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.

Photo: Getty
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PMQs review: Jeremy Corbyn prompts Tory outrage as he blames Grenfell Tower fire on austerity

To Conservative cries of "shame on you!", the Labour leader warned that "we all pay a price in public safety" for spending cuts.

A fortnight after the Grenfell Tower fire erupted, the tragedy continues to cast a shadow over British politics. Rather than probing Theresa May on the DUP deal, Jeremy Corbyn asked a series of forensic questions on the incident, in which at least 79 people are confirmed to have died.

In the first PMQs of the new parliament, May revealed that the number of buildings that had failed fire safety tests had risen to 120 (a 100 per cent failure rate) and that the cladding used on Grenfell Tower was "non-compliant" with building regulations (Corbyn had asked whether it was "legal").

After several factual questions, the Labour leader rose to his political argument. To cries of "shame on you!" from Tory MPs, he warned that local authority cuts of 40 per cent meant "we all pay a price in public safety". Corbyn added: “What the tragedy of Grenfell Tower has exposed is the disastrous effects of austerity. The disregard for working-class communities, the terrible consequences of deregulation and cutting corners." Corbyn noted that 11,000 firefighters had been cut and that the public sector pay cap (which Labour has tabled a Queen's Speech amendment against) was hindering recruitment. "This disaster must be a wake-up call," he concluded.

But May, who fared better than many expected, had a ready retort. "The cladding of tower blocks did not start under this government, it did not start under the previous coalition governments, the cladding of tower blocks began under the Blair government," she said. “In 2005 it was a Labour government that introduced the regulatory reform fire safety order which changed the requirements to inspect a building on fire safety from the local fire authority to a 'responsible person'." In this regard, however, Corbyn's lack of frontbench experience is a virtue – no action by the last Labour government can be pinned on him. 

Whether or not the Conservatives accept the link between Grenfell and austerity, their reluctance to defend continued cuts shows an awareness of how politically vulnerable they have become (No10 has announced that the public sector pay cap is under review).

Though Tory MP Philip Davies accused May of having an "aversion" to policies "that might be popular with the public" (he demanded the abolition of the 0.7 per cent foreign aid target), there was little dissent from the backbenches – reflecting the new consensus that the Prime Minister is safe (in the absence of an attractive alternative).

And May, whose jokes sometimes fall painfully flat, was able to accuse Corbyn of saying "one thing to the many and another thing to the few" in reference to his alleged Trident comments to Glastonbury festival founder Michael Eavis. But the Labour leader, no longer looking fearfully over his shoulder, displayed his increased authority today. Though the Conservatives may jeer him, the lingering fear in Tory minds is that they and the country are on divergent paths. 

George Eaton is political editor of the New Statesman.

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