It has been an extraordinary time for the Labour Party. After a second shattering electoral defeat Labour’s world has been turned upside down by the election of Jeremy Corbyn. The atmosphere has been one of confusion, exhilaration and fear. Nothing is predictable. Tens of thousands have joined the party wanting a meaningful expression of their politics. But the movement has been dominated by a hard left politics, and a progressive middle class politically dispossessed by the New Labour years. It is insulated from the public by its cultural exclusivity and a tendency toward a moral purity that brooks no compromise. This is not Labour’s renewal.

We are witnessing the catharsis of a national institution in near terminal crisis when a millenarial burst of energy flares up in its embers. It is impossible to know what will happen to the Labour Party. To add to its predicament it is confronted by a Conservative Party toying with the ambition of destroying it once and for all.

It is a moment we need to understand in order to have a sense of Labour’s future. Answers do not lie in the political views of Jeremy Corbyn or whether or not he bows to the Queen, but in Labour’s post war history. Marx too can teach us something about the situation we are in.

1979 class politics halted

In his 1978 essay, ‘The Forward March of Labour Halted’ Eric Hobsbawm analysed the changing composition of the working class and its impact on the future of socialism and the labour movement. He warned of trouble ahead. ‘The development of the working class in the past generation has been such as to raise a number of very serious questions about its future and the future of its movement.’ He called on the left to, ‘recognize the novel situation in which we find ourselves’. If the labour movement was going to recover its soul, its dynamism, and the historical initiative, it was vital to analyse the ‘reasons, historical and otherwise’, for its failures as well as its successes. His advice fell on a skeptical readership and it came too late.

In 1979 Margaret Thatcher won the General Election. The Conservative victory was the consequence of the inability of Jim Callaghan’s Labour Government to resolve the class antagonisms of a failing UK economy. In 1976 Chancellor Denis Healey, anxious that the value of sterling would collapse, was forced to apply to the IMF for a £2.5bn loan. Negotiations had focused on public spending. The government was faced with substantial public sector deficits that would require borrowing from abroad. Foreign governments with the money to lend would demand a reduction in the Public Sector Borrowing Requirement (PSBR) or a drawing down of the remaining IMF credit. Financing a growing PSBR would push up interest rates to levels that would prohibit urgently needed investment by industry. The alternative would be to print money but that would further increase inflation.

The only solution was austerity – a reduction in public spending in order to keep firm control of the money supply and ensure industry could invest. £1bn was cut from the planning total for 1977-78. The IMF required a further £3bn in cuts. The Labour Government cut capital spending programmes. In an attempt to dampen inflationary demand it imposed a 5 per cent limit on public sector pay rises. But the hope of encouraging pay restraint in the private sector was broken by a dispute at Ford. A free for all ensued in what became known as the Winter of Discontent.

On Tuesday 9th January 1979, Bernard Donoughue, Callaghan’s head of policy recorded in his diary, ‘Suddenly there is madness in the air, with unions threatening strikes long before the negotiating procedures have been completed … We cannot take them all on at once. So they could sweep our counter-inflation policy away… and we don’t have much else.’ On the 17th, opposition leader, Margaret Thatcher outlined her proposals for restricting trade union powers. Five days later the country experienced the largest day of industrial action since the 1926 General Strike. Public trust in Labour was destroyed and the standing of the Conservatives transformed. Donoughue wrote, ‘The Tories have never done us this kind of damage. Nor did the IMF. The present demoralisation arises from within, from within the Labour movement and from within the Cabinet itself.’

A Labour government brought the post war Social Democratic consensus to an end. The trade unions had founded the Labour Party and were integral to its structure. Their escalating pay demands were a significant cause of inflationary pressure. Faced with controlling inflation and cutting back on public spending, the government foundered on a contradiction of interest at the heart of the party.

