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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Commons Confidential: What happened at Tom Watson's birthday party?

Finances, fair and foul – and why Keir Starmer is doing the time warp.

Keir Starmer’s comrades mutter that a London seat is an albatross around the neck of the ambitious shadow Brexit secretary. He has a decent political CV: he was named after Labour’s first MP, Keir Hardie; he has a working-class background; he was the legal champion of the McLibel Two; he had a stint as director of public prosecutions. The knighthood is trickier, which is presumably why he rarely uses the title.

The consensus is that Labour will seek a leader from the north or the Midlands when Islington’s Jeremy Corbyn jumps or is pushed under a bus. Starmer, a highly rated frontbencher, is phlegmatic as he navigates the treacherous Brexit waters. “I keep hoping we wake up and it’s January 2016,” he told a Westminster gathering, “and we can have another run. Don’t we all?” Perhaps not everybody. Labour Remoaners grumble that Corbyn and particularly John McDonnell sound increasingly Brexitastic.

To Tom Watson’s 50th birthday bash at the Rivoli Ballroom in south London, an intact 1950s barrel-vaulted hall generous with the velvet. Ed Balls choreographed the “Gangnam Style” moves, and the Brockley venue hadn’t welcomed so many politicos since Tony Blair’s final Clause IV rally 22 years ago. Corbyn was uninvited, as the boogying deputy leader put the “party” back into the Labour Party. The thirsty guests slurped the free bar, repaying Watson for 30 years of failing to buy a drink.

One of Westminster’s dining rooms was booked for a “Decent Chaps Lunch” by Labour’s Warley warrior, John Spellar. In another room, the Tory peer David Willetts hosted a Christmas reception on behalf of the National Centre for Universities and Business. In mid-January. That’s either very tardy or very, very early.

The Labour Party’s general secretary, Iain McNicol, is a financial maestro, having cleared the £25m debt that the party inherited from the Blair-Brown era. Now I hear that he has squirrelled away a £6m war chest as insurance against Theresa May gambling on an early election. Wisely, the party isn’t relying on Momentum’s fractious footsloggers.

The word in Strangers’ Bar is that the Welsh MP Stephen Kinnock held his own £200-a-head fundraiser in London. Either the financial future of the Aberavon Labour Party is assured, or he fancies a tilt at the top job.

Dry January helped me recall a Labour frontbencher explaining why he never goes into the Commons chamber after a skinful: “I was sitting alongside a colleague clearly refreshed by a liquid lunch. He intervened and made a perfectly sensible point without slurring. Unfortunately, he stood up 20 minutes later and repeated the same point, word for word.”

Kevin Maguire is the associate editor (politics) of the Daily Mirror

Kevin Maguire is Associate Editor (Politics) on the Daily Mirror and author of our Commons Confidential column on the high politics and low life in Westminster. An award-winning journalist, he is in frequent demand on television and radio and co-authored a book on great parliamentary scandals. He was formerly Chief Reporter on the Guardian and Labour Correspondent on the Daily Telegraph.

This article first appeared in the 19 January 2016 issue of the New Statesman, The Trump era