Carney charms MPs (once they get over his pay)

The next BoE governor reveals his plans for expectation management, but stays firmly conventional.

Against a background of the Bank of England's monetary policy committee deciding to keep interest rates flat at 0.5 per cent for another month — meaning it has now been four full years since the last rate change — the next governor of then Bank of England, Mark Carney, appeared before the Treasury select committee and and gave some of the first hints as to how he plans to run the country's central bank.

Of course, before he could do that, he had to justify his pay to the assembled MPs. Admittedly, Carney will be payed a lot: £480,000 a year base salary, plus a £250,000 "housing allowance", well above his predecessor Mervyn King's £305,000. But he defended his salary by pointing out that "I'm moving from one of the least expensive capital cities in the world – Ottawa – to one of the most expensive capital cities in the world," and by noting that his pay was in line with the outgoing head of the FSA, whose responsibilities are being merged with the Bank of England's.

David Ruffley MP was behind him, at least:

On the question of pay, you will be paid considerably less than recent England football managers and I think you are likely to have more success than them.

Eventually, Carney was allowed to talk about monetary policy, and revealed that, while he isn't going to be the loose-cannon central banker of our dreams — NGDP targeting and helicopter drops are out of the question — he does plan to be somewhat more aggressive than King.

In Canada, where Carney was the head of the central bank before his appointment here, there are formal reviews of the inflation target on a five-yearly timeframe. Here, by contrast, the target is — and has been since it was introduced fifteen years ago — for inflation to be within a one percentage point band of two per cent annually. MPs asked whether that target should be changed or loosened, and, while Carney did not directly offer any alternatives, he did argue that there should be that debate, albeit a "short" one.

The "high bar" that Carney thinks needs to be met before change can happen means that NGDP targeting — the idea of mandating the Bank to aim for a particular level of nominal (un-adjusted for inflation) GDP — is unlikely. He remains "far from convinced" that it could work. Similarly, while the USA has a dual mandate, requiring the Fed to target both inflation and unemployment, Carney isn't necessarily aiming for that as an end-stage for Britain either. He starts "from a position of considerable monetary stimulus to take up the slack", but believes that, for the time being, there is enough flexibility under the normal target to pull that off.

Where Carney marked the most substantial break with King was in his expressed belief that communication could be used more effectively to achieve the aims of the bank.

A huge part of monetary policy is expectations management — ensuring that people believe that the future economy is going to be certain way, and act on that belief. That's because many economic prophecies are self-fulfilling. If you tell everyone the stock market will crash, and have enough credibility that they act on it, then they will pull money out of the market and cause that very crash.

As a result, there's a huge difference between a central bank having a plan to keep interest rates low for a further two years, and a central bank saying it has a plan to keep interest rates low for a further two years. Carney understands that difference, and apparently plans to make the most of it.

No matter what happens, though, he has reiterated that he is only going to stay in charge for one five-year term, due to family commitments and a desire to get out of the high stakes world of central banking while he still can. While MPs expressed disbelief that someone could let something so prosaic as a family affect their job, Carney explained that he hoped to achieve all his goals in that span, and to make an exit "that is less newsworthy than my entrance".

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Corbynism isn’t a social movement and Labour shouldn’t be one

The leader's supporters have confused party with movement and party with public. 

The second Labour leadership contest in 12 months is at its heart a clash of mandates. Jeremy Corbyn and his supporters justify his leadership with repeated reference to "grassroots democracy" and his backing among members, whether in votes, polls or turnout at meetings. The Parliamentary Labour Party (PLP) majority justify their disengagement from the leadership by highlighting their relationship with the electorate: the programme they were elected on, Corbyn's record unpopularity and the extreme unlikelihood of winning a general election under his leadership.

However, the moral legitimacy and strategic orientation underpinning Corbynite claims derives in large part from the notion that they are a "social movement" that reaches beyond parliament. To an extent, this is mirrored by some in the PLP, who differentiate themselves by reference to exclusively or primarily being a parliamentary party.

The problem is that Corbynism is not a social movement and neither wing adequately understands the relationship between parties and movements. The coordinated action of "people all round the country" does not necessarily make something a movement. Existing explanations of social movements (ecological, labour, feminist, LGBT etc) tend to emphasise broad-based and diverse coalitions of activists focused largely on social transformation goals in civil society and only then directed towards state actors/actions. As Matt Bolton notes, "The relation between activist groups and the state is not mediated by any electoral mechanism". Most movements are long-term in character, though others may be more ephemeral such as Occupy.

In contrast, statements from the Corbyn leadership and from Momentum emphasise more limited party and state-directed goals. These primarily focus on building a mass party and holding parliamentary representatives to account. Labour now has a mass membership, but is no more a mass party than when there was a similar expanded membership in the early Blair years.

