According to Nationwide, UK house prices have fallen on an annual basis for the first time since 2012. In June they fell by 0.1% compared to a year earlier. They fell by a whopping 1.4% between May and June, but that is not as much as the 1.7% fall recorded in May compared to the previous month. As an average monthly fall of around 1.6% that is equal to a fall around 18% for a full year, if it continues in coming months.
But, there is every reason to think that the fall in the coming year will be greater than that. In 1990, when a recession led to rising unemployment, at the same time that UK interest rates were also spiking higher, house prices went from a ridiculous bubble to a bust in which they fell by 40%, in a matter of months, and did not recover, even in nominal terms until 1996.
Today, as a result of the economic catastrophe caused by the government imposed lockdown, we have the worst economic slowdown in 300 years, putting the 1990's recession in the shade by a long way. We have had economic output and new value creation deliberately scuppered by government action, and with huge additional costs imposed on top of the problem. That in itself will cause inflation, as those higher costs, and reduced supply of commodities feeds through, as the ocean of liquidity pumped into circulation necessarily leads to rising prices. Higher prices, will on their own lead to rising nominal interest rates to compensate, but other factors mean that interest rates are rising anway, even in real terms.
So, far the effects of the lockdown are not being really felt. The furlough scheme means that many workers are remaining on company books so long as the government keeps paying their wages, but that scheme is being wound down from this month. Many businesses facing have to pick up that tab have already started laying workers off. Unemployment is then set to soar by several millions, and as in 1990, that sharply rising unemployment means that many people who were already struggling to pay mortgages, even with mortgage rates that have been massively manipulated by the state down to unsustainably low levels, will no longer be able to pay them. For now, also, the government told banks and building societies to give homebuyers a mortgage holiday, so those difficulties are not yet feeding through. As the mortgage interest holiday ends, and millions join the dole queue. there will be an sharp increase in repossessions, and of people seeking to sell houses they can no longer afford.
But, that is not at all. The other consequence of all the borrowing resulting from the economic chaos caused by the lockdown is that interest rates are set to soar. Companies profits have been smashed, even their incomes have disappeared in many cases, as their businesses have been closed by government diktat, or else have seen sharp declines in sales, whilst their costs have risen. Many need to borrow just to pay their bills and stay afloat, meaning they have to pay whatever rate of interest is required to do so. But, whatever shape the recovery comes in, as the lockdown ends, there will be a recovery. People will again begin to spend money buying those things they need, and those things they have not been able to buy over the last few months. Some firms will have to go from a standstill to increased production, others will have to take on additional workers to meet increased demand, as they try not to lose market share to competitors. Both will have to borrow to do so.
Company borrowing is set to increase at a time when profits are being squeezed, and that means they have to finance a greater proportion of their capital from borrowing than from internal resources. Those lower profits also means that less of those profits find their way into money markets, reducing the supply of loanable money-capital. The consequence is that interest rates rise. As millions of workers join the dole, their first response will also be to draw down any saving they might have, and to begin borrowing, often from high cost lenders, in order to survive. Again, interest rates are pushed higher.
And, finally, the government has already borrowed massively and will have to borrow even more massively in coming months as it tries to save large strategic industries in aircraft production, car production, airports and so on, even before its commitments to spend on infrastructure, and the huge bills it will face to pay for the welfare benefits to millions of unemployed workers who have lost their jobs as a result of the government imposed lockdown. This is borrowing on an unprecedented level, at a time when an economic slowdown has reduced productive capacity, and reduced the mass of profit available to cover either the borrowing or the capital accumulation. This is almost a perfect storm for rising interest rates.
Rising interest rates not only mean a further problem for people already struggling to pay their mortgages. Rising interest rates always result in a fall in asset prices, and a major component of house prices is the price of land as an asset. But, the property built on the land has also become a speculative asset over the last 40 years, its price being bid up via speculation divorced from any real value represented by the house as a commodity. In fact, houses as a commodity, should have fallen in value over the last 40 years, as with the value of other commodities, as a result of rapidly rising productivity.
Rising interest rates means falling asset prices, be it for land, shares, bonds and all the other assets like art, wine and so on that has been bid up into ridiculous speculative bubbles, reminiscent of the Tulipmania, over the last 40 years. We are seeing the inevitable, but rapid reversal of the conditions that led to that asset price hyperinflation over the last 40 years, and house prices are set to crash spectacularly as part of it.
On every previous occasion, house prices when they have inflated into such bubbles have quickly reverted to the mean with a sudden bursting of the bubble. That process began in 2008. In the US, Ireland, Spain and elsewhere, house prices fell by around 60%. In Britain they fell by 20%, but action by the state to artificially reduce mortgage rates, to pump huge amounts of liquidity into circulation, and to introduce measures to reflate property and other asset prices cut it short. As the graph above indicates the reversion to the mean in Britain was never completed. UK house prices need to fall by around 75% to bring about that mean reversion. It may not be an actual 75% drop, as all of the liquidity pumped into circulation, now going into financing consumption, and so facilitating a rise in commodity price inflation, may mean that a 75% real terms drop manifests as only a 50-60% nominal terms drop, depending upon how high consumer price inflation moves.
