IPR Blog

Expert analysis, debates and comments on topical policy-relevant issues

UK Industrial Strategy – Mirage or Destination?

📥  Economy, labour market

Dr Felicia Fai is Senior Lecturer in Business Economics and Director of Widening Participation and Outreach at the University of Bath's School of Management

The UK’s Industrial strategy green paper was released on Monday 23rd January 2017. It is founded on 10 pillars that the government predicts will drive productivity and balanced economic growth – but its reception has been mixed, with some business leaders giving a lukewarm and others a more resounding welcome.

A dirty term

To reiterate what Carolyn Fairbairn, Director-General of the CBI said, it is better to have an industrial strategy than not, so it is good to see the UK government explicitly embracing an industrial strategy – something of a dirty term in previous governments of the last 3 decades, among whom a non-interventionist philosophy has prevailed. If we look at emerging economy challengers such as China and India, however, it is common to have 5-year plans and to prioritise the industries that will receive investment and support – automotive and aerospace, pharmaceuticals, etc. Furthermore, as an academic working out of a Management School, I know that no organisation operates without a strategy; thus it seems strange to observe previous governments’ aversion to the term.

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The reluctance to embrace industrial strategy proceeds, in the case of the UK, from having been burnt by such an approach in the 1970s – when the government attempted to ‘pick winners’ and failed miserably. However, modern academic definitions of the policies arising out of industrial strategy are much broader and more comprehensive:

“[Industrial strategy] comprises policies affecting ‘‘infant industry’’ support of various kinds, but also trade policies, science and technology policies, public procurement, policies affecting foreign direct investments, intellectual property rights, and the allocation of financial resources. Industrial policies, in this broad sense, come together with processes of ‘‘institutional engineering’’ shaping the very nature of the economic actors, the market mechanisms and rules under which they operate, and the boundaries between what is governed by market transactions, and what is not”[1].

This contrasts with a definition provided in a recent House of Commons Library Briefing Paper[2]:

“’Industrial strategy’ refers to government intervention which seeks to support or develop some industries to enhance economic growth”.

The latter definition appears to prevail in the minds of the public, and explains the rather mixed reception of the green paper. If our understanding of the purpose of industrial strategy is to support some industries, then it is unsurprising that industries which are specifically mentioned – such as the creative industries and aerospace – have welcomed it, whereas others perceive the green paper as merely reiterating what the government is already doing with little added that is new. It has also been criticised for being a broad, discursive paper with little insightful direction. To be fair, it is a green paper, not a white one – and in that sense fulfils its purpose: to engage discussion and seek feedback from those potentially affected by its proposals, and to inform future policy formulations. However, it seems that the government has moved to a definition of industrial strategy that is closer to the broader definition. What if we interpret its breadth and apparent reiteration of existing policies and initiatives as deliberate? How do we assess it then?

Safeguarding innovation

As an academic with a background in evolutionary economics and an interest in the role of systems, the fact that much of the content looks familiar is comforting to me, not disappointing. Most innovation is incremental rather than radical; knowledge progresses cumulatively. Radical shifts in policy are disturbing to industry, not reassuring (although maintaining stubborn adherence to an inappropriate path would be irresponsible). The ‘exogenous shock’ is of course Brexit, which does require a strong response from UK industries who look to the government for guidance. The steer the government has given in its proposed industrial strategy is not radical in itself, but the methods by which it will be pursued are more multifaceted than they have been in the past two decades – and their delineation clearer.

The green paper might be called ‘broad’, but a kinder interpretation is that it is seeking to be ‘comprehensive’. Much of it is encouraging. It continues with the horizontal support that has proven popular in the last three decades (albeit with some new initiatives – the Industrial Strategy Challenge Fund, for example), potentially allowing all industries to benefit. Importantly, however, the paper also signals a willingness to re-engage in vertical support for some industries, so far identified as ultra-low emission vehicles, life sciences, industrial digitalisation, nuclear energy and the creative industries. The paper recognises the need to increase productivity and the quality of human resources with improved basic education in STEM and more business-led vocational routes. It also recognises the role of capital in raising productivity – both physical capital investment in infrastructure for transport (rail, road and air) and digital infrastructure. Further, in its identification of the need for ‘patient capital’, it acknowledges the importance of financial infrastructure – particularly that targeted towards the commercialisation stage of innovation processes.

While the UK has always been a great trading nation, the pillar ‘encouraging trade and inward investment’ takes on particular significance in the Brexit and post-Brexit era. Addressing the gap in basic skills to raise productivity, thereby driving our comparative advantages in science and innovation, is critical if we are to ensure that our capabilities are augmented to the point that they compensate for any higher costs companies might face when trading from the UK with the EU in their international value chains. In this way, the UK can remain attractive as a location for inward direct investment. Simultaneously, the government is using industrial strategy as a tool to address the underlying reasons behind Brexit – inequity in wealth creation and disparities in regional growth. The pillars on ‘developing skills’, ‘upgrading infrastructure’ and particularly ‘driving growth across the whole country’ resonate with earlier rhetoric to improve the UK economy for all and achieve more balanced growth across regions.

The move to devolved regions makes sense. Regional economic geographers and scholars of innovative clusters all find the formation of relationships and knowledge creation, diffusion and transfer operate best when there is physical proximity between different organisational players. The emphasis on regions also reflects influences from EU policy based on the SMART specialisation of regions. Having conducted the first Science and Innovation Audit in 2016, the government’s understanding of the industrial basis upon which various UK regions might build industrial strength is much clearer and the variance highlights why a one-size-fits-all approach will not work.

At the same time, clusters – when completely localised – can lose their energy, inspiration and relevance. They need to be connected to other clusters and the wider global economy. These connections can be created through the presence of multinationals in the economy. These are often, but not always, large corporates – academic work on international new ventures and born-global companies attest to the rise of technology-based SMEs which operate globally. Therefore, the sections in the green paper stressing the importance of anchor organisations and the supporting role they play, the importance of supporting start-up businesses, and, crucially, the importance of encouraging trade and inward investment are integral. Anchor firms have the capability to embed local SMEs into their global supply chains. The small firms can be supported by anchor firms through their growth stages via mentoring support, and their financial security ensured through procurement contracts – but this requires the UK to have strong SMEs with ambitions to be international in the first place.

Policy to practice

Nevertheless, as managers are well aware, strategy – while useful as a broad plan of action – is one thing, its implementation and the fulfilment of strategic objectives another. So whilst the outline proposals for UK industrial strategy are reassuring, it is still an open question as to whether this strategy will come to fruition.

In part, it depends on how the 10 identified pillars will influence the UK, as well as its regions and industries, as systems (national, regional and sectoral innovation systems). In the evolutionary economic perspective, systems consist of both ‘nodes’ and, critically, their relationships. Indeed, within the green paper there are lots of ‘nodes’ – the involvement of private firms (large and small, manufacturing and service based), universities, colleges and schools, government departments and supporting institutions. They are each being asked to undertake multiple tasks, roles and responsibilities which may be challenging for some. The role of relationships between the nodes seems to be recognised in several ways. For example, creating the right institutional support that helps the sharing of knowledge, establishing contacts for businesses and representing their collective views, encouraging organisations to come together to seek support from the government to ease the regulatory environment and so on.

The importance of relationships is also reflected in the green paper’s emphasis on the regions, and this is perhaps the greatest novelty in the proposed industrial strategy. Whilst we know the benefits and potential pitfalls of localised economic activity from regional economic geography and innovative cluster research, these agglomerated effects have emerged rather organically. How to purposively foment these same changes by implementing a place-based strategy within devolved government is a new challenge of which the UK has little experience beyond the level of the four nations within the UK. You can create the institutions to support the growth of industries, small businesses and regions, but whether they operate effectively to raise productivity and economic growth is another matter.

Financial commitment from the government will also affect its ability to deliver the strategy. Whilst big announcements about increased investment for UK science and technology and the establishment of various funds for horizontal support are welcome, local governments and LEPs face tight budgetary constraints – so although it would be politically popular, giving greater autonomy at the regional level might put additional strain on resources.

Another significant challenge is the timeframe. To implement this proposed industrial strategy requires a long-term commitment from the government – and successive governments. Political challengers to the incumbent government may not look substantial at present, but there must be a degree of continued support for these various initiatives in future.

Overall, this green paper is a stage in a process. The government appears to be genuinely seeking a coherent and consistent strategy which will led to the formulation of a set of policies that are designed to improve the performance of the economy. Time will tell whether this stronger embracing of industrial strategy is any more successful than its predecessors.

The green paper is open for consultation until 17 April 2017.

[1] Cimoli, M. Dosi, G. and Stiglitz, J. E. 2009. Industrial Policy and Development: The Political Economy of Capabilities Accumulation, Oxford, Oxford University Press, pp1-2.

[2] Rhodes, C. (2016) “Industrial strategy”, House of Commons Library Briefing Paper, Number 07682, 14 October 2016.

 

Awkward to the last: Britain and the EU

📥  Brexit, EU Referendum, voting

Professor David Galbreath is Professor of International Security and Dean of the University of Bath’s Department of Social and Policy Sciences

Following the Supreme Court ruling on the UK Government’s plans to trigger Article 50 of the Lisbon Treaty, Theresa May delivered a 1-page draft bill to Parliament which purposed ‘to confer power on the Prime Minister to notify, under Article 50(2) of the Treaty on European Union, the United Kingdom’s intention to withdraw from the EU’. What will most likely become the European Union Act of 2017 signals the beginning of the end for UK membership of the most economically and politically powerful trading bloc in history.

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In his book An Awkward Partner, Professor Stephen George set out to characterise the British role in the EU, stating that while the UK became a member of what was then the European Communities in 1973, it was never all the way in. For European integrationists, the UK was a regular break from ‘an ever-deeper partnership’ – while for European federalists, the UK encouraged state sovereignty that allowed for ‘variable speeds’ of integration. In other words, the UK became a sui generis member of a sui generis institution.

