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Miliband and Balls have fallen into a Tory trap, says Mehdi Hasan

Without a focused and consistent message, any political party is stuck. Voters make decisions based not on specific party policies or positions, but on larger "frames" or metaphors.

There is one word that dominates the debate over the Labour Party's economic strategy: credibility. It is a word that is much used but much misunderstood by the political and the media elite. "We're talking a lot about the need for Labour to win back credibility," says Lisa Nandy, one of Labour's sharpest new MPs, "but we're not asking who we're trying to win credibility with - the financial markets and credit rating agencies, or the public?" The interests of the latter do not always coincide with those of the former and, as Nandy points out, the latest polls show that voters believe the coalition is cutting "too much, too quickly".

Yet the Labour leadership seems to have outsourced its definition of fiscal credibility to the right. In the hands of conservative politicians and commentators, not to mention BBC journalists, credibility becomes code for austerity - ironically, at the exact moment that austerity is choking growth and driving up unemployment and borrowing across Europe.

Labour's renewed focus on credibility-as-austerity has forced some of the party's biggest hitters into all sorts of verbal slips, intellectual contortions and tactical errors. On 10 January, Miliband used his first big speech of the year to claim that "the next prime minister will still have a deficit to reduce, and will not have money to spend". This is economically illiterate: Prime Minister Miliband could choose to fund new spending by raising taxes or collecting the billions of pounds in unpaid taxes.

On 14 January, the shadow chancellor, Ed Balls, arch-Keynesian and architect of Labour's "too far, too fast" attacks on the coalition's cuts, seemed to go further. "My starting point is, I am afraid, we are going to have to keep all these cuts," Balls told the Guardian as he endorsed George Osborne's public-sector pay freeze.

Balls, who has yet to retract or modify the line, was denounced three days later by the leader of the Unite union - and ex-Miliband ally - Len McCluskey as one of "four horsemen of the austerity apocalypse" (along with his Blairite shadow cabinet colleagues Liam Byrne, Jim Murphy and Stephen Twigg).

Behind the scenes, as aides briefed journalists that Balls had not renounced Labour's opposition to Tory cuts or ruled out reversing some of them in 2015, some Labour figures suggested the shadow chancellor may have gone beyond the agreed formula. "All we were supposed to say was that we will review everything when we're back in government," said a member of the shadow cabinet. A senior Labour MP who backed Balls for leader said: "Ed was trying to pacify the right, who were after his blood. He probably thinks it helps to have the unions baying for his blood instead."

It was left to Labour's deputy leader, Harriet Harman, to try to clarify the party position in response to McCluskey's full-frontal assault. "It's simply not the case that we're accepting the government's spending cuts," she said on the BBC's Today programme. "That couldn't be further from the truth." But, given the rhetoric from Miliband and Balls on the need for "tough choices", she wasn't quite convincing. "Aren't you trying to have your cake and eat it?" the presenter Sarah Montague asked Harman. So much for a clarification.

Shifting goalposts

It's not just clarity and coherence that the party should be worried about; it's the lack of a distinct Labour narrative. Consider the recent past. The Tories obsess over the deficit; Labour tries to find a compromise position on deficit reduction ("halving the deficit over four years"). The Tories shout about the need for cuts; Labour tries to find a softer position on cuts ("too far, too fast"). The Tories announce that austerity will continue into the next parliament; Labour's response is to say that it can't guarantee it will reverse any ("all"?) of the Tory cuts.

There is a theme here - the Tories set the agenda, Labour operates within it. On the economy, in particular, the Tories have displayed extraordinary message discipline. At the start of the financial crisis in 2008/2009, they settled on a theme - that "big government" was to blame, that Labour had "overspent" and that the budget deficit threatened to "bankrupt" Britain - and have repeated it since like robots: in speeches, interviews, articles and at the des­patch box. "We're clearing up Labour's mess," goes the Tory mantra. In his resignation letter in October 2011, the outgoing defence secretary, Liam Fox, even referred to the "vital work of this government, above all in controlling the enormous budget deficit we inherited".

By defining deficit-reduction-through-austerity as responsible and unavoidable, the Tories have defined those opposed to such austerity measures as irresponsible and deluded: as "deficit deniers".

At this point, it is worth invoking George Lakoff, the Berkeley University linguistics professor who is one of the US's most influential progressive thinkers. His landmark book Don't Think of an Elephant! explains, using cognitive science, how voters make decisions based not on specific party policies or positions, but on larger "frames" or metaphors. Lakoff shows how the right has long used loaded, image-laden language and sustained repetition to exploit our unconscious minds. (The book title relates to the way you can't help but think of an elephant when you hear the word, even if you are asked not to.)

