In 2008, as the financial crisis afflicted the West, many progressive politicians, notably Ed Miliband, spoke of a “social democratic moment”. Unprecedented state interventions, such as the bank bailouts, prompted talk of a new economic settlement. It did not amount to much.
Indeed, as we warned at the time, such hopes were always naive. The centre left was complicit in the deregulation and financialisation that precipitated the crash. In Europe, it championed the single currency and the creation of a monetary union without a complementary fiscal union. When the system inevitably faltered, social democrats could not credibly pose as its saviours. Instead it was the right that thrived by harnessing anxiety over immigration and by reframing a private sector crisis as one of public debt.
A decade later, as the state once more intervenes to underwrite the economy, commentators are again asking whether this could be a progressive moment. “It’s a wonderful time to be a social democrat,” the Dutch historian and author Rutger Bregman says this week. And in this week’s cover story, Andrew Marr asks whether the Covid-19 crisis could mark “the start of a big left turn”.
The essay’s title – “The Great Moving Left Show” – is an allusion to the late cultural theorist Stuart Hall’s January 1979 essay “The Great Moving Right Show”. At a time when many on the left dismissed Thatcherism as an aberration, he understood that the right was engaged in a potent mission not just to win electoral power but to redefine “common sense”. There is no equivalent movement on the left or the right today to the Hayekian New Right, but we can ask whether the crisis, like the collapse of the Keynesian consensus in the 1970s, represents a historical turning point.
In 1996, at the height of liberal triumphalism, Bill Clinton declared that the “era of big government is over”. His message was echoed by social democratic parties across the West. Yet in Britain, confronted by the threat of the largest recession since 1709, the state has returned to the centre of economic life. Like the 1918 Spanish flu, which spurred the creation of the egalitarian Swedish welfare state, the Covid-19 pandemic is remaking the case for social security as a form of collective insurance.
Under David Cameron and George Osborne in 2008, the Conservatives opposed the fiscal stimulus introduced by the Labour government, before ushering in an “age of austerity”. By contrast, the present Chancellor, Rishi Sunak, has provided economic support of £330bn and, through the Job Retention Scheme, is paying the wages of 7.5 million people (a quarter of the private-sector workforce).
The crisis has accelerated the Conservatives’ pre-existing retreat from austerity economics. Under Boris Johnson, the party had already committed to higher NHS spending and to borrowing for investment (embracing a version of Labour’s 2017 fiscal rules). Though the right has been wedded to free-market economics since the neoliberal turn of the 1980s, big government conservatism was never previously a contradiction in terms.
For this reason, among others, the left should resist the temptation to claim ideological victory. Rather than resolving the contradiction between Mr Johnson’s national conservatism and his embrace of a freewheeling “Global Britain”, the pandemic has deepened it. Once the crisis has passed, the temptation among many on the right will be to retreat to the familiar territory of tax cuts, deregulation, limited government and privatisation in pursuit of growth at any cost.
The former French president Charles de Gaulle once declared that it was his political mission to reconcile the left to the state (or authority) and the right to the nation (or democracy). In the wake of the 2008 crash, even as living standards fell, the right marginalised the left by claiming the mantle of nationhood. By intensifying focus on questions of borders and citizenship, the Covid-19 crisis could provide a similar opening. If we are witnessing the beginnings of a new consensus, the left must not merely hail the return of the protective state – it must respond to the return of the nation.
This article appears in the 20 May 2020 issue of the New Statesman, The Great Moving Left Show