21 comments:
Isn't this very bad news indeed for the Tories, as one of the main reasons why people vote Tory is to protect the value of their residential property? Note the role that the decline in house prices following Black Wednesday played in the 1997 Labour landslide!
Of course the Tories now have another mass appeal in the shape of Brexit, but will that really matter in 2024 when will have been fully out of the EU for three years? Will the fact that Brexit will most likely prove a disappointment to Leave voters only encourage the Tories to double down on xenophobia even more: perhaps making it a 2024 manifesto pledge to eliminate Islam from Britain?
I don't place too much weight on people voting Tory to get high house prices, although that has generally been a consequence of Tory lax monetary policy, e.g. Maudling, Barber, Lawson and Clarke all introduced monetary easing and additional credit that sparked speculative booms that subsequently burst.
I've responded to Blissex on the same point previously. The 1990 40% bust was pretty bad for anyone who had just bought, including thousands who had been persuaded to take out mortgages to buy their council house. But, remember the bubble had been rapid too. I bought a house in 1988 for £30,000, which by 1990 was priced at £60,000, and then after the bubble burst dropped back to more or less the original £30,000. What was more annoying for me was that I did not sell my former house, until several months after buying the new one. I sold my old house for £22,500, and if I'd held on to it till 1990, I could have sold it for £39,000!
So, for many, particularly the elderly Tory voters who have owned their houses for a long time, I don't think it was that bursting of the bubble that was decisive, and by 1996, house prices were back to their nominal 1990 levels. Moreover, New Labour, as with all conservative social-democrats tend to have a fetish for high asset prices because they don't understand the difference between values and prices. About 15 years ago, as my friend Bill Cawley reminded me, I had a bit of a heated discussion in the pub with the then Deputy Labour Leader of the County Council, who was an estate agent. I had been warning in Council Meetings that all of the inflation of asset prices and debt was leading to an almight bursting of bubbles - this was a couple of years before I predicted the actual bursting of the bubbles in 2008. The Labour Deputy Leader was insisting that all of the debt the blowing up of house prices was a wonderful thing.
Surveys suggest that more people now see high house prices as a bad thing than a good thing, so I think they are probably an electoral liability other than for some who can't see very far, don't have kids or grandkids and so on, and who are not thinking of buying a better house.
I don't think Brexit is mass appeal, and is bound to become even less so. It fulfils the same function for the Tories that similar policies do for Trump, merely of consolidating the core vote, but the core vote isn't a majority. Had labour put forward a clear anti-Brexit position in the last elections that would have been abundantly clear. I don't believe the Tories will "Get Brexit Done" in any meaningful sense by the end of this year. The EU has Johnson over a barrel. He will now almost certainly have to capitulate yet again to get a deal or make an embarrassing U-Turn to get an extension. He's not going to allow a crash out that would devastate the economy on top of the devastation that the lockdown has already inflicted on it unnecessarily.
Certainly, however, expect more bluff bluster and xenophobia to cover up that reality.
I've responded to Blissex on the same point previously.
Yes, it was of course Blissex that introduced me to the "the British vote for whoever they trust most to protect or (better) increase the price of their property" hypothesis, but isn't it clear how every change of government since 1970 has been triggered by an economic disaster?
1970: Devaluation of the pound
1974: Three-day week
1979: Winter of Discontent
1997: Black Wednesday
2010: Crash of 2008
I don't think Brexit is mass appeal, and is bound to become even less so. It fulfils the same function for the Tories that similar policies do for Trump, merely of consolidating the core vote, but the core vote isn't a majority. Had Labour put forward a clear anti-Brexit position in the last elections that would have been abundantly clear.
Disagree strongly here.
Labour suffered its terrible defeat last December because a quarter of Leave voters who voted Labour in 2017 switched directly to the Tories. If Labour had gone for a "revoke Article 50" stance then they would have lost at least as many Leave voters as they did, and there were never enough winnable Remain-voting constituencies to compensate as practically all of them were either:
1) already in Labour hands, or
2) in Scotland, where the right's longer dominance of Scottish Labour meant that the millennials and BAME voters that were Corbynism's base in England and Wales were attracted to the SNP instead, or
2) affluent places in southern England where Labour was highly unpopular for class reasons, and where the threat of Corbyn might even have seen many Remainers stick with the Tories (because they considered Corbyn a worse evil than Brexit)
Labour did unexpectedly well in 2017 because it was able to mobilize a lot of new left-wing voters without antagonizing their traditional Leave-voting supporters in the Red Wall. Those latter voters were willing to give Labour a chance provided it respected their referendum vote, but had Labour shifted to a second referendum stance (or more so, a "cancel Brexit" stance) it would have lost enough of these voters to the Tories (probably less than in 2019 as they hadn't yet been so radicalized by Facebook et al) to give Theresa May the landslide that was historically won by Boris Johnson.
