or crude manner and engage in heavy drinking sessions”) did little to counterbalance. And mixed up in it all was a new class tourism, all about football, greasy-spoon cafés and glottal stops. The fashionable direction of travel was nailed in one of the zeitgeisty quotes issued by Damon Albarn: “I started out reading Nabokov – and now I’m into football, dog racing, and Essex girls.” The era’s most successful sitcom, it may pain some people to recall, was the proudly moronic Men Behaving Badly.

As Britpop widened its reach and came to define no end of stuff beyond music, whole crowds of influential people were co-opted into the fun. The inclusion of fashion was a cinch, as was evident from the Union Jacks soon wrapped around ­Alexander McQueen, Stella McCartney and the tailor Ozwald Boateng. Frantic praise was heaped on the new conceptual art pioneered by the so-called Young British Artists, whose de facto leader, Damien Hirst, joined with Blur’s Alex James and the actor Keith Allen to form a notorious trio whom Vanity Fair’s coverage characterised as the “Boulevardiers” – Groucho regulars to be found “ankle-deep in cigarette butts and spilled spirits at 2.35am”. Tracey Emin was often just as soused, and equally omnipresent.

Danny Boyle’s film Trainspotting – a rare Scotland-centred contribution to the fun, included partly thanks to its Britpop-heavy soundtrack – was released in early 1996. By way of an arch comment on what was afoot, the first Austin Powers picture, subtitled International Man of Mystery and co-starring Elizabeth Hurley, came out the following year, skewering Cool Britannia’s self-conscious echoes of the Sixties but instantly including itself in the same cultural moment. Four Weddings and a Funeral (1994) had been an early portent of the new wave of British cinema; the pretty ghastly Notting Hill, which followed in 1999, symbolised the point at which everything had long since started to smell cheap and nasty.

Until then, it was just about possible to work oneself into a slightly altered state and flit around a London that seemed to live up to the hype. Britpop stars really did compare notes in Camden pubs; actors, models and musicians could be seen doing laps of Soho – or in the East End, flitting around the newly trendy corners of Shoreditch and Hoxton. There was a general sense not just of hyperactive creativity, but extravagance: there were lots of parties, as I recall, with insanely expensive drinks, and the period’s must-have fixture – an ornate ice sculpture, which would melt away decadently as the revelry intensified. Meanwhile, for grown-ups, there were new restaurants: Oliver Peyton’s Coast in Mayfair, the River Café in Hammersmith and Terence Conran’s Mezzo restaurant on Wardour Street, which opened in 1995. Mezzo was archetypally Cool Britannia, both in its size (it seated 700 and employed 350) and its in-and-out eating experience, seemingly designed for people who could only pause for twenty minutes, in case they should miss the next party or premiere. Besides, as the phrase went, eating was cheating.

Which brings us to cocaine, which fell on London like snow. In the midst of a culture increasingly built on oafish belligerence, it was the perfect drug, whose ubiquity was captured in Blur’s “Charmless Man”, released as a single in 1996. Its lyric also sent up the kinds of posh people who now affected a faux-proletarian swagger: “Educated the expensive way/He knows his claret from his Beaujolais/I think he’d like to have been Ronnie Kray/But then nature didn’t make him that way”. But the most pointed lines came a little later on: “He talks at speed/He gets nosebleeds/He doesn’t see/His days are tumbling down upon him”.

That New Labour became the political wing of Cool Britannia was hardly surprising: Blair, Alastair Campbell and Peter Mandelson, after all, were accomplished opportunists and inveterate networkers. But there were deeper similarities between the two inventions which seemed to draw them together without anyone having to push things along. Like the new London, the political project that Blair led was outwardly open and optimistic, but up close, there was some of the same avarice, status-worship and self-regard. When Alex James was invited to the House of Commons by a young Labour Party staffer and passed around fawning MPs, he got a pretty clear sense of what was afoot. “There was a bit of a starf***er thing going, wasn’t there?” he said, five years later. “But they’re just like the rest of us. They just want to get pissed and shag famous people.”

