The British syndrome: an abdication of responsibility

William Blake, Dante's Inferno, Canto X. Wikicommons. Some rights reserved.My book, Mammon’s Kingdom, was born of
incredulity. The global financial and economic crisis of 2008 was the second
most devastating in the long history of capitalism. Only the crisis that began
with the Wall Street crash of 1929 and culminated in the Great Depression of
the 1930s did more damage to output, employment and welfare.

And, just
as the crisis of the 1930s made nonsense of the economic orthodoxy of the
previous half century, the crisis of 2008 and its aftermath tore gaping holes in
the intellectual system that had underpinned the assumptions of central
bankers, ratings agencies, business schools and professional economists for a
generation, and had shaped the policies of international economic institutions such
as the World Trade Organisation and the International Monetary Fund.

On a
deeper level, the crisis exploded the dogmas spawned by that system: that
government intervention in the economy does more harm than good, that markets
should therefore be left to regulate themselves, that rewards reflect
productivity, that, since ‘a rising tide lifts all boats’, the forces that make
the super-rich richer also benefit the poor, that the information available to
buyers and sellers in the market place is symmetrical, that the choices made by
unfettered economic agents are rational and that the booms and busts which had
been capitalism’s most obvious hallmark for centuries were no more.

In my
innocence, I assumed that Keynes would come in from the cold, and that a hunt
would be on for a new politico-economic paradigm to replace the paradigm that
had come so disastrously to grief.

‘80’s common sense

Nothing of
the sort took place. The crisis of the thirties led policy makers in the United
States, in Germany, in Sweden and even, to some degree, in the United Kingdom
to jettison the economic orthodoxy of what was then the recent past and to
search for new approaches. (The new approaches were not all benign: among them
was Nazi Germany’s combination of brutal racism, illegal rearmament and economic
autarchy.)

This time,
new departures are conspicuous for their absence. No modern-day Roosevelt has
called on his countrymen to ‘drive the money changers from the temple’; no
twenty-first century Lloyd George has called for a British New Deal. Left and
right alike have spent the last six years searching for a cleaned-up version of
business as usual, in the fond hope that a combination of somewhat more
effective regulation and a somewhat fairer taxation system will keep the old
show on the road.

Left and
right differ in emphasis and style. 
Raucous shouting matches during Prime Minister’s Questions in the House
of Commons; smearing and jeering by the overwhelmingly right-of-centre popular
press; and desperate attempts to give inconsequential policy distinctions more
importance than they deserve are features of the landscape.  But these are examples of what Freud called
‘the narcissism of minor differences’.

What
matters is that both political families have stuck to the fundamentals of the
pre-crash public doctrine, just as they did in the long boom of the
late-nineties and early-noughties. The three Cs which have encapsulated the
common sense of the age since the early-1980s – Choice, Customer and
Competition – still dominate public debate and shape public policy.  The great question posed by the crash  – what is to replace the public doctrine that
came to grief six years ago – has rarely been asked, and even more rarely
answered. Commentators like Will Hutton and Edward and Robert Skidelsky have
challenged that doctrine and the behaviours that flow from it, but the response
from the political world has been an embarrassed silence.

Ending with a whimper

Hence, my
incredulity. How, I asked myself, could this be? Why the contrast between the
radical new departures of the 1930s and the comatose intellectual conservatism
of the last six years?  Why the paucity
of Joshuas trumpeting outside the walls of the market-fundamentalist Jericho? And
why did Jericho’s leading inhabitants fail to see that the earth was shaking
beneath their feet?

Crises
create opportunities for the future as well as suffering in the present.
Political will and imagination, not ineluctable fate, determine the outcome. Cases
in point include the crisis of stagflation that ended the long post-war boom in
the 1970s and paved the way for the Hayekian ascendancy that followed; the
fiscal crisis of the Bourbon monarchy that led through a succession of unsuccessful
palliatives to the great French Revolution; the long-drawn-out crisis of
British rule in Ireland that led, after much bloodshed, to the secession of the
twenty-six counties of southern Ireland from the United Kingdom; and the crisis
of the French Fourth Republic that brought De Gaulle to power and led to the
establishment of the Fifth.

Why have
things been so different in present-day Britain? Why has our crisis ended with
a whimper rather than a bang? And what does the story imply for our future as a
people?

One man’s search

Mammon’s Kingdom sets out the results of one
man’s search for answers to these questions. But the key word in that sentence
is ‘search’. The answers I offer are necessarily incomplete and in some cases
provisional. Others will give different answers; some will pose different
questions.