I was perhaps inaccurate in referring to the basis of the Tories' popularity among the non-rich as "Brexit": perhaps "ethnonationalism" would be more accurate? ("Social conservatism" is just plain wrong though: surely the most socially-conservative group in today's Britain would be Muslims, and they were very Labour and very Remain.)
Between 2017 and 2019 Labour lost 1.9 million Remainers and 1.8 million Leavers (which means it proportionately lost more Leavers, as twice as many Remainers as Leavers voted Labour in 2017). It also gained 0.9 million Remainers but only 0.1 million Leavers. The Leaver losses were also more damaging because they tended to switch directly the Tories (while Remainer losses tended to switch to Lib Dems or Greens) and because they were disproportionately concentrated in the Red Wall.
In 2019 47% of the vote went to "Leave" parties (Tories, Brexit Party and DUP) while 53% went to "Remain" parties (Labour, Lib Dems, Greens, SNP, Plaid Cymru, UUP, Alliance, SDLP and Sinn Féin). However, if we compare aggregate "Leave" votes with aggregate "Remain" votes on a constituency-by-constuency basis "Leave" wins by 327 seats to 323. This shows that the concentration of Remainers in cities was at least as damaging as the (mostly class-based) division of the Remain vote.
I don't believe the Tories will "Get Brexit Done" in any meaningful sense by the end of this year.
Maybe not by the end of this year, but surely he'll "Get Brexit Done" well before the next election in 2024? Or is your thesis that they'll deliberately spin out Brexit in order to keep their base onside, just as the US Republicans do with abortion in order to keep evangelicals onside?
The EU has Johnson over a barrel. He will now almost certainly have to capitulate yet again to get a deal or make an embarrassing U-Turn to get an extension. He's not going to allow a crash out that would devastate the economy on top of the devastation that the lockdown has already inflicted on it unnecessarily.
You're assuming that the Tory Brexiteers actually care about the British economy. What if instead they (or more accurately their financial backers) plan to profit from Britain's economic collapse, just as the Russian oligarchs leveraged the collapse of the Soviet Union to become some of the richest plutocrats in the world?
My thesis is that the Tories are about getting elected/reelected, and a British economy that goes into meltdown as a result of a Brexit crash out, or hard Brexit would see the Tories kicked out in 2024, if not before. Johnson, unlike Trump, is not a moron. He knows that, and so isn't going to do it. He will continue all the bluff and bluster about walking away as he did last year (he didn't die in a ditch but capitulated, and had to accept an EU deal that even May had rejected). He will try to present any deal as a victory, as he did with his capitulation over the withdrawal agreement. But, the politico-economic reality is that a settlement requires either effectively staying in the single market, via some kind of EEA type arrangement, or else requires an extension of the transition period. The EU, unlike the UK is now more than prepared for Britain crashing out, the EU will lose little, but the UK will be devastated.
The financiers of the Tories that support Brexit, are mavericks. They are precisely the people linked to groups like the Russian oligarchs, and others who want to break up the EU for their own short-term interests. The other group backing the Tories and Brexit are the financial traders for whom the more frictions, and opportunities for trading and arbitrage the better. But, that is not in the interests of capital, or of the big share and bondholders in that capital, because it means additional costs and lower profits.
But, even the big banks and financial institutions that employ many of those traders are wary of Brexit, because it means additional costs and limitations for them. Because the UK didn't arrive at a deal with the EU by the June deadline, the City now faces not having passporting rights, so a lot of that business worth hundreds of billions of pounds will move to the EU, where Frankfurt will be only to happy to become the centre of European finance. The Russian oligarchs benefited from the fact that in the 1990's when they were picking up shares in privatised Russian companies (as with those that picked up masses of shares in privatised UK companies in the 80's) the world was seeing astronomical asset price inflation. Now the world is facing a massive bursting of that bubble and collapse of asset prices, at a time when commodity price inflation is rising.
The future consists of capital chasing after real profits, and rising money profits as inflation rises, which requires real capital investment, not speculation in shares and bonds. And for the profits from such investment to be rising it requires the economy to be growing not crashing as a result of deliberate or stupid government policies. That is a reverse of what has happened for the last 30-40 years.
I agree about the effect of economic crises on elections. Its necessary to think about what is actually behind that. As I've argued elsewhere, social-democracy is about a compromise by which workers remain within the confines of the system so long as the system provides them with more or less continuous improvements in their conditions. They most closely associate that with the party that represents that perspective. It used to be the Liberals, then the LP took over that role. On each occasion when Labour lost those elections, it was when Labour governments had failed to abide by their side of the bargain. Its more about workers staying away than voting Tory.