Lakoff outlines "a basic principle . . . when you are arguing against the other side: do not use their language. Their language picks out a frame - and it won't be the frame you want."

What conservatives have done, he told the New York Times in 2005, "is find ways to set their frames into words over many years and have them repeated over and over again and have everybody say it the same way and get their journalists to repeat them, until they became part of normal English". (Think Tories, austerity, deficits, deniers.)

Lakoff argues that attacking your opponents' frame - be it on deficit reduction or a cap on immigration - ends up reinforcing their message. When I mention to him the Balls line on "keeping the cuts", he groans. Loudly. "There is a view on the left that says if you take the other guy's language you can then undercut them - but it just shifts the discourse to the right," Lakoff says. Instead, progressives should "use their own language and frames".

So what should the alternative, Labour frame be? The answer is obvious: growth and jobs. In November 2011, a YouGov poll found that more voters (37 per cent) wanted the government to focus on growth, "even if this means the deficit stays longer, or gets worse", than on reducing the deficit (36 per cent), "even if this means growth remains slow". Given that You­Gov's polls show Labour leading the Conservatives by 18 points on job creation but trailing them by 22 points on deficit reduction, it seems strange to focus all the rhetoric and airtime on closing the deficit gap.
One of Miliband's chief advisers disagrees. "We have internal polls and focus groups showing people don't think Labour treats their money with respect or spends it in the right way. We have to move Labour's reputation on this issue and close the gap." He adds: "Growth is still our message, by the way."

You could have fooled me. All of the chatter since Christmas has been around cuts, austerity and "tough choices". Credibility continues to be viewed through the Tory prism; voters hear a Tory, not a Labour, world-view.

It is the wrong place, both tactically and strategically, for the opposition to be. Tactically, it hobbles the ability of an opposition party to oppose in the here and now. Strategically, it bolsters the Tories' economic frame.

If the next general election comes down to which party can best manage austerity, Labour is finished. Party strategists say that the aim is to appeal beyond the Labour base to those in the middle, who need reassurance about fiscal responsibility. Lakoff calls this "the myth of the centre". "People in the so-called centre are partly conservative, partly liberal," he says, and he argues that it is the job of progressive poli­ticians to use language that "activates" the liberal parts of their brains.

Down a dead end

Lakoff's book has been in print since 2004 and yet, he points out, progressive politicians across the west - including those in our own Labour Party - do not seem to want to understand its simple message or take its ideas on board.

“They assume the Enlightenment and reason rules," Lakoff says - "that if you just tell people facts, they'll reach the right decision." But language matters, metaphors and images matter, clear narratives and frames matter.

Most senior Labour figures I spoke to haven't read Lakoff; Miliband, despite his passion for ideas and US politics, does not own a copy of Don't Think of an Elephant!. Douglas Alexander does. So, too, does Chuka Umunna. But they are in a tiny minority - and, incidentally, Alexander is said to be one of those shadow ministers pushing for a more "credible" Labour position on deficit reduction.

The Labour Party has been going through colour-coded policy phases since the last general election. First, there was Blue Labour, with its emphasis on communities, relationships and tradition. Then there was The Purple Book, with its reassertion of Blairite values and its rhetorical assault on the "big state". Then came the pamphlet In the Black Labour, which calls for Labour to centre its economic strategy on "fiscal conservatism".

Where are we now? Are we witnessing the birth of "white flag Labour"? That is the pro­vocative title of a new report from the centre-left pressure group Compass. Its author, the economist Howard Reed, defines the phrase as a "tame surrender to the misguided economic policies currently wreaking havoc on the UK's economic and social fabric".

Senior Labour figures tell me that they have no plans to abandon their opposition to the depth and timing of Tory cuts; they are, however, intent on taking on the Tories over the deficit in order to establish their (you guessed it) "credibility". Yet, as Lakoff shows, austerity is not just an economic but a political dead end for progressives.

It's time to change the subject - and build an economic strategy in which so-called credibility revolves around the promotion of growth and creation of jobs. As the spending cuts begin to bite and Britain heads back into recession, Labour's front bench should not be fixating on austerity or the deficit, but focusing on restoring growth and employment levels.

Memo to the two Eds: read George Lakoff; don't take on the Tories on their terms; don't think of an elephant.

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

This article first appeared in the 23 January 2012 issue of the New Statesman, Has the Arab Spring been hijacked?

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 23 January 2012 issue of the New Statesman, Has the Arab Spring been hijacked?