Three months after taking power, Blair and his people hosted a Downing Street reception that would mark the most visible high point of this noble idea. The party was intended to thank celebrities who had lent their support to Labour’s 1997 election campaign, as well as serving notice of the new regime’s affinity with the so-called creative industries. There they all were: Eddie Izzard, Vivienne Westwood, Lenny Henry, Ian McKellen, the Pet Shop Boys, Angus Deayton – and Noel Gallagher, who later remembered some of his conversation with the new prime minister about the morning after the 1997 election. “We were chatting away,” he recalled, “and I said, ‘Oh, it was brilliant, man, because we stayed up till seven o’clock in the morning to watch you arrive at the headquarters. How did you manage to stay up all night?’ And this is his exact words: he leant over and said, ‘Probably not by the same means as you did.’ And at that point I knew he was a geezer.”

Twenty years on, how does all of this look? I still treasure the best Britpop records: Blur’s Modern Life Is Rubbish and Parklife, Oasis’s Definitely Maybe, the first Suede album, the debut album by Elastica, Pulp’s This Is Hardcore. That said, I also regret paying far too much attention to a lot of anaemic, hopelessly derivative music that sounded the death knell for guitar-led rock. Among the records from that time that I now listen to most are three that were part of it only in the most general sense. Tricky’s Maxinquaye (1995) and Massive Attack’s Protection (1994) and Mezzanine (1998) are full of qualities rather lacking in most of that era’s music: audacity, worldliness, a keen sense of the future. They also highlight one of Cool Britannia’s most glaring features: the fact that it was so white.

Retrospection brings on other uncomfortable thoughts. If, from 1995 onwards, people were giddily messing around with flags and endlessly evoking a past Britain that probably never existed, where did that lead? A generous answer might include the 2012 London Olympics. But with the addition of the Nineties’ undertone of boorish stupidity – albeit of the “ironic” kind – you might end up somewhere a bit different.

It’s a somewhat half-formed theory, but if you tried to explain Cool Britannia to an alien and gave them the constituent parts to assemble, you might find that they presented you with something that looked a bit like Boris Johnson. Certainly, if our national conversation now seems increasingly coarse and unhinged, that might be partly down to lad culture. If the surest sign of a political opportunist is a Union Jack, some of the explanation must lie in the period when the flag was suddenly stripped of its problematic aspects, and seemingly became ubiquitous. This is not a matter of drawing lines from Cool Britannia to Brexit: apart from anything else, the voter demographics don’t fit. But often, once things are introduced to the culture, there is no telling where they will end up.

When it comes to the role of New Labour in what happened, ambivalence rules. The end of 18 years of Conservative government was a truly euphoric moment. There did seem to be a shift from fusty, greying Tories to a new breed of politicians who at least had some idea about culture and how it worked – which, in the midst of a politics built on small differences, felt significant, until the drab realities of government broke the spell. I can remember one morning at the offices of Select, not long after the Blair landslide, when the conversation turned to what an amazing thing it was that had just happened, before one of our photographers butted in. He was older than most of the other staff, and attuned to the kind of rock’n’roll attitude that insisted that all squares and straights were usually to be avoided. “It’s just another suit,” he said.

Most pop-culture waves turn out to have been the advance party for a new mutation of capitalism, and so it proved with this one. If Cool Britannia boiled down to anything, it was the birth of a London that by the early Noughties was becoming stupidly expensive and far too full of itself. Perhaps the most telling story arrived unfashionably late, in 2001, when the estate agent Foxtons introduced its capital-based fleet of Mini Coopers, which allowed its salespeople to sell overpriced flats while channelling the spirit of Austin Powers. And yet, and yet. Watching your contemporaries storm the charts was great. Flitting from party to bar to awards ceremony was nothing but a blast.