On 2019 and Leave voters I disagree. The main problem for Labour was not Leave voters, but all the Remain voters it lost, who constituted 4 for every Leave voter they lost. It got some back by the election, but not all, and had to waste time getting them back. All of those Remain voters in places like North Staffordshire saw little point in voting Labour and either abstained or went back or to the Liberals, and Greens. The idiotic fantasy politics of Swinson didn't help, because had it been more apparent that a Corbyn government, even a minority government could have the support of other Remain supporting parties then more people would have voted for it to keep the Tories out.
But also, its not just a matter of Leave or Remain. Had Labour been putting forward a principled anti-Brexit stance from 2015 onwards, instead of wasting time trying to win back the Remain voters it lost by Corbyn's economic nationalism, it could have been focusing on taking the argument to Leave supporting Labour voters, showing why it was a stupid policy that would damage their interests. It could have coupled it with its radical social-democratic agenda, to show to those workers why it was a labour government pushing through that agenda that could better meet their interests than could Brexit, which would on the contrary damage them. You are forgetting the role of active politics, which is what a party and programme exist for, and instead simply looking at thinks in terms of comparative statics, of merely adding up the votes that were cast rather than looking at how the votes could have been changed. People have said to me "Oh you want a different electorate", using the old saw, and my response is, "Yes, I do", I want an electorate that has different views to the conservative and reactionary views that many currently hold, and the way to achieve that is by a socialist party, or even a progressive social-democratic party engaging with the current electorate, and trying to change its views rather than simply tailing behind it trying to tailor its own politics to the lowest common denominator.
I've dealt with the Corbyn factor elsewhere. People claim "Oh we could never vote for Corbyn", but clearly many of them who say that did in 2017. But, the fact is that in 2020 Corbyn was a factor, and he was a factor because in the intervening period he had come out as a dissembler, and the daily electoral bribes of the campaign simply seemed to emphasise that. I hate vox pops, but listen to some of those people in Dudley and so on who think that Johnson will deliver he goods on public spending etc. and who add, "more chance than that other bloke, what was his name, Corbyn, would have done". Some of it obviously is down to a fantastically ignorant electorate, but that is a given that parties have to deal with, and its because Labour has focused on only trying to sell its product to voters at election time rather than doing continual education work with the working-class that such a condition exists. It forgot about educate, agitate, organise, and instead adopted triangulate, moderate, equivocate.
On each occasion when Labour lost those elections, it was when Labour governments had failed to abide by their side of the bargain. Its more about workers staying away than voting Tory.
I wonder how much the decline and fall of the Red Wall was driven by the fact that former workers in collapsed industries (mostly lacking the academic achievements to get jobs in the knowledge-based economy) often ended up becoming self-employed tradesmen, and as a result adopted the Tory petit-bourgeois outlook?
When people speak of "working-class Tories" they often mean these self-employed "white van man" types rather than actual proletarians.
The financiers of the Tories that support Brexit, are mavericks.
Agreed. Perhaps one reason why the Tories have become increasingly harmful is that rising inequality meant they were able to rely on the backing of a handful of super-rich mavericks rather than a broad cross-section of capitalism in Britain.
On 2019 and Leave voters I disagree. The main problem for Labour was not Leave voters, but all the Remain voters it lost, who constituted 4 for every Leave voter they lost.
That's nonsense: the only way you can get "Labour 4 Remainers lost for every Leaver" is if you assume there was no movement between non-Labour parties, while in fact there was a significant movement from the Tories to the Lib Dems.
The Lord Ashcroft polls tell the story, showing that Labour Leave voters were more than twice as likely to desert the party as Labour Remain voters:
2017 Conservative Leavers: CON 92%, LAB 3%, LD 2%, BXP 2%, GRN 1%, OTHER 1%
2017 Conservative Remainers: CON 66%, LD 21%, LAB 8%, GRN 3%, SNP 1%, OTHER 1%
2017 Labour Leavers: LAB 64%, CON 25%, BXP 4%, LD 3%, GRN 2%, SNP 1%, OTHER 1%
2017 Labour Remainers: LAB 84%, LD 9%, GRN 2%, CON 2%, SNP 1%, OTHER 1%
2017 Liberal Democrats: LD 52%, LAB 27%, LD 14%, GRN 4%, SNP 2%, OTHER 1%
People have said to me "Oh you want a different electorate", using the old saw, and my response is, "Yes, I do", I want an electorate that has different views to the conservative and reactionary views that many currently hold, and the way to achieve that is by a socialist party, or even a progressive social-democratic party engaging with the current electorate, and trying to change its views rather than simply tailing behind it trying to tailor its own politics to the lowest common denominator.
I put a lot of the blame on the middle-class pro-EU establishment, as once the 1975 referendum went their way they were happy to treat the EU as their own elitist project, and completely lost interest in trying to sell the EU to the masses. The results of this are clear in the way that referendums on European integration issues are usually won by the Eurosceptics, and not only in the UK. By the time the 2016 referendum was announced, anti-EU opinion (cultivated over decades by the Tory press) was too well entrenched to be shifted.
Thatcher's rebate was also probably to blame in that it helped create a myth of EU profligacy, that was at odds with the reality of the EU imposing austerity on the Eurozone.
