This isn't the Great Recession, it's the Great Uncertainty

There's power in a name. But we have to get the right one.

Labels matter in orienting our thinking about, characterising and constructing different eras in the global political economy. They are also invaluable shorthand and these days we all increasingly write, and possibly think, in shorthand.

It’s also striking that many such labels have come to acquire the declaratory claim of being the ‘great’ variant of whatever it is they announce. Some of these are now so widely used that we hardly recall their origins.

Think of the "Great War" or the "Great Depression" (although the latter is usually attributed to the book of that name by the economist Lionel Robbins first published in 1934). Keynes, by the way, preferred to talk of the ‘Great Slump, but for some reason that did not catch on in the same way.

Other eras lack an agreed label; and some even lack the epithet ‘great’. John Ruggie generated many citations by proposing the notion of "embedded liberalism" to capture the essence of the post-1945 era, but the phrase never spread beyond the academy. The French, of course, talked of "les trente glorieuses" to describe the period of steady growth up to the mid 1970s, but that too never infiltrated the global English vernacular. Nobody, however, tried out the "Great Growth", or the "Great Expansion", or the "Great Social Democracy"!

Coming closer to the present we have now lived through what some describe, in a rather odd way perhaps, as the "Great Moderation". This phrase was coined by two American economists, James Stock and Mark Watson, in a 2002 National Bureau of Economic Research publication and was then popularised by Ben Bernanke, then a member, now the chairman of the US Federal Reserve, in a speech he made in 2004.

The term is grounded in the claim that, starting in the mid-1980s, a series of institutional and structural changes in the economies of leading developed countries caused a reduction in the volatility of normal business cycle fluctuations, thereby diminishing the influence of traditional macroeconomic policy. Now wrecked by events, it was always a complacent take on reality and our colleagues in CRESC at the University of Manchester have fought back by dubbing this whole period of boom the "Great Complacence"!

So where do we sit now? At one level the answer is simple: we live – at least those of us in the West – amidst the "Great Recession". The New York Times journalist, Catherine Rampell, has recently provided a nice etymology of the use of this term. It’s spot on, of course, but it doesn’t catch the deeper elements of our current conjuncture.

For the honest answer is that we don’t really know – yet – where we are, not least because where we think we are will determine how we get out of this mess and we still seem a long way from that. Many suggest, or maybe just hope, that neoliberalism is over. But the neoliberals don’t think so and in any case new eras always take longer to emerge than people think. Thus far, neoliberal dispositions seem to have been reinforced by the crisis – for in a sense that is exactly what austerity is all about.

It is important, though, to remind ourselves that getting from the Wall Street crash of 1929 to the Bretton Woods conference of 1944 took fifteen years. The other great recent period of shift – the "long 1970s" – is even harder to date with precision. But, again, it took a lot of pounding by the neoliberal right to move us from the first signs of the crisis of "embedded liberalism" in the late 1960s to the hey-day of Reaganism and Thatcherism in the early 1980s. So perhaps fifteen years is about standard for these sorts of transitions …

In these circumstances many analysts fall back on Gramsci, reaching for The Prison Notebooks and quoting that bit where he writes that "the crisis consists precisely in the fact that the old is dying and the new cannot be born", adding that "in this interregnum a great variety of morbid symptoms appear". However, we have opted to take up the challenge implicitly laid down here by Gramsci by trying to think through the key elements of the confusion and contradiction that dominate so many attempts to chart our position.

We label the current era the Great Uncertainty and suggest, by deliberate use of this term, that the present conjuncture is being shaped by a remarkable, and hugely challenging, coalescence of three major processes of structural change occurring simultaneously and interacting in all manner of complicated ways. They can be distinguished analytically as follows:

  • Financial crisis: a largely Western crisis brought about by neoliberal excess and now rendering the resumption of economic growth a severe conundrum for the US, Japan and nearly all major European economies and a problem at least for the rest of the global economy;
  • Shifting economic power: the recent intensification of longstanding movements in the locus of economic power in the world characterised by the rise of countries like China, India, Brazil and several others too;
  • Environmental threat: the eventual realisation that climate change is both real and accelerating and is now asking the most serious questions about the ongoing viability of traditional notions of economic growth and indeed the good society itself.

The key point, though – and the reason that this all adds up to the Great Uncertainty – is that these processes of change are all taking place now and arguably will come to a head at broadly the same time. They also feed off each other in extraordinary and unexpected ways, with the politics flowing both through and between them in highly complex fashion.

This web of change is what SPERI was set up to research and help us understand. In subsequent blogs we will analyse further each of these three interlocking features of our uncertain times.

This is the first in a five-post series on the "Great Uncertainty".

Photograph: Getty Images

Professors Colin Hay and Tony Payne are Directors of the Sheffield Political Economy Research Institute at the University of Sheffield.