Labour’s election defeat paved the way for the New Right and its attack on post war collectivism. Its free market politics inspired by the Austrian School and Milton Friedman gave shape to a new kind of Tory politics that became known as Thatcherism. By aligning itself with the leading social and economic trends it destroyed the post war political settlement and created what Antonio Gramsci describes in his Prison Notebooks as an interregnum: ‘the old is dying and the new cannot yet be born’. Large parts of the working classes were losing their traditional political loyalties, and in Gramsci’s words, ‘no longer believe what they used to believe previously.’

Collapse of the 1945 settlement

The 1945 welfare settlement was the culmination of a century of reforms and labour struggles. It involved the collective effort of generations of socialist and liberal intellectuals, and the widespread trauma and patriotic sacrifices of two world wars. It was a settlement based on the idea of full employment, a culture of mass consumption, and an industrial class system of deference and authority. It harnessed the centralised state of the war economy as its instrument of reform. Public services were modeled on a one-size-fits-all provision. Nationalised industries excluded their workers from participation and retained power in the state and in a strata of top managers and technocrats. Labour politics was characterised by taxing and spending and state bureaucratic control that did things to and for people. It was a product of an industrial economy that by the 1970s was facing extinction.

In 1956 Anthony Crosland had provided the intellectual underpinning of this political settlement. In The Future of Socialism he surveyed the changes to the economy since the turn of the century and asked, ‘is this still Capitalism?’ His answer was ‘no’: ‘To-day the redistribution of incomes, and the rise in working class purchasing power, have banished the worst effects of production for profit by calling forth a quite different pattern of output.’ Crosland’s revisionism provided the intellectual corner stone for British social democracy. But by the 1970s it was coming under sustained attack from the left as radical socialists and Marxists argued that capitalism was in a state of terminal crisis.

In fact both were wrong. Capitalism was on the brink of a global transformation which would transcend the constraints of the post war national welfare states. Its creative destruction would sweep away national, industrial forms of organization. A revolution in information and communications technology was already evident in a number of sectors, creating a globalized economy. New forms of services, production and consumption were creating a global low wage proletariat and irreversibly changing the national class cultures and structures of western market economies. Sections of the British working class were growing more affluent and seeking status and distinction in the new consumer markets. Economic security and increasing spending power were creating anti-establishment youth cultures. The growth of the services sector and the expansion of higher education led to new class interests less amenable to Labour’s authoritarian and paternalistic politics.

This was the world that Hobsbawm had glimpsed and his fears proved correct. The Labour Party’s working class support started to fracture. For a few political observers it had already been evident in the populist reaction against immigration in the late 1960s and the emergence of Enoch Powell as a self-styled tribune of the people. Powell identified the ‘insufferable moral condescension’ of the metropolitan liberal elite when it addressed the English people. He declared it an ‘enemy within’ and guilty of betraying the country. His charge resonated.

Powell was the harbinger of Thatcherism and in 1979 the tangible evidence of his impact was evident in an 11 per cent swing from Labour to the Conservatives amongst the skilled working class (C1s) and a 9 per cent swing amongst the unskilled working class (C2s). The split within Labour deepened. Labour plunged into a state of civil war between an insurgent left led by Tony Benn and the right of the party and the trade unions. In a spirit of compromise, Michael Foot was elected leader. Things got worse.

A decade of defeats

In 1983 Labour suffered a second severe Election defeat on a left wing manifesto – ‘the longest suicide note in history’. Hobsbawm spelt out the crisis in his essay, ‘Labour’s Lost Millions’. The fact was, he stated, large numbers of people preferred a Thatcher government to a reformist Labour Government.

Before some of us have quite managed to retreat into an imaginary world behind the screens which self-delusion is already erecting to shelter us from the grim sight of reality, it is important to remind ourselves just how terrible a beating the labour movement took at the 1983 election. It is not just that Labour lost one in five of its already low number of votes. It is the massive defection of supporters of all classes, ages and genders.

Hobsbawm remained an orthodox communist uncomfortable with the heterodoxy of Marxism Today. But he provided the framework for a new kind of ‘neo-socialist’ politics couched in a traditional left politics palatable to the left leaning Labour Party. The latter however still remained wedded to its comforting screens of self-delusion.

