Labour’s Crisis

July 31, 2016

One useful way to think about the UK Labour Party’s current crisis is by comparing it to the two previous major crises in the party’s history. All three internal political crises have followed, and been directly caused by, macroeconomic crises. Labour’s project, as a party of government, has always been the efficient management of a capitalist economy, to foster economic growth and thereby enable the more equitable distribution of an economic surplus. Absent a growing surplus to distribute, however, Labour is unclear and internally divided on questions of economic policy, and on broader political goals. In Andrew Thorpe’s words:

during more prosperous times, Labour does at least have something coherent to say: namely, that the fruits of that prosperity should be used in order to create a fairer society… The problem, throughout Labour’s history, is what to do when the economy moves into difficulties. (Thorpe, Andrew. A History of the British Labour Party. 1997. p. 241)

Moments of economic crisis and stagnation therefore bring to the fore tensions between the different components of Labour’s coalition. Historically, this coalition has most prominently consisted in: the trade union movement and, secondarily, the co-operative movement; socialists, of a range of different kinds, with centralising statism largely eclipsing decentralising syndicalism across the early decades of the twentieth century; and the left wing of the liberal movement, driven by neither socialist ideology nor ties to organised labour, but by a progressivist opposition to the effects of social inequality. These can – in shorthand, and very very inadequately – be mapped onto the centre (trade unionist / co-operative), left (socialist) and right (liberal / self-described ‘social democratic’) segments of the party’s ideological spectrum.

The three periods of internal Labour Party crisis have tracked the three major economic crises of the period of Labour’s existence: the crash of 1929 and subsequent depression; the period of stagnation and stagflation of the 1970s; and the financial crisis of 2008 and subsequent recession. Each period of economic crisis and stagnant growth has resulted in civil war within the party, as the unifying project of administering a flourishing capitalist economy and then directing its economic surplus to the working class, has fallen apart. In the first two cases – and quite possibly in the present third case – this has resulted (may very well result) in schism and years of electoral disaster.

In each case, Labour has been in government during the moment of economic crisis. In 1929 Labour was in government when the stock market crash took place. The party was divided over the wisdom or necessity of austerity policies in the subsequent depression, and this internal conflict ultimately resulted, in the period 1929-32, in a four-way schism. The internal defeat of Mosley’s nationalist Keynesian plan led to Mosley’s departure from the party and his founding of the New Party, and then in 1932 the British Union of Fascists. Ramsay MacDonald, aligning with the liberal right, chose to leave the party, with a handful of others, to form a National Government with the Conservatives and Liberals. The Independent Labour Party – representing a significant portion of the left socialist wing of the party – chose to disaffiliate, with the ultimate result of parliamentary irrelevance. The majority rump of the party – the centrists, alongside non-schisming figures from the party’s other wings – persisted, in electoral strife, until the outbreak of WWII, the formation of the wartime coalition government, and postwar electoral success. Very crudely speaking, then, the left, right, centrist, and (in Mosley) novel proto-fascist wings of the party all chose to go their different ways – with short-term success for the right, long-term success for the centre, and electoral oblivion for the schisming left and proto-fascist wings.

In the 1970s Labour was likewise in (and out of) government through the period of stagnation, stagflation, and financial crisis. The Wilson and Callaghan governments’ apparent inability to adequately resolve these crises was widely taken as a damning failure of the ‘revisionist’ Labour right’s technocratic Keynesian approach to economic management. Again, the party was profoundly internally divided, as the glue that bound together the components of its coalition – a smoothly growing capitalist economy with an easy-to-reallocate surplus – evaporated. After the electoral loss of 1979 the party was therefore preoccupied by internal conflict. In the early 1980s, however, unlike in the early 1930s, the components of the party did not so comprehensively schism. There was one major split: in 1981 a significant portion of the liberal (right) wing of the party formed the SDP – a progessivist party unburdened by union affiliations or socialist ideology. The remainder of the party – including the portion of the right that had chosen to remain in Labour – spent the following years in civil war. The left mounted a serious effort to gain control of the party machinery, pushing for greater influence in both its parliamentary (Bennite) and revolutionary entryist (Militant) forms. Ultimately the leftists were purged (in the case of Militant) and internally marginalised (in the case of the Bennites) and the right of the party began a long march to internal dominance over an acquiescent centre and sidelined left, cemented by the victory of Blair in the 1994 leadership election.

