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26 September 2017

Why Labour is wise to use “war game” planning for government

As for François Mitterrand in 1981, the challenge of implementing a socialist programme would be immense. 

By George Eaton

John McDonnell is a man preparing for power. “We have proved that we are an effective campaigning party,” he declared in his speech yesterday. “We now have to prove that we will be an effective governing party.”

At a World Transformed event last night (“Governing from the Radical Left”), McDonnell went further and explained how Labour is preparing for the economic tumult that could accompany its election. “It [planning] tries to answer the question about what happens when or if they come for us,” the shadow chancellor said. “What if there is a run on the pound? What happens if there is this concept of capital flight? I don’t think there will be but you never know so we’ve got to scenario-plan for that. People want to know we are ready and they want to know we have got a response to anything that could happen.”

 Labour, McDonnell said, was preparing “detailed implementation manuals” and drafting legislation so it could “hit the deck running”. Even more intriguingly, he revealed that supporters (led by Richard Barbrook, founder of the group Class Wargames) are performing “war-game type scenario planning”. 

In view of Labour’s manifesto, such preparation is essential. Not since the Mitterrand government has a European party entered power with such an interventionist programme (including the renationalisation of public utilities, higher taxation of the rich and corporations, increased public investment, a financial transaction tax and a £10 minimum wage). 

Within two years of François Mitterrand’s election in 1981, his Socialist administration had been brought to heel by the market. A surging trade deficit (owing to pressure on the Franc) and higher inflation led to the tournant de la rigueur, or “austerity turn”, of 1983. Public spending was slashed, taxes on workers and consumers were increased and wages were cut. 

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The challenge for a Labour government, as McDonnell knows, is precisely to avoid such an outcome. In a far more globalised economy than that of the 1980s, the task is formidable. As a senior Labour politician recently told me: “There is simply no historical model anywhere in the world for what we want to do, which has been successful. A left government being elected in a post-industrial society and then successfully managing to transition into a major new settlement, whether a new form of capitalism or socialism: this is not easy to achieve.” Indeed, as McDonnell told me: “We went beyond the concept of socialism in one country many decades ago. To transform our society, we know we have to work internationally and globally.”

And all this even before the likely fallout from Brexit. To the UK’s existing defects – low productivity, low investment and low pay – new ones have been added: political uncertainty and economic instability. McDonnell is wise to hope for the best but prepare for the worst.