The point
of the ‘national conversation’ I call for in the final chapter (of which more
later) is to refine and thrash out these differences. I do not envisage the
conversation as an anodyne exercise in collective self-congratulation, but as a
UK-wide equivalent and successor to the astonishingly profound and vigorous national
conversation that took place during the Scottish referendum campaign in
September 2014 – and, for that matter, to the searching, decades-long
nineteenth-century conversation about the ‘Condition of England Question’ that
I describe in chapter two.

Mention of
the Scottish independence referendum is a reminder that the political and
cultural landscapes have changed a great deal since the manuscript of this book
was delivered to the publishers at the end of May 2013.

In chapter
three I wrote that the ‘mystic chords of memory’ that Abraham Lincoln evoked in
his First Inaugural now pulled the peoples of Great Britain apart instead of
holding them together. The Scottish referendum result suggests a much more
nuanced picture. On the other hand it has confirmed my view that the union
state is unlikely to survive in its present form for much longer.

Equally, I
now think I under-estimated the significance of the privatizations of the
Thatcher and New Labour governments. I was right to say that they did not make
much difference to the public realm, but wrong not to add that the
helter-skelter sale of public assets to private purchasers, often at knock-down
prices, strengthened Mammon’s grip on the public culture as well as lining the
pockets of extravagantly rewarded accountants, management consultants and
former nationalized industry heads.

As well, I
should have acknowledged that the result was to give a powerful boost to the
forces which have made Britain the most unequal of the long-established
democracies of the European continent. (Only ex-communist Bulgaria, Latvia and
Rumania on the eastern periphery of the EU, and ex-Fascist Portugal and Spain on
its southern periphery are more unequal than Britain.) In a different sphere, I
was right to argue that English local government should be rescued from its
status as the ‘humiliated Cinderella of English governance’, but I should have
argued much more forcefully for a constitutional convention to decide how the
nations, regions and localities of the United Kingdom should relate to each
other and to the centre.

The British syndrome

But these caveats do not touch the heart of the
approach and supporting arguments that I put forward in Mammon’s Kingdom. About these I am unrepentant. I still believe, as
I put it in chapter two, that ‘software’, not ‘hardware’ – the long, slow waves
of cultural change, not the more obvious technological and economic changes that
figure so prominently in public debate and academic social science – hold the
key to the British predicament; that our ills form an interdependent system or,
in medical language, a ‘syndrome’; and that they reflect the bewilderment and
disorientation of a people who have forgotten the history that shaped them, and
who therefore no longer know who they are.

Equally, I
am still convinced that we can resolve our predicament only through a
revolution of sentiment, comparable in scale to the revolution that procured
the neo-liberal ascendancy of the last thirty years; and that we cannot make
such a revolution unless we first dig deep into what I called the ‘buried
riches of our culture’.

By the
same token, I still believe that we need to rediscover and reinterpret the
three overlapping political traditions – conservative, liberal and socialist or
social-democratic – that have woven in and out of our history for well over a
century; and that we have at least as much to learn from our complex religious traditions
as from political ones.

The ethic
encapsulated in Christ’s immortal warning that ‘ye cannot serve God and
Mammon’; in the Book of Deuteronomy’s complex provisions for redistributing
resources from the rich and powerful to the marginal and dispossessed; and in the
Islamic tradition’s prohibition of riba
lending money at interest and acquiring it in unjust ways – is the strongest
barrier we have to the indefinite expansion of the empire of money. If a future
regulatory system is to bite, that ethic will have to underpin it.

The need
is urgent. The attrition of the public realm; the remorseless growth of
inequality; the social pathologies associated with its growth; the humiliations
suffered by those at the bottom of the economic pile; the callous indifference
of those at the top; the penetration of state institutions by corporate
interests; the decline of public trust; and, not least, the hubristic
irresponsibility of a sometimes criminal financial sector – all the stigmata of
pre-crisis Britain – loom as large as they did before 2008.

Not long
ago the Sunday Times rich list revealed
that there are now 104 billionaires in the United Kingdom, worth a total of
£301.133 bn., and that London is home to more billionaires than any other city
in the world. Soon afterwards, the High Pay Commission reported that the
average income of the poorest 20 per cent of British households was lower than
the equivalent figure in virtually all other north-western European nations and
on a par with former Communist countries such as the Czech Republic and
Slovenia.

As I write,
a frenetic house-price bubble is under way in London and South-East England,
for which government policy bears a large part of the blame. The European
Commission has urged the British Government to rein in house price increases;
the IMF has warned that the bubble imperils Britain’s economic recovery. George
Santayana’s aphorism that those who forget the past are condemned to repeat it
seems increasingly apposite.