In 2008, again, Labour was in government when the financial crisis hit. Again, its immediate handling of the crisis was creditable, but its reputation for competent economic governance was devastated. Again, once out of office the party became profoundly divided on how best to respond to a period of recession and stagnant growth. Between 2010 and 2015, under the leadership of Ed Miliband, the party’s message was confused, as different ideological segments of the party pushed for different platforms. Then, after the 2015 electoral defeat, and the election of a representative of the left faction, Jeremy Corbyn, to party leader, under a new ‘one member one vote’ system, the party moved into open civil war. The present situation is very febrile, and my goal here is not to rehearse the details of the current party infighting – but many commentators find a schism of some sort the most likely outcome, at present. It is not hard to see some of the same basic themes reprised here, as in the 1930s and 1980s.

Three economic crises; three civil wars within Labour; and at least two – quite possibly three – periods of schism and electoral collapse. One doesn’t want to overstate the parrallels, but this historical perspective does at least make clear that, whatever one’s position within the current internal party conflict, this crisis shouldn’t simply be attributed to superficial – or indeed profound – failings of any ideological faction, but rather to a long-term weakness in the party’s very constitution; the glue that binds it together as an electoral project – and that sometimes fails to.

So much for parallels; in the rest of the post I want to note some ways in which the current crisis differs from the previous two I’ve discussed.

To begin with, it’s worth stressing that the categories of ‘left’, ‘right’ and ‘centre’ – which I’ve obviously used throughout this post – are fuzzy, internally diverse, and historically variable – see, for example, the changing ideological valence, within the party, of attitudes to Europe and to free trade, since the 1970s and the early twentieth century respectively. Today’s left and right aren’t the same as the left and right of the ’30s or ’80s, on which more below.

Further, the balance of forces within the party is different today than at previous moments of crisis. Seemingly paradoxically, the majority of the parliamentary party is today significantly to the right of the historical norm, while the party leadership is significantly to the left. These facts are related: the rightward shift of the parliamentary party has in relative terms reduced the gap between the median selectorate member and the party’s left faction. Combined with the new one-member-one-vote electoral system, and a leftward shift in the selectorate – partly perhaps due to changing sensibilities, but also partly due to an influx of new members – this has unusually, and probably unstably, aligned a majority of the base with the party’s left. This in turn has led to significant tensions between a large segment of the membership and the majority of the parliamentary party.

Finally, and in my view most significantly, the broader political and ideological context matters. Again very schematically, one can differentiate periods of capitalist history – often divided by economic crises – in terms of the governance systems that enjoy broad ruling class consensus. The period from WWI through WWII is a period of declining liberalism and rising statism – represented by fascism and communism; an increasingly statist understanding of labourism within the labour movement; and the rise of the Labour Party itself as against the Liberals. The period from WWII through the 1970s is a period of Keynesian technocratic governance, the failure of which, in the 1970s, is the (relative) failure of the Wilson and Callaghan governments. The period from the 1980s through the mid 2000s is a period of neoliberalism – the reassertion of the centrality of the market, privatisation, and deregulation. Blairism was an attempt to transform the traditional Labour project by connecting it to neoliberal policy mechanisms and goals.

We are currently in another period (like the 1970s) where the old governance structure (in the 1970s statist Keynesianism; today neoliberalism) is dead, but a new consensus structure has yet to emerge, or secure its dominance. History is contingent; we do not know what will happen next. But there are concerning signs about the current trends. We are clearly in a populist moment – populisms of both left and right are making dramatic gains against a shrinking, threatened and delegitimated centrist liberalism. It also seems to me that the populist right insurgency is stronger than that of the left: fascism, and movements with a ‘family resemblance’ to fascism, are making major gains across the world. One would expect these Zeitgeist shifts to influence the balance of political forces both between parties, and within them.

