A few weeks ago I came across an excellent post on the Flip Chart Fairy Tales blog which
looked at the rise of what the author (known only as “Rick”) called “the
libertarian right” elements within the Conservative Party and how they captured
the economic high ground. Over the past 35 years they have shifted the centre of
political gravity in the UK based on an agenda of “cutting taxes, busting unions and privatising everything down to the
street lights.” So successful were they in their endeavour that they
spawned an imitator in the form of Tony Blair, who introduced a policy based
largely based on low taxes and free markets, thus turning the Labour Party into
something akin to a continental European social democratic party which
consigned the Conservatives to 13 years of political opposition.
Although the political right may have changed the terms of
domestic UK politics, they were still not content and devised a call to arms to
fend off the creeping influence of the European Commission which, they feared,
was about to introduce “socialism by the
back door.” Thus was the Brexit war conceived and the terms of engagement
defined. But as “Rick” pointed out, “the
important thing to understand about right-wing libertarianism is that it is a
very eccentric viewpoint. It looks mainstream because it has a number of
well-funded think-tanks pushing its agenda and its adherents are
over-represented in politics and the media. The public, though, have never
swallowed it. Countless think-tank papers, opinion pieces and editorials,
telling us that shrinking the state is just common sense and that
re-nationalisation is a loony left pipe-dream, have had remarkably little
effect.”
We need only look at the way the electorate bought into Labour’s
electoral platform this year in a way which confounded nearly all of the
pundits. Although the Conservatives’
2017 election manifesto tried to be less aggressively free market than in the
past, there is a sense that many people are beginning to realise that low taxes
imply a reduction in the role of the state which they are increasingly
uncomfortable with. The 2017 Social Attitudes Survey pointed out that support amongst the UK electorate for higher taxes and more spending is at its highest in a decade.
But only this week prime minister Theresa May raised the prospect that failure
to deal with the UK’s fiscal deficit could prompt draconian Greek-style fiscal contraction.
It was a bad enough argument when used by George Osborne in 2010: Today, it
just seems out of touch.
Brexit will be the ultimate test of the right-wing libertarian
economic model in the UK. In the event of Brexit, the UK will be forced to
stand alone politically and economically in a way which it has not done for many
centuries. Indeed, that part of British history which sees Britain as the plucky
underdog fighting against the odds is largely a myth. In a fascinating book
which challenges the conventional history of World War II,
the historian David Edgerton writes “Empire
gave Britain manpower. But even the British Empire, vast as it was, was not
alone, and did not feel itself to be alone. It was supported economically and
politically by much of the rest of the world … The idea of a small island
nation, standing ‘alone’, was far from being the central image of Britain it
was to become after the war.” Go back to the Crimean War and Britain fought
alongside allies such as France. The decisive intervention in the Battle of
Waterloo came from the Prussian von Blücher. We don’t need to labour the point
here, but if there is a consistent pattern which emerges from Britain’s
history, it is less that it fought alone but rather that it picked its allies
well.
Obviously Brexit is not a war. But having decided to decouple
from its European allies, the UK will face a testing period as it negotiates its
way through a very complex geo-political environment. Failure to get this right
could sound the death knell for the post-Thatcherite political and economic
establishment, particularly since we may be on the verge
of a swing in the political pendulum. More than ever in the last 35 years, the
UK will have to show that an economic model based on free markets, free trade
and low (ish) taxes can deliver the full employment and rising living standards
that EU membership has somehow failed to do. Because if it does not, Jeremy
Corbyn’s acolytes are waiting in the wings to show us how to do it with a
policy straight out of the 1970s. For some reason, neither of these alternatives
set my pulse racing.
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