Illustration by Nick Hayes for the New Statesman.
Show Hide image

What David Cameron can learn from Abraham Lincoln

Wearing the Union blue.

Abraham Lincoln’s Emancipation Proclamation of 1863 is one of the noblest statements ever delivered, and forcing the abolition bill through a reluctant Congress, as Steven Spielberg’s masterful Oscarnominated film attests, was a monumental achievement. But Lincoln’s principal contribution to American history was to save the Union, as those from the Southern states are quick to tell you. In the former Confederacy, the civil war is still called “the War Between the States”.

Lincoln confided his thoughts about secession and slavery in a letter of 1862. “If I could save the Union without freeing any slave I would do it, and if I could save it by freeing all the slaves I would do it; and if I could save it by freeing some and leaving others alone I would also do that,” he wrote. “What I do about slavery, and the coloured race, I do because I believe it helps to save the Union; and what I forbear, I forbear because I do not believe it would help to save the Union.”

His proclamation did not, in fact, free the slaves in the North, nor was he in a position to free slaves in the Confederate South, but, under his powers as commander-in-chief in wartime, he issued an executive order that freed all slaves in the Southern states as soon as they were occupied by the Union army.

It may at first seem a little far-fetched, but there are poignant similarities between the conundrum that Lincoln encountered 150 years ago and the dilemma David Cameron faces today. They are both confronted with threats to the very existence of the nations they govern. While Lincoln was obliged to respond to a fait accompli, a group of slave states that had decided before his election to wrest themselves from the Union, by force of arms if necessary, Cameron finds himself under siege on all sides. But while Lincoln was presented with the simple option of whether to take up arms to defend the Union or watch as his country split in two, Cam eron has no such easy choice.

In Scotland, the Scottish National Party has finally achieved what it has been dreaming of for 80 years. It has a mandate to demand from Westminster a referendum on whether, after three centuries united with England and Wales, Scotland should become a free nation again. The Union came about as a result of the Union of the Crowns, when the Scottish king James VI, son of Mary, Queen of Scots, acceded to the throne of England following the death of the childless Elizabeth I in 1603. It took a full century before the English and Scottish parliaments combined in the Acts of Union of 1707. Lincoln was obliged to defend a union barely 90 years old; Cameron must protect a union that has lasted more than 300 years.

In Ireland, Cameron presides over the latest skirmish in a bloody struggle that has lasted much longer. The colonisation of Ireland was messy and brutal from the start, and the independence wrested from Britain in 1922 left the northern, overwhelmingly Protestant and unionist part of the island in British hands. A border had to be drawn somewhere, leaving many who would prefer to live in the republic stranded in a British province. The continuing troubles offer a challenge to Cameron to find a permanent peace. No less than in Scotland, British sovereignty and British lives are severely at risk.

Then there is the European Union. Those with a sense of history will remember that joining Europe was always predominantly a Conservative project. It was Harold Macmillan, with Edward Heath at his side, who first flirted with the continentals in 1961 and had his overture rudely rebuffed by Charles de Gaulle’s “Non!”. Heath the eternal bachelor then made it his life’s mission to make a marriage with the Europeans and the lasting legacy of his otherwise awkward, chilly and ultimately tragic premiership was British entry into the European Economic Community in 1973. As Cameron must be all too aware, the principled Heath condemned the referendum that Harold Wilson called on European membership two years later as a shabby gimmick, designed to appease internal Labour divisions over the Common Market.

Since the moment when Heath’s successor Margaret Thatcher – who had campaigned in favour of remaining in Europe in 1975 – began arguing, as prime minister after 1979, against closer European union, the Conservatives have been profoundly and openly divided on the matter. The rupture over Europe, even more than Thatcher’s unpopular poll tax, led to her defenestration by cabinet colleagues in 1990. John Major’s leadership of the Tories was blighted by the question of Europe; and the election of three Eurosceptic leaders in a row – William Hague, Iain Duncan Smith and Michael Howard – did not settle the matter.

Cameron’s inheritance is a party facing both ways on Europe, and his inability to reconcile the opposing forces has given rise to a challenge for the affections of his patriotic electoral base from the anti-European Ukip. Although Ukip’s leader, Nigel Farage, along with every other Ukip candidate, failed to win a Commons seat in 2010 (Farage was beaten by a candidate dressed as a dolphin), his party stole enough votes from the Conservatives to deprive Cameron of a parliamentary majority.