Author of Article 50 of the Lisbon Treaty when he was Secretary-General of the EU Convention in 2002-03, Lord Kerr set out in a recent talk just how ‘awkward’ and ‘sui generis’ the UK would continue to be – even through the act of withdrawal from membership of the EU. Entitled “Brexit: Will Divorce be damaging, and could it be amicable?”, Lord Kerr’s public lecture – which was hosted by the Institute for Policy Research on campus at the University of Bath – evidenced the argument that in addition to being damaging, Brexit would be very unlikely to be amicable either at home or in Europe.

Lord Kerr reminded us that it was Margaret Thatcher who made the strongest argument for UK membership of the EU. The UK was “stronger in Washington because we were seen to be strong in Brussels, and stronger in Brussels because we were seen to be strong in Washington.” Furthermore, the country was comfortable to assume an identity that was both British and European at that time, which followed the post-war settlement, the major political movements in the region and the quick turnaround in trade after the 1973 accession. Thatcher knew that Britain had an awkward role in the EU, but that it was a role which suited Britain in terms of where it wanted to be in Europe and the world.

Prime Ministers John Major and Tony Blair followed suit with a vision for Britain that was both strongly European and Atlanticist. Even more, both Major and Blair sought to enlarge the EU so that it would include more states which were like the UK, and would seek a federal rather than integrated Europe. Denmark, which joined at the same time as the UK and was similarly inclined towards Brussels, was joined by Finland and Sweden in 1995. Following this, the augmentation of the bloc continued with the 2004 Enlargement, which brought 10 new member states (Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia); further enlargements in 2007 to include Bulgaria and Romania; and the 2013 accession of Croatia. Successive British prime ministers saw this as a way to slow down European integration – and, to all intents and purposes, it worked.

Yet even before the 2004 enlargement the UK (as well as Ireland and Sweden) had opened its economy to EU accession state populations, with the greatest EU migration to the UK being in the years prior to their home country’s inclusion in the bloc.

While EU migration has continued to decline, especially following the 2007-2012 financial crisis, the impact of EU and world immigration to the UK has had identifiable impacts on many communities across the UK – especially in areas that voted to remain in the EU, an irony not lost on remainers. Whereas net migration from the EU has declined over time, the percentage of the population that was not born in the UK has increased. The view on immigration was the single most important indicator for voting to remain or leave the EU in the 23 July 2016 referendum.

The cost of ‘divorce’ is high, and Lord Kerr laid out well the negotiations that will have to go on around trade, industries, banking, and the atomic energy sector – not to mention the status of UK citizens throughout the EU, as well as the EU citizen in the UK. Controlling immigration may give a sense of power to many communities, but it will not solve the problems that existed before the referendum and, in some cases, will be exacerbated by it.

The mistake that the UK government is making is assuming that British industry and products (though not labour) will be needed in Europe going forward, despite the fact that in a globalised world there are many economies that will thrive on being an alternative to the UK in European trade and finance. Already Germany and the Netherlands are receiving marked increases in business and capital that previously would have gone to the UK, and from those that would have invested in the UK but will not following the triggering of Article 50.

To say that Donald Trump and Vladimir Putin are the only winners in this situation gives the European economies too little credit and discounts the power of new regional economic blocs that just might use this opportunity to build a real alternative to Europe and the UK as a whole. Now that would be awkward.

This post was inspired by a recent IPR Public Lecture given by Lord Kerr of Kinlochard, author of Article 50. You can read more about the lecture, and find links to the video and podcast, here.

 

The empire strikes back: How the Brexit vote has reopened deep wounds of empire and belonging, and challenged the future of the United Kingdom

📥  Anglosphere, Brexit

This piece originally appeared in New Statesman

Joseph Chamberlain, it has been widely remarked, serves as an inspiration for Theresa May’s premiership. The great municipal reformer and champion of imperial protectionism bestrode the politics of late-Victorian and Edwardian Britain. He was a social reformer, a keen ­unionist and an advocate for the industrial as well as the national interest – all values espoused by the Prime Minister.

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Less noticed, however, is that May’s excavation of Chamberlain’s legacy is a symptom of two larger historical dynamics that have been exposed by the vote for Brexit. The first is the reopening on the British body politic of deep wounds of race, citizenship and belonging, issues that home rule for Ireland, and then the end of empire, followed by immigration from the former colonies, made central to British politics during the 20th century. Over the course of the century, the imperial subjects of the queen-empress became British and Irish nationals, citizens of the Commonwealth and finally citizens of a multicultural country in the European Union. The long arc of this history has left scars that do not appear to have healed fully.

The second dynamic is the renewal of patterns of disagreement over free trade and social reform that shaped profound divisions roughly a century ago. Specifically, the rivalry was between a vision of Britain as the free-trade “world island”, supported by the City of London and most of the country’s governing elite, and the protectionist project, or “imperial preference”, articulated by Chamberlain, which sought to bind together the British empire in a new imperial tariff union, laying the foundations for industrial renewal, social progress and national security. The roots of these commitments lay in his career as a self-made businessman and reforming mayor of Birmingham. A leading Liberal politician, Chamberlain broke with his own party over home rule for Ireland and, with a small group of Liberal Unionists, joined Lord Salisbury’s Conservative government of 1895, becoming colonial secretary. He subsequently resigned in 1903 to campaign on the question of imperial preference.

The fault lines in contemporary political economy that Brexit has starkly exposed mimic those first staked out in the early part of the 20th century, which lie at the heart of Chamberlain’s career: industry v finance, London v the nations and regions, intervention v free trade. This time, however, these divides are refracted through the politics of Britain’s relationship with Europe, producing new economic interests and political ­alliances. What’s more, the City now serves the European economy, not just Britain and her former colonies.

Chamberlain is the junction between these two critical dynamics, where race and political economy interweave, because of his advocacy of “Greater Britain” – the late-Victorian idea that the white settler colonies of Canada, Australia, New Zealand and South Africa should be joined with the mother country, in ties of “kith-and-kin” solidarity, or more ambitiously in a new imperial federation. Greater Britain owed much to the Anglo-Saxonism of Victorian historians and politicians, and was as much a Liberal as a Conservative idea. Greater Britain was a new way of imagining the English race – a ten-million-strong, worldwide realm dispersed across the “white” colonies. It was a global commonwealth, but emphatically not one composed of rootless cosmopolitans. Deep ties, fostered by trade and migration, held what the historian James Belich calls “the Anglo-world” together. It helped equip the English with an account of their place in the world that would survive at least until the 1956 Suez crisis, and it was plundered again by latter-day Eurosceptics as they developed a vision of the UK as an integral part, not of the EU, but of an “Anglosphere”, the liberal, free-market, parliamentary democracies of the English-speaking world.

Greater Britain carried deep contradictions within itself, however. Because it was associated with notions of racial membership and, more specifically, with Protestantism, it could not readily accommodate divisions within the UK itself. The political realignment triggered by Chamberlain’s split with Gladstone over Irish home rule, which set one of the most enduring and intractable political divides of the era, was symptomatic of this. For Chamberlain, Irish home rule would have entailed Protestant Ireland being dominated by people of “another race and religion”. Unless there could be “home rule all round” and a new imperial parliament, he preferred an alliance with “English gentlemen” in the Tory party to deals with Charles Stewart Parnell, the leader of Ireland’s constitutional nationalists.

The failure of Chamberlain’s kith-and-kin federalism, and the long struggle of nationalist Ireland to leave the UK, left a bitter legacy in the form of partition and a border that threatens once again, after Brexit, to disrupt British politics. But it also left less visible marks. On Ireland becoming a republic, its citizens retained rights to travel, settle and vote in the UK. The Ireland Act 1949 that followed hard on the Irish Free State’s exit from the Commonwealth defined Irish citizens as “non-foreign”.

A common travel area between the two countries was maintained, and when immigration legislation restricted rights to enter and reside in the UK in the 1960s and 1970s, Irish citizens were almost wholly exempted. By the early 1970s, nearly a million Irish people had taken up their rights to work and settle in the UK – more than all of those who had come to Britain from the Caribbean and south Asia combined. Even after the Republic of Ireland followed the UK into the European common market, its citizens retained rights that were stronger than those given to other European nationals.

In 1998, the Good Friday Agreement went a step further. It recognised the birthright of all the people of Northern Ireland to hold both British and Irish citizenship. Common EU citizenship north and south of the border made this relatively straightforward. But under a “hard Brexit”, Britain may be asked to treat Irish citizens just like other EU citizens. And so, unless it can secure a bilateral deal with the Republic of Ireland, the UK will be forced to reinvent or annul the common travel area, reintroducing border and customs controls and unstitching this important aspect of its post-imperial, 20th-century settlement. Will Ireland and its people remain “non-foreign”, or is the past now another country?

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Today’s equivalent of 19th-century Irish nationalism is Scottish national sentiment. Like Gladstone and his successors, Theresa May is faced with the question of how to accommodate the distinct, and politically powerful, aspirations of a constituent nation of the United Kingdom within the unsteady framework associated with the coexistence of parliamentary sovereignty and ongoing devolution. Scotland’s independence referendum bestowed a sovereign power on its people that cannot be set aside in the Brexit negotiations. The demand for a “flexible Brexit” that would allow Scotland to stay in the European single market is also, in practice, a demand for a federal settlement in the UK: a constitutional recognition that Scotland wants a different relationship to the EU from that of England and Wales.

If this is not couched in explicitly federal terms, it takes the unitary nature of the UK to its outer limits. Hard Brexit is, by contrast, a settlement defined in the old Conservative-Unionist terms.