To state my own opinion, then: I think many participants in, and commentators on, the current Labour party crisis are at once overstating the historical novelty of the present situation, and fighting the last war in terms of their understanding of the factions at play. Speaking anecdotally now: figures from the party right frequently characterise members of the left faction as ‘Trots’ and ‘entryists’, by analogy with Militant’s attempted transformation of the party in the 1980s. This is a poor understanding of the current ‘left’ faction, which is better seen as an alliance between the parliamentary socialist left and its supporters in the membership; the major trade unions – concerned about their waning influence in a party otherwise largely dominated by the liberal, ‘social democratic’ right; an emerging, more youthful, left wing ‘populist’ movement; and a more traditionally centrist base concerned about the parliamentary party’s steady rightward movement. This is, itself, an unstable coalition; but while it lasts, it is a powerful one.

At the same time, the left of the party frequently characterises its opponents on the right as ‘Blairites’, in a way that misses the structural transformation of the economy – and, correspondingly, of the ideological terrain – since 2008. Blairism was a project that combined law-and-order demagoguery, neoliberalising marketisation and deregulation, and high welfare spending. It is dead, in part because in a period of stagnant growth the problem of social wealth distribution moves closer to a zero-sum game, making it harder to enact redistributive policy without threatening the interests of those in possession of wealth and capital. More profoundly, though, Blairism is dead because neoliberalism is dead; for better or worse, that economic governance paradigm has ended. The question for the right of the party is therefore: what replaces Blairism? To a large extent the current relative success of the left faction can be attributed to the ongoing inability of the Labour right to settle the answer to that question. And this failure is itself not simply an ideological one – we are still within a structural transformation of the world system, which will ultimately result in a new global power and governance structure. Political actors can attempt to influence that transformation, but they cannot individually resolve it; and the ideological superstructure that informs policy-makers’ actions is itself strongly influenced by the political-economic base.

Nevertheless, answers are being proposed to the question: what replaces Blairism? One prominent answer is captured by the recent book ‘Labour’s Identity Crisis’, edited by Tristram Hunt MP. Contributors to that book argue that Labour has lost the confidence of many of its traditional voters because its technocratic, economistic emphasis on wealth redistribution has neglected the ‘identity politics’ of “white working class” patriotic pride in Englishness. Hunt and other contributors emphasise that Englishness should not be understood in terms of ethnicity, but rather as a form of class solidarity grounded in local community and place. Yet for many on the left of the party – and that includes myself – this ‘English identity politics’ project seems to amount, in practice, to a Labour variant of the anti-immigrant, xenophobic and racist nationalism that has informed a significant proportion of the recent UKIP, and Brexit, votes. The worry here is that where Blairism proposed a Labour that could operate effectively within the neoliberal paradigm, the advocates of ‘English identity politics’ aspire to create a Labour that can operate effectively within an emerging neofascist paradigm. Further: right or centrist efforts to minimise the influence of the party’s left faction, in the hope of re-establishing something closer to a Blair-era liberal social-democratic project, may instead risk opening the door to a highly illiberal valorisation of ethnic solidarity. This is, of course, a risk, not a certainty. But – to put it crudely – where some on the Labour right fear a return of Militant, some of us on the left fear a return of Mosley.

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4 Responses to “Labour’s Crisis”


  1. Great column. Very smart. Thanks.

    Makes me think why do populists like Owen Jones distract us from the context of the issues? Context is so much more enlightening that personality politics. Does he do it on purpose or just because he’s a lot less smart than he pretends? He makes it about personality when really the situation we find ourselves in today, as this piece so eloquently demonstrates, is the outcome of long sociological, economic and cultural processes.

    Without context the stories we tell about the present are simplistic and untrue. Backstory provides understanding and insight. There are a lot of smart people talking a lot of twaddle who might do well to read this piece and step back from their personal biases and prejudices..