On your first point I agree. But, there have always been working-class Tories. People who fell from the middle-class, or whose parents did can fall into that category. Some who thought they had risen from the ranks of the WC of their parents, because they got white-collar jobs, and so saw themselves as MC, especially where they were a bit grasping, and not connected with the organised LM did so. But, its also at the other extreme of the more backward workers, where a lack of education, individualist mentality and separation from the LM often creates WC Tories, or worse.
You are Labour Leave and Remain voters, you are confusing different things. If you look at the polls in earlier 2019, it was clear that Labour lost 4 times as many 2017 Remain voters as it did Leave voters. Part of the reason for that is that in 2017, it drew in a significant number of Liberal, Green and Plaid voters. It lost them by early 2019. Its what caused Labour to sink to 4th and 5th places. Agreed that is not the case if you take the 2019 GE poll result, but as I'd said that is because following the hammering in the local and EU elections, Labour was forced to change tack, and readopt the 2nd referendum line that Corbyn had ditched.
The point is it lost millions of votes from 2017, and then had to waste time and energy trying to get them back. It didn't get them all back, anyway, but in the meantime, it hadn't been able to use the time to focus on the Labour Leavers. It tried to respond to them instead by daily bribes that the Tories were able to portray as such, and as being promises Labour couldn't keep. Given Corbyn's duplicity and backsliding over the previous 4 years, many voters believed them, probably justifiably.
Cont'd
On your last point, I agree entirely, and I've made the same argument many times in previous posts over the last ten years. I've made the point that many would disagree with that things like racism, sexism, homophobia are not in the interests of the dominant section of the ruling class. These are things that are relics of previous modes of production, and particularly mercantilism, and early capitalism. There is a good argument pt forward by a black US Marxist, Oliver Cromwell Cox, who said that previous modes of production made no claims to equality. They were based on systems of rank and status. But, early capitalism based on merchant capital, and colonialism did put forward notions of equality and liberty, as the bourgeoisie sought such equality and liberty in relation to the then ruling landed aristocracy. They, therefore, had to come up with justifications for enslaving millions of people, and the answer was to describe them as in some way sub-human.
But, industrial capitalism, which becomes dominant in the latter part of the 19th century, is not based upon such colonialism, and unequal exchange. It is based upon exploiting labour and extracting surplus value in production, in which ends it seeks to spread capitalist production across the globe, and to have labour move freely to where it is needed. All kinds of discrimination cause frictions in that regard, and are hostile to the interests of industrial capital. But, rather than engage in the kind of political struggle against the backward sections of capital required to defeat those ideas, which would require industrial capital allying openly with the organised working-class, as it did in the 19th century to defeat mercantilism, it decided instead to try to deal with those issues via a typically bureaucratic solution. It tried to outlaw bigoted ideas, an created an entire equalities industry around it, whilst fermenting the material basis of those ideas, by appeasing the bigots with immigration controls and so on.
Cont'd
The position in relation to the EU was an example. The Tories had a problem because from Day 1 there was a large nationalist contingent opposed to the EU. As Thatcher strengthened the position of the small capitalists in the 1980's, it became stronger and spurred the development of the Eurosceptics. Labour too always had a signifcant reactionary nationalist element connected to the Stalinists. Corbyn was a reflection of that. So, there have always been only a small minority of international socialists making a case for a socialist Europe. New Labour continued the bureaucratic approach of Heath and major, and the early Thatcher. A similar approach can be seen by new Labour's cothinkers in the US, where, for example, Obama dealt with the Dreamers issue via a bureaucratic solution rather than an all out political struggle.
As Trotsky following Marx and Engels points out, in relation to Permanent Revolution, the dominant section of the ruling class, whose interests are tied inextricably to the fortunes of large scale socialised capital, needs to confront and defeat those ideas, as it did when it defeated the Corn Laws in 1848, which also meant defeating not just the landed aristocracy, but also the merchant and money lending classes associated with it. But, the dominant section of that ruling class is tiny in number and can only achieve that with the support of the working-class. In the 19th century, the ideologists of the bourgeoisie amongst the Ricardians realised that having defeated the landlords, the logic was also to nationalise the land, because although rent would continue, the rent would then go to the state, and would thereby help cover the state's spending, so enabling taxes to be lowered, which would benefit industrial capital. But, they never pushed for it, because they knew they could only achieve it with the support of the workers, and if they opened the door to nationalising one type of property, they opened the door to workers demanding nationalisation of all property.
So, the ruling class will always shy away from mobilising against reactionary sections of its own class, by drawing in the workers, because they fear it getting out of their control. So, instead they try to use bureaucratic manoeuvres and methods.
"So, there have always been only a small minority of international socialists making a case for a socialist Europe."
Actually, that's not entirely true. Up until the 1970's, the position of the majority of the Marxist Left outside the CP (who aren't Marxists anyway) was an internationalist position based around abstention, and a recognition of the fact that nation states were reactionary compared to an EU state, and around the need to fight for a socialist Europe.