Unionism and federalism both failed as projects in Ireland. Chamberlain and the Conservative Unionists preferred suppression to accommodation, a stance that ended in a war that their heirs ultimately lost.
Similarly, the federal solution of Irish home rule never made it off the parchment of the parliamentary legislation on which it was drafted. The federalist tradition is weak in British politics for various reasons, one of which is the disproportionate size of England within the kingdom. Yet devising a more federal arrangement may now be the only means of holding the UK together. May’s unionism – symbolised by her visit to Edinburgh to meet Scotland’s First Minister, Nicola Sturgeon, in the first days of her premiership – will be enormously tested by a hard Brexit that cannot accommodate Scottish claims for retention of single-market status or something close to it. Separation, difficult as this may be for the Scottish National Party to secure, may follow.

The idea of Greater Britain also left behind it a complex and contentious politics of citizenship. As colonial secretary at the end for 19th century, Chamberlain faced demands for political equality of the subjects of the crown in the empire; Indians, in particular, were discriminated against in the white settler colonies. He strongly resisted colour codes or bars against any of the queen’s subjects but allowed the settler colonies to adopt educational qualifications for their immigration laws that laid the foundation for the racial discrimination of “White Australia”, as well as Canadian immigration and settlement policies, and later, of course, the apartheid regime in South Africa.

Nonetheless, these inequalities were not formally written into imperial citizenship. The British subject was a national of the empire, which was held together by a common code of citizenship. That unity started to unravel as the colonies became independent. Specifically, a trigger point was reached when, in 1946, the Canadian government legislated to create a new national status, separate and distinct from the common code of imperial citizenship hitherto embodied in the status of the British subject.

The Attlee government responded with the watershed British Nationality Act 1948. This created a new form of citizenship for the UK and the colonies under its direct rule, while conferring the status of British subject or Commonwealth citizen on the peoples of the former countries of empire that had become independent. It was this that has made the act so controversial: as the historian Andrew Roberts has argued, it “gave over 800 million Commonwealth citizens the perfectly legal right to reside in the United Kingdom”.

This criticism of the act echoed through the postwar decades as immigration into the UK from its former empire increased. Yet it is historically misplaced. The right to move to the UK without immigration control had always existed for British subjects; the new law merely codified it. (Indeed, the Empire Windrush, which brought British subjects from the Caribbean to London in June 1948, docked at Tilbury even before the act had received royal assent.)

At the time, ironically, it was for precisely opposite reasons that Conservative critics attacked the legislation. They argued that it splintered the subjects of empire and denied them their rights: “. . . we deprecate any tendency to differentiate between different types of British subjects in the United Kingdom . . . We must maintain our great metropolitan tradition of hospitality to everyone from every part of our empire,” argued Sir David Maxwell Fyfe, the Tory shadow minister of labour and future home secretary.

As the empire withered away in the postwar period, some Conservatives started to change their minds. Enoch Powell, once a staunch imperialist, came to believe that the idea of the Commonwealth as a political community jeopardised the unity of allegiance to the crown, and so was a sham. The citizens of the Commonwealth truly were “citizens of nowhere”, as Theresa May recently put it. As Powell said of the 1948 act: “It recognised a citizenship to which no nation of even the most shadowy and vestigial character corresponded; and conversely, it still continued not to recognise the nationhood of the United Kingdom.”

Once the British empire was finished, its core Anglo-Saxon populace needed to come back, he believed, to find their national mission again, to what he viewed as their English home – in reality, the unitary state of the UK – rather than pretend that something of imperialism still survived. On England’s soil, they would remake a genuine political community, under the sovereignty of the Crown-in-Parliament. If Greater Britain could not exist as an imperial political community, and the Commonwealth was a fiction, then the kith and kin had to live among themselves, in the nation’s homeland.

Contemporary politicians no longer fuse “race” and citizenship in this way, even if in recent years racist discourses have found their way back into mainstream politics in advanced democracies, Britain included. However, the legacies of exclusivist accounts of nationality persist, and not merely on the populist right. British politics today is dominated by claims about an irreconcilable division between the attitudes and national sentiments of the white working classes, on the one hand, and the cosmopolitanism of metropolitan liberals, on the other.

But thinking and speaking across this artificial divide is imperative in both political and civic terms. Many Remainers have the same uncertainties over identity and political community as commentators have identified with those who supported Brexit; and the forms of patriotism exhibited across the UK are not necessarily incompatible with wider commitments and plural identities. Above all, it is vital to challenge the assumption that a regressive “whiteness” defines the content of political Englishness.

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Brexit thus forces us once again to confront questions about our citizenship, and the question of who is included in the nation. In an ironic twist of fate, however, it will deprive the least cosmopolitan of us, who do not live in Northern Ireland, or claim Irish descent, or hold existing citizenship of another EU country, of the European citizenship we have hitherto enjoyed. Conversely it also leaves a question mark over the status of EU nationals who live and work in the UK but do not hold British nationality. The government’s failure to give guarantees to these EU nationals that they will be allowed to remain in the UK has become a matter of deep controversy, on both sides of the Brexit divide.

As only England and Wales voted for it, Brexit has also exposed the emergence once again of distinct identities in the constituent nations of the UK. Although Scottish nationalism has been the most politically powerful expression of this trend, Englishness has been growing in salience as a cultural and, increasingly, as a political identity, and an insistent English dimension has become a feature of British politics. Although talk of a mass English nationalism is misplaced – it can scarcely be claimed that nationalism alone explains the complex mix of anxiety and anger, hostility to large-scale immigration and desire for greater self-government that motivated English voters who favoured Brexit – it is clear that identity and belonging now shape and configure political arguments and culture in England.

Yet, with a handful of notable exceptions, the rise in political Englishness is being given expression only on the right, by Eurosceptics and nationalists. The left is significantly inhibited by the dearth of serious attempts to reimagine England and different English futures, whether culturally or democratically.

It is not just the deep politics of the Union and its different peoples that Brexit has revived. The divisions over Britain’s economy that were opened up and positioned during the Edwardian era have also returned to the centre of political debate. Though as yet this is more apparent in her rhetoric than in her practice, Theresa May seems drawn to the project of reviving the Chamberlainite economic and social agendas: using Brexit to underpin arguments for an industrial strategy, a soft economic nationalism and social reform for the “just about managing” classes. She has created a new department responsible for industrial strategy and advocated places for workers on company boards (before watering down this commitment) as well as increased scrutiny of foreign takeovers of British firms. Housing policy is to be refocused away from subsidising home ownership and directed towards building homes and supporting private renters. Fiscal policy has been relaxed, with increased infrastructure investment promised. The coalition that delivered Brexit – made up of struggling working-class voters and middle-class older voters (or the “excluded and the insulated”, as the Tory peer David Willetts puts it) – is seen as the ballast for a new Conservative hegemony.

Presentationally, May’s vision of Brexit Britain’s political economy is more Chamberlainite than Thatcherite, a shift that has been obscured in Brexit-related debates about migration and tariff-free access to the European single market. Her economic utterances are edged with a national, if not nationalist, framing and an economic interventionism more commonly associated with the Heseltinian, pro-European wing of her party. In a calculated move replete with symbolism, she launched her economic prospectus for the Tory leadership in Birmingham, advertising her commitment to the regions and their industries, rather than the City of London and the financial interest.

It is therefore possible that May’s project might turn into an attempt to decouple Conservative Euroscepticism from Thatcherism, creating a new fusion with Tory “One Nation” economic and social traditions. It is this realignment that has left the Chancellor, Philip Hammond, often exposed in recent months, since the Treasury is institutionally hostile both to economic interventionism and to withdrawal from the single market. Hence his recent threat to the European Union that if Britain cannot secure a decent Brexit deal, it will need to become a deregulated, low-tax, Dubai-style “world island” to remain competitive. He cannot envisage another route to economic prosperity outside the European Union.

It also leaves those on the Thatcherite right somewhat uncertain about May. For while she has sanctioned a hard Brexit, in crucial respects she appears to demur from their political economy, hence the discontent over the government’s deal to secure Nissan’s investment in Sunderland. As her Lancaster House speech made clear, she envisages Brexit in terms of economically illiberal goals, such as the restriction of immigration, which she believes can be combined with the achievement of the new free trade deals that are totemic for her party’s Eurosceptics.

In practice, the Prime Minister’s willingness to endorse Hammond’s negotiating bluster about corporate tax cuts and deregulation shows that she is anything but secure in her Chamberlainite orientation towards industrial strategy and social reform. Her policy positions are shot through with the strategic tension between an offshore, “global Britain” tax haven and her rhetoric of a “shared society”, which will be difficult to resolve. May has embraced hard (she prefers “clean”) Brexit, but a transformation of the axes of conservative politics will only take place if she combines Euroscepticism with a return to pre-Thatcherite economic and social traditions. This would make her party into an even more potent political force. The recent shift of the Ukip vote into the Tory bloc and the notable weakening of Labour’s working-class support suggest what might now be possible. This is the domestic politics of Chamberlain’s social imperialism shorn of empire and tariff – only this time with better electoral prospects.

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There are some big pieces of 20th-century political history missing from this jigsaw, however. In the 1930s, Chamberlain’s son Neville succeeded where his father had failed in introducing a modest version of tariff reform, and trade within the empire rebounded. Britain abandoned the gold standard in 1931 and cheap money revived the national economy. The collectivism of the wartime command economy and the postwar Keynesian settlement followed. New forms of economic strategy, industrial policy and social reform were pioneered, and the Treasury beliefs in limited state intervention, “sound money” and free trade that had defined the first decades of the 20th century were defeated.

This era was brought to an end by the election of Margaret Thatcher in 1979. Her government smashed the industrial pillars and the class compromises that had underpinned the postwar world. The ensuing “New Labour” governments inherited a transformed political economy and, in turn, sought to fuse liberal with collectivist strands in a new settlement for the post-industrial economy. What many now view as the end of the neoliberal consensus is, therefore, better seen as the revival of patterns of thinking that pre-date Thatcherism. This tells us much about the persistent and deep problems of Britain’s open economic model and the continuing, unresolved conflict between finance and parts of industry, as well as London and the regions.