I don’t
know if these evils can be overcome, but I am as sure as I was in the summer of
2013 that we have no hope of doing so unless we can hammer out a new public
philosophy to replace the bankrupt philosophy of the long boom. I am equally
sure that the conventional routines of party politics, indispensable though
they are to the day-to-day working of a pluralist democracy, have little or
nothing to contribute to the new public philosophy that the times demand.

That is
why I wrote, quite explicitly, in the introduction that Mammon’s Kingdom was not intended to be a programme for government
and still less a political manifesto. In the final chapter of Mammon’s Kingdom I wrote that the new
public philosophy I called for would not be ‘a blueprint for a future
government, but a philosophy of dialogue, open-ended and indeterminate’; I
added that another way of saying the same thing was that it would be ‘a
philosophy of mutual education’.

Towards a new public philosophy

William Blake, Dante's Purgatorio. Canto XXX. Wikicommons. Some rights reserved.To those
who envisage the world as a place where polar opposites engage in a manichean
struggle for domination – white versus black, good versus evil – the notion of
mutual education will seem fanciful, even escapist. But the Scottish referendum
debate was an exercise in mutual education, in which the contestants learned
from each other, and from which they emerged as different people.

To mention
only a few other examples, the same was true of the astonishingly thoughtful
and wide-ranging debate that enabled the thirteen former British colonies on
the Atlantic seaboard of what became the United States to form a lasting union;
of the sometimes anguished debates in post-war France and Germany that enabled
them, in Jean Monnet’s words, to ‘exorcise the demons of the past’ and to lay
the foundations of the longest period of peace in post-Roman European history; and
of the lively, remarkably open-minded debates between Muslim, Jewish and
Christian thinkers that, in Rosa Menocal’s splendid phrase, made medieval Spain
the ‘ornament of the world’ and, in due course, helped to give Aristotelian
philosophy a central role in the intellectual life of Catholic Christendom.

My critics

Mammon’s Kingdom was widely reviewed and
I also received a number of thoughtful (and thought-provoking) comments, some
from old friends and some from virtual strangers. These reviews and comments
cut across the lines of party and ideology and elude the familiar pigeon holes
of left and right. Richard Reeves, a former adviser to the Liberal Democrat
leader Nick Clegg, chastised me for sins varying from my opposition to the
coalition Government’s threefold increase in student fees to my suggestion that
British society is the second most dysfunctional in the rich developed world. Favourable
reviews came from Anthony Barnett, founder of the internet journal openDemocracy
and prime animator of the  constitutional
reform campaigning group Charter 88; from Rowan Williams, former Archbishop and
also former professor of theology; and from the Oxford economic geographer
Danny Dorling. Broadly speaking, academics and churchmen were more favourable than
journalists; and those outside the metropolitan media bubble than its denizens.

The
criticisms fell into three main categories:

1.My call for a ‘national conversation’ was a
cop-out
.

My old
friend Kenneth O. Morgan, Labour peer as well as distinguished historian,
thought we needed ‘action as well as conversation’, and chided me for failing
to put forward a shopping list of concrete proposals akin to the shopping list
of global reforms proposed by Thomas Piketty in his Capital in the Twenty-first Century. Gaby Hinsliff, writing in the Guardian, thought there was no point in
a national conversation since for the last six years ‘we’ve talked about little
else’. In a long review in the London
Review of Books,
Jeremy Harding wrote that if my proposed conversation were
possible, ‘we’d have had it already’.   

These criticisms
reflect an unconscious positivism which has been a bane of Britain’s public
culture for almost a century. Like Thomas Gradgrind in Dickens’s Hard Times, their authors take it for
granted, probably without realising it, that only ‘facts’ count; that ‘facts’
are hard, solid and impermeable, like billiard balls; and that ideas are, by
definition, not ‘facts’.

I take a
different view. I think Keynes was over-egging the pudding when he wrote, in
the famous peroration to his General
Theory,
that the world is ruled by ‘little else’ other than ideas, but I fervently
agree with him that ideas ‘are more powerful than is commonly understood’; and
that ‘soon or late, it is ideas, not vested interests, which are dangerous for
good or ill’. Twentieth-century British history is incomprehensible if Keynes’s
– or for that matter Hayek’s – ideas are left out of the story.

My
approach to ideas goes wider than Keynes’s. To change society, I believe, ideas
have to descend from the lofty empyrean of economists and philosophers to the common
or garden world of ordinary citizens talking to and learning from each other.
In other words, they have to become the stuff of a national conversation.  As I tried to show in chapter two of Mammon’s Kingdom, Keynes’s ideas did
just that – as did Thomas Carlyle’s, John Stuart Mill’s, John Ruskin’s and R.H.
Tawney’s. Absent that national conversation and the social reforms of the
post-war Attlee Government would never have been thought of, much less
accomplished. Without an international conversation, Piketty’s shopping list of
global reforms will be little more than an intellectual curiosity.