From the vantage point of 2017, we might think of Cool Britannia as the last burst of an era that lasted from about 1955 to 2000, when pop culture repeatedly seemed to give a sense of possibility and hope, and mere records could take on no end of meaning. I’m not sure it works like that any more. The most successful British music of today – witness Coldplay, or Ed Sheeran, or Adele – is omnipresent, but its vocabulary is a kind of flimsy emotional Esperanto. Conceptual art is a cultural irrelevance. Fashion chitter-chatters on, with no sense that it says anything about the wider world. And the idea that a mainstream politician might credibly claim to be a cultural player seems almost laughable.

As far as I can tell, the only thing that Cool Britannia still denotes is a brand of vaping fluid made in Manchester. The somewhat baffling online sales blurb reads thus: “Cool Britannia . . . goes for the cloud chasing enthusiasts and extreme vapers. Caramel and vanilla create the most spectacular fashion. Extraordinary combo of milk, coconuts and oats gives a tinge of nuttiness for the most fulfilling experience. Cool Britannia is all about giving you just the kind of sensation that you’re looking for.” So it proved back in 1997, before we all woke up with a slightly nasty taste in our mouths, and a sudden sense of a world that was rather more complicated than we’d thought.

John Harris is a writer for the Guardian. His book “The Last Party: Britpop, Blair and the Demise of English Rock” is published by Harper Perennial

This article first appeared in the 27 April 2017 issue of the New Statesman, Cool Britannia 20 Years On

Picture: Archives Charmet / Bridgeman Images
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What Marx got right

...and what he got wrong.

1. You’re probably a capitalist – among other things

Are you a capitalist? The first question to ask is: do you own shares? Even if you don’t own any directly (about half of Americans do but the proportion is far lower in most other countries) you may have a pension that is at least partly invested in the stock market; or you’ll have savings in a bank.

So you have some financial wealth: that is, you own capital. Equally, you are probably also a worker, or are dependent directly or indirectly on a worker’s salary; and you’re a consumer. Unless you live in an autonomous, self-sufficient commune – very unusual – you are likely to be a full participant in the capitalist system.

We interact with capitalism in multiple ways, by no means all economic. And this accounts for the conflicted relationship that most of us (including me) have with capitalism. Typically, we neither love it nor hate it, but we definitely live it.

2. Property rights are fundamental to capitalism . . . but they are not absolute

If owning something means having the right to do what you want with it, property rights are rarely unconstrained. I am free to buy any car I want – so long as it meets European pollution standards and is legally insured; and I can drive it anywhere I want, at least on public roads, as long as I have a driver’s licence and keep to the speed limit. If I no longer want the car, I can’t just dump it: I have to dispose of it in an approved manner. It’s mine, not yours or the state’s, and the state will protect my rights over it. But – generally for good reason – how I can use it is quite tightly constrained.

This web of rules and constraints, which both defines and restricts property rights, is characteristic of a complex economy and society. Most capitalist societies attempt to resolve these tensions in part by imposing restrictions, constitutional or political, on arbitrary or confiscatory actions by governments that “interfere” with property rights. But the idea that property rights are absolute is not philosophically or practically coherent in a modern society.

3. What Marx got right about capitalism

Marx had two fundamental insights. The first was the importance of economic forces in shaping human society. For Marx, it was the “mode of production” – how labour and capital were combined, and under what rules – that explained more or less everything about society, from politics to culture. So, as modes of production change, so too does society. And he correctly concluded that industrialisation and capitalism would lead to profound changes in the nature of society, affecting everything from the political system to morality.

The second insight was the dynamic nature of capitalism in its own right. Marx understood that capitalism could not be static: given the pursuit of profit in a competitive economy, there would be constant pressure to increase the capital stock and improve productivity. This in turn would lead to labour-saving, or capital-intensive, technological change.

Putting these two insights together gives a picture of capitalism as a radical force. Such are its own internal dynamics that the economy is constantly evolving, and this in turn results in changes in the wider society.

