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Here come the liberals

For decades American conservatism defined global politics. Now we are about to witness a seismic cha

British politicians, commentators and the public like to believe in their sturdy autonomy. We have arrived at our decisions as freeborn men and women. We debate our ideas furiously in pubs, on radio phone-ins or via letters to the editor. We read the opinion pages. We elect a sovereign parliament that passes the laws and regulations that we mandate.

The truth is more subtle. We dance to another country's tune. It is the United States that makes the political, cultural and intellectual weather. It is the rich American institutes that develop the ideas for XYZ plan or ABC radical reform. Our academics, especially in the social sciences, want to get published in the American journals and ensure they please the editor in question. Our politicians watch closely to see what works in the US. We enjoy their movies and use their technology. The West Wing and Mad Men are part of our culture, as are Sex and the City and Friends. We think we are free; we are painfully and excessively influenced by the US.

Which is why the election of Barack Obama matters so much. In the tidal wave of tears of joy, analysis of county by county results, the "were you awake to hear the speech" conversations, naming the puppy and the critiques of Michelle's wardrobe - and yet another article on the big things in his in-tray - one thing has been underplayed. Obama's success will transform British politics. The centre ground will move significantly to the left.

No account of the rise of Thatcherism or the character of new Labour is possible without acknowledging the force and impact of the 30-year ascendancy of American neoconservatism. They won control of Washington in the late 1970s, creating the Washington consensus. No country - from communist China to the Nordic social democracies - held out. Everybody, to a degree, bought into the market fundamentalist consensus. Tony Blair could have held out more than he did - but the room for manoeuvre was tiny.

It went very deep. Editors of the top US social science journals published articles in this idiom because they had secured their jobs by conforming to it; ambitious British academics soon learned what was accepted and what was not. Young British investment bankers training in New York learned about the value of securitisation. Treasury officials on secondment to Washington bought into the consensus that privatisation and deregulation were the only ways forward. From social policy (remember zero tolerance and broken windows) to " light touch" financial regulation, and from a belief in labour market flexibility to distrust of public service broadcasting, the cultural and intellectual backdrop was conservative.

Obama's election ends that. American conservatism is now in profound disarray. It is not just that Republicanism has been forced back to the south and the mountain states: the intellectual paradigm that it championed led to nowhere but a credit crunch, a bloated and overpaid financial elite and the onset of a deep recession. No accident that Obama's lead jumped in the wake of the Lehman Brothers' bankruptcy and the part nationalisation of the banking system. Conservatism was on the ropes. A change had to come. Yes it did.

Here is a checklist of areas where the discourse is going to move left - intelligently and moderately because that is part of the Obama DNA. Firstly, trade unionism. Barack Obama shares the view of liberal Democrats that the best way to roll back the stagnating real incomes of the squeezed middle of the United States is to strengthen the bargaining power of organised labour. An empowered upper working class across all ethnic groups is the backbone of both the Democrat party and the economy.

This president is the most pro-union since Roosevelt. He wants to help unions organise and get recognition through a simple membership card check system, which workers can use freely and anonymously to signal their readiness to join - fiercely opposed by American business. This June, Obama even wrote to Tesco boss, Sir Terry Leahy, urging him to work with unions in the US (as he already does in the UK). The anti-unionism that led US officials to veto OECD reports that questioned labour market flexibility will be over. Now the US will encourage the OECD to publish evidence.

The BBC and Channel 4 should also be relieved at the victory. Obama is a strong supporter of public service broadcasting and caps on media ownership; he wants to see every American television and radio network commit to neutrality. In the US, one of the live issues is whether the Fairness Doctrine, requiring equal time between different points of view on broadcast media, should be reinstated - it was abolished by Ronald Reagan.

The subsequent avalanche of right-wing shock-jocks, the dumbing down of the American media and the partisanship of Fox News are even more an issue for the left in the US than the power of the right-wing print media is in Britain. For Democrats in the House, and Obama's chief of staff Rahm Emanuel, reinstating the Fairness Doctrine is of iconic importance. Obama may stop short of imposing a legal obligation on broadcasters - but he will go a long way towards it.

