NOTHING TO DO WITH US
Can the Tories honestly escape any blame for the financial crisis?
It was the Tories under Margaret Thatcher who – along with Ronald Reagan in
America – originally championed the market fundamentalism that ultimately led to
the present crisis.
David Cameron’s apology for not anticipating the crisis was therefore sheer
effrontery. His speech on 13 March was obviously intended to distance the Tories
from the Labour government. As an apology it seemed synthetic but, if sincere,
it was a bit late coming.
Presumably Cameron hadn’t noticed Vince Cable, who was warning for several years
that the growing levels of debt were unsustainable. Cable was not alone. Other
respected commentators were also raising the alarm.
Not that New Labour is innocent. It shares responsibility for this crisis
because it reinforced the policies that allowed corporate and personal debt to
spin out of control. Gordon Brown is wrong to claim that the British economy was
fundamentally sound until it was hit by a calamity from abroad.
Cameron at least conceded that there had been a ‘cosy economic consensus’
between the main parties, but the thinking behind this consensus goes back
further than he cares to admit. An honest critique is not possible without
repudiating the neoliberal economic dogma that has dominated British politics
for the past thirty years. Cameron has not recanted, so why should anyone trust
him to manage the economy?
The Tories’ lead in the polls is the product of New Labour’s exhaustion rather
than any new thinking. Since Cameron became leader, his party has failed to
produce any serious big ideas. You would have thought this is an urgent
requirement when the main pillars of Tory policy have just been demolished.
The global financial crisis has thoroughly discredited neoliberal ‘turbo
capitalism’. Neoconservative foreign policy lies in ruins in Iraq. Atlanticism
looks even less credible as an alternative to Europe, after the offhand gift by
President Obama to Gordon Brown of some bargain bin DVDs. And Labour’s policies
on crime continually outflank the Tories to the right.
What does that leave the Tories with? Their answer to the crisis, insofar as one
can make it out, would turn a recession into a slump. One wonders how much
longer they can keep a lead in the polls if they continue to be all spin and no
The Tories’ dilemma is that they want to maintain the support of both their
traditional ageing supporters and a younger, more progressive constituency. At
some point between now and the next general election, they will have to make
some hard policy choices, which will inevitably alienate one group or the other.
Tory poll ratings are high for now because voters are tired of Labour and want a
change. As the main opposition party, the Tories are naturally perceived as ‘the
alternative’. But this default position cannot last indefinitely without some
The lack of credible policies is the Tories’ Achilles’ heel, but choosing such
policies will open up splits among Tory supporters. The Liberal Democrats should
exploit this weakness for all it’s worth.
A CLEAN BREAK
An enduring puzzle of the financial crisis is why the Liberal
Democrats seem reluctant to repudiate openly the neoliberal dogma that led to
this crisis. If they genuinely wish to offer the voters a distinct alternative,
what better way to make a clean break with the ‘cosy economic consensus’?
Most Liberal Democrats have never been fans of neoliberal economics but an
influential minority continues to believe in this nonsense. There was no
tradition of neoliberalism in the party until the start of this decade, when
people such as Paul Marshall and Mark Oaten, and organisations such as Liberal
Future and later Liberal Vision, began to lobby for it.
Dutch writer Paul Treanor defines neoliberalism as “a philosophy in which the
existence and operation of a market are valued in themselves, separately from
any previous relationship with the production of goods and services... and where
the operation of a market or market-like structure is seen as an ethic in
itself, capable of acting as a guide for all human action, and substituting for
all previously existing ethical beliefs.”
In the neoliberal universe, markets are treated more as an object of religious
devotion than merely as a useful mechanism. Ethics is reduced to calculations of
wealth and productivity. Values like morality, justice, fairness, empathy,
nobility and love are either abandoned or redefined in market terms.
This always was a bleak, heartless and illiberal belief system. And now it’s a
busted flush. No wonder its adherents have failed to convert the party. But
their continuing influence inhibits the Liberal Democrats from making trenchant
criticisms of the ideology underlying the crisis. And this in turn prevents the
party from sounding distinctive, which stunts its growth.
Nick Clegg has been making increasingly bold statements recently. If he wants to
distance his party from the Con-Lab consensus, he should make another. He should
declare that neoliberalism is a shop-soiled idea that has no place in the party,
and that we should instead support a more human form of capitalism. And if a
handful of zealots can’t handle this rejection, too bad.
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