4. And what he got wrong . . .

Though Marx was correct that competition would lead the owners of capital to invest in productivity-enhancing and labour-saving machinery, he was wrong that this would lead to wages being driven down to subsistence level, as had largely been the case under feudalism. Classical economics, which argued that new, higher-productivity jobs would emerge, and that workers would see their wages rise more or less in line with productivity, got this one right. And so, in turn, Marx’s most important prediction – that an inevitable conflict between workers and capitalists would lead ultimately to the victory of the former and the end of capitalism – was wrong.

Marx was right that as the number of industrial workers rose, they would demand their share of the wealth; and that, in contrast to the situation under feudalism, their number and geographical concentration in factories and cities would make it impossible to deny these demands indefinitely. But thanks to increased productivity, workers’ demands in most advanced capitalist economies could be satisfied without the system collapsing. So far, it seems that increased productivity, increased wages and increased consumption go hand in hand, not only in individual countries but worldwide.

5. All societies are unequal. But some are more unequal than others

In the late 19th and early 20th centuries, an increasing proportion of an economy’s output was captured by a small class of capitalists who owned and controlled the means of production. Not only did this trend stop in the 20th century, it was sharply reversed. Inherited fortunes, often dating back to the pre-industrial era, were eroded by taxes and inflation, and some were destroyed by the Great Depression. Most of all, after the Second World War the welfare state redistributed income and wealth within the framework of a capitalist economy.

Inequality rose again after the mid-1970s. Under Margaret Thatcher and Ronald Reagan, the welfare state was cut back. Tax and social security systems became less progressive. Deregulation, the decline of heavy industry and reduction of trade union power increased the wage differential between workers. Globally the chief story of the past quarter-century has been the rise of the “middle class”: people in emerging economies who have incomes of up to $5,000 a year. But at the same time lower-income groups in richer countries have done badly.

Should we now worry about inequality within countries, or within the world as a whole? And how much does an increasing concentration of income and wealth among a small number of people – and the consequent distortions of the political system – matter when set against the rapid ­income growth for large numbers of people in the emerging economies?

Growing inequality is not an inevitable consequence of capitalism. But, unchecked, it could do severe economic damage. The question is whether our political systems, national and global, are up to the challenge.

6. China’s road to capitalism is unique

The day after Margaret Thatcher died, I said on Radio 4’s Today programme: “In 1979, a quarter of a century ago, a politician came to power with a radical agenda of market-oriented reform; a plan to reduce state control and release the country’s pent-up economic dynamism. That changed the world, and we’re still feeling the impact. His name, of course, was Deng Xiaoping.”

The transition from state to market in China kick-started the move towards truly globalised capitalism. But the Chinese road to capitalism has been unique. First agriculture was liberalised, then entrepreneurs were allowed to set up small businesses, while at the same time state-owned enterprises reduced their workforces; yet there has been no free-for-all, either for labour or for capital. The movement of workers from rural to urban areas, and from large, unproductive, state-owned enterprises to more productive private businesses, though vast, has been controlled. Access to capital still remains largely under state control. Moreover, though its programme is not exactly “Keynesian”, China has used all the tools of macroeconomic management to keep growth high and relatively stable.

That means China is still far from a “normal” capitalist economy. The two main engines of growth have been investment and the movement of labour from the countryside to the cities. This in itself was enough, because China had so much catching-up to do. However, if the Chinese are to close the huge gap between themselves and the advanced economies, more growth will need to come from innovation and technological progress. No one doubts that China has the human resources to deliver this, but its system will have to change.

7. How much is enough?

The human instinct to improve our material position is deeply rooted: control over resources, especially food and shelter, made early human beings more able to reproduce. That is intrinsic to capitalism; the desire to acquire income and wealth motivates individuals to work, save, invent and invest. As Adam Smith showed, this benefits us all. But if we can produce more than enough for everybody, what will motivate people? Growth would stop. Not that this would necessarily be a bad thing: yet our economy and society would be very different.

