Flip-flopping

The reality is that the “flip flop” is really little more than a catchy phrase that essentially capt

No sooner than Hillary conceded to Obama then the US presidential campaign got underway in earnest and with it came the usual rampant speculation.

Who might get top jobs in the next administration, dark whispers alluding to salacious details in each candidate’s alleged past; and, most entertainingly of all, the art of calling the “flip flop” on your opponent.

The “flip flop” is what people in Britain might call a change of heart or U-turn on a previously held position. In the current race, this translates recently into Barack Obama’s decision to forgo public financing in his campaign (in recognition of the immense amount of money he has managed to raise from small individual donors), or John McCain’s turn-around from being a Senator vigorously against off-shore drilling and tax cuts – to deciding that both are in fact probably good solutions to current issues (conveniently both are issues that appeal to a Republican base that remains tepid towards him).

There have been even more egregious shifts from both campaigns as we have gone along: John McCain went from calling the Christian right “agents of intolerance” to recognising that if he wants to win, he is also going to have to bring this crucial conservative constituency on-side.

A problem when one considers that in January 2007, James Dobson, head of the Focus on the Family - a leading Christian group - stated that “I would not vote for John McCain under any circumstances, I pray that we won't get stuck with him” (while he has since reached out to McCain, he has yet to give him the endorsement).

Barack Obama on the other hand was embarrassed when his heartfelt protectionist campaign rhetoric clashed with what his key economic adviser was running around telling concerned Canadians that “much of the rhetoric that may be perceived to be protectionist is more reflective of political manoeuvring than policy.”

Politics as normal one might cynically say. Well, yes, but last time the “flip flop” got thrown around properly in an American campaign was with John Kerry, when his “I actually did vote for the $87 billion before I voted against it” (referring to a vote to allow a supplemental bill to get funding for troops in the field in Iraq and Afghanistan), became the “gift that kept giving” as Karl Rove put it.

Endless pro-Bush ads played on constant repeat highlighting what by Kerry’s own admission was “one of those inarticulate moments,” and Republican rallies became slipper waving affairs with speakers leading the crowds in “flip flop” themed chants. And when people went to the polls, the charge stuck, with Kerry losing and polls showing that 65 per cent saw him as a “flip flopper,” while Bush led the faithful with merely 36 per cent doubting him.

This may not have been the only reason for John Kerry’s defeat, but it was one of the defining features of the campaign – and neither the Macattack nor Obaminator want to be tarred with this losing brush (though they are perfectly happy for surrogates to throw it around liberally against the other).

This concern may actually be misplaced, as it is not totally clear that the public either care or trust one more than the other. A recent CNN/Opinion Research Corp. poll reported that “61 per cent of voters polled said McCain has changed his mind for political reasons” and “59 per cent of those polled said Obama also shifts positions with the political winds”. The American public apparently holds both men with equal disdain when it comes to believing their promises.

The reality is that the fixation on the “flip flop” is really little more than a catchy phrase that essentially captures what politician’s have been doing for years. This is not to justify the sometimes openly mendacious things that they say, but merely another sort of reflection of the endless media coverage politicians are subjected to.

Any wavering away from message, contradiction with a previous statement, or an “inarticulate moment” will be likely captured on video, broadcast around the world, and over-analysed ad nauseam. This is true not only of “flip flops” but also open bigotry (witness Republican Senator George Allen’s “macaca” comment that managed to lose him one of the US’s most Republican states) and other errata (like former President Bill Clinton on the stump for his wife).

“Events, dear boy, events,” was how Harold Macmillan described things that steer governments off course – and this is equally applicable to any political campaign and any policy stand. Given we live in a world where time moves on, and things happen, why are we surprised when a politician’s stand might slightly alter or correct itself when some new information comes to light or something happens? On the basis of the weight given to the “flip flop” it would appear we need either politicians with an oracular degree of prescience – or we need ones who are so bull-headed that even in the face of overwhelming facts, they stick to their guns and let history be their judges.

That or we need to find a way of getting the world to stop turning until the election ride is over.

Jeremy Corbyn. Photo: Getty
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Lexit: the EU is a neoliberal project, so let's do something different when we leave it

Brexit affords the British left a historic opportunity for a decisive break with EU market liberalism.

