Behind the headlines about Brexit, a counterrevolution has quietly occurred in the UK. Its reverberations seemed certain to reach beyond the English Channel when last week the guillotine unexpectedly came down on British chancellor of the exchequer Sajid Javid.
Javid, a devotee of the libertarian philosopher Ayn Rand and alumnus of Deutsche Bank, was edged out of British Prime Minister Boris Johnson’s Cabinet largely because he seemed too much a foot soldier of the ideological revolution that occurred in the 1980s in, first, the UK, and then, the US.
In that upheaval, the individualist free-marketeering of former British prime minister Margaret Thatcher and former US president Ronald Reagan became dominant across the West.
Thatcher aimed to “roll back the frontiers of the state.”
Her ideological kin Reagan claimed that “government is not the solution to our problem, government is the problem.”
In this view, the primary, if not the only, legitimate economic role of the government is to guarantee price stability rather than to intervene repeatedly to stem inequality and protect the weakest members of the population.
However, today many citizens buffeted by global economic headwinds have come to see government yet again as a necessary player in the national economy.
Javid is actually the latest casualty of the counterrevolutionary urge to overthrow obsolete pieties. The much bigger victims have been left-leaning political parties across Europe, such as the Labour Party, the creator of the UK’s welfare state. Rebranded as “New Labour” under former British prime minister Tony Blair, it embraced Thatcherism — to the point where Thatcher identified Blair as her heir.
During its 13 years in power, “New Labour” pushed through Thatcher-style deregulation and privatization, often disguising it through “public-private partnerships.”
Failing to check deindustrialization, or rising social inequality, it started to lose the party’s traditional working-class voting base in the manufacturing and mining districts of northern England.
Claiming to be Blair’s “true heir,” former British prime minister David Cameron, together with former British chancellor of the exchequer George Osborne, more aggressively advanced policies of “austerity” that further shrunk the remnants of the welfare state.
The eventual outcome of Thatcherism on steroids was Brexit: a furious rejection by the working class of a long ideological status quo that seemed to benefit only a rich metropolitan minority.
An early beneficiary of the anti-establishment mood was Labour Party leader Jeremy Corbyn, who, in elections held one year after the Brexit referendum, dramatically increased his party’s share of the vote.
Corbyn belonged to the marginalized left wing of the Labour Party, which had always seen the EU as an enforcer of free-market fundamentalism, drastically constraining the UK’s ability to intervene in the economy.
Accepting that Brexit had to get done, Corbyn offered in his popular election manifesto of 2017 a bonanza of spending promises.
The manifesto was groundbreaking not only because it broke with the Thatcherite orthodoxy of non-intervention that for decades had prevailed inside the Labour Party.
It was extraordinary also because the Conservative Party, traditionally the representative of big business and the landed aristocracy, rushed to imitate Corbyn’s rhetoric and to disown Thatcherism, claiming in its own manifesto that “we do not believe in untrammeled free markets” and that “we reject the cult of selfish individualism.”
“She has even adopted Labour’s ‘Marxist’ policy of energy-price caps,” The Economist complained of then-British prime minister Theresa May.
In last year’s elections, the Conservative Party under Johnson competed even more fiercely with Labour to offer spending plans (much to the despair of orthodox economists and balanced-budget diehards).
Johnson carefully distanced himself from his posh Tory pals, such pro-EU architects of austerity as Cameron and Osborne. He promised to use Brexit to re-engineer laws in favor of British people. He even abandoned an earlier promise to cut corporation tax from 19 percent to 17 percent.
Johnson, closely identified all his life with Tory free-marketeers, was responding to an altered public mood.
Sixty percent of the public support more government spending, according to a British Social Attitudes survey.
As it turned out, Johnson’s gamble succeeded. While the London-based leadership of the Labour Party strove futilely for a second referendum on Brexit, many of its lifelong voters in northern England lent their support to a party that seemed more capable of extracting the UK from the EU and turning on the spending taps.
Johnson is moving fast to please his new and potentially fickle constituency, nationalizing train operating company Northern and increasing public spending.
Javid, with his tattered copy of The Fountainhead, clearly stood in his boss’ (and neighbor’s) way, insisting that the UK should run a balanced budget by 2023. Javid’s replacement, British Chancellor of the Exchequer Rishi Sunak, a hurriedly promoted Johnson loyalist, has no such constricting goal.
“It wasn’t a question of what they wanted to spend more money on; it was more a question of whether there was anything they didn’t want to spend more money on,” a political insider told the Financial Times about the new occupants of Downing Street.
Johnson is, of course, an opportunist; and his actual ability to spend, already limited, might shrink even more by the time Brexit gets done. Moreover, he has barely started on his impossible task: triangulating the clashing demands of rich Tory grandees and northern England’s immiserated working class.
Nevertheless, the political alignments and realignments of the past three decades are now in plain sight.
During the ideological hegemony of Reagan and Thatcher, left-leaning parties with electoral bases among working classes moved right — or, to the “center,” in their preferred euphemism.
One unexpected outcome of this shift is that, today, they appear complicit in extensive social and economic breakdown. Worse: Their founding ideas about beneficent government, which they have steadily discarded since the 1980s, are being stolen by carpetbaggers and the far-right.
Indeed, Johnson’s success in the UK could be paralleled by National Rally president Marine Le Pen in France.
Presidential elections are due in two years and Le Pen, pitted against a weakened French President Emmanuel Macron (hailed early and fatefully in his tenure as the “French Blair”) is surging on the back of her promise to deepen the activist role of the state in the national economy.
France might well witness in 2022 what has already occurred in the UK: a counterrevolution that sends both free-marketeers and self-proclaimed “centrists” to the guillotine.
Pankaj Mishra is a Bloomberg Opinion columnist. This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
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