So it goes, too, with tax. This is the president who will redistribute income from the top 5 per cent earners above $200,000 to the other 95 per cent. There may not be much cash involved, but as Professor Avner Offer says in The Challenge of Affluence,, the point about higher tax rates is not so much the cash they raise but the signal they send about the dominant values of society. Obama has clear views on that. As he has on tax havens.

His reforms of Wall Street will be far-reaching; he will constrain bank bonuses, introduce tough new regulations and, as Roosevelt did, set up a wave of new banking institutions. He is already committed to a National Infrastructure Bank. When this is set up, financing roads, railways, bridges and dams across the US, the argument that Britain should have one too will become irresistible. Obama will try to deliver universal health provision. He will try to extend college access. He will want to build affordable homes. He will try radically to lower the US's carbon footprint, lower petrol consumption and improve energy efficiency. He will aim to reindustrialise the US.

As for foreign policy, he will be more multilateralist and there will be no Iraqs on his watch. But he is closer to Tony Blair and David Miliband (I think, rightly) as a liberal internationalist than many on the British left might like. Enlightenment values, democracy and human rights are worth asserting as universal rather than western principles. And, at the limit, worth fighting for. Trade is a big question mark. His party remains very protectionist.

For all that, the message is unmistakeable. Barack Obama will change the trajectory of the US.

I have found it odd to have been pro-BBC, pro-multilateralist Europe, pro-moderate trade unions, a City of London sceptic, pro-public service, pro-fairness and pro-redistribution for more years than I can remember. Now the leader of the world's hegemonic power, in control of its political, intellectual and cultural levers, is making this cluster of views the mainstream. The Labour Party and the wider liberal left are being given permission to be moderately and intelligently social democratic again. It may be a hackneyed phrase - but this really is a seminal moment.

Will Hutton is executive vice-chair of The Work Foundation

Obama's inner circle

Rahm Emanuel: chief of staff An Illinois congressman and the fourth-highest-ranking House Democrat. A centrist renowned for his aggressive manner, he is a former ballet dancer and was a volunteer mechanic in Israel's army during the first Gulf War in 1991. After working for the Clinton White House, he made $18m in two years at an investment bank. He is feared for his tactical prowess on Capitol Hill by Republicans and by Democrats who are not on his list of favourites.

Robert Gibbs: press secretary Gibbs has been with Obama since his 2004 Senate campaign, an affable Southerner with a temper. He was despatched on the trail in 2007 after concerns that Obama's message wasn't getting across; no adviser has spent more time at Obama's side. He made waves in a recent on-camera confrontation with Fox News's arch-conservative commentator Sean Hannity. Obama calls him "the guy I want in the foxhole with me during incoming fire".

Robert Gates The secretary of state for defence may hold on to his position in the short term to provide continuity in Iraq and Afghanistan. He has worked as a CIA chief and president of Texas A&M. He shares Obama's vision for emphasising "smart power" over raw military force, and keeping him on could lend a bipartisan aura.

Lawrence Summers Tipped for the position of treasury secretary, a post he held under Clinton, Summers is also a former World Bank chief economist and Harvard president. Intellectually, he is hugely respected, but his occasional tactlessness - notably his comments about women's aptitude for science - has earned him detractors.

Tom Daschle Tipped for a cabinet-level post, possibly secretary of state or health policy tsar, Daschle led the Senate for a decade before being voted out in 2004. His early support for Obama lent the candidate credibility, and his legislative know-how will be of use in driving the agenda.

David Axelrod A likely senior White House adviser, Obama's chief campaign strategist began his career as a reporter for the Chicago Tribune. He will be keeping his eye on Obama's 2012 re-election prospects, though probably with less of a hand in policy than Karl Rove had.

Valerie Jarrett A contender for a cabinet post, Jarrett is more likely to become a White House adviser. Co-chair of Obama's transition team, she is a businesswoman and a close friend of Barack and Michelle Obama.

This article first appeared in the 17 November 2008 issue of the New Statesman, Obamania

Picture: SÉBASTIEN THIBAULT
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Jeremy Corbyn, Emmanuel Macron and the age of volatility

The rise of populism in Britain and France is the result of a restless “crowd electorate”. Both countries' future stability depends on their changing relationship with the EU.