Brexit brings these tensions back to the surface of British politics, because it requires the construction of a completely new national economic and political settlement – one that will be thrashed out between the social classes, the leading sectors of the economy, and the nations and regions of the United Kingdom.

Few peacetime prime ministers have confronted the scale and kinds of challenge that Brexit will throw up: holding together the UK, revitalising our industrial base, delivering shared prosperity to working people and renegotiating Britain’s place in Europe and the wider world. This is the most formidable list of challenges. Lesser ones, we should recall, defeated Joe Chamberlain.

Michael Kenny is the inaugural director of the Mile End Institute policy centre, based at Queen Mary University of London

Nick Pearce is professor of public policy at the University of Bath 

 

Basic income: beyond left and right?

📥  universal basic income

Joe Chrisp is a PhD student at the IPR. His doctoral research is on the feasibility of a universal basic income

How has basic income – an issue at the margins of social policy and politics for decades – suddenly become such a hot topic? And why has it captured the attention of so many political actors, in a number of different countries, in recent months?

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One of the most common explanations of this surge of interest in basic income is that it transcends the political divide: that it is “beyond left and right”. In the UK, the Adam Smith Institute – a libertarian think-tank – sits alongside the left-leaning Compass in backing basic income proposals. In Finland, the country where basic income has had perhaps the most consistent political support in recent decades, the Left Alliance and Green League have historically been keen supporters of the idea – together with the Centre Party, which currently leads a right-wing coalition government. This kind of broad political interest can be found in France, Canada and other countries around the world. Although it is tempting to accept this eclectic mix as a given, there are at least three reasons why the reality is more complex than ‘anyone can support basic income’.

Is it basic income?

The first explanation for the diversity of support is simply that basic income is being misrepresented. If we define basic income as ‘an income paid by a political community to all its members on an individual basis, without means test or work requirement’ (Van Parijs, 2004), many of its so-called ‘advocates’ are actually proposing schemes that do not meet the criteria. For example, Italy’s 5 Star Movement has adopted the term to designate a policy that is better described as means-tested unemployment benefit or social assistance for the uninsured. The Fabian Society’s proposal for an ‘individual credit’ has often been touted as a basic income, yet is more closely related to a ‘participation income’ (A.B. Atkinson, 1996), as it includes work- or education-related conditionality.

The vast majority of those on the political right who are said to support basic income, from Milton Friedman to the Canadian Conservative MP Hugh Segal to the Adam Smith Institute, actually advocate a negative income tax. Although negative income tax is capable of producing identical distributional outcomes to basic income, the payment mechanisms and underlying logic differ substantially, particularly in relation to the role of the state. Even the basic income experiments in Finland and the Netherlands fall short of Van Parijs’ definition because they are not universal; they are currently limited to unemployed individuals. While the focus in the Finnish case is on testing the impact on labour market participation, in the Netherlands the drive seems to be related to municipalities’ concern about the cost of enforcing work conditionality on the unemployed. All of these deviations lend themselves to the argument made by Declan Gaffney that basic income is most useful as a thought experiment for the sort of reforms we want to implement within the welfare state, as there will be adjustments made to the ‘pure’ version that reflect the different political positions held by advocates in constrained political and fiscal environments.

How do we fund a basic income?

Another reason why basic income appears to find support across the political spectrum is that its advocates don’t cohere around a specific set of proposals for funding its introduction. Were they to do so, they would confront significant ideological or normative choices that would divide them. Luke Martinelli lays out many of these fiscal trade-offs in his recent IPR blog and in a forthcoming working paper, but it is worth reiterating some of his arguments in light of Malcolm Torry’s response. The first crucial point to make is that choosing to abolish the tax threshold to fund a basic income is not, as Torry comes close to implying, an apolitical decision. Putting national insurance aside, if the tax-free allowance of £11,000 was abolished, the UK government budget would increase by roughly £72 billion. That would amount to a 10% increase in government revenue and, if all of it was used to fund a basic income without offsetting cuts, government spending would shift from 43% of GDP to roughly 47%.

Given that attitudes to the size of the state are one of the most fundamental expressions of one’s ideological position, it is unsurprising that this way of funding a basic income does not elicit support from all parts of the political spectrum. Regardless of whether the revenue is earmarked for basic income in the short-term, such a reform empowers the state with resources that could be used for different ends. This fact explains the preference for negative income tax over basic income among libertarian advocates, as it would not necessarily increase the size of the state. If accompanied with cuts to social security, a negative income tax could reduce government expenditure. Indeed, precisely the opposite logic to the Torry and Compass basic income models has defined recent Conservative and Coalition tax and welfare reforms. The policy of increasing the tax free allowance – and, to a lesser extent, the minimum wage – while cutting tax credits has been at the core of Conservative plans to reduce the proportion of income provided by the government to low-income households.

This is not to say that the basic income models laid out by Torry or Compass are flawed, but simply that they are inherently political. Attempts to coalesce around a single “feasible” proposal may be tactically sound, but these cannot be abstracted from their ideological assumptions. There is no ‘common sense’ or technocratic basic income proposal. It is also worth adding that these models are all very UK-centric. The apparent simplicity of reducing means-tested social assistance and abolishing the tax threshold to fund a basic income cannot be applied so readily to countries that have entrenched contributory systems of social insurance and comparatively low tax-free allowances. Existing welfare state architectures will affect both the political and administrative complexities that basic income will have to negotiate in different countries.

All of these models of funding also rely on income tax, but alternative taxes on consumption, land, natural resources or wealth are possible. Torry cites the fact that “the proceeds of production will continue to accrue to capital rather than to labour” as one of the reasons why a basic income is a necessity. Yet, a basic income funded by income tax, by its very nature, cannot address this disparity. It redistributes income from labour without touching capital income, explaining why advocates such as Yanis Varoufakis insist on basic income being linked to capital rather than (labour) income taxes. If the purpose of basic income is to valorise unpaid work and allow workers to drop out of the labour market or move towards a post-work economy, then income tax cannot be the sole source of funding. Here again, the choice of tax relates to a basic income package that reveals a wider ideological position. It is telling that the basic income experiments currently avoid most of these thorny issues because they do not involve the question of funding on a wider scale.

Does basic income highlight a new distributional conflict?

The previous two reasons why we find support from both left and right relate to different visions of basic income. However, it is also becoming increasingly difficult to reduce the politics of the welfare state more widely to a left-right axis. Since at least the 1950s, it has been argued that cultural or post-materialist issues influence voters and parties as much as distributional issues (Inglehart, 1977), and it has become relatively common to understand politics as (at least) two-dimensional, with a libertarian-authoritarian axis as well as a left-right axis (Kitschelt, 1994). This manifests itself in questions related to law and order, immigration, the environment, the emancipation of women and national identity. These questions are perceived as distinct from economic issues that represent the left-right axis such as government intervention or redistribution.

However, the boundaries between distributional and cultural issues are becoming increasingly blurred, as distributive deservingness has become a central theme of political debate (Hausermann & Kriesi, 2015). Particularly in an era of austerity, the restriction of social security to “deserving” as opposed to “undeserving” groups such as immigrants, unemployed people or disabled people has come to the fore in welfare state politics (van Oorschot, 2000, 2006). In many countries in continental Europe, where pronounced differences in entitlement to social security based on levels of contribution are an important component of insider-outsider politics, the size of government spending again masks a more nuanced picture of unequal distribution (Palier & Thelen, 2010). So the politics of welfare entitlement, whether welfare chauvinism, deservingness, misuse or contribution, does not sit easily on a left-right axis of more or less state intervention. Beramendi et al. (2015) propose a universalist-particularist dimension that indicates corresponding attitudes and policy positions on these issues, largely mirroring the libertarian-authoritarian axis, with restrictive immigration attitudes correlating with narrow conceptions of welfare deservingness.

The obvious question then is to ask where basic income fits on this axis. In the sense that it is the antithesis of restricting social security to deserving groups or linking benefits to a history of contribution, basic income would seem to represent a fundamentally universalist policy. Libertarians on the right that advocate negative income tax are as likely as the New Left to subscribe to notions of equal treatment, understood in this sense. Green parties across Europe that often support a basic income tend to siphon off votes from social democratic parties by emphasising issues on this cultural or post-materialist axis. A leading contender for the French Socialist Party’s presidential candidacy who won the first round of voting, Benoît Hamon, has made basic income his flagship policy alongside calls to legalise cannabis and maintain an open immigration policy. In the current political climate, with Brexit, Trump and far-right gains across Europe, it appears that culture matters as much, if not more, than economics – even if culture is still related to social class. Perhaps, then, interest in basic income is an expression of this trend.

One interesting complication could be the extent to which basic income, if tied to restrictive notions of citizenship, may turn this on its head and act as an instrument of welfare chauvinism. With the rise of the Far Right, the question of entitlement – particularly in reference to immigration – may come to dominate the basic income debate if it develops beyond the recent flurry of interest. Another contentious point relates to Beramendi et al.’s (2015) assertion that the universalist-particularist axis can be applied to government spending trade-offs between social investment and more traditional consumption-based policies of social security. Understood as a passive form of income transfer, basic income would appear to be a policy of consumption, lending itself to particularism rather than investment-centred universalism. Yet, as with employment-conditional earnings subsidies such as Working Tax Credits in the UK, it may be that under the banner of activation (as basic income is understood in the Finnish experiments, for example) basic income could be conceived of as a form of social investment.

