Saturday, October 24, 2015

Emptiness of New Labour economics . . . (2000)

Book Review from the December 2000 issue of the Socialist Standard

The Political Economy of New Labour. By Colin Hay, Manchester University Press.

If economics is the dismal science, then political science must be its poor cousin. Colin Hay's book is another in that long line of critical studies of the Labour Party from leftist commentators wishing they could run capitalism better in the fervent belief that the politicians have the power to effect real changes.

Hay's solidly cultural materialist analysis of Labour's political development since the 1980s begins with a look at the cult of novelty within the Labour Party, and the way in which the signifier "New" has been used to create a distance from an unspecified past to an equally indistinct present political position. Hay then backs up this analysis with an elegant description of the "hotelling" model of voter preference and political competition: i.e. that political parties, much like high street retailers, will tend to try and converge on the same best pitch for securing votes.

Hay then describes how Labour has been trying to catch up with the significant changes to the political apparatus wrought by the Tory party during their period of office. Hay proposes that Labour has surrendered to their perceptions of the new voter consensus, and that New Labour is the product of "preference accommodation" as opposed to "preference shaping" on their part, i.e., that they adapt to voters' views rather than trying to change them. Hay ascribes this as being in part an undue attachment to finance capital, as opposed to industrial capital.

Hay delineates what he perceives as being the main problem for British capitalism—the persistent under-investment of capital within the British economy. He then poses a wish list of reforms: the creation of regional government to promote investment and changes to pension fund laws (including possible regional pension funds) in order to allow them to invest more in British manufacturing. His aim is explicitly to make capitalism work—he even approvingly cites Engels's definition of the state as an idealised capitalist as being the state of affairs that should pertain.

Although successful, to some extent, at analysing what has happened to the Labour movement on an empirical level, Hay does not demonstrate why Labour has chosen to follow preference accommodation rather than shaping. He does not analyse the movements within the party, nor the structures of dependency and power that sustain them. Nor, for that matter, does he analyse the perceptions within the capitalist class that have led to them seeking to pursue one particular economic consensus over another. In other words, aside from his airy reforms, Hay does not look at the operation of economic conditions as a driving force for political ideas. In his support for capitalism, and his wish to make it better, he overlooks that capitalism is the ultimate limiting factor on political attempts to save it.
Pik Smeet

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