Britain seems to have joined the rest of the democratic world in the volatility of its politics. Electorates are no longer armies, but crowds. Identities shaped by religion, class, region, ideology and tradition weaken. Conventional parties are hollowed out, and disoriented and angry voters turn to single-issue campaigns or insurgent populism. In every country this takes diverse forms shaped by political institutions and political cultures – Donald Trump and Bernie Sanders in America, Marine Le Pen and Emmanuel Macron in France, Beppe Grillo and the Five Star Movement in Italy, Nigel Farage’s Ukip and now Jeremy Corbyn’s Labour Party.

The trend, noticeable from the 1990s, was analysed in a now classic work by Peter Mair, Ruling the Void: the Hollowing of Western Democracy, which was published in 2013, two years after the author’s death. Elected governments had conceded powers to non-elected agencies such as the IMF, the World Bank, the World Trade Organisation (WTO), and above all the EU. Politicians had become professionals, largely detached from civil society and operating increasingly within these international institutions, “safe from the demands of voters”. Citizens were decreasingly willing to join professionalised political parties financed by large donors or public funds, or to identify strongly with them.

Membership fell across Europe and beyond, and among the sharpest falls were those in France and Britain, where levels of political participation had previously been high. Electoral turnout fell too.

As Mair saw it, “hand in hand with indifference goes inconsistency”, as low levels of participation were paralleled by rising levels of volatility. People who did vote for mainstream parties often changed allegiances at random, and made up their minds at the last minute in response to short-term factors. Others flooded into new movements, or even old ones that reinvented themselves as enemies of the system.

The political effects of the 2007-08 banking crisis are still being felt everywhere and subsequent policy failures have aggravated the discrediting of elites. Naturally, the most volatile element has been the young. Youthful radicalism is hardly new. In my youth, inspiration came from Mao, Che Guevara and even the Khmer Rouge. Now it comes from elderly white males such as Bernie Sanders, Jeremy Corbyn and Jean-Luc Mélenchon, who seem able to present old remedies as new revelations to those inevitably lacking political memory. Historians are perhaps tempted to seek precedents. My own choice is the 18th-century radical John Wilkes. His brilliantly provocative tactics made fools of successive governments and appealed to a largely London-based electorate.

Wilkes’s secret – apart from barefaced cheek – was that he was not seeking office. It has been liberating for Sanders, Corbyn and Mélenchon that they were not expected, and did not expect, to win, and hence were free to run election campaigns that were not programmes of government but protest movements aimed at generating maximum support and momentum. Brexit seems to have further liberated the British left. Only the hardest of Brexits would give free rein to a radical programme of nationalisation and support to industry, which would contravene EU legislation on equal competition and restrictions on state aids.

This kind of populism is a new phenomenon in modern British politics, because never has a major party entered a campaign with such an absolute conviction that it would lose. And never has the Labour Party been so dominated by the ideas and campaigning style of the hard Left: the ubiquitous rent-a-crowd, the conspiracy theories, the violence of language (especially online), the ruthless and immediate politicisation of national tragedies. This old recipe has been given unprecedented dynamism by social media. It is populism in its purest form: a movement purporting to represent “the many” against a corrupt and remote system.

Populism is unlikely to come to power in normal circumstances because of its evident risks. However, volatility is now “normal” and accidents happen.

The two most successful populists are Donald Trump and Emmanuel Macron. Both won only with the help of a chapter of accidents. The divisions in the Democratic Party, the peculiarities of the American voting system and the accusations directed at Hilary Clinton’s email system were crucial for Trump. The collapse of François Hollande’s Socialist presidency and the meltdown of the Parti Socialiste following Mélenchon’s populist challenge from the left, along with the “Penelopegate” scandal enveloping the conservative presidential favourite, François Fillon, have delivered both the presidency and a huge parliamentary majority to Macron. What might have resulted in Britain had the Grenfell Tower tragedy happened a few days before the poll?