A mass party brings together members and activists with deep roots in communities and movements that enable it to understand social conditions and changes. That degree of embeddedness may allow the party to build electoral blocs that articulate and aggregate interests and identities in a governing project that can win and then exercise power. That is different from the dominant conceptions of both sides in the clash of mandates debate. Most of the PLP majority come from a tradition where the party is little more than an electoral machine, where members have occasional walk-on parts and where the public is seen mainly through the prism of focus groups and mass media. The result is a hollowed out and professionalised politics without a transformative agenda that reinforces the roader crisis of representation.

In contrast, Corbynism conflates and confuses the functions of party and movements. The former becomes the"‘voice" of the latter – a kind of social movement aggregator and/or megaphone for any group "in struggle". But this fails to understand the complex nature of building a popular coalition, where those interests and identities may diverge and even clash sharply. Furthermore, the vast majority of voters are not active in parties or social movements and their views will be unlikely to be heard on the picket line or party rally. Democratic (as distinct from vanguardist) parties have to engage in trade-offs, identification of priorities and tactical manoeuvers that are a sharp contrast to ‘"support anyone/all demands in struggle". Even genuine insurgent parties such as Podemos and Syriza, with roots in movements, inevitably struggle to manage these tensions when faced with the prospect or practice of governing.

The Corbynite confusion is not new. We saw it at the height of the Bennite wave in the 1980s and particularly in Ken Livingstone’s vision of Labour as a rainbow coalition. Here, a prospective electoral coalition was envisaged from combining the demands of various movements, filtered through their supposed organisational expression in black sections, women's sections and so on. In practice, activist voices tend to substitute for the actual experiences and concerns of the various groups. This kind of vanguardist politics takes a different form today, partly as result of changed social and political conditions, but also because of the changing means of communication and organising.

Rather than a social movement, Corbynism should be understood as a network, with a variety of horizontal and vertical characteristics. The former consists of a large and loose association of supporters who function largely as an army of clickivists who aggressively defend the goals of the project and the authenticity of the leader, while consigning those who dissent to some beyond the pale category (Blairite, Red Tory, traitor etc). Abuse is not an inherent feature of those attacks, but the ideological and personality-driven character of the project tends to encourage it. Indeed, the leader-focused nature of Corbynism "testifies precisely to the lack, the weakness, of the "social movement" of which he is the supposed avatar".

The speed and reach of such forms of networking are facilitated by the growth of social media. Such efforts have been conceptualised and popularised by Paul Mason, who has transferred his belief that the agency of social change in a "postcapitalist" world is the ‘educated networked individual’ to the distinctive nature of Corbyn party/movement hybrid. Something different is clearly happening with such networking, but as has been widely observed, the effectiveness of horizontal organising to effect lasting political change has been exaggerated and the tendency to act as self-referential cultural echo chambers vastly under-estimated.

As for the vertical, this is represented by the core team around the offices of Corbyn and John McDonnell and through the factional organisation of Momentum. Their focus is party building, albeit dressed up in the language of social movement. Circumstances have combined to offer the hard left a unique opportunity to capture a social democratic party machine. There is a genuine though mistaken belief that institutional capture will lead to a broader institutional transformation. This does not mean that Momentum should be characterised as a "mob" or a plaything of Trot entrists. Momentum brings together a large number of committed activists understandably fed up with the narrow and timid nature of Labour in particular and politics in general. Some of their party building can help revitalise Labour at local level, though at the moment there is little evidence of substantive participation in campaigns on the ground.

In a recent Guardian piece, Ellie Mae O’Hagan takes critics of Corbynism to task: "There are not enough delusional Leninists in Britain to make up the entirety of Corbyn’s support – these are only ordinary British voters who want radical solutions to a growing number of crises". The first observation is certainly true, but the second is deeply misguided, though all-too typical. As the MP Richard Burden aptly notes, "We stop thinking about how we connect with 'the people' and start to think of ourselves as 'the people'. And as we do that, we get into the politics of the echo chamber where the voices we hear are those we want to hear".

It is sometimes said that Corbyn and co are not interested in winning elections. I don’t think that is true. The problem is that their double confusion between party and movement and party and public means that they don’t know how to. Instead of winning over the electorate, they will carry on accumulating members, waiting for some illusory tipping point where mass party becomes mass appeal. In the wake of a decisive general election defeat – for that it is what is overwhelmingly likely to happen - they will have the party, but Labour as a national electoral alternative and agent of potential social transformation will be finished for the foreseeable future.  

This piece originally appeared in Renewal.

Paul Thompson is Professor of Employment Studies at the University of Stirling and was a founding editor of Renewal.