British politics has always been something of an experimental laboratory for the industrialized world. In the 1970s, Britain was where the pre-eminent postwar model of how to manage the economy collapsed. That model had been based politically on the creation of consensus, and economically on Keynesian demand management. Today, the equivalent collapse has been of the “regulation-lite” regime in which a party that styled itself as “New Labour” accepted a powerful role for markets — particularly for largely deregulated financial markets.
In the 1960s, Keynesian policies delivered the illusion that everyone was benefiting, with high levels of employment and significant wage growth. Britain was the coolest place on earth, boasting the Beatles and the Rolling Stones and the pastel fashions of Carnaby Street.
But Keynesianism involved continued fiscal expansion, with no offsetting monetary contraction. By the 1970s, it had brought to the UK large and ultimately unsustainable current-account deficits, high levels of inflation and then political gridlock over what to do. Which group should be the first to make a sacrifice?
In early 1974, former prime minister Edward Heath’s Conservative government was locked in a struggle with the powerful coal miners’ union over “who rules Britain.” He called a premature election in February, in which there was no clear winner. Heath was deeply unpopular. But the opposition Labour Party was not convincing either, and had little in the way of an intellectual alternative. It simply sought to avoid confrontation with the unions.
The election produced a political stalemate. The centrist Liberal Democrats appeared to hold the balance of power, and stories circulated of how Heath was prepared to concede a reformed voting system. He held out the promise of proportional representation, which would ensure a greater number of parliamentary seats for the Liberal Democrats in future elections, in exchange for the party’s support for a new Conservative government.
There appears to be an overwhelming likelihood that the 1974 stalemate will be repeated in the upcoming general election on May 6. The political maneuvering has already started, with the unpopular British Prime Minister Gordon Brown, today’s equivalent of Heath, bidding for the Liberal Democrats’ support by promising a constitutional reform that would give the party major advantages.
In 1974, the touted Conservative-Liberal Democrat coalition never materialized, as the Liberal Democrats were wary of hitching their fortunes to an unpopular and discredited politician. The result was a minority government that struggled for support and legitimacy, and in the end offered only policies that provided no real answer to the country’s underlying problems.
Britain today resembles 1974 much more than it resembles 1979, when the Thatcher revolution set the country on a new path. There is again a major economic problem, the end of a credit-driven boom, and a threat to the banks (except that it all looks much bigger, owing to the financial system’s massive growth and internationalization). Both major political parties look tired, and at the same time as if they are competing to imitate each other. The choice appalls voters.
There is also an ominous resemblance to Italy in 1992, when both major parties of the previous 40 years, the Christian Democrats and the Communists, simply melted away in a mixture of corruption and intellectual failure.
In the 2000s boom, as in the 1960s, it looked as if everyone could live on the never-never. In the 1960s, it was counter-cyclical fiscal policy that held out the promise of prosperity for all; in the 2000s, it was that individuals rather than the state piled up debt. The magic of markets made possible an individualization of borrowing and consumption.
As in the meltdown of the 1970s, it is easy to see how everyone benefited from the recent boom: Homeowners saw their houses rising in price, social-welfare payments were expanded and people seemed swept up in a new wave of 1960s-style “Cool Britannia.”
But now, as then, Britain’s future is bleak and overshadowed by debt. Major adjustments are needed. At the same time, the main parties find it hard to address the country’s problems because they are reluctant to call for sacrifice before an election.
And, because the party programs of the Labour government and the Conservative opposition are not clearly distinguishable, they find it hard to differentiate themselves from the Liberal Democrats. Both major parties are appealing to the political center, but they will never be as convincing as a political party that really is in the political center and that is unencumbered by the scandals attached to the past exercise of power.
The course of the electoral struggle so far indicates that the Liberal Democrats will do very well. Their leader outshines his Conservative and Labour counterparts in television debates and on the campaign trail. Moreover, Labour and the Conservatives are in a political trap. The moment they start to disagree with the Liberal Democrats, they will make themselves look extreme and will forfeit voter sympathies.
But this demand for political moderation impedes the search for the radical and painful solutions that Britain needs. Little wonder, then, that currency markets are treating the likely outcome in Britain — a hung parliament, with no clear majority for any party — as a repeat of the mid-1970’s, with no clear solution to the country’s underlying economic problems on offer.
Harold James is a professor of history and international affairs at Princeton University and Marie Curie Professor of History at the European University Institute, Florence, Italy.
Copyright: Project Syndicate
When US budget carrier Southwest Airlines last week announced a new partnership with China Airlines, Southwest’s social media were filled with comments from travelers excited by the new opportunity to visit China. Of course, China Airlines is not based in China, but in Taiwan, and the new partnership connects Taiwan Taoyuan International Airport with 30 cities across the US. At a time when China is increasing efforts on all fronts to falsely label Taiwan as “China” in all arenas, Taiwan does itself no favors by having its flagship carrier named China Airlines. The Ministry of Foreign Affairs is eager to jump at
The muting of the line “I’m from Taiwan” (我台灣來欸), sung in Hoklo (commonly known as Taiwanese), during a performance at the closing ceremony of the World Masters Games in New Taipei City on May 31 has sparked a public outcry. The lyric from the well-known song All Eyes on Me (世界都看見) — originally written and performed by Taiwanese hip-hop group Nine One One (玖壹壹) — was muted twice, while the subtitles on the screen showed an alternate line, “we come here together” (阮作伙來欸), which was not sung. The song, performed at the ceremony by a cheerleading group, was the theme
Secretary of State Marco Rubio raised eyebrows recently when he declared the era of American unipolarity over. He described America’s unrivaled dominance of the international system as an anomaly that was created by the collapse of the Soviet Union at the end of the Cold War. Now, he observed, the United States was returning to a more multipolar world where there are great powers in different parts of the planet. He pointed to China and Russia, as well as “rogue states like Iran and North Korea” as examples of countries the United States must contend with. This all begs the question:
Liberals have wasted no time in pointing to Karol Nawrocki’s lack of qualifications for his new job as president of Poland. He has never previously held political office. He won by the narrowest of margins, with 50.9 percent of the vote. However, Nawrocki possesses the one qualification that many national populists value above all other: a taste for physical strength laced with violence. Nawrocki is a former boxer who still likes to go a few rounds. He is also such an enthusiastic soccer supporter that he reportedly got the logos of his two favorite teams — Chelsea and Lechia Gdansk —
RSS