Right on!

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.