Is it too simplistic to imply that the underlying cause of political interest in basic income is competition on a universalist-particularist axis? Undoubtedly. Yet, it is also clear that essential components of basic income – such as its universality and unconditionality, as well as the fact it is a flat-rate, non-contributory benefit – relate to questions of distribution that deviate from a simple question of more or less state. At the same time, attitudes to these principles are fundamentally ideological and perhaps likely to cluster around other ‘universalist’ policy positions. All in all, it is important not to downplay the fact that, in the midst of talk about automation, economic necessity or just bureaucratic simplicity, any process that led to the implementation of basic income would require agreement on its contested features, as well as an accompanying package of cuts and taxes. This means that even if we accept that it is beyond left and right in the sense that it draws support (as well as opposition) from both, it is not beyond ideological or distributional conflict.

 

References

Atkinson, A. B. (1995). Public economics in action : the basic income/flat tax proposal. Oxford University Press.

Atkinson, A. B. (1996). The case for a participation income. Political Quarterly, 67(1), 67.

Beramendi, P., Hausermann, S., Kitschelt, H., & Kriesi, H., Eds. (2015). The Politics of Advanced Capitalism. Cambridge University Press.

Hausermann, S., & Kriesi, H. (2015). What Do Voters Want? Dimensions and Configurations in Individual-Level Preferences and Party Choice. In P. Beramendi, S. Hausermann, H. Kitschelt, & H. Kriesi (Eds.), The Politics of Advanced Capitalism (pp. 202–230). Cambridge University Press.

Inglehart, R. (1977). The silent revolution : changing values and political styles among Western publics. Princeton; Guildford: Princeton University Press.

Kitschelt, H. (1994). The transformation of European social democracy. Cambridge; New York: Cambridge University Press.

Palier, B., & Thelen, K. (2010). Institutionalizing Dualism: Complementarities and Change in France and Germany. Politics & Society, 38(1), 119–148.

Parker, H. (1989). Instead of the dole : an enquiry into integration of the tax and benefit systems. London; New York: Routledge.

Van Oorschot, W. (2000). Who should get what, and why? On deservingness criteria and the conditionality of. Policy & Politics, 28(1), 33–48.

Van Oorschot, W. (2006). Making the difference in social Europe: deservingness perceptions among citizens of European welfare states. Journal of European Social Policy, 16(1), 23–42.

Van Parijs, P. (2004). Basic Income: A Simple and Powerful Idea for the Twenty-First Century. Politics & Society, 32(1), 7–39.

 

How do we decide what works in wellbeing?

📥  data science, health, Uncategorised

Emily Rempel is an interdisciplinary PhD student in the Department of Psychology and the Institute for Policy Research at the University of Bath.

The region around the University of Bath is a relatively ‘well’ local authority. By this I mean that Bath and North East Somerset (B&NES) consistently ranks at or above average on the ONS measures for wellbeing, which include population scales of life satisfaction, anxiety, worthwhileness and happiness. B&NES, and other surrounding authorities, are committed to providing services that address these kinds of measures and seek to increase the wellbeing of the people that use their services. Examples include the Wellbeing College, Developing Health & Independence and Second Step Housing Association. While one can assume there is significant worth in increasing the wellbeing of a community for that community’s own cohesion and happiness, there are also more economically minded ideals behind the push for wellbeing. The main driving concept is that happier, more stable people are healthier people and that healthier people use public services less and ultimately save money for institutions like the NHS. This sounds all well and good: people are happier, governments are spending less money and we all end up better off. But the reality is far more complex. That basic assumption that happiness leads to cost savings requires, for lack of a better word, evidence.

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What constitutes evidence in wellbeing is both politically and practically challenging. An essential first question is: what do we mean by wellbeing? Professor Sarah White, Professor of International Development and Wellbeing at the University of Bath, has written extensively on this issue. She argues that wellbeing includes a variety of factors from subjective assessments of happiness to objective ‘quality of life’ measures1. Professor White also describes key differences between individual concepts of wellbeing and collective wellbeing – personal happiness versus national economic health, for example. While there is no easy answer to the question of what wellbeing consists of, local and national governments have provided several frameworks in order to measure wellbeing (and provide services that address it). The aforementioned ONS scales are one example of measuring and defining wellbeing at the national level. Another commonly used framework is the New Economics Foundation’s commissioned work on the Five Ways to Wellbeing. This distils subjective wellbeing into five key areas: be active, take notice, connect, giving and keep learning. Although they consist of a frustrating mix of participles and infinitives, the ‘Five Ways’ are often used by both third sector organisations and local authorities to conceptualise wellbeing. However, none of these definitions offer a holistic and comprehensive concept of wellbeing. To add a bit more complexity, when it is difficult to define it is also difficult to measure – how, for example, do we measure the Five Ways? And more specifically, how do we measure whether programmes like those listed above address these areas? What constitutes success?

From my own experience, measures of wellbeing are at least as complicated as definitions. Assessments of local wellbeing services often contain a battery of different kinds of measures. Much of this diversity is due to diversely vested interests in what these wellbeing services do. Is the purpose of the service to address personal wellbeing, save money or improve health? Or all three?  From a subjective wellbeing perspective, measures like the Warwick-Edinburgh Mental Wellbeing Scale (WEMWBS) are appropriate. However, this does not capture economic wellbeing or objective measures of personal environment. For example, knowing that someone has a score of 56 out of 70 on the WEMWBS tells us nothing about whether they live in a stable and safe home environment. From the health and economic perspective, administrative data is often used to see if individuals who participated in wellbeing courses or activities used health services less. But can we be sure that a decrease in health services use is not due to other factors? There are seasonal, regional and personal variations in health services use that are difficult to capture with administrative data. Furthermore, how can we be sure that using health services less indicates people are healthier? From an individualistic perspective, the Five Ways to Wellbeing could be measured simply by asking people how they ‘connect’ or how much they ‘connect’ in their day-to-day lives. But does every individual interpret ‘connecting’ in the same way? As always, it is difficult to create consistency in subjective, individualistic measures. More broadly, how can we expect a wellbeing service to show success on all of these different kinds of measures? When there is a lack of conceptual clarity, muddles in measurement will follow. The solution is not to throw everything at the wall and hope that something will stick in the name of evidence. There needs to be a better understanding of what these services and activities offer if ‘wellbeing’ is to be addressed in the community.

It would be logical to assume that the solution to this lack of evidence in wellbeing services is simply more evidence. However, as outlined above, the answer is not so simple. Instead of more evidence, there must be a shift towards the right kind of evidence on whether services improve individual, and therefore community, health and wellbeing. First, there must be a critical review around the causative assumptions of wellbeing activities. This means picking apart the impact a typing course has on wellbeing versus a yoga class. Each has value, but measuring them the same way would be a misstep. This means taking a step back from the assumption that improved subjective wellbeing leads to, and necessitates, cost savings. For example, administrative health records are unlikely to tell us if a basket weaving course is effective. Furthermore, basket weaving is unlikely to put the NHS in the black. It may be more effective to evaluate the impact of basket weaving via measures of social isolation. We need to unpick and critique the aspects of wellbeing that individual activities and courses address, and then apply the appropriate metrics to assess whether wellbeing improves. After those steps are achieved, there may be an opportunity to truly test if that personal wellbeing leads to improved health leads to cost savings causative narrative persists. In the end, measuring and commissioning wellbeing services is a national initiative that will continue whether we agree on what wellbeing means or not. And commissioners will likely project onto wellbeing services the kinds of changes they want to see in health services in general – specifically, less money, fewer patients and better population health. It is impossible to predict where this push for wellbeing will take us, but – as with any change in community health and public services – we need to be critical of how ‘well’ we really are doing.

1 White, Sarah (2014). Wellbeing and Quality of Life Assessment: A Practical Guide, Rugby, UK: Practical Action Publishing.

 

Brexit Redux

📥  Anglosphere, Brexit

If only Alan Milward were still alive. Our foremost historian of Britain’s relationship with Europe, and author of the first volume of the official history of the United Kingdom and the European Community, would have brought the full force of his intellect and scrupulous scholarship to bear on the prospectus the Prime Minister has set out for the Brexit negotiations.

Why, he asked, did our first attempt to join the EEC fail in 1963, and our national strategy collapse?  “Britain’s weakness in the negotiations did not spring from its tactics”, he wrote in his official history, “but from the direct conflict between its own worldwide strategy, which in the Conservative Party still had powerful adherents, and that of France.  It was not a part of the United Kingdom’s strategy to base its economic or political future on European preferences. France, however, would accept nothing less and the outcome was de Gaulle’s veto.” (Milward, A., The Rise and Fall of a National Strategy 1945-1963, 2020 p483).

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That history seems wearily prescient now. Should we learn any lessons from it? Contemporary eurosceptics, whose number must now be taken to include the UK government, would doubtless retort that leaving is not the same as joining: we are not petitioning for entry, but quitting. “No deal is better than a bad deal”, as the Prime Minister put it in her Lancaster House speech. Unfortunately, we have been given to such hubris before and it has not served us well. Britain has now played the key cards in its negotiating hand: to leave the single market and the customs union, and end free movement. It is left with the threat of imposing retaliatory tariffs on incoming EU goods and turning Britain into a corporate tax haven – the United Kingdom offshoring itself into one of its own dependent territories. These do not look like strong bargaining chips, even if they weren’t so patently undesirable in their own terms. And, just as in the early 1960s, we are bringing perspectives to bear that are shrouded in the mists of our national history, not the realities of contemporary European diplomacy.

Britain sought entry to the EEC when it became undeniably clear that our post-war economic performance was vastly inferior to that of the six EEC countries.    Between 1950 and 1960, GDP grew at an annual average of 2.7% in the UK, compared to 7.75% in West Germany, 5.85% in Italy and 4.6% in France. By the early 1960s, productivity levels in West Germany and France overhauled those in the UK, and have remained higher ever since. Unlike continental Europe, the UK did not successfully integrate commercial and industrial policy in the 1950s. It preferred, as Milward put it,  “nebulous rhetoric about global competition”. Thus, “while British diplomats and civil servants, pushed into action by the Bank and the financial interests it represented, argued for a “one world system” in which British industry might well in reality have been at a serious disadvantage compared to its competitors, their European counterparts kept their eyes on the finer details of the relationship between industry and trade. All of them were rewarded by higher rates of growth of productivity in manufacturing than in Britain.” (Milward A, The European Rescue of the Nation-State, 1992, p393).

