Michael Sheen as Tony Blair in the 2006 film The Queen.
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Michael Sheen: The tyranny of mere wealth is destroying our democracy

Wealth without responsibility will inevitably lead to a society that eats itself from within and tears itself apart.

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Remember that scene in Grease where ­Danny Zuko is with his friends and then Sandy, the girl he’s had a summer romance with, comes along? He doesn’t want to look like a “ponce” in front of everyone, so he’s mean to her and humiliates her, and then later when they’re alone he apologises to her and says he loves her really. It’s hard not to think of it whenever I hear David Cameron talking about “wanting to bring our country together” and how he will “reclaim a mantle that we should never have lost – the mantle of One Nation, one United Kingdom”. You see, Scotland, I hit you because I love you. Don’t leave me. I’ll make it up to you, honest! Just replace Danny’s T-Bird wannabe pseudo rebels with Tory backbenchers, potential Ukip defectors and the true-blue core vote, and you have a pretty accurate remake. Just without the apology.

Now, comparing Cameron and the Tory party with John Travolta has its limits. We’re talking about a man who is embroiled in an organisation seen by many as malevolent, who is in thrall to an ideology espoused by a self-serving, dictatorial maniac responsible for years of suffering and abuse. Just to be clear, that’s John Travolta and Scientology I’m talking about.

This last election campaign was one drenched and distorted by fear on all sides. Fear of the Scots, fear of immigrants, fear of fiscal irresponsibility, fear of bacon sandwiches. Since the global banking disaster of 2007-2008 the economic situation has caused a great deal of fear in the UK and the programme of austerity implemented in reaction to it has caused and continues to cause a great deal more. It has been argued that the severe cuts sanctioned by austerity are totally unnecessary and are, in fact, holding back the rebuilding of the economy. Nevertheless, the coalition government pushed their programme through, along with the narrative that they were fixing what had been broken by the previous Labour government and cleaning up after their opponents’ wanton and reckless spending.

The clue to the real situation is in the word “global”. You’d be hard-pressed to find anyone outside Britain who would listen to you trying to pin the financial crisis on the Labour government without nervously backing away as if they were being told that it was a secret race of Lizard People wot done it. And yet, a significant proportion of people in Britain are prepared to believe just that. That Labour and the Lizard People brought down the world financial mechanism by spending too much. Spending that the Conservative Party in opposition agreed with every single step of the way. It would be like popping a Ginsters pasty in the microwave and discovering you just nuked Africa. (No, that was not actually in the Ukip manifesto.)

Of course, where that same Labour government can be severely criticised is in not creating regulation that would have reined in the excesses and sharp practices of the banking world. Regulation that the current Conservative government would now be in the process of dismantling, of course. Because the Conservatives want less regulation. It’s worth saying again – the banking crisis happened because there wasn’t enough regulation in place to contain the lust for profit over and above any sense of responsibility to anything else, and the Conservatives want even less of it.

Now, given all that, you’d think it would be an absolute open goal for an excoriating rebuttal from Labour on all of this. They could tear the paint off the walls with their blistering attack on the explosion of the Thatcherite consensus, its blind trust in the all-knowing markets and the ultimate wisdom of profit-seeking firms. How they’d scorn the Tory-supporting bankers for having to be bailed out by the very state they have so much disdain for. Oh, the wrath that would be directed at anyone who dared to talk about the danger of welfare “handouts”, when the greatest danger was quite clearly those who were being given massive handouts by the state to sort out the miserable mess they had created in the first place.

You’d expect them to be screaming it from the rooftops, along with the argument that the Tories are using the disguise of “much-needed” austerity measures to push forward the right-wing agenda of dismantling state mechanisms for ensuring equality. It is policy being led by ideology, not economic necessity, in the same way a neocon agenda was given its head in the US after the 9/11 attacks under the guise of “homeland security measures”. You’d think that we would be sick of hearing about all this from the Labour leadership by now.