But a
monologue, or even a series of monologues, is not a conversation. Conversations
involve listening as well as talking. Gaby Hinsliff is right that there has
been a lot of talking in the last six years; indeed I described some of it in
my last chapter. But the talkers have inhabited separate enclaves – Greens
here; Occupy London there; Citizens UK in the middle distance; the Living Wage
campaign alongside them; Compass, the non-party campaigning group of the democratic
left, in the foreground – and, despite their captivating élan, they have not
yet launched a true conversation.

2. I haven’t grasped the significance of the
individualism I deplore.

Richard
Reeves was the main exponent of this criticism. Writing in the Observer, he quoted a passage in the
second chapter of Mammon’s Kingdom in
which I wrote that the established structures of post-war Britain, such as
Parliament, the judiciary, the monarchy, the churches and, above all marriage
and the family, ‘generated loyalties and promoted public trust. They told
people who they were and where they belonged’. To Reeves, this was anathema.

People no longer want to
be told by others where they belong. They don’t want to be told who they are:
they want to decide that for themselves. Marquand is quite right that society
has, in this sense, become more individualistic. It is also why such progress
has been made towards racial tolerance, lesbian and gay rights, and gender
equality.

Lurking in
this passage is the unspoken assumption that society is nothing more than a
collection of disaggregated individuals, solitary captains of their own souls,
making their own choices for themselves. That assumption, I believe, is a
perfect example of the ‘debased liberalism’ which I excoriated in my final chapter,
and which I see as a formidable obstacle to the search for a new public
philosophy fit for our times.

In truth,
we don’t make our choices in a social or cultural vacuum. We can’t; we don’t
inhabit a social or cultural vacuum. Many of the structures of the past may
have fallen on evil days, but new structures have replaced them: Google, Goldman
Sachs, GCHQ, Barclays Bank, the Murdoch Press, the Premier League, BP and GlaxoSmithKlein,
to mention only a few. These constrain our choices at least as tightly as did
the structures of the past; and they tell us too where we belong and who we
are. A society without such structures is unimaginable. It would be like Thomas
Hobbes’s terrible vision of the state of nature.

The robust
and passionate social liberals of the past, from John Stuart Mill to L.T.
Hobhouse and David Lloyd George, were well aware of this, but twenty-first
century liberalism is a pale shadow of the liberalism of their day. The passion
has withered into a querulous self-righteousness; in the liberal lexicon,
positive freedom, freedom ‘to’, has given way to negative freedom, freedom
‘from’. 

Like
Reeves (and for that matter like Clegg), most of today’s liberals see
individuals as free-floating, untethered social atoms, quite unlike the rooted,
flesh and blood individuals presupposed by the social liberals of yesteryear.
The moral I draw from Reeves’s contempt for the structures of the past is that
the first step towards a new public philosophy is to re-phrase the tough-minded,
challenging social liberal commitment to positive freedom in a modern idiom.

3. My call for a ‘revolution of sentiment’ is a
nonsense.

Writing in
the Literary Review, the philosopher
John Gray made this essentially fatalist charge with characteristic subtlety
and panache.  First, he lavished praise
on the diagnosis I offered in Mammon’s
Kingdom
and on the incisiveness with which I did so. Then he changed tack.

My implied
suggestion that new elites could do for our time what the elites of the post-war
period did for theirs, he wrote, ‘is as remote from the realities of Britain
today as Cameron’s preposterous ‘Big Society’. Marquand’s ‘lost Eden’, he
continued, ‘is the peculiarly British type of collectivism that came into being
with the postwar settlement established by Labour in 1945’. But the post-war
settlement, he added, could not be a model for the future. It was the product
of a ‘very unusual war – one that was popular and socially unifying. The core
policies and institutions of the postwar welfare state… were all products of
wartime planning’. Then came Gray’s coup
de grace:

Behind David Marquand’s
high-minded hopes looms a question he shrinks from confronting: what if most people
actually prefer the raffish capitalism that prevails in this country today and
– for all its unsightly blemishes – want more of it? His reply is that this
doesn’t matter, since it’s a type of capitalism that is not sustainable. As he
puts it in the last line of the book, ‘We can’t go on as we are’. But we can.
And until some large event shifts the scenery in the way that the Second World
War did when it produced the lost Golden Age for which Marquand pines, we will.