The post-war regime of fixed exchange rates meant that this loss of economic competitiveness showed up in recurrent balance of payments crises and pressure on sterling reserves. Policymakers were forced to address underlying weaknesses in our economy and direct national resources towards exporting sectors. This drove the change in Britain’s strategy towards the EEC – instead of standing aside, we sought to join the new, burgeoning European market, opening up our manufacturers to the competitive pressures it would bring, as well as to its consumers. The 1960s saw the development of a new industrial strategy to support this economic reorientation. It led to massive investment in our infrastructure, a new regional policy and a huge expansion of further and higher education opportunities.

Today, a floating exchange rate means that sterling bears the weight of adjustment. Our loss of competitiveness is signalled in a weakening pound. It is just that the markets decide its level, not Prime Ministers or Chancellors.  They are absolved from addressing the root causes of our current account deficit, as and until inflation eats deeply into living standards or foreign direct investment dries up. When faced with the prospect of a bad Brexit deal and further relative economic decline, our current Chancellor and Prime Minister argue for tax cuts and deregulation, not industrial strategy, capital investment and stronger public services.

In the early 1960s, it was our failure to resolve our relationship with the Commonwealth, and what entry to the EEC would mean for their critical exports to the UK, that sunk our negotiations. But more than that, what the EEC negotiations forced the UK to confront was the accumulated geopolitical and economic problems of the post-war era; not just our relative economic decline or our trading relationship with the old, “white settler” Anglosphere commonwealth, but the economic development needs of India and Pakistan, the political demands for decolonization in Africa, the status of three European territories (Malta, Gibraltar and Cyprus) and the meaning of our Atlantic defence and security relationship after the Suez crisis. As Milward put it, the “cumulative problems of 250 years of British rule” were “all gathered together in one negotiation.” (Rise and Fall p370).

Today that list would read rather differently. But Brexit will still be a prism through which a profound set of national challenges will be refracted. Inter alia, these include: the future of the United Kingdom itself, given Scotland’s vote to stay in the EU and the positions taken by the elected SNP government; Northern Ireland’s relationship to the Republic of Ireland, given our impending departure from the single market and customs union; the balance of economic and social class interests within the economy and political system of the country, and the weight given to the regions and manufacturing vs London and the City; and, most of all, our ability to pay our way in the world, given our longstanding trade deficits. All of this takes place against the radical uncertainty introduced into global politics by the election of Donald Trump. It is a formidable challenge.

Future historians will have to rise to the task of explaining how a marginal political preference that was largely (if not entirely) the preserve of the Eurosceptic right in British politics became the official position of the UK government.  We can be pretty sure that the answers will not be found in the Whitehall archives, as they were for Milward. Brexit has become a deeply political process, inside the Conservative Party, and outside it. Official histories will only tell us half the story. But as the negotiations with the European Union get underway, we would do well to learn from our past.

 

Making it Work: the Future of Universal Credit

📥  Uncategorised

Dr Rita Griffiths is Research Programme Lead for the IPR.

What will the future hold for universal credit (UC) in 2017? Its rollout to date has largely been restricted to single applicants, many of whom have no housing costs because they are still living at home. Next year, UC will be increasingly extended to couples and families with children whose needs and circumstances will be considerably more complex, thus presenting the policy – and the households receiving it – with many more challenges to negotiate.

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This expansion will begin to test more rigorously the extent to which UC’s much-lauded real-time information system is genuinely fit for purpose. Some predict this will be the policy’s ultimate downfall – the system will collapse under the weight of administrative complexity, unable to cope with fluctuations in earnings and the messiness of people’s lives and changing circumstances. This may well be UC’s destiny. A not dissimilar fate awaited the first incarnation of tax credits, working families tax credit. Introduced in 1999, it underwent radical reform barely three years after implementation due in large part to the inability of the system to respond flexibly and fast enough to people’s changing circumstances.

However, another no less significant design flaw lies waiting in the wings: the removal of the administrative distinction between being in and out of work. Unlike the current tax credit system, entitlement to UC for working people begins with just a single hour of work. By linking means-tested financial help to earnings rather than hours worked, this design feature is intended to smooth the fluctuations in income arising from movements into and out of employment, with the aim of reducing financial uncertainty and risk when people make the transition from benefits to work – an admirable goal. The system has also been deliberately designed to ensure that unemployed people and those working only a small number of hours will always be incentivised to work more – a similarly laudable objective (though justifiably not without its critics, given the risk of simply oiling the wheels of an increasingly casualised labour force).

Merging in-work and out-of-work benefits into a seamless, unified system may seem like an elegant policy but the problem is that the trade-off needed to achieve it involves extending the reach of Universal Credit further and deeper into the working population than any other social security system or earnings top-up scheme has ever ventured – anywhere in the world. An estimated three million low-income working households – the very hard working and ‘just about managing’ families that Theresa May’s government is meant to be helping, and who would formerly have remained outside the system of behavioural conditionality – will be drawn into its unyielding embrace.

With entitlement to UC comes a new raft of mandatory obligations. Work conditionality will be extended to low-paid working adults and their partners for the first time. Those whose earnings fail to reach the minimum earnings threshold – equivalent to 35 hours’ work at the national minimum wage for single adults and both members of a couple with children over the age of 11 – will be required to attend mandatory Jobcentre Plus meetings where they must demonstrate they are actively seeking to find more hours, better-paid work, or a second job. Only designated carers of children under the age of one will be exempt from this. Fines and sanctions for non-compliance accompany these rules. For couples, the hours of work, earnings and compliance of one partner will crucially affect the conditionality requirements imposed on the other.

While, therefore, it is legitimate to challenge claims of ‘simplification’, promoting ‘independence’ and ‘making work pay’ as hubris, we should not be lulled into thinking UC is simply old wine in new bottles. Make no mistake: in-work conditionality really is new and different. Crucially, it turns on its head the policy intent of working tax credit, designed as remuneration and a reward for work rather than a state benefit. Paid directly into the wage packet via the employer, the aim was precisely to avoid state interference in family life and to distance the payment from the stigma attached to claiming out-of-work benefits. No one yet knows how the requirement to attend mandatory jobcentre meetings, work longer hours or get a second job will be greeted by people who are already working, or the female partners of low-earning men who would prefer to stay home to look after their children. Randomised control trials currently underway are shrouded in secrecy, and with good reason if media reports of a working mother sanctioned for going on holiday are to be believed.

Only time will tell, but my prediction for 2017 is that without a radical rethink, current proposals for in-work conditionality may well prove to be Universal Credit’s undoing.

This article originally appeared in edition 23.3 of Juncture, IPPR’s quarterly journal of politics and ideas.

Datafication and democracy: Recalibrating digital information systems to address societal interests

📥  data science, future, open data

Dr Jonathan Gray is Prize Fellow at the IPR

Digital information systems have come to play a central role in how we organise and imagine collective life in the 21st Century. The limits of our world are demarcated by electronic equipment scanning the movements of the clouds and space debris above us and the oceanic currents deep below. Within this comparatively narrow band around the surface of the Earth where life is possible – which geologists call the ‘critical zone’ – ever more activity is registered, connected, facilitated and mediated by digital technologies, resulting in vast reserves of data. In addition to the familiar genres of enumerating people, resources, space and time which have been institutionalised for centuries (through official statistics or accounting practices, for example), the digital infrastructures and devices that surround us proliferate data as a result of their every interaction.

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These processes of ‘datafication’ – or ways of seeing and engaging with the world by means of digital data – are not just limited to the neutral representation of phenomena: data can also actively participate in the shaping of the world around us. The very act of generating data can change behaviour, albeit in sometimes unexpected ways and with unintended consequences, as we see, for example, in the dynamics created by league tables and performance metrics, rankings, indexes and indicators. Economic sociologist Donald MacKenzie wrote that financial models are not just like cameras that depict behaviour within markets, they can also act as engines that change them.[1] The same is doubtless true of the quantitative appraisal of life in the workplace, in the classroom, in the home, or on the street.

Data not only refers or designates: it can also stage, guide and enact social life in different settings. Historians and sociologists of statistics argue that classificatory practices at public institutions have brought new social categories into existence. Today, computers and algorithms play a role in the grouping and ordering of society. Information brokers propose new ways of classifying society drawing on the automated analysis of large volumes of data from different sources – proposing consumer profiles such as ‘credit crunched: city families’, ‘ethnic second-city strugglers’ and ‘rural and barely making it’.[2] Such emerging forms of ‘data work’ can have huge social, political, economic, environmental and cultural consequences.

BEYOND COMMODIFICATION AND CONTROL

As with the machine age before us, the social repercussions of these processes of datafication can be more than the sum of their immediate material effects. The concerns of comparatively niche subcultures of past decades – of the gamers, gangs and cowboy hackers ‘jacking in’ to multicoloured cities of data depicted in cyberpunk fiction – have spilled out into the mainstream of collective imagination. Reflection on the broader societal implications of datafication has been fuelled by reports of mega-leaks, mass privacy scares, state-sponsored hacks, algorithmic inequality, ubiquitous automation, experimental human–computer interfaces, the silicon super-rich, the gold-dust of data, and the digital mediatisation of everyday life.