The Brexit vote to leave the European Union has many parents, but "Lexit" – the argument for exiting the EU from the left – remains an orphan. A third of Labour voters backed Leave, but they did so without any significant leadership from the Labour Party. Left-of-centre votes proved decisive in determining the outcome of a referendum that was otherwise framed, shaped, and presented almost exclusively by the right. A proper left discussion of the issues has been, if not entirely absent, then decidedly marginal – part of a more general malaise when it comes to developing left alternatives that has begun to be corrected only recently, under Jeremy Corbyn and John McDonnell.

Ceding Brexit to the right was very nearly the most serious strategic mistake by the British left since the ‘70s. Under successive leaders Labour became so incorporated into the ideology of Europeanism as to preclude any clear-eyed critical analysis of the actually existing EU as a regulatory and trade regime pursuing deep economic integration. The same political journey that carried Labour into its technocratic embrace of the EU also resulted in the abandonment of any form of distinctive economics separate from the orthodoxies of market liberalism.

It’s been astounding to witness so many left-wingers, in meltdown over Brexit, resort to parroting liberal economics. Thus we hear that factor mobility isn’t about labour arbitrage, that public services aren’t under pressure, that we must prioritise foreign direct investment and trade. It’s little wonder Labour became so detached from its base. Such claims do not match the lived experience of ordinary people in regions of the country devastated by deindustrialisation and disinvestment.

Nor should concerns about wage stagnation and bargaining power be met with finger-wagging accusations of racism, as if the manner in which capitalism pits workers against each other hasn’t long been understood. Instead, we should be offering real solutions – including a willingness to rethink capital mobility and trade. This places us in direct conflict with the constitutionalised neoliberalism of the EU.

Only the political savvy of the leadership has enabled Labour to recover from its disastrous positioning post-referendum. Incredibly, what seemed an unbeatable electoral bloc around Theresa May has been deftly prized apart in the course of an extraordinary General Election campaign. To consolidate the political project they have initiated, Corbyn and McDonnell must now follow through with a truly radical economic programme. The place to look for inspiration is precisely the range of instruments and policy options discouraged or outright forbidden by the EU.

A neoliberal project

The fact that right-wing arguments for Leave predominated during the referendum says far more about today’s left than it does about the European Union. There has been a great deal of myth-making concerning the latter –much of it funded, directly or indirectly, by the EU itself.

From its inception, the EU has been a top-down project driven by political and administrative elites, "a protected sphere", in the judgment of the late Peter Mair, "in which policy-making can evade the constraints imposed by representative democracy". To complain about the EU’s "democratic deficit" is to have misunderstood its purpose. The main thrust of European economic policy has been to extend and deepen the market through liberalisation, privatisation, and flexiblisation, subordinating employment and social protection to goals of low inflation, debt reduction, and increased competitiveness.

Prospects for Keynesian reflationary policies, or even for pan-European economic planning – never great – soon gave way to more Hayekian conceptions. Hayek’s original insight, in The Economic Conditions of Interstate Federalism, was that free movement of capital, goods, and labour – a "single market" – among a federation of nations would severely and necessarily restrict the economic policy space available to individual members. Pro-European socialists, whose aim had been to acquire new supranational options for the regulation of capital, found themselves surrendering the tools they already possessed at home. The national road to socialism, or even to social democracy, was closed.

The direction of travel has been singular and unrelenting. To take one example, workers’ rights – a supposed EU strength – are steadily being eroded, as can be seen in landmark judgments by the European Court of Justice (ECJ) in the Viking and Laval cases, among others. In both instances, workers attempting to strike in protest at plans to replace workers from one EU country with lower-wage workers from another, were told their right to strike could not infringe upon the "four freedoms" – free movement of capital, labour, goods, and services – established by the treaties.

More broadly, on trade, financial regulation, state aid, government purchasing, public service delivery, and more, any attempt to create a different kind of economy from inside the EU has largely been forestalled by competition policy or single market regulation.

A new political economy

Given that the UK will soon be escaping the EU, what opportunities might this afford? Three policy directions immediately stand out: public ownership, industrial strategy, and procurement. In each case, EU regulation previously stood in the way of promising left strategies. In each case, the political and economic returns from bold departures from neoliberal orthodoxy after Brexit could be substantial.

While not banned outright by EU law, public ownership is severely discouraged and disadvantaged by it. ECJ interpretation of Article 106 of the Treaty on the Functioning of the European Union (TFEU) has steadily eroded public ownership options. "The ECJ", argues law professor Danny Nicol, "appears to have constructed a one-way street in favour of private-sector provision: nationalised services are prima facie suspect and must be analysed for their necessity". Sure enough, the EU has been a significant driver of privatisation, functioning like a ratchet. It’s much easier for a member state to pursue the liberalisation of sectors than to secure their (re)nationalisation. Article 59 (TFEU) specifically allows the European Council and Parliament to liberalise services. Since the ‘80s, there have been single market programmes in energy, transport, postal services, telecommunications, education, and health.