Did the Ricardians want to fully nationalise the land (in the sense that the state would determine how it was to be used), or did they just want to nationalise the land rent while leaving the actual allocation of land in the hands of the free market, just as was later (and far more famously) advocated by Henry George?
They wanted to fully nationalise the land. The state would then decide who to rent it to, but, of course, being Ricardians, such decisions could not be divorced from the function of the market. Their purpose was to maximise the rent obtained from the land, so as to maximise state revenue, and so reduce taxes on capital. So, the market would determine what uses produced the greatest surplus profit/rent.
Back in 1983, when I was a Stoke City Councillor, I caused a bit of an uproar on this issue - amongst many more. Maggie Thatcher was in full free market flow, and, of course, the Tories main membership and support then as now came from the petty-bourgeoisie. There was a typically bureaucratic and monopolistic system of allocating market stands in the Council's indoor markets. Basically, traders went on a list, with most of them having little chance of ever getting a stand, because traders could also pass down their stand to family members etc., if they decided to retire.
So, I proposed that the market should be divided into zones of different types of stall, so that we did not get swamped with all butchers, or grocers or whatever. I then proposed that the agreements for each stall should be time limited, I think probably for 5 years, but I might have said a year, I can't remember now. I proposed that there then be sealed bids submitted as the leases expired with the highest bidder winning. It was a similar idea to that introduced by Brown when they auctioned mobile phone spectrum. The traders were up in arms, because they knew that their existing monopoly would be broken, and also that such auctions would mean their rents increased substantially going to the Council. The Tory Councillors also protested loudly, but I simply pointed out to them that such a proposal was fully in line with the dictum of the Glorious Leader in relation to the free market. The Labour Council Leader also complained to me, because he said he and his wife were getting their ear bent by traders every time they went into the market.
But, Council officers knew it was a rational proposal that was not just fair, but would also bring in much needed funds to the Council. Like many of the proposals I put at the time that caused uproar, a modified version of it was introduced not long after.
The point is it lost millions of votes from 2017, and then had to waste time and energy trying to get them back. It didn't get them all back, anyway, but in the meantime, it hadn't been able to use the time to focus on the Labour Leavers. It tried to respond to them instead by daily bribes that the Tories were able to portray as such, and as being promises Labour couldn't keep. Given Corbyn's duplicity and backsliding over the previous 4 years, many voters believed them, probably justifiably.
While Labour would have kept its existing Remain voters (and perhaps won more) if it had shifted to a second referendum stance earlier (or even adopted revoke Article 50 stance) it would have made it impossible for them to gain back the lost Leave voters, especially as many of them had been radicalized by nationalist propaganda on Facebook.
The reason I brought up the failure of middle-class supporters of the EU is that (IIRC) the British working class isn't significantly more Eurosceptic that the working class in mainland Europe, but the middle class is. Perhaps it was down to the Falklands War (which happened about the same time as many of today's government ministers were coming of age) creating the illusion that the UK was still a great power in its own right?
"it would have made it impossible for them to gain back the lost Leave voters".
I disagree. All surveys show that when its actually put, even to Leave voters do you want an end to free movement if it means a fall in your living standard, etc., they say no. If Corbyn had wages a large scale internationalist campaign from 2015 onwards, setting out why a progressive social-democratic agenda of the kind he was putting forward was only possible in the context of remaining in the EU, and of joining with EU workers to transform it, he would have been able to make his economic and social agenda credible and attractive to those Labour Leavers. Not all, I grant you, because some of them are and always have been right-wingers who would never be attracted to a progressive social-democratic agenda whether put forward alongside Brexit or in opposition to it. The MP's of that ilk were on the platform alongside Boris Johnson anyway.
But, a large number of Labour Leave voters could have been won over to such a position. By 2019 they couldn't, and as anyone who went canvassing in 2019 will tell you, amongst those voters it was not just, or even mainly Labour's pro-referendum position that was the issue, but Corbyn himself, and what was perceived as a reckless uncosted, unaffordable and unachievable economic and social agenda that ws being put forward as bribes.
I would prefer to say that the small business class is more Euroscpetic. And not surprisingly. They see the kinds of regulations the EU stands for as limiting their ability to make profits by unscrupulous behaviour. They have little contact with the EU, the majority of their business being local, or at best regional/national rather than international, and so the EU does simply represent another tier of government and cost for them. The enlightened middle-class by contrast tend to be more pro-EU, as well as also being less bigoted in general, in line with their liberal sentiments. Its why the Tories lost these enlightened middle class voters to the Liberals, Greens, Plaid, SNP and in places like Canterbury and Kensington (in 2017) to Labour.