The aspirations of tech giants, politicians, policymakers and entrepreneurs find their dark counterparts in the ruminations of artists and activists, novelists and newspaper columnists, TV writers and film-makers. On the one hand, we find concerns about ubiquitous state surveillance and bureaucratic control, running through from the classics of Orwell’s 1984 and Zamyatin’s We to spy thrillers and science fiction films like Enemy of the State and Minority Report. On the other we have depictions of corporate domination and the commodification of all things depicted in works such as Charlie Brooker’s Channel 4 drama series Black Mirror, Dave Eggers’ acclaimed novel The Circle or Adam Curtis’s recent BBC documentary HyperNormalisation.

Beyond these data-driven dystopias of all-consuming marketisation and state control, can we imagine another role for data in collective life? How might it facilitate human flourishing, advance social progress and strengthen democratic political engagement, rather than stifling or undermining these aims? What kinds of rules, policies, politics, mechanisms and mobilisations might be required to support the creation and use of data in the service of other kinds of social, political and economic objectives?

BEYOND OPENNESS AND PRIVACY

The past few decades have seen the rise of two kinds of interventions around our digital information environments, leading to the creation of new rules, norms and practices in many countries around the world. The first is the push for transparency and openness – leading to everything from freedom of information laws to public reporting requirements, from official open data portals to unofficial leaks. Actors from Obama to Wikileaks often share a Promethean-style rhetorical frame: of liberating information that already exists within the public sector or private companies, so that it can be exploited as a kind of resource to enable different kinds of societal value – whether commercial exploitation, new kinds of services, journalism, activism or citizen engagement. The second type of intervention is the push for protecting personal privacy and securing information from either state surveillance or corporate commodification – through legal rules, technical fixes, resistance to platforms, or the creation of alternative systems that don’t collect, share or monetise user data.

While these are both vital considerations, any more substantive attempt to enlist processes of datafication into the service of social progress will have to look beyond this dual focus on openness and privacy. A more ambitious politics of data would have to move beyond programmes to make data public or keep data private through various attendant technical, policy and legal systems that facilitate or inhibit the flows of data in society. It would have to cultivate the political imagination and practical capacities to recalibrate digital information systems to be attuned to a broader set of societal interests – interests that may be quite different from the immediate concerns of technology companies, investors, ministers and managers. This would entail opening up spaces for democratic deliberation and social participation around the creation of data and around processes of datafication.

DEMOCRACY AND EXPERTISE

To be sure, democratic experimentation in this direction surfaces some hard questions. Not least regarding the relation between aspirations for democratic engagement and public participation on the one hand, and the expert scientific, technical, legal and economic knowledge that can be implicated in the making of data on the other. Where and how might we redraw lines between democratic political life and the technical details of expert knowledge production? Public institutions around the world are still reeling from and adjusting to the consequences of social mobilisations and populist insurgencies of varying stripes. We don’t have to look far to consider the difficulties, uncertainties and complexities that issue from mass movements of people who – as it has been alleged – ‘have had enough of experts’[3] or otherwise wish to challenge or augment received forms of knowledge about their issues.

Policymakers and public institutions argue that populist groups lack the expert knowledge and resources to effectively understand and institutionally advance their causes. Social movements and insurgent political groups counter that public institutions have been captured by forms of expertise that are premised on assumptions that they reject. The knowledge and resource requirements for participating in expert consultation processes can be prohibitively high. Standards and systems underpinning the production of data can depend on enormous amounts of social and political work. This raises questions not only about asymmetries of resources and capacities to participate in processes whereby data is made, but also about the production of expert knowledge upon which data depends. Large institutions and companies have not only money and personnel, but epistemological traditions of scientific and technical expertise on their side in order to create data that is attuned to their prerogatives.

These questions were raised in a series of encounters between the philosopher John Dewey and the journalist Walter Lippmann in the first part of the 20th century. They both sought to interrogate the composition of democratic political life in the US, and to theorise how democratic ideals could keep pace with increasingly complex settings and scenarios that required a high degree of specialised and technical knowledge (Lippmann emphasised the vast gulf between the ‘pictures in our heads’ and the ‘world outside’).[4] They both sought to affect a shift from thinking about ‘the public’ in the abstract (which Lippmann characterised as an ‘abstraction’ and a ‘mere phantom’), to looking at how particular ‘publics’ are organised around particular issues and concerns.[5]

Each proposed a different response to this situation. Dewey favoured mass educational programmes to cultivate the broader societal capacities (beyond ‘officials, administrators and directors of industry’) required for democratic ideals to keep up with advanced technological societies.[6] Lippmann focused on a re-evaluation of the role of expertise in democratic societies and the development and resourcing of commensurate institutional forms. However, they also shared a lot of common ground with respect to their analyses. The Lippmann–Dewey debates have played an important role in the social study of science and technology, thanks to an influential re-reading by sociologist Noortje Marres – who uses their work as inspiration for the study of ‘social-technical arrangements that facilitate public involvement’.[7] Their work can also inform reflection about processes of datafication in democratic societies.

DATA CONTROVERSIES AND DATA LITERACIES

How can we reimagine the politics of data beyond commodification and control, beyond openness and privacy? For a start we can look at how different actors have sought to contest and reshape different aspects of digital information systems beyond liberating data and safeguarding privacy. This entails looking at how the creation of data has itself ‘become an issue’ for different people and groups, and how they have attempted to change it. For example, environmental campaigners in Beijing or resident associations in Pennsylvania have questioned official processes of pollution and air quality data collection – from the sensitivity of monitoring equipment to where it is located – and have started collecting their own data. Anti-corruption, anti-poverty and tax justice campaigners have contested the scope, legal definitions and economic thresholds used in company reporting standards, undertaking work to reform official company registers and to design and build their own. Networks of journalists have developed public data infrastructures to track police killings and migrant deaths.

From climate change to economic reforms, gender equality to human rights, when we zoom in on how issues are rendered into data, we can find people hard at work – often in the background, behind the scenes in consultation processes or through targeted lobbying efforts – to shift boundaries, change thresholds, add or remove database fields, redirect instruments, standardise identifiers and expand monitoring practices. Just as the sociologist Bruno Latour suggests that researchers can ‘feed’ off scientific and technological controversies,[8] so we might study ‘data controversies’ in order to understand and theorise social and political interventions to reshape processes of datafication. This in turn can furnish us with new vocabularies of ‘data speak’ and new repertoires of ‘data work’ to ensure that different publics have the required literacies and capacities to align these processes with their interests.

How might we extend Dewey’s proposition of democratic education to include the capacities to understand and intervene around processes of datafication? On the one hand we might analyse data controversies and civil society interventions around the creation and collection of data in order to – as Max Weber puts it – make explicitly conscious the means that have demonstrated their value in practice.[9] On the other hand, public institutions and policymakers will need to think about participatory design processes and public engagement mechanisms to facilitate the assembly of publics who are able not only to make use of data as a resource, but who are also able to reshape the processes of its creation – as well as to reflect on the emerging forms of politics, genres of sociality and modes of experience that datafication gives rise to.

This article originally appeared in edition 23.3 of Juncture, IPPR's quarterly journal of politics and ideas.

 

FOOTNOTES

[1] MacKenzie D (2008) An Engine, Not a Camera: How Financial Models Shape Markets, MIT Press.
[2] US Senate Committee on Commerce, Science and Transportation, Office of Oversight and Investigations Majority Staff (2013) A Review of the Data Broker Industry: Collection, Use, and Sale of Consumer Data for Marketing Purposes: Staff Report For Chairman Rockefeller. https://www.commerce.senate.gov/public/_cache/files/bd5dad8b-a9e8-4fe9-a2a7-b17f4798ee5a/D5E458CDB663175E9D73231DF42EC040.12.18.13-senate-commerce-committee-report-on-data-broker-industry.pdf.
[3] Quote from former justice secretary Michael Gove, talking to Faisal Islam on Sky News, 3 June 2016.
[4] Lippmann W (1998) Public Opinion, Transaction Publishers: 3–32.
[5] See Lippmann W (1993) The Phantom Public, Transaction Publishers: 67. See also Dewey J (1954) The Public and Its Problems, Swallow Press.
[6] Dewey D (1922) Review of “Public Opinion” by Walter Lippmann, New Republic, 3 May 1922: 286–288.
[7] Marres N (2005) No Issue, No Public: Democratic Deficits After the Displacement of Politics, doctoral thesis, University of Amsterdam, Netherlands. http://dare.uva.nl/document/17061.
[8] Latour B (2005) Reassembling the Social: An Introduction to Actor-Network-Theory, Oxford University Press: 21.
[9] Weber M (1949) Methodology of the Social Sciences, Free Press: 115.

 

Liberalism can survive but it has to renew its social traditions

📥  Brexit, Liberalism, Trump

I wrote this for the Financial Times yesterday on the breadth and resilience of liberalism and how it can be renewed by reaching back to the social liberal tradition.

As 2016 comes to an end, liberalism will be given a place on the roster of the year’s notable deaths, slotted in somewhere between Harper Lee and Muhammad Ali. In the year of Brexit, Donald Trump and Vladimir Putin, liberalism has been declared dead and buried. “The liberal pageant is fading,” writes John Gray, the dystopian philosopher, and “all that really remains of liberalism is fear of the future.” He is not alone. All around us, a “post-liberal” era is being announced.

European liberalism joined forces with nationalism in the 19th century to give political expression to demands for autonomy and self-rule. Today, the two have mostly parted company, save where civic nationalists still seek liberation from larger nation states, as in Scotland and Catalonia. Nationalism now wears an illiberal face and it does so with pride. Authoritarian, conservative nationalists govern much of the world, including swaths of eastern Europe. Liberal politics is in retreat.
Yet the rush to read the funeral rites of liberalism is premature. It is a capacious and tenacious ideology with a rich, diverse history. The concept of liberty always at its core, it has worn numerous political and intellectual guises — from the classical defence of property rights and restraints on arbitrary power, to the expansive social liberalism that gave birth to the British welfare state, and also the emancipatory liberalism of civil rights movements worldwide. Even when politically weak, it has lent its ideas and energy to other movements. John Maynard Keynes and William Beveridge gave the UK Labour party the intellectual tools with which to build Jerusalem after the second world war.