So, why the resounding silence? Well, here we have the crux of the matter. New Labour became toxic with the electorate primarily because of Iraq and also because it was the one in office when the banking collapse happened. In the hope of not being smeared with the same brush, Ed Miliband wanted to disassociate himself from all things Blair-Brown. He gambled that not standing up for the positives in New Labour’s record would be worth it, weighed against not being blamed for the negatives. He also seemed to want to appeal to the more traditional left-wingers by standing up to the bastions of the right, such as “predatory” big business, Rupert Murdoch and so on, but doing it really quietly so he wouldn’t alienate the centrists he needed to win the election.

Well, one Old Etonian could have sounded a warning to Miliband’s Labour – George Orwell. In his novel Nineteen Eighty-Four, he wrote, “Who controls the past controls the future: who controls the present controls the past.” Miliband let the Tories control the past by not stamping out the “Labour caused the recession” narrative early on. Not only did this feed into the ­conventional Tory myth of fiscal responsibility v Labour’s economic ineptitude, but it also prevented Labour from getting on the front foot about what did cause it, who was responsible and what might be necessary to prevent something similar happening again. Once Cameron and Osborne controlled that narrative of the past, it became impossible for Labour to form a coherent one of its own in the present.

The future now belongs to the Tories; the next five years at least. They face the pressures of globalisation on one side and a rising politics of identity on the other. Local councils are fearful of what another round of cuts will do to services that have already been stripped to the bone. All this takes place within the context of an ever-growing mistrust and outright contempt for the entire political culture and its inhabitants.

The Tories might have won the election but they are just as woefully unprepared for the reality of what needs to be done as Labour is. At least Labour has the opportunity to regroup and have a long, hard look at itself. Change is being forced upon it by humiliation and perhaps in the long term that is no bad thing.

So, where does Labour go from here? The muted and confused narrative of the past five years has made it difficult to know if Miliband lost because he was seen as too left-wing or not left-wing enough. Or just not anything enough. Neil Kinnock welcomed Miliband’s election by saying, “We’ve got our party back.” Tony Blair said that when a traditional party of the left goes up against a traditional party of the right it ends in the traditional result – a Labour loss. Labour did lose, but was Blair right? I suppose it depends on where you’re standing. The SNP swept the board north of the border with the kind of rhetoric and vision that has been seen as a traditional-left position. Could Labour have done the same? How would that kind of message have played with the voters in England? And, whatever the message, what if it had been delivered by a leader who was seen as more substantive and electable than Ed Miliband? At the time of writing, there’s a handful of Labour leadership candidates essentially trying to be everything to everyone. Aspiring to be aspirational to the aspirants who aspire towards aspiration.

When you hit rock bottom, you need time to accept that you don’t know what the fuck you’re talking about and that you really have gone terribly wrong, before you can trust yourself to come out with anything worth saying. I suspect that period is a bit longer than a few days. I find it deeply troubling that most of the talk is about how to become electable again. How to reclaim the share of seats that Labour had at the end of the 1990s. In the same way that, in retrospect, it is deeply troubling to realise how much the opinion polls led the policies in the recent election period and were proved totally wrong in the end. It’s the tail wagging the dog, isn’t it? While the dog is taking a shit, no less.

The question of whether Labour moves back towards the centre, doing more to seem business-friendly or breaking away from the unions, is totally secondary to the fundamental question: “What do you believe in?” If it wasn’t about getting elected, or ­being popular, or being successful in the short term: what do you believe in? Then, how do you turn that into policy that can make concrete change? You should have deeply held beliefs and core principles based on your experience of living with and listening to the people you are representing, shouldn’t you? Then that becomes the bedrock from which you are able to face the uncertainties and challenges of the future. Your adaptability and flexibility in the moment is precisely related to how solid you are at your core. If politics is about compromise and flexibility on the surface, then unless there is a passionate belief at the heart of what you do, you will die slowly, eaten up from the inside, crumbling from within. You won’t realise it until your head hits the floor, your mouth still moving, making promises into the dust.