This is
bad history and bad sociology, resting on bad science. It’s true that, in
Britain, the post-war welfare state and mixed economy were pre-figured by the
‘war socialism’ of the Churchill coalition, and by the commitments to full
employment, to a nation-wide system of compulsory social insurance and (less
precisely) to a national health service made by the parties to the coalition.

But it’s
not true that the coalition made a clean break with the past. The Churchill
coalition’s war socialism harked back to the étatiste interventionism of the 1930s. The commitment to
nation-wide social insurance that William Beveridge advocated in his famous
1942 Report was evolutionary, not revolutionary; he sought to consolidate the
partial systems that had grown up over the previous half century, not to father
a completely new system, derived from first principles.

Besides,
as I pointed out in chapter two, Britain’s post-war settlement is best seen as
a local variation on a theme that sounded right across the western world, from
the Pacific coasts of Canada and the United States to the Baltic and the
Adriatic.

Other
variations included the legacy of Roosevelt’s New Deal in the United States;
Germany’s emerging social-market economy that harked back to the Catholic
social teaching foreshadowed in Pope Leo XIII’s encyclical De Rerum Novarum; and the combination of Keynesian economics and
generous social welfare in Tage Erlander’s Sweden.

None of
these was a child of war. I don’t deny that Britain’s post-war settlement owed
something to wartime experience. But the real significance of the war is that
it speeded up developments that were already under way.

Mind-forg’d manacles

William Blake. The Human Abstract. Songs of Innocence and of Experience. Copy B. Wikicommons. Some rights reserved.More
striking than Gray’s bad history is his bad sociology. Who are the ‘most
people’ who might prefer our ‘raffish capitalism’ to a different economic
system? Who are the ‘we’ who can and will go on as we are? I’m sure the
‘masters of the universe’ in banks, Murdoch-owned newspapers, hedge funds,
private equity firms, management consultancies, accountancy firms and private
health-care companies, many of them officially resident in tax havens in
British jurisdictions, prefer Gray’s ‘raffish capitalism’ to any conceivable
alternative.

But are
they really ‘most people’? The evidence suggests that most real people are
shocked by the growth of inequality and the rise of the super-rich (or top 1.0
cent) which have been among the central themes of the last thirty years of
British history.

Equally, it
would be preposterous to suggest that the humiliations inflicted on the growing
number living in poverty – perhaps the ugliest feature of contemporary British
capitalism – are welcomed by the victims, or that the marketization of the
health service is welcome to its users or to the dedicated professionals who
work in it.

The truth,
surely, is that ‘most people’ – indeed a large majority of British people – are
trapped. We would dearly love to escape, but we don’t know how to. Instead, we
thrash around in dumb despair. I believe we can spring the trap if we put our
minds to it. But the key word in that sentence is ‘minds’. We won’t escape
until we recognise that we are trapped
and decide that we want to escape. That is what I meant by a ‘revolution of
sentiment’. Policies and programmes will follow later.

‘Bad
science’

Now for
‘bad science’. Gray suggests that we will go on as we are until some ‘large
event’ shifts the scenery. But one of the central themes of Mammon’s Kingdom, repeated again and
again throughout the book, is that we – and not just we in these islands, but
the entire human race – are travelling at a rate of knots towards a very large,
and very unpleasant, event which, on present form, is likely to make civilized
life impossible.

I refer,
of course, to climate change. This features largely in my book and the facts
are well-known. The consensus among scientists is that it is imperative to
limit the rise in the global temperature to 2 degrees Celsius above
pre-industrial levels. Pace the
pedlars of gloom who confuse debates on the question, this goal is achievable –
and without halting economic growth.

But it
won’t be achieved without a drastic shift in the world’s economic structures,
That shift can’t be made by voluntary action or market mechanisms alone, though
both have a part to play. As I point out in chapter three, Dieter Helm,
Professor of Energy Policy at Oxford, and one of the most authoritative writers
on the subject, has shown that the world’s response to the threat posed by
climate change has so far been hopelessly inadequate, and that a world-wide
programme of ‘de-carbonization’ is urgently needed. Helm argues that
de-carbonization on the scale that is needed would require the co-ordinated
replacement of all the capital stock ‘of the world’.

For that
to happen, state power would have to constrain market forces more radically
than at any time since 1945. And that would mean the end of ‘raffish
capitalism’. To be sure, the world in general and Britain in particular may
fail to meet Helm’s challenge; Gray’s ‘we’ may prefer catastrophe to survival.
But it is not realism to act on the assumption that they are bound to do so. It
is an abdication of responsibility.              

Special thanks go for permission to publish a slightly edited version of the Preface to the new paperback edition of Mammon's Kingdom.

Leave a Reply

Your email address will not be published. Required fields are marked *