Why we need a strong left

More powerful left-wing movements would mean better policy-making by the centre & right.

Anyone hoping that the marginalization of the Labour left would lead to rational, liberal policy has been badly disappointed by Starmer's recent remarks (pdf) on immigration echoing Enoch Powell and speaking of "incalculable" damage. "Disgraceful and damaging" says Simon Wren-Lewis; "untethered from reality" says Jonathan Portes; and "a moral, political and economic embarrassment" says Ian Dunt.

I want to suggest that there's a causal link here. The absence of leftist voices in mainstream political discourse is a cause of dishonesty, lies and stupidity in policy-making. I'm not going to try to persuade centrists of the merits of leftist policies, but to do something else. In politics we must ask not only "what is the right policy?" but also "what type of political culture or ecosystem is conducive to good policy-making?" My argument is that the demise of the left has created an ecosystem hostile to good policy.

Old stockbrokers had a saying: "it takes differences of opinion to make a market". And the loss of some opinions has led to a worsening political market.

Here, I'm using "left" in a particular (idiosyncratic!) way, to mean a left that pushes for economic policies for workers and customers against the interests of the rich. The absence of such a left is in small part its own fault. Pretty much the only idea many leftists have now is a wealth tax. But even if this would work (which as Dan Neidle argues is doubtful) it does not address our main economic problems: how to reallocate jobs; and how to raise productivity. What has been forgotten is any interest in economic democracy. That's a big loss.

I don't much blame leftists for this: there's no point writing recipes if you don't have a kitchen. Nevertheless, it is something intelligent non-leftists should mourn.

Starmer's talk of the damage done by migration echoes Reeves' embarrassing drivel about there being "not a huge amount of money" and "maxing out the credit card". Neither seem to believe in logic or fact. Contrast that with New Labour, which based its policies upon evidence and research. Working tax credits were modelled on the US's earned income tax credits; the minimum wage upon the work of Card and Krueger; Bank of England independence upon research by economists such as Alex Cukierman; and Brown's interest in endogenous growth theory was influenced by economists such as Paul Romer and Philippe Aghion.

Of course, this evidence was incomplete. But New Labour at least looked for it. Blair used to speak a lot about "evidence-based policy-making." His epigones do not. Why the difference? It's because Blair and Brown had to appeal across the political spectrum, so they needed evidence*. New Labour faced competition from the left, and competition keeps people on their toes. Reeves and Starmer, on the other hand, feel the need to appeal only to a few newspapers so any drivel is good enough.

It's not just Labour that has been degraded by the decline of the left. So too has the Tory party. Trades unions taught generations of their opponents a valuable skill: how to negotiate. As they shrank, so too did that ability. The result was that the Tories were unable to negotiate Brexit, falling instead into a childish tantrums of "I want, I want a fairy unicorn". Had they been formed by dealing with unions rather than by appealing to their nannies, they might have done a little better.

Conservative constituency associations used to be dominated by businessmen accustomed to recalcitrant unions. That taught them that it was difficult to bend the world to their will. That lesson has been lost, and so Tories have voted for the fantasies offered by Truss or Badenoch.

For much of the 20th century strong unions had other benefits. One is that they imposed a modicum of justice and efficiency onto corporate management. They helped rein in bosses' pay (pdf) - for fear that big boardroom pay rises would provoke workers' demands for similar - and in doing so might have helped discourage rent-seeking and jockeying for the top job. And insofar as they raised workers' pay, unions compelled firms to look for ways to raise productivity growth; this was faster even during the strike-riddled 70s than it has been in recent years.

Allied to the genuine fear of communism, unions did something else. They forced governments to focus upon avoiding recessions and upon improving economic growth, because these were ways of helping to shore up the legitimacy of capitalism - and, from capital's point of view, a better alternative to redistribution.

The loss of these pressures, however, has led to the triumph of what Joel Mokyr has called the forces of conservatism, constituencies hostile to economic growth. For example, financiers and rentiers like the low interest rates and resulting high asset prices that are the consequence of stagnation; lawyers and accountants support the complicated tax system that diverts effort to compliance or avoidance; incumbent companies oppose competition; little Englanders like the trade barriers erected by Brexit; and landlords don't want taxes to be shifted from incomes to land. And so economic growth is strangled.

Politically, it's pointless to debate economic policy, because policy is determined not by ideas but by interests. Good policy doesn’t require merely technical know-how. It requires the right material conditions, the right power bases. It is these, rather than technical know-how, that are lacking. And the demise of the left is one reason for this.

I'm not saying that intelligent policies can come only from the left. What I'm saying is that a strong left creates the political space for such policies from anywhere on the spectrum. Would Starmer have spoken about immigration in that way if he'd been fearful of the left of the Labour party?

Here, though, we come to a vicious circle. The absence of a significant left contributes to economic stagnation, and stagnation in turn fosters the far-right. Since Ben Friedman's work we have lots of evidence that weak economies lead to reaction and illiberalism. Thiemo Fetzer for example has shown that austerity boosted support for Brexit; he and his colleagues have shown that shop closures encouraged support for Ukip; and Diane Bolet and colleagues have demonstrated (pdf) that pub closures have a similar effect.

A stronger left could act as a circuit-breaker here. It would offer an alternative account of our economic decline and better remedies for it than Farage's Truss-on-steroids fantasies. The absence of this, however, gives us the grotesque sight of a Labour PM pandering to the far-right.

My point broadens. Dan Ariely has shown that belief in conspiracy theories is more common among the victims of poor economic performance**:

The feeling of being hard done by is prevalent among the misbelievers I've met, and I think it goes a long way toward explaining the recurring theme of "the elites" that we find in many common conspiracy theories. If you're convinced that you're at a disadvantage, someone else must have an (unfair) advantage. If you're suffering unusual hardship, someone else is getting off easy. If you're lacking control, someone else must be controlling things. (Misbelief, p67)

Again, a healthy left would help correct this. It would provide other, better explanations for why people feel at a disadvantage, and (because any serious left must be committed to some form of economic democracy) offer people more genuine control over their lives. Without this, however, we see the rise of fruitloop conspiracy theories.

There's an analogy here. You might not like Wetherspoons or McDonalds. But they offer something even if you never go into them; competition from them forces other pubs and restaurants to up their game. Similarly, you might not like a strong left, but it too would force other parties to do better. That's competition. And who can possibly be scared of competition?

* It might be no accident that Blair's gravest error was the Iraq war, which was the result of ignoring both the evidence and the voice of the left.

** Ariely doesn't mention Andrew Tate, but I suspect his case might fit our point.