The main problem with the middle class and with the dominant section of the ruling class, i.e. the representatives of the top 0.01% is that they have not been prepared over the last century to actually tackle the reactionary ideas of the small business class, who make up numerically the vast majority of the bourgeoisie/petty bourgeoisie. They have not been prepared to do so, despite it being in their interests, because it would require mobilising the working-class in that struggle similar to what happened in 1848 over the Corn Laws, or indeed the 1848 European revolutions. The difference is today that workers are more powerful than in 1848, and so as Trotsky describes in Permanent Revolution, they are even more scared of mobilising workers for such limited struggles lest the workers quickly go beyond them.
That is why instead they have relied on bureaucratic manouevres over the heads of voters.
All surveys show that when its actually put, even to Leave voters do you want an end to free movement if it means a fall in your living standard, etc., they say no.
Could that be a case of the Bradley effect though, where they say one thing to a pollster because they don't want to be seen as racist, while knowing that they'd do the exact opposite in the privacy of a voting booth?
If Corbyn had wages a large scale internationalist campaign from 2015 onwards, setting out why a progressive social-democratic agenda of the kind he was putting forward was only possible in the context of remaining in the EU, and of joining with EU workers to transform it, he would have been able to make his economic and social agenda credible and attractive to those Labour Leavers.
Didn't the EU's imposition of austerity on the Eurozone periphery make it far more difficult to make a convincing case that the EU was a progressive force?
By 2019 they couldn't, and as anyone who went canvassing in 2019 will tell you, amongst those voters it was not just, or even mainly Labour's pro-referendum position that was the issue, but Corbyn himself, and what was perceived as a reckless uncosted, unaffordable and unachievable economic and social agenda that was being put forward as bribes.
The sloppy 2019 manifesto hardly helped, but when pressed as to their reasons for opposing Corbyn most Leave voters admitted either that it was because they didn't trust him to deliver Brexit, or that they opposed him for some other basically nationalistic reason (usually sourced from the media).
Even the antisemitism affair (which wasn't really just about Corbyn himself, given the waving of Palestinian flags at the 2019 Labour conference) was mainly about Labour being seen as more loyal to the global South (as personified by the Palestinians) than to the people of Britain.
I would prefer to say that the small business class is more Eurosceptic. And not surprisingly. They see the kinds of regulations the EU stands for as limiting their ability to make profits by unscrupulous behaviour. They have little contact with the EU, the majority of their business being local, or at best regional/national rather than international, and so the EU does simply represent another tier of government and cost for them. The enlightened middle-class by contrast tend to be more pro-EU, as well as also being less bigoted in general, in line with their liberal sentiments. Its why the Tories lost these enlightened middle class voters to the Liberals, Greens, Plaid, SNP and in places like Canterbury and Kensington (in 2017) to Labour.
You misunderstood my question, which was "why is the British middle class now not staunchly Europhile in the way that the middle class is in mainland Europe, or indeed as the British middle class was in 1975?"
One reason could be that British imperial illusions were by no means found only on the Eurosceptic side: much pro-EEC rhetoric in the 1970s portrayed Britain as the natural leader of Europe, while in the 2010s it was clear that the undisputed leader of the EU was Germany: this would have been particularly galling to the boomer generation who grew up in a very jingoistic and WWII-obsessed popular culture.
Perhaps this (justifiable) belief that the EU was dominated by Germany also helped mobilize racist voters, given Merkel's generosity to Syrian refugees? (Especially since the grooming gang scandals in northern England – and then the sex attacks in Cologne on New Year's Eve 2015 – helped create a stereotype of Muslim men as sexual predators.)
Or perhaps another factor unique to the UK is that its people (particular the less well-educated) tended to look for inspiration more to their own settler diaspora (in Australia, New Zealand, Canada and the USA) rather than to Europe. This could also have fuelled anti-immigration sentiment by creating the impression that the UK is a grossly overpopulated country.
George,
It could just be that they actually didn't want a drop in their living standards if that was the consequence of ending free movement. After all, prior to the referendum, neither immigration nor the EU ranked highly on voters lists of concerns.
There is a difference between something being progressive, and being a progressive force. The EU is progressive, because of what it represents historically. Are the conservative politicians currently in charge of the EU and its policies progressive? No, they are conservative. But, does that mean that the working-class cannot utilise the fundamentally progressive nature of the EU, and build progressive solutions within it? Clearly not. One of the weaknesses of Syriza, and of Podemos etc., was precisely that they saw their struggle as a national struggle against the EU bureaucracy and conservative politicians that dominate the EU currently. It has been a problem with social-democracy from the start that has been nationalistic, seeing its internationalism only in diplomatic terms. Syriza from the start should have been appealing to, indeed demanding that progressive social-democrats across Europe came to its assistance against the conservative EU regime. They didn't. Corbyn saw things in equally nationalistic terms. A socialist, however, sees the potential, indeed necessity of mobilising the working-class across the EU in such struggles, as a class struggle rather than a national struggle.
And, in any case, how was the EU imposition of austerity any different from the UK imposition of austerity?