Nordic social democracy can be readily assimilated to the social liberal tradition, as can Rooseveltian American liberalism. Even continental liberalism can lay claim to its part in the success of postwar Christian Democracy. With an ideological lineage of such range and influence, liberalism will not be so easily consigned to oblivion. But to thrive again it needs rescuing from its friends as much as its enemies.

In recent decades, it has been stripped of its philosophical and political power. In the quest for robust theories of social justice, liberal political philosophy grew ever more removed from daily struggles for improvement in the human condition. Liberalism lost sight of its insurgent roots in the fight against established orders and lost ground as politics focused after the financial crisis on questions of jobs, security and identity.
Meanwhile, the decline of the social liberal tradition left the field open for colonisation of liberal language by the Thatcherite right, which used it to pioneer the extension of markets, competition and new managerial regimes of regulation into public life and social relationships. Benthamite utilitarian liberalism has been recently revived but as a “science of happiness”, less often to liberate humans than to devise new means of governing them, furnishing justification for technologies to monitor moods and behaviour, corporate HR strategies and government by technocratic nudge.

Little wonder that, when they finally acquired some power by joining the UK coalition government, the Liberal Democrats were reduced to an agenda of softening the edges of public spending cuts and constraining conservative Euroscepticism. Theirs was a besieged version of liberalism, for which a heavy price was paid at the ballot box last year.

The renewal of liberalism will start with resistance. Already in eastern Europe a liberal rearguard is being fought to defend democratic and constitutional rights, from Poland to Hungary. We can expect American liberalism, at its radical and rumbustious best, to stand its ground against attacks on constitutional norms, environmental degradation and incursions into the rights of minorities. In the UK, liberals of all parties are at the heart of opposition to hard Brexit. In these battles, particular as they are to different national political arenas, liberalism can throw off the caricature of unpatriotic rootlessness and self-righteous political correctness.

But liberalism will fail if protest is all it can muster. It needs to renew its social traditions and the alliances once forged with the working classes — to rediscover social liberalism’s emphasis on the interdependence of individual and community, the pursuit of human flourishing and the economic radicalism with which to shape capitalism in the common good. It must play its part in constructing a liberal politics of community to compete with that offered by nationalists: one that responds to demands for good jobs, decent housing and social respect, and which appeals to voters outside the cosmopolitan cities.

These are big tasks, made harder by the political weakness of the UK Labour party and its centre-left sister parties elsewhere in the world. But liberalism is a resilient, adaptive creed. We should not pronounce it dead yet.

 

How the left should respond to the steady march of nationalism

📥  Brexit, future, International relations, Trump

Published in The New Statesman, December 2017

The new wave of nationalism is a reminder of the contingent, if not cyclical, nature of history. The liberal left cannot retreat to the comforts of moral outrage.

“Their world is collapsing. Ours is being built,” remarked ­Florian Philippot, the chief strategist of France’s Front National, after Donald Trump’s victory. Trump’s election to the presidency of the United States has consolidated a global shift towards nationalism that has been under way since the 2008 financial crisis. The steady march of nationalist politics has swept up swaths of the world’s population: Russia and Turkey are governed by authoritarian, ethno-religious regimes; eastern Europe is criss-crossed by illiberal, nationalist governments; and western Europe is now home to virulent, far-right movements and large, electorally competitive political parties, such as the Front National and the Freiheitliche Partei Österreichs (Freedom Party) in Austria, which have made their way into the democratic mainstream. Japan and India are governed by democratic, conservative nationalists, while in China an emergent strongman, Xi Jinping, has been newly designated as the “core” of the Communist Party leadership.

hero-nationalist-rise2

Until recently, the Anglosphere countries had largely bucked these trends. Centrist conservative dominance in England, Justin Trudeau’s victory in the 2015 Canadian general election and the likelihood that the Democrats would retain the White House promised to build a liberal firewall against the nationalist ascendancy. Brexit and Trump upended those assumptions. The nationalist virus has infected the body politic of Burkean Anglo-America.

A focus on populism – in policy, rhetoric and political style – obscures the asymmetry of this shift along the left/right axis. Contemporary nationalism is almost wholly conservative or authoritarian, and sometimes avowedly fascist. It is only civic or leftist in the case of political movements seeking liberation from existing nation states, as with Scottish or Catalan nationalism. Its ascendancy is therefore another marker of the electoral weakness of the contemporary centre left.

But it is also highly differentiated. In the UK, Theresa May’s government represents an attempt to reconcile post-Thatcherism with a soft economic nationalism and renewed social conservatism. Its bedrock is an older, security-conscious electorate that is sceptical of immigration and hostile to elites. This is a far cry from the nativist and fascist movements of the European mainland, which draw energy from youthful extremists as well as the post-industrial dispossessed, and which direct unstinting fire at migrant populations and the EU project.

European nationalism, in turn, cannot supply the conceptual frameworks with which to understand Prime Minister Narendra Modi’s business-friendly Hindu identity politics in India, nor, in Turkey, President Recep Tayyip Erdogan’s Islamist, anti-Kurdish authoritarianism, which seeks to wrench Turkish nationalism out of its 20th-century secular, Kemalist frame. These have their own origins and trajectories. For its part, China maintains a political order that is highly ethnocentric, built around the dominant identity of the Han Chinese, and its leadership is increasingly centralised. But China is committed to the rule-bound, liberal global economic order on which its economic growth critically depends, and shows no interest in the military adventurism of its Russian neighbour.

This suggests that talk of a nationalist ­revolt against globalisation offers too simple an account of a complex picture. The new wave of nationalism has been incubated in the era of global integration, but it will not bring it to a close. Global supply chains, foreign direct investment, cross-border lending and the political institutions of managed trade all inhibit a reversion to autarky, imperial blocs or high tariff walls.

Global trade has fallen because of weak demand and the slowing of China’s growth, not protectionist sentiment, and although new multilateral deals with the Americans may now be off the cards, the cost of the US launching punitive tariff wars will be punishingly high. Trump’s election signifies an end to the signature trade agreements of the Obama era, and his narcissism and volatility introduce a deep uncertainty into global politics, particularly in the handling of relations with China, as the storm over Taiwan has shown. But regional trade blocs such as the North American Free Trade Agreement and the European single market are unlikely to collapse, and the integration into the global economy of the huge working populations of Asia will continue, not unwind.

Still, such are the howls of protest from the rust belts of advanced economies, the surge of discontent among debt-laden, college-educated young people who have been locked in to low salaries and priced out of housing markets, and the political shocks administered by Trump and Ukip, that austerity in Europe and inequality in the US will come under renewed pressure. A “reactionary Keynesianism” of tax cuts for the rich, increased military spending and infrastructure credits will form the core of Trump’s economic strategy as he seeks to repay his base. He will be inaugurated at a time of rising wages, and as long as inflation is held in check, American workers will feel their pay cheques swell throughout his first term. In the UK, the rhetoric of delivering for the “just about managing” classes will outpace reality, but, like their Republican counterparts, the Conservatives will seek to lock down the electoral allegiances of working-class voters.

The eurozone is more uncertain. A victory for Marine Le Pen would be a cataclysmic defeat for European liberalism, but even if her Front National doesn’t manage to emulate Trump, the size of its popular support, the pressure of left-wing opponents of austerity in southern Europe, and the electoral threat posed by reactionaries in Germany may yet force Angela Merkel to abandon the self-defeating straitjacket of EU-wide austerity and weaken the mercantilism of the country’s export sectors. By dint of history and conviction, Germany’s leaders remain deeply committed to the European project; they will not let it disintegrate easily.

Some reshaping of the global security order is likely, in which tacit co-operation between the main military powers returns, retrospectively endorsing Vladimir Putin’s land-grabs and power plays in the Middle East. With the US, Japan and France pivoting towards more Russia-friendly postures, and Britain detached from European security diplomacy by Brexit, the stage is set for a new rapprochement with Putin. The EU is likely to expend more effort in defending the Paris climate-change agreement and the Iranian nuclear deal than in contesting Crimea or Aleppo, despite the fears of the Baltic states. China has already indicated that its priorities for dealing with a Trump presidency will be resisting protectionism and any backsliding on climate change.

The electoral success of nationalist and conservative authoritarian governments also masks the continued strength of liberalism’s social and economic redoubts. Cosmopolitan liberalism is not rootless: it is founded on large and growing university-educated, ethnically diverse urban populations. In recent electoral contests, this bloc has roughly matched those of the conservatives and nationalists. It has suffered narrow defeats, not decisive ones. It will now dig in to defend its social gains and to resist encroachments on civil rights and liberal constitutionalism. This resistance is already facing down authoritarianism in central and eastern Europe, and will put up a fight against evangelical-inspired culture wars, environmental degradation and attacks on minority rights. The politics of constitutional patriotism, often restricted to a “kissing the typewriter” liberalism of procedural justice, will, for once, attract passion and anger.

The new wave of nationalism is a reminder of the contingent, if not cyclical, nature of history. It is unlikely to usher in a post-liberal order, let alone foreshadow the end of capitalism, though one cannot discount increased violence and repression of minority communities. The space for a broad alliance of liberal, centrist, social-democratic and green politics remains wide – but it will need to find a way of articulating working-class interests, economic as well as cultural, and to find a more expressive, emotional and compelling register for its politics.

The liberal left cannot retreat to the comforts of moral outrage and political protest. The new times demand a progressive engagement with the politics of identity and belonging, as well as renewed radicalism on economic policy and social protection. “You have made yourself the trustee for those in every country who seek to mend the evils of our condition by reasoned experiment within the framework of the existing social system,” Keynes wrote to Roosevelt in December 1933. If the era of nationalists and authoritarians is to pass, this kind of leadership will be needed again.