When he dreamed of leading his party, Cameron could never have imagined that Britain’s existence would be subject to a three-pronged attack. But he finds himself in the same position as today’s Republican leadership in America, under assault from angry rank and file who feel they are being ignored and betrayed by their leaders. The Republicans, once the proud “party of Lincoln”, have evolved into a testy vehicle for insurgent mavericks and malcontents.

To add insult to indignity, the “Grand Old Party”, which once bravely saved the Union, is the home of a new secessionist movement. Having failed to devolve substantial powers from the federal government to the states, many are demanding independence. At present, eight states, all from the defeated Confederacy, have petitioned the White House to be allowed to secede: Texas, Louisiana, Florida, Georgia, Tennessee, North Carolina, Alabama and South Carolina. The muddled, ahistorical thinking behind the treacherous talk is evident in the argument proffered by the libertarian Ron Paul: “It’s very American to talk about secession. That’s how we came into being.”

On a personal level, there are as few similarities between Cameron and Lincoln as between Jacob and Esau. Lincoln was brought up in a sparsely furnished log cabin and, much to his ignorant father’s despair, taught himself to read and write, eventually emerging as a jobbing country lawyer in Illinois. Cameron, as we know, was the son of high privilege. Everyone who met Lincoln commented on his rough looks and his even rougher clothes. Cameron’s smooth, unlined face betrays an easy, affluent, well-fed life.

Both men, however, could be described more accurately as Whigs than Conservatives, in their commitment to parliament or Congress over absolute powers held by the monarch or president. Indeed, Lincoln was an old American Whig before he joined the Republicans over the issue of abolition. Allied to their commitment to rewarding individual effort, irrespective of background, is a strong, Protestant sense that their good fortune entails paying something back. Despite his comfortable circumstances, Cameron has argued that “it’s where you are going to, not where you have come from, that matters”. In a decisive break from the philosophy of heroic individualism that inspired Thatcher, he believes “there is such a thing as society”.

As well as soaring ambition, the two men share other similarities. Both are most eloquent when they do not refer to notes. Although stiff and wooden at first, Lincoln’s speeches gathered pace and by the peroration he would be ripping off his necktie, loosening his starched collar and throwing his arms around like a deranged windmill. “His pronunciation is bad, his manners uncouth and his general appearance anything but prepossessing,” is how one eyewitness described his platform presence.

Cameron’s delivery is calm, ordered and deliberate. His speech to the Tory party conference in 2005, delivered without notes, may not have been as powerful and inspirational as the 268 words of Lincoln’s Gettysburg Address of 1863, which would be a tall order for anyone except, perhaps, Winston Churchill. But the performance at Blackpool, in its carefully pitched content tailored to the party faithful and the confidence of its delivery, ensured his election as leader.

Lincoln took into his administration the big beasts of the Republican Party whom he had beaten to the Republican nomination: William H Seward, Salmon P Chase and Edward Bates. And Cameron, too, assembled a team of former rivals. To become Tory leader, he saw off David Davis, Liam Fox and Kenneth Clarke, all of whom he invited into his shadow cabinet. Like Lincoln, Cameron leads his disparate colleagues with the minimum of friction. But there the favourable comparisons between the two leaders start to run out.

Lincoln was always a man of principle rather than pragmatism. He could be rash, failing to hold his tongue in the presence of those he knew disagreed with him, and found it difficult to compromise even when it was in his best interest to do so. Nowhere was this more obvious and powerful than when he spelled out, years before running for the White House, what he felt about race.

He declared that when the Founding Fathers wrote, “We hold these truths to be selfevident: that all men are created equal,” they meant “the whole great family of man” and not merely those with white faces. Lincoln said the founders knew enough about human nature to imagine that, “in the distant future”, people would emerge who would “set up the doctrine that none but rich men, or none but white men, were entitled to life, liberty and the pursuit of happiness”. But he was certain that racism could never have been in the founders’ minds and he would have none of it.

In comparison to this eloquent statement of principle, just one among dozens that Lincoln crisply articulated in his short life, Cam - eron emerges as a dissembler, always alert for a way to delay taking a stand, ever ready with the smudgy phrase and the tactical retreat. Let us give him a pass on Ireland. Few have got it right and it may well be insoluble so long as a vociferous minority in Northern Ireland demands the impossible and the intractable majority insists on being British. In Scotland, however, when the SNP obtained a majority in the Scottish Parliament and claimed a mandate to call a referendum on independence, Cameron readily ignored Lincoln’s example to resist the dissolution of the Union and readily agreed to Alex Salmond’s demands.