  2. Dylan, Owen Jones represents the liberal strand in Labourism. His blindness to the fact of context – the ruling class attempting to veto who the working class is allowed to elect as a representative – reflects the class basis of liberalism: the petty-bourgeoisie. Jones’ role as an enfant terrible of the Guardianista hipsters is exposed for the shallow moralising it is at the first sign of serious class battles.

    What he thinks he’s doing is immaterial; sharp turns in history always leave such dilletantes floundering. Millions of workers instinctively understand the need to take sides in this fight; feeling in their bones that if they don’t defend Corbyn’s right to his elected position then we all suffer a major defeat.

    Instinctively likewise the psephological accountants with a linear view of historical development -Jones et al – feel alien to the mass movement unfolding before our eyes. That is not even to take into account the pressure from those whose loyalty is to the class enemy: the Blairite saboteurs, to whom the liberals are beholden for “pelf and place” – or in Jones’ place insider gossip in his role of serial intriguer and court seer.

    Capitalist economic crises display the limits of Labourism in a sharp light. This because the raw economic struggle to survive comes to the fore in a million working class households: there is no choice but to fight or go down.

    I enjoyed this article, not least because it focussed on the economic. There are of course other factors at play, then and now. I think having the Red Army at the Brandenburg gate had something to do with Labour’s election in 1945; as did the fall of the USSR in the nineties.

    As for the party splitting in the current context? “Better a good fight than a bad peace” Vladimir Illych Lenin.

  3. swordfish Says:

    Superb, insightful analysis, Duncan. At one and the same time: intelligent, historically rigorous but also very accessible to a broad range of readers. Beautifully done.

    On the Owen Jones thing (both of the 2 comments above), personally I’m of the Corbynista Left but also have a great deal of sympathy for where Jones is coming from. Speaking as someone with a strong tendency to pour through the entrails of each and every opinion poll once it’s released, I think Owen has some very cogent points to make about Jeremy’s pretty dire personal ratings. And that while a deeply biased mainstream media and a grossly disloyal / sabotaging PLP have much to answer for, Corbyn’s team is by no means above criticism.

    Having said that, I wouldn’t have written that blog post until AFTER the leadership election. Doing it now would seem to be playing into Smith’s (and therefore the Establishment PLP’s) hands. Anything that puts a smile onto (what will I call them ?) neo-Blairite/Brownite chops is bound to be a bad move.


  4. Duncan,

    Your other correspondents (to whom I’m tempted to refer collectively as “Alias Smith and Jones”) seem to think that the solution to the problem you state is for the Corbynistas to take over the Labour Party, reconstruct it in their own image and get it elected with an overall majority, but I think you and I know there is no chance this could ever happen.

    Of course, I admire your analysis, as they do; what I miss, as they seem not to, is your own answer, however tentative, to the rather pressing question, – whose author I’m sure they’ll have no difficulty identifying, – “What is to be done?”

    The further left the Labour Party goes, the less likely it is to gain an overall majority, but that doesn’t mean a far left Labour Party has no role to play in a coalition government. The very least the LP should aim to do, first off, is save the welfare state, which can be done by a huge tax-hike on inter-generational wealth-transfers, justified on a “we’re all in this together” basis. If Labour made this a central condition of entry into a coalition, LDs and ScotNats would have to accept it, particularly if all three parties could agree between them, prior to the next election, a constitutional reform to be implemented without a referendum along the following lines:

    1) Let the Commons continue to be elected on a FPTP basis.
    2) Replace the House of Lords with a smaller, wholly appointed chamber of, say, 400.
    3) Give every voter two votes, one for a constituency MP in the Commons, and one for a political party in the Lords.
    4) Let members of the Lords be appointed from gender-equal party lists in exact proportion to votes cast for parties in the Lords.
    5) Adopt a constitutional rule that no bill can become law without majority support in both Houses.

    If your other correspondents reject this as petit-bourgeois constitutional tinkering, let them remember that, without Ed Milliband’s tinkering with the Labour Party constitution, there would have been no mass vote for Corbyn. The fact that Corbyn has so far made no overture of any kind to those other parties suggests that he is still living in his own version of that fantasy about “the Red Army at the Brandenburg Gate”.


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