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Macron’s extraordinary victory in France, which some hail as a defeat of populism, is its most brilliant success. Macron came from outside politics, set up a new movement, and pledged to “renew” and “moralise” politics by recruiting half his party candidates from civil society and half from women, and excluding all with criminal records. His La République En Marche! has crushed the other parties. Unlike Trump, he has moved smoothly into power as if born to it.

The Fifth Republic is a “republican monarchy” and Macron seems to be pushing the system as far as it will go. His inauguration ceremonies equalled or exceeded the regal style of his loftiest predecessors, Charles de Gaulle, Valéry Giscard d’Estaing and François Mitterrand. He has been dubbed “Jupiter in the Elysée”, above the public fray, refusing to speak to journalists except in circumstances of his own choosing, and tightly muzzling his aides and ministers. Macron has ensconced himself in his palace with a tiny number of trusted young advisers – perhaps, as with Trump, a direct consequence of a populism that rejects established political elites. He has also begun an intensive centralisation and politicisation of the civil service, assuming the power to decide the reappointment or replacement of several hundred top officials.

However, Jupiter has an Achilles heel. The solidity of his support in the country is uncertain, and hence much depends on his cunning and charisma. This may seem paradoxical for the leader of a populist movement, but perhaps it is a fundamental feature of a politics that bypasses intermediaries and relies on the volatile support of the crowd-electorate: Trump, Macron, Corbyn, Farage, Mélenchon, Grillo – all one-man bands.


Emmanuel Macron’s success represents a populist eruption from the centre. Photo: Getty

In France’s recent legislative elections only 43 per cent of the electorate voted –probably the lowest turnout in a national election in its democratic history – due to uncertainty or suspicion. One survey puts the level of Macron’s positive support at only 11 per cent. His left-wing opponents have announced their intention of shifting the contest from the ballot box to the street, and Mélenchon has called for a “civic general strike”. Macron’s slick middle-class populism might have to confront the tough populism of the old left. I wouldn’t care to bet on the outcome.

How French and British politics develop in this time of volatility depends on the countries’ changing relationship with the European Union. France has chronic youth unemployment and its economic performance has long been sluggish. Some of its wounds are self-inflicted, but underlying them is the problem of the eurozone and the disparity of economic behaviour between France (and southern Europe) and Germany.

As long as the eurozone is managed as at present, this problem is insoluble. Germany is permanently in surplus and presses austerity on the laggards. France, while a less extreme case than Italy, needs Germany to agree to expand state borrowing by setting up eurobonds backed by the EU (that is, by Germany) and with an EU finance minister to control national budgets – hence, removing another core function of democratic governments. France’s future rests on Macron’s success. If his bold attempt to change France and the EU fails, it is hard to see where the country can go next.

Brexit may prove an easier prospect than that facing Macron, but its successful management – not least because of its centrality in the national debate – is equally crucial to our political stability. A crisis here could mean the wreckage of the Conservative Party, Jeremy Corbyn in Downing Street, turmoil in Northern Ireland and the breakaway of Scotland. Readers may regard some or all of these outcomes with favour.

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Theresa May’s failure to secure a majority has revived doubts about how resolved the British really are. Labour’s side-stepping of the issue – accepting Brexit but not the Prime Minister’s version of it – was electorally clever but adds to the uncertainty. Adopting David Cameron’s approach to negotiation, Corbyn declares that “there is no such thing as ‘no deal’”. This inevitably encourages those in the EU who wish Brexit to be damaging enough to deter others: there have already been provocative statements from Jean-Claude Juncker and Guy Verhofstadt. Macron recently declared that “the door is always open” to Britain dropping Brexit; reversing national electoral choices is something the EU has past form on.

Quasi-Remainers of all parties are trying to strip the issue of everything except “jobs and the economy”, blithely denying the importance of democratic legitimacy, national sovereignty, immigration, strategic security and the future of the EU itself. Imagine the divisive effects on British politics and British society if a future government were forced to apologise for the referendum and asked to be readmitted to the EU: bitter recrimination, national humiliation, evaporation of international influence – all far beyond anything we are experiencing today

It would deliver a death blow to any attempt to reassert democratic choice over bureaucratic and financial power within Europe, and would mark the effective eclipse of national sovereignty for the foreseeable future. Nor would it make sense in the long run: the eurozone, if it is to survive, must create greater central control, which hardly anyone in Britain accepts; so we would in any case find ourselves on the outside.