In calling an all-or-nothing, in-out referendum on independence next year in Scotland only, David William Donald Cameron, to give him his full, Scots-derived name, failed to question the legality of one half of the nation being able to secede from the other on its own cognisance. Instead, he conceded the principle that if the referendum records a majority of Scots in favour of secession, that is enough to grant a divorce, as if England, Wales and Northern Ireland, and the Scots living in the rest of Britain, were not entitled to a say in the dissolution of the United Kingdom. “I’m not going to stand here and suggest Scotland couldn’t make a go of being on its own, if that’s what people decide,” Cameron said. “There are plenty of small, independent nation states of a similar size or even smaller. Scotland could make its way in the world alongside countries like those.”

Lincoln would never have yielded on such a fundamental principle. As he put it, “If we do not make common cause to save the good old ship of the Union on this voyage, nobody will have a chance to pilot her on another voyage.”

When Cameron conceded the principle that one part of the United Kingdom may constitutionally break from the rest, he also declared himself “ready for the fight for our country’s life”. He appears to be in favour of two incompatible principles, the right of Britain to remain a nation and the right of Scotland to secede. He then adopts the principle that gives Scotland the moral right to secede to inform his party’s demand that Britain be allowed to renegotiate a looser union with our European partners. What, then, is Cameron’s guiding principle when dealing with Scotland and the European Union? There is none. Both are craven acts of political expedience. His promise of a referendum on British membership of the EU is largely an attempt to save the Conservatives from being driven from office by Ukip.

Cameron’s answer to the Ukip threat to the renewal of his Downing Street lease is to avoid saying exactly what the relationship between Britain and the EU should be, because plainly he doesn’t know where the line should be drawn. Instead he abrogates the responsibility of a true leader and, in the hope of being re-elected, promises an in-out referendum on EU membership, so long as he is re-elected. As Lincoln asked, “What is conservatism? Is it not adherence to the old and tried against the new and untried?”

Cameron is less a conservative than a trimmer, less a Heath than a Wilson, less a That - cher than a Blair.

When Lincoln confronted the break-up of the United States, he borrowed from the Gospel according to Saint Matthew: “A house divided against itself cannot stand.” To avoid the consequences of the Conservatives’ deeply divided house, Cameron is willing to risk the dissolution of the United Kingdom and British withdrawal from the European Union. Both are too high a price to pay for trying to bridge the irrevocable schism in the Tory ranks.

Nicholas Wapshott’s most recent book is “Keynes Hayek: the Clash That Defined Modern Economics” (W W Norton, £12.99)

Nicholas Wapshott’s Keynes Hayek: the Clash That Defined Modern Economics is published by W W Norton (£12.99)

This article first appeared in the 11 February 2013 issue of the New Statesman, Assange Alone

Picture: Archives Charmet / Bridgeman Images
Show Hide image

What Marx got right

...and what he got wrong.

1. You’re probably a capitalist – among other things

Are you a capitalist? The first question to ask is: do you own shares? Even if you don’t own any directly (about half of Americans do but the proportion is far lower in most other countries) you may have a pension that is at least partly invested in the stock market; or you’ll have savings in a bank.

So you have some financial wealth: that is, you own capital. Equally, you are probably also a worker, or are dependent directly or indirectly on a worker’s salary; and you’re a consumer. Unless you live in an autonomous, self-sufficient commune – very unusual – you are likely to be a full participant in the capitalist system.

We interact with capitalism in multiple ways, by no means all economic. And this accounts for the conflicted relationship that most of us (including me) have with capitalism. Typically, we neither love it nor hate it, but we definitely live it.

2. Property rights are fundamental to capitalism . . . but they are not absolute

If owning something means having the right to do what you want with it, property rights are rarely unconstrained. I am free to buy any car I want – so long as it meets European pollution standards and is legally insured; and I can drive it anywhere I want, at least on public roads, as long as I have a driver’s licence and keep to the speed limit. If I no longer want the car, I can’t just dump it: I have to dispose of it in an approved manner. It’s mine, not yours or the state’s, and the state will protect my rights over it. But – generally for good reason – how I can use it is quite tightly constrained.

This web of rules and constraints, which both defines and restricts property rights, is characteristic of a complex economy and society. Most capitalist societies attempt to resolve these tensions in part by imposing restrictions, constitutional or political, on arbitrary or confiscatory actions by governments that “interfere” with property rights. But the idea that property rights are absolute is not philosophically or practically coherent in a modern society.

