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The Political Economy of ‘Progressive Austerity’

Can there be anything ‘progressive’ about austerity? Does capitalist crisis always have to be resolved anti-socially, with mass unemployment and impoverishment, and on political terms which favour the right? Our most recent history is not encouraging.

Hard times ain’t gonna rule my mind no more,’ Gillian Welch, The Harrow & The Harvest (CD 2011)

Britain’s last major sustained economic crisis began in the mid-1970s and was finally resolved by the ‘authoritarian populism’ and ‘regressive modernisation’ of Thatcherism, with large-scale privatisation, deregulation and de-industrialisation, and hugely divisive and destructive effects on British society evident to this day.1 The initial reaction of the left and the labour movement (in those days very much the same thing) was wholly traditional and predictable, a wave of strikes and demonstrations, and beyond that widespread civil disorder. The assumption was that this was just ‘the same old Tories’, and that like Heath in 1974, they could be defeated by the same old combination of voting Labour and industrial action.

But unlike previous Tory governments, Thatcher was happy to confront opposition, and in the process to defeat and disperse the political left. The later 1980s response from the left was rather more intelligent and constructive – serious consideration of alliance politics and electoral reform, of the sweeping changes in global capitalism in these ‘new times’ and the shifts in policy and perspective they might require, the beginnings of a mass green politics – but by then it was too late. Thatcherism had transformed the economic and political landscape, consolidated its own hegemony, and killed off the ‘social democratic consensus’ forever. An exhausted and demoralised left was forced into accepting the new ideological dispensation. The ‘New Labour years’ of shabby compromise and unbridled consumerism, of binge and bling and spin and scandal, ensued. As soon as bust replaced boom, and the inherently destructive cyclical dynamic of capitalism was again revealed, New Labour imploded in another round of defeat and disillusionment. Perhaps earlier periods of austerity, and ‘progressive’ responses to it, might offer more encouragement.

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