Although we are at least twice as rich as we were half a century ago, the urge to consume more seems no less strong. Relative incomes matter. We compare ourselves not to our impoverished ancestors but to other people in similar situations: we strive to “keep up with the Joneses”. The Daily Telegraph once described a London couple earning £190,000 per year (in the top 0.1 per cent of world income) as follows: “The pair are worried about becoming financially broken as the sheer cost of middle-class life in London means they are stretched to the brink.” Talk about First World problems.

Is there any limit? Those who don’t like the excesses of consumerism might hope that as our material needs are satisfied, we will worry less about keeping up with the Joneses and more about our satisfaction and enjoyment of non-material things. It is equally possible, of course, that we’ll just spend more time keeping up with the Kardashians instead . . .

8. No more boom and bust

Are financial crises and their economic consequences part of the natural (capitalist) order of things? Politicians and economists prefer to think otherwise. No longer does anyone believe that “light-touch” regulation of the banking sector is enough. New rules have been introduced, designed to restrict leverage and ensure that failure in one or two financial institutions does not lead to systemic failure. Many would prefer a more wholesale approach to reining in the financial system; this would have gained the approval of Keynes, who thought that while finance was necessary, its role in capitalism should be strictly limited.

But maybe there is a more fundamental problem: that recurrent crises are baked into the system. The “financial instability” hypothesis says that the more governments and regulators stabilise the system, the more this will breed overconfidence, leading to more debt and higher leverage. And sooner or later the music stops. If that is the case, then financial capitalism plus human nature equals inevitable financial crises; and we should make sure that we have better contingency plans next time round.

9. Will robots take our jobs?

With increasing mechanisation (from factories to supermarket checkouts) and computerisation (from call centres to tax returns), is it becoming difficult for human beings to make or produce anything at less cost than a machine can?

Not yet – more Britons have jobs than at any other point in history. That we can produce more food and manufactured products with fewer people means that we are richer overall, leaving us to do other things, from economic research to performance art to professional football.

However, the big worry is that automation could shift the balance of power between capital and labour in favour of the former. Workers would still work; but many or most would be in relatively low-value, peripheral jobs, not central to the functioning of the economy and not particularly well paid. Either the distribution of income and wealth would widen further, or society would rely more on welfare payments and charity to reduce unacceptable disparities between the top and the bottom.

That is a dismal prospect. Yet these broader economic forces pushing against the interests of workers will not, on their own, determine the course of history. The Luddites were doomed to fail; but their successors – trade unionists who sought to improve working conditions and Chartists who demanded the vote so that they could restructure the economy and the state – mostly succeeded. The test will be whether our political and social institutions are up to the challenge.

10. What’s the alternative?

There is no viable economic alternative to capitalism at the moment but that does not mean one won’t emerge. It is economics that determines the nature of our society, and we are at the beginning of a profound set of economic changes, based on three critical developments.

Physical human input into production will become increasingly rare as robots take over. Thanks to advances in computing power and artificial intelligence, much of the analytic work that we now do in the workplace will be carried out by machines. And an increasing ability to manipulate our own genes will extend our lifespan and allow us to determine our offspring’s characteristics.

Control over “software” – information, data, and how it is stored, processed and manipulated – will be more important than control over physical capital, buildings and machines. The defining characteristic of the economy and society will be how that software is produced, owned and commanded: by the state, by individuals, by corporations, or in some way as yet undefined.

These developments will allow us, if we choose, to end poverty and expand our horizons, both materially and intellectually. But they could also lead to growing inequality, with the levers of the new economy controlled by a corporate and moneyed elite. As an optimist, I hope for the former. Yet just as it wasn’t the “free market” or individual capitalists who freed the slaves, gave votes to women and created the welfare state, it will be the collective efforts of us all that will enable humanity to turn economic advances into social progress. 

Jonathan Portes's most recent book is “50 Ideas You Really Need to Know: Capitalism” (Quercus)

Jonathan Portes is senior fellow The UK in a Changing Europe and Professor of Economics and Public Policy, King’s College London.

This article first appeared in the 22 June 2017 issue of the New Statesman, The zombie PM

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