3. What Marx got right about capitalism

Marx had two fundamental insights. The first was the importance of economic forces in shaping human society. For Marx, it was the “mode of production” – how labour and capital were combined, and under what rules – that explained more or less everything about society, from politics to culture. So, as modes of production change, so too does society. And he correctly concluded that industrialisation and capitalism would lead to profound changes in the nature of society, affecting everything from the political system to morality.

The second insight was the dynamic nature of capitalism in its own right. Marx understood that capitalism could not be static: given the pursuit of profit in a competitive economy, there would be constant pressure to increase the capital stock and improve productivity. This in turn would lead to labour-saving, or capital-intensive, technological change.

Putting these two insights together gives a picture of capitalism as a radical force. Such are its own internal dynamics that the economy is constantly evolving, and this in turn results in changes in the wider society.

4. And what he got wrong . . .

Though Marx was correct that competition would lead the owners of capital to invest in productivity-enhancing and labour-saving machinery, he was wrong that this would lead to wages being driven down to subsistence level, as had largely been the case under feudalism. Classical economics, which argued that new, higher-productivity jobs would emerge, and that workers would see their wages rise more or less in line with productivity, got this one right. And so, in turn, Marx’s most important prediction – that an inevitable conflict between workers and capitalists would lead ultimately to the victory of the former and the end of capitalism – was wrong.

Marx was right that as the number of industrial workers rose, they would demand their share of the wealth; and that, in contrast to the situation under feudalism, their number and geographical concentration in factories and cities would make it impossible to deny these demands indefinitely. But thanks to increased productivity, workers’ demands in most advanced capitalist economies could be satisfied without the system collapsing. So far, it seems that increased productivity, increased wages and increased consumption go hand in hand, not only in individual countries but worldwide.

5. All societies are unequal. But some are more unequal than others

In the late 19th and early 20th centuries, an increasing proportion of an economy’s output was captured by a small class of capitalists who owned and controlled the means of production. Not only did this trend stop in the 20th century, it was sharply reversed. Inherited fortunes, often dating back to the pre-industrial era, were eroded by taxes and inflation, and some were destroyed by the Great Depression. Most of all, after the Second World War the welfare state redistributed income and wealth within the framework of a capitalist economy.

Inequality rose again after the mid-1970s. Under Margaret Thatcher and Ronald Reagan, the welfare state was cut back. Tax and social security systems became less progressive. Deregulation, the decline of heavy industry and reduction of trade union power increased the wage differential between workers. Globally the chief story of the past quarter-century has been the rise of the “middle class”: people in emerging economies who have incomes of up to $5,000 a year. But at the same time lower-income groups in richer countries have done badly.

Should we now worry about inequality within countries, or within the world as a whole? And how much does an increasing concentration of income and wealth among a small number of people – and the consequent distortions of the political system – matter when set against the rapid ­income growth for large numbers of people in the emerging economies?

Growing inequality is not an inevitable consequence of capitalism. But, unchecked, it could do severe economic damage. The question is whether our political systems, national and global, are up to the challenge.

6. China’s road to capitalism is unique

The day after Margaret Thatcher died, I said on Radio 4’s Today programme: “In 1979, a quarter of a century ago, a politician came to power with a radical agenda of market-oriented reform; a plan to reduce state control and release the country’s pent-up economic dynamism. That changed the world, and we’re still feeling the impact. His name, of course, was Deng Xiaoping.”

The transition from state to market in China kick-started the move towards truly globalised capitalism. But the Chinese road to capitalism has been unique. First agriculture was liberalised, then entrepreneurs were allowed to set up small businesses, while at the same time state-owned enterprises reduced their workforces; yet there has been no free-for-all, either for labour or for capital. The movement of workers from rural to urban areas, and from large, unproductive, state-owned enterprises to more productive private businesses, though vast, has been controlled. Access to capital still remains largely under state control. Moreover, though its programme is not exactly “Keynesian”, China has used all the tools of macroeconomic management to keep growth high and relatively stable.

That means China is still far from a “normal” capitalist economy. The two main engines of growth have been investment and the movement of labour from the countryside to the cities. This in itself was enough, because China had so much catching-up to do. However, if the Chinese are to close the huge gap between themselves and the advanced economies, more growth will need to come from innovation and technological progress. No one doubts that China has the human resources to deliver this, but its system will have to change.