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Find the EU renegotiation demands dull? Me too – but they are important

It's an old trick: smother anything in enough jargon and you can avoid being held accountable for it.

I don’t know about you, but I found the details of Britain’s European Union renegotiation demands quite hard to read. Literally. My eye kept gliding past them, in an endless quest for something more interesting in the paragraph ahead. It was as if the word “subsidiarity” had been smeared in grease. I haven’t felt tedium quite like this since I read The Lord of the Rings and found I slid straight past anything written in italics, reasoning that it was probably another interminable Elvish poem. (“The wind was in his flowing hair/The foam about him shone;/Afar they saw him strong and fair/Go riding like a swan.”)

Anyone who writes about politics encounters this; I call it Subclause Syndrome. Smother anything in enough jargon, whirr enough footnotes into the air, and you have a very effective shield for protecting yourself from accountability – better even than gutting the Freedom of Information laws, although the government seems quite keen on that, too. No wonder so much of our political conversation ends up being about personality: if we can’t hope to master all the technicalities, the next best thing is to trust the person to whom we have delegated that job.

Anyway, after 15 cups of coffee, three ice-bucket challenges and a bottle of poppers I borrowed from a Tory MP, I finally made it through. I didn’t feel much more enlightened, though, because there were notable omissions – no mention, thankfully, of rolling back employment protections – and elsewhere there was a touching faith in the power of adding “language” to official documents.

One thing did stand out, however. For months, we have been told that it is a terrible problem that migrants from Europe are sending child benefit to their families back home. In future, the amount that can be claimed will start at zero and it will reach full whack only after four years of working in Britain. Even better, to reduce the alleged “pull factor” of our generous in-work benefits regime, the child benefit rate will be paid on a ratio calculated according to average wages in the home country.

What a waste of time. At the moment, only £30m in child benefit is sent out of the country each year: quite a large sum if you’re doing a whip round for a retirement gift for a colleague, but basically a rounding error in the Department for Work and Pensions budget.

Only 20,000 workers, and 34,000 children, are involved. And yet, apparently, this makes it worth introducing 28 different rates of child benefit to be administered by the DWP. We are given to understand that Iain Duncan Smith thinks this is barmy – and this is a man optimistic enough about his department’s computer systems to predict in 2013 that 4.46 million people would be claiming Universal Credit by now*.

David Cameron’s renegotiation package was comprised exclusively of what Doctor Who fans call handwavium – a magic substance with no obvious physical attributes, which nonetheless helpfully advances the plot. In this case, the renegotiation covers up the fact that the Prime Minister always wanted to argue to stay in Europe, but needed a handy fig leaf to do so.

Brace yourself for a sentence you might not read again in the New Statesman, but this makes me feel sorry for Chris Grayling. He and other Outers in the cabinet have to wait at least two weeks for Cameron to get the demands signed off; all the while, Cameron can subtly make the case for staying in Europe, while they are bound to keep quiet because of collective responsibility.

When that stricture lifts, the high-ranking Eurosceptics will at last be free to make the case they have been sitting on for years. I have three strong beliefs about what will happen next. First, that everyone confidently predicting a paralysing civil war in the Tory ranks is doing so more in hope than expectation. Some on the left feel that if Labour is going to be divided over Trident, it is only fair that the Tories be split down the middle, too. They forget that power, and patronage, are strong solvents: there has already been much muttering about low-level blackmail from the high command, with MPs warned about the dire influence of disloyalty on their career prospects.

Second, the Europe campaign will feature large doses of both sides solemnly advising the other that they need to make “a positive case”. This will be roundly ignored. The Remain team will run a fear campaign based on job losses, access to the single market and “losing our seat at the table”; Leave will run a fear campaign based on the steady advance of whatever collective noun for migrants sounds just the right side of racist. (Current favourite: “hordes”.)

Third, the number of Britons making a decision based on a complete understanding of the renegotiation, and the future terms of our membership, will be vanishingly small. It is simply impossible to read about subsidiarity for more than an hour without lapsing into a coma.

Yet, funnily enough, this isn’t necessarily a bad thing. Just as the absurd complexity of policy frees us to talk instead about character, so the onset of Subclause Syndrome in the EU debate will allow us to ask ourselves a more profound, defining question: what kind of country do we want Britain to be? Polling suggests that very few of us see ourselves as “European” rather than Scottish, or British, but are we a country that feels open and looks outwards, or one that thinks this is the best it’s going to get, and we need to protect what we have? That’s more vital than any subclause. l

* For those of you keeping score at home, Universal Credit is now allegedly going to be implemented by 2021. Incidentally, George Osborne has recently discovered that it’s a great source of handwavium; tax credit cuts have been postponed because UC will render such huge savings that they aren’t needed.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

This article first appeared in the 11 February 2016 issue of the New Statesman, The legacy of Europe's worst battle