The following year the miners went on strike without calling a ballot. The prolonged and bitter dispute fractured the NUM and destroyed it. The unions as a political force in the country were routed by the Thatcher government. Manufacturing industry was decimated and the industrial regions of the country, shorn of jobs and opportunities, became economic wastelands of poverty and despair. By the middle of the decade Labour could no longer claim to be the party of the working class. Thatcherism had been it’s nemesis.

In his Prison Notebooks, Antonio Gramsci describes the fate of political parties in times of crisis.

‘At a certain point in their historical lives, social classes become detached from their traditional parties. In other words, the traditional parties in that particular organizational form, with the particular men who constitute, represent, and lead them, are no longer recognized by their class (or fraction of a class) as its expression.’

Labour elected Neal Kinnock as its new leader. Labour suffered another defeat in 1987. The penny dropped. The party had to undergo radical change and the long road to renewal and electability began. Ten years later Labour’s period of opposition was brought to an end by New Labour. Tony Blair and Gordon Brown had heard Hobsbawm’s message and they adapted social democracy to the new political settlement.

New Labour

Blair and Brown inherited a divided and harsher society. Public services were in a state of disrepair and breakdown. A dominant culture of personal acquisitiveness and consumer spending added to a national mood of cynicism. The combination of globalisation, and deindustrialisation was transforming the country. In 1986, the deregulation of the City of London in the ‘Big Bang’ had unleashed the power of finance capital. It led to a rent seeking economy of wealth extraction, fuelled by mergers and takeovers, financial bubbles and household credit. New Labour deployed a conventional social democratic tax and spend politics to compensate for the failures of productive wealth creation. It taxed the booming financial sector to pay for tax credits to boost low pay, improve public services, and create jobs in the post- industrial regions.

New Labour succeeded in winning back some of the party’s lost working class voters, but by 2005 many had deserted it again. Despite its considerable achievements in reducing poverty, its redistributive policies barely kept pace with an economy that was generating insecurity, low pay and income inequality. By 2005 wages had begun to stagnate and it was becoming evident that the rewards of growth were confined to the South and spiraling upward to the already wealthy. For many cheap credit replaced a depleted welfare provision. Household debt rose.

New Labour created a much better country to live in. Alongside its better known achievements like Sure Start, the National Minimum Wage and devolution, it had been an incubator for new ideas. But it had failed to change its organizational culture and its institutions. The New Labour leadership, in order to win in the country, had bypassed the party and neutered any capacity for innovation and initiative. Its subsequent hollowing out left it incapable of grappling with the social and economic transformations taking place around it. Alongside its intervention in Iraq, this top down control generated an enduring anger amongst many Labour members and sympathisers for both New Labour and Tony Blair. The anger would return with a vengeance in the leadership contest of 2015.

New Labour made few enduring institutional reforms and so too many of its achievements were vulnerable to being reversed by a Tory government. It’s uncritical acceptance of globalization, its tolerance of irresponsible rent seeking in the financial sector, and its enthusiasm for large scale immigration as an economic good, began to accelerate the Party’s divide from the working class. It’s success had been partly dependent on the extraordinary longevity of economic growth which had obscured the growing levels of indebtedness and inequality. It had bought itself time by dispensing money and so delaying distributional conflict. But the financial crisis of 2008 had exposed the dysfunctional nature of the British economy. New Labour had not been able to tackle its structural weaknesses, nor manage the unleashed power of capital. Despite its extraordinary electoral successes and talented leadership, it had proven to be only a staging post in the country’s interregnum, not its resolution.

2010 Austerity

In 2010 New Labour under Gordon Brown suffered its worst electoral defeat since 1918. During its time in office it had lost 5 million voters. Brown was not a popular Prime Minister. The electorate blamed Labour for the high levels of immigration. Many considered it an ‘easy touch’ on welfare, rewarding the undeserving and neglecting those who contributed to the system. The country was confronted once again with another period of severe recession and austerity and it was primed and ready to blame Labour’s tax and spend politics.

In government, Labour