7. How much is enough?

The human instinct to improve our material position is deeply rooted: control over resources, especially food and shelter, made early human beings more able to reproduce. That is intrinsic to capitalism; the desire to acquire income and wealth motivates individuals to work, save, invent and invest. As Adam Smith showed, this benefits us all. But if we can produce more than enough for everybody, what will motivate people? Growth would stop. Not that this would necessarily be a bad thing: yet our economy and society would be very different.

Although we are at least twice as rich as we were half a century ago, the urge to consume more seems no less strong. Relative incomes matter. We compare ourselves not to our impoverished ancestors but to other people in similar situations: we strive to “keep up with the Joneses”. The Daily Telegraph once described a London couple earning £190,000 per year (in the top 0.1 per cent of world income) as follows: “The pair are worried about becoming financially broken as the sheer cost of middle-class life in London means they are stretched to the brink.” Talk about First World problems.

Is there any limit? Those who don’t like the excesses of consumerism might hope that as our material needs are satisfied, we will worry less about keeping up with the Joneses and more about our satisfaction and enjoyment of non-material things. It is equally possible, of course, that we’ll just spend more time keeping up with the Kardashians instead . . .

8. No more boom and bust

Are financial crises and their economic consequences part of the natural (capitalist) order of things? Politicians and economists prefer to think otherwise. No longer does anyone believe that “light-touch” regulation of the banking sector is enough. New rules have been introduced, designed to restrict leverage and ensure that failure in one or two financial institutions does not lead to systemic failure. Many would prefer a more wholesale approach to reining in the financial system; this would have gained the approval of Keynes, who thought that while finance was necessary, its role in capitalism should be strictly limited.

But maybe there is a more fundamental problem: that recurrent crises are baked into the system. The “financial instability” hypothesis says that the more governments and regulators stabilise the system, the more this will breed overconfidence, leading to more debt and higher leverage. And sooner or later the music stops. If that is the case, then financial capitalism plus human nature equals inevitable financial crises; and we should make sure that we have better contingency plans next time round.

9. Will robots take our jobs?

With increasing mechanisation (from factories to supermarket checkouts) and computerisation (from call centres to tax returns), is it becoming difficult for human beings to make or produce anything at less cost than a machine can?

Not yet – more Britons have jobs than at any other point in history. That we can produce more food and manufactured products with fewer people means that we are richer overall, leaving us to do other things, from economic research to performance art to professional football.

However, the big worry is that automation could shift the balance of power between capital and labour in favour of the former. Workers would still work; but many or most would be in relatively low-value, peripheral jobs, not central to the functioning of the economy and not particularly well paid. Either the distribution of income and wealth would widen further, or society would rely more on welfare payments and charity to reduce unacceptable disparities between the top and the bottom.

That is a dismal prospect. Yet these broader economic forces pushing against the interests of workers will not, on their own, determine the course of history. The Luddites were doomed to fail; but their successors – trade unionists who sought to improve working conditions and Chartists who demanded the vote so that they could restructure the economy and the state – mostly succeeded. The test will be whether our political and social institutions are up to the challenge.

10. What’s the alternative?

There is no viable economic alternative to capitalism at the moment but that does not mean one won’t emerge. It is economics that determines the nature of our society, and we are at the beginning of a profound set of economic changes, based on three critical developments.

Physical human input into production will become increasingly rare as robots take over. Thanks to advances in computing power and artificial intelligence, much of the analytic work that we now do in the workplace will be carried out by machines. And an increasing ability to manipulate our own genes will extend our lifespan and allow us to determine our offspring’s characteristics.

Control over “software” – information, data, and how it is stored, processed and manipulated – will be more important than control over physical capital, buildings and machines. The defining characteristic of the economy and society will be how that software is produced, owned and commanded: by the state, by individuals, by corporations, or in some way as yet undefined.

These developments will allow us, if we choose, to end poverty and expand our horizons, both materially and intellectually. But they could also lead to growing inequality, with the levers of the new economy controlled by a corporate and moneyed elite. As an optimist, I hope for the former. Yet just as it wasn’t the “free market” or individual capitalists who freed the slaves, gave votes to women and created the welfare state, it will be the collective efforts of us all that will enable humanity to turn economic advances into social progress. 

Jonathan Portes's most recent book is “50 Ideas You Really Need to Know: Capitalism” (Quercus)

Jonathan Portes is senior fellow The UK in a Changing Europe and Professor of Economics and Public Policy, King’s College London.

This article first appeared in the 22 June 2017 issue of the New Statesman, The zombie PM

0800 7318496