Britain has long been an extreme outlier on privatisation, responsible for 40 per cent of the total assets privatised across the OECD between 1980 and 1996. Today, however, increasing inequality, poverty, environmental degradation and the general sense of an impoverished public sphere are leading to growing calls for renewed public ownership (albeit in new, more democratic forms). Soon to be free of EU constraints, it’s time to explore an expanded and fundamentally reimagined UK public sector.

Next, Britain’s industrial production has been virtually flat since the late 1990s, with a yawning trade deficit in industrial goods. Any serious industrial strategy to address the structural weaknesses of UK manufacturing will rely on "state aid" – the nurturing of a next generation of companies through grants, interest and tax relief, guarantees, government holdings, and the provision of goods and services on a preferential basis.

Article 107 TFEU allows for state aid only if it is compatible with the internal market and does not distort competition, laying out the specific circumstances in which it could be lawful. Whether or not state aid meets these criteria is at the sole discretion of the Commission – and courts in member states are obligated to enforce the commission’s decisions. The Commission has adopted an approach that considers, among other things, the existence of market failure, the effectiveness of other options, and the impact on the market and competition, thereby allowing state aid only in exceptional circumstances.

For many parts of the UK, the challenges of industrial decline remain starkly present – entire communities are thrown on the scrap heap, with all the associated capital and carbon costs and wasted lives. It’s high time the left returned to the possibilities inherent in a proactive industrial strategy. A true community-sustaining industrial strategy would consist of the deliberate direction of capital to sectors, localities, and regions, so as to balance out market trends and prevent communities from falling into decay, while also ensuring the investment in research and development necessary to maintain a highly productive economy. Policy, in this vision, would function to re-deploy infrastructure, production facilities, and workers left unemployed because of a shutdown or increased automation.

In some cases, this might mean assistance to workers or localities to buy up facilities and keep them running under worker or community ownership. In other cases it might involve re-training workers for new skills and re-fitting facilities. A regional approach might help launch new enterprises that would eventually be spun off as worker or local community-owned firms, supporting the development of strong and vibrant network economies, perhaps on the basis of a Green New Deal. All of this will be possible post-Brexit, under a Corbyn government.

Lastly, there is procurement. Under EU law, explicitly linking public procurement to local entities or social needs is difficult. The ECJ has ruled that, even if there is no specific legislation, procurement activity must "comply with the fundamental rules of the Treaty, in particular the principle of non-discrimination on grounds of nationality". This means that all procurement contracts must be open to all bidders across the EU, and public authorities must advertise contracts widely in other EU countries. In 2004, the European Parliament and Council issued two directives establishing the criteria governing such contracts: "lowest price only" and "most economically advantageous tender".

Unleashed from EU constraints, there are major opportunities for targeting large-scale public procurement to rebuild and transform communities, cities, and regions. The vision behind the celebrated Preston Model of community wealth building – inspired by the work of our own organisation, The Democracy Collaborative, in Cleveland, Ohio – leverages public procurement and the stabilising power of place-based anchor institutions (governments, hospitals, universities) to support rooted, participatory, democratic local economies built around multipliers. In this way, public funds can be made to do "double duty"; anchoring jobs and building community wealth, reversing long-term economic decline. This suggests the viability of a very different economic approach and potential for a winning political coalition, building support for a new socialist economics from the ground up.

With the prospect of a Corbyn government now tantalisingly close, it’s imperative that Labour reconciles its policy objectives in the Brexit negotiations with its plans for a radical economic transformation and redistribution of power and wealth. Only by pursuing strategies capable of re-establishing broad control over the national economy can Labour hope to manage the coming period of pain and dislocation following Brexit. Based on new institutions and approaches and the centrality of ownership and control, democracy, and participation, we should be busy assembling the tools and strategies that will allow departure from the EU to open up new political-economic horizons in Britain and bring about the profound transformation the country so desperately wants and needs.

Joe Guinan is executive director of the Next System Project at The Democracy Collaborative. Thomas M. Hanna is research director at The Democracy Collaborative.

This is an extract from a longer essay which appears in the inaugural edition of the IPPR Progressive Review.