Your quite right that many voters distrusted Corbyn for nationalistic reasons, but that reactionary politics was part of a wider reactionary outlook. A lot is made of voters in former mining areas, but remember there were a lot of scabs during the miners strike, and not just in Nottingham. They are the same kinds of people who always associated at best with the Labour Right, and often with the Tories, or were too individualistic to bother about voting. I know many people like that, people who even admitted they opposed unions, people who were attracted to being able to buy their council house and so on. The idea of some that these people could somehow have been a base for progresive politics if only Corbyn had come out more strongly for Brexit is a fantasy.
On Corbyn and the global south etc. its again an example of politics over the heads of, and not grounded in an education of the workers whose support you seek. Its he same problem as the Manifesto of demands and proposals that appear plucked out of the air, and which you have done no work in talking to workers about in a long education process prior to putting it front and centre. Its typical of social-democracy and Stalinism.
I didn't misunderstand the question, its that I think your term middle class misses the point. I don't think the "middle class" is less Europhile than it is in Europe, or was in 1975. I think that middle class is Europhile just as much, which is why I think the Tories lost votes from that middle class in 2017 in particular. That middle class is generally better educated and less bigoted. That middle class, the people who are the executives and managers of large companies, the state bureaucrats, trades union bureaucrats and so on, are generally socially liberal, and in favour of the EU.
The people who are not are the petty-bourgeoisie, the small traders and small businesspeople. The middle class depend upon the large businesses doing well. On that depends their own jobs, the ease of bargaining within the system, the ease of he state raising finances for itself and so on, and all that depends upon EU membership. None of that is true of the small business people.
The idea of some that these people could somehow have been a base for progressive politics if only Corbyn had come out more strongly for Brexit is a fantasy.
My personal belief is that Labour would have won more seats with a pro-Brexit stance, but still not enough to prevent a Tory majority, and most likely would have won fewer actual votes. And it was very difficult anyway for Labour (whose voters and members were overwhelmingly anti-Brexit) to respect the referendum vote unless they believed Brexit couldn't be stopped (which was the case in 2017, but not in 2019 due both to the lost Tory majority and to the failure to leave the EU in March).
One thing that Labour canvassers noticed during the 2019 campaign is that many voters in particular were dissuaded from voting Labour not by opposition to Labour policies, nor by a belief that Corbyn was lying about his intentions, but rather by a belief that the political establishment would frustrate a Corbyn government much as they had (up to that point) frustrated the Brexit that had a democratic mandate from the British people.
I didn't misunderstand the question, its that I think your term middle class misses the point.
The David Timoney blog post which I had quoted in my 13 July comment didn't actually make the distinction (which you have rightly made) between the professional middle class and the petty-bourgeoisie.
Reading it again though I think it was actually primarily about the latter, and is making the point that the continental petty-bourgeoisie is just as generally bigoted (and attracted to right-wing populism) as its British counterpart, but also much less keen on leaving the EU in particular.
Perhaps the difference is that no continental European nation has established settler offspring nations outside Europe, as Britain did with the USA, Canada, Australia and New Zealand. These settler nations allowed many Britons to believe that their country had a fundamentally non-European destiny, and were also very attractive to the ambitious petty-bourgeois, because of the common language and very high standard of living (made possible by their low land prices).
George,
As i said previously, the trouble is that you are trying to evaluate what ifs on the basis of comparative statics, simply looking at changes in votes, but without considering what effect an effective campaign after 2015 against Brexit would have had on voters perceptions and behaviour. The argument of more seats less votes misses that point that had Labour wages a vigorous campaign after 2015 against Brexit, and for a Workers Europe, you have to accept that at least some Labour Leave voters would have changed position. And, having not lost the Remain voters, Labour could have focused on making the case for its social programme rather than dropping it on voters at the election as a series of bribes.
I don't think many voters worried about Corbyn's programme being frustrated. The overwhelming message was they didn't trust or like Corbyn, and that was a big chance from 2017.
I don't think the EU petty-bourgeoisie is less Eurosceptic. I just think they know that there is little chance of winning a majority for it, and as Greece showed, they are right, because the majority of workers know that it would be dire for them, as the currency collapsed, and so on. As I've always said, I think Johnson also knows that, which is why for all the bluff and bluster and ridiculous posturing for supposed negotiating tactics, in the end he will capitulate rather than face a crash out Brexit. It would be so disastrous as to crush the Tories, probably lead to an election, and in short order a Bre-entry on worse terms.
I don't think the colonial empire argument works, because Spain more or less did the same thing in South America, and large parts of the world speak Spanish or French, as well as English. Spain does have close links with South America and its former colonies, France too with its former colonies. But, the drive has always been to create a European state, going back to the Holy Roman Empire. Britain's role has always been to frustrate it out of its own interest. I doubt the current deal of the EU for a fiscal rescue package would have been agreed so quickly if Britain were at the table. From an EU perspective, Brexit could be a shot in the arm to faster integration. It will make future UK membership harder to get support for, but maybe UK out whilst the EU integrates, is the fastest route to that EU state, and eventual UK acceptance of and membership of it.
Post a Comment