It’s easy to forget that democracy is an imposition. It does not arise naturally. Its victories and progressions are often pulled from grasping hands that wish them to be withheld. Its aim is to express the will of the people, and for that will to be the basis of the authority of government. It is made manifest through the institutions that are created to reflect it and the mechanisms that are put in place to deliver it.

We have seen through recent history that the establishment of those institutions and mechanisms is a slow process. They don’t suddenly appear once a dictatorship or the like is overthrown. They must be designed carefully. They have to channel what is best about us and keep in check what is worst. Self-interest at the expense of the many will always be lurking. Fear will always be used as a tool to exploit weakness and tear asunder what has been so carefully built.

It can be difficult to recognise the face of regression, because it is not the new. It has a familiarity about it and can be easily mistaken for something known and safe. Ronald Reagan, the 40th president of the United States, said: “Man is not free unless government is limited.” If the banking crash taught us anything, it is that freedom is dangerous if it does not go hand in hand with responsibility. The 26th president of the United States, Theodore Roosevelt, saw the merging of big firms such as the railroads and the oil companies, and the consolidation of wealth into fewer hands that resulted from it, as a grave threat. He wrote, “. . . we had come to the stage where for our people what was needed was a real democracy; and of all forms of tyranny the least attractive and the most vulgar is the tyranny of mere wealth, the tyranny of a plutocracy.”

Roosevelt made aggressive use of the Sherman Antitrust Act 1890 to break up large industries reaching monopolistic levels. A handful of wealthy heads of corporations were beginning to exert increasing influence over industry, public opinion and politics after the American civil war. A journalist of the time, Walter Weyl, wrote that money was the “mortar of this edifice”, with ideological differences among politicians fading and the political realm becoming “a mere branch in a still larger, integrated business. The state, which through the party formally sold favours to the large corporations, became one of their departments.”

Wealthy heads of ever-merging corporations consolidating wealth and exerting influence over the policies of democratically elected government. Public opinion being shaped by a mainstream press owned by many of the wealthiest people in the country. Political parties becoming ideologically indistinguishable. Sound familiar?

We have to defend ourselves against a plutocracy by proxy. Against politicians shaping the mechanisms of democracy to serve the wealthy few, whose ranks they will join once their governmental tenure is over. Rolling back fundamental rights and freedoms. Doing away with checks and balances. Reducing the reach of the state to allow market forces to run amok. People’s lives reduced to figures on a chart. All done in the name of “efficiency” and “fairness”, but in reality to allow greater ease of access to vast sums of money for fewer and fewer people. Undeniably, wealth must be created in any society that wishes to sustain itself, and wealth creation should be promoted and supported by government. But wealth created in the face of ever-increasing inequality, which takes no responsibility for the society to which it is intrinsically connected, will inevitably lead to a society that eats itself from within and tears itself apart.

If we are to withstand the truly terrifying possibilities that something such as the Transatlantic Trade and Investment Partnership (TTIP) – a free-trade treaty that jeopardises the future of the NHS as we know it – might visit upon us, then we must be vigilant, informed and organised. Look it up, read about it and be ready. The challenge of our immediate future is that the architecture of our democracy clearly needs to be ­reformed. We have to ensure that it serves the will of the people more fairly and provides for greater equality and inclusivity.

Can our leaders be trusted to take that delicate but supremely important journey of renewal on our behalf? Can we trust them to do it in a way that leads us away from the “tyranny of mere wealth, the tyranny of a plutocracy”, and towards an ever purer expression of the greatest imposition of all – true democracy?

Michael Sheen is an actor. He tweets at: @michaelsheen.

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This article first appeared in the 27 May 2015 issue of the New Statesman, Saying the Unsayable

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.

 

 

This article first appeared in the 27 May 2015 issue of the New Statesman, Saying the Unsayable