The effort to restrict debate to “jobs and the economy” is based on reiteration of the dogma that Brexit threatens economic disaster. This revives the narrative created during the referendum campaign, whose most influential element was the official report produced by George Osborne’s Treasury. The IMF and the Organisation for Economic Co-operation and Development naturally followed Whitehall’s lead: that is how such bodies operate. The Treasury predicted that a “no deal” Brexit would cost around 7.5 per cent of GDP by 2030, an average loss of £6,600 per family. Even some Remainers were alarmed at what seemed a politicisation of the civil service. The former governor of the Bank of England Mervyn King has since described the report as “not an objective presentation of the facts”.

Nevertheless, the report had a huge impact on the referendum (most Remain voters said they were motivated mainly by economic fears) and its pessimism continues to overshadow the Brexit negotiations and provide grist to the mill of anti-Brexit groups in the UK and beyond: “we didn’t vote to become poorer”.

Significantly, the Treasury refuses to discuss with academics how it arrived at its forecast. However, a group of economists based in Cambridge, led by Graham Gudgin and Ken Coutts, has for the first time applied the standard scientific method of verification by trying to reproduce the Treasury’s results using the same economic models. Their findings, now accessible through Policy Exchange (“A Critique of Estimates of the Economic Impact of Brexit”), are startling.

Astonishingly (or perhaps not) the Treasury did not produce an estimate of the effects on UK trade of leaving the EU. Instead, it worked out the average importance of EU trade for all 28 member states, including the new eastern European states that do most of their trade within the EU. It also adopted a long time-scale, rather than focusing on the years since the creation of the euro – which have seen a slowing of intra-EU trade generally, and for the UK particularly.

This approach greatly magnifies the importance of EU trade for Britain, which is less than for any other EU country, and which has been declining in importance for years. Finally, the Treasury made the extraordinary assumption that if Britain did less trade with the EU, it would not be able to compensate significantly by embarking on more trade outside the EU – even though its non-EU trade has been growing and shows a favourable balance. In consequence of these methods, the Treasury prediction of the results of a “hard Brexit” was a considerable exaggeration.

Using the same methods as the Treasury, but applying data relating specifically to the UK rather than to the EU as a whole, the Cambridge researchers reach a very different conclusion. Even if it proved impossible to reach a free trade agreement and the UK reverted to trading under WTO rules (“falling off a cliff”, as some express it) there would be “only a minor loss” in overall GDP by 2030, as tariffs in 90 per cent of products have already been more than compensated for by the fall in a previously over-valued sterling. As for per capita GDP – that is, average living standards – they predict that this could actually rise if the rate of immigration were reduced.

So no deal is clearly better than a bad deal, including the “soft Brexit” advocated by Corbyn and others: to leave the single market but stay in the customs union. This would mean being unable to trade freely either inside or outside the EU or to influence EU policies from within.

In short, we have no reason to be frightened by the Brexit negotiations. Being inside or outside the EU has made no difference to our economic fortunes: our national wealth has increased at exactly the same rate as that of the US for the period since 1945. We are not facing economic disaster. It is not the case, as Nick Clegg recently asserted, that we face a choice between “painful concessions” and “economic disruption”.

Moreover, Britain is a major power independently of its ties with the EU. The international relations specialist and New Statesman contributing writer Brendan Simms estimates that it is the third power in the world after the US and China because of its wealth, size, “soft power”, military potency, and its relative internal cohesion and long-term political stability. A good relationship with Britain is important for the security, stability and prosperity of the whole European continent. Unless we play our hand extraordinarily badly in these negotiations, the outcome should reduce the potential of that volatile populism of which we are presently feeling the shock: volatility, after all, is a two-way process.

Peter Mair feared the democratic world was losing control of its political institutions, and thought it “not at all clear how that control might be regained”. Brexit should, as many of us hope, provide the beginning of an answer.

Robert Tombs is the author of “The English and their History” (Penguin) 

This article first appeared in the 17 November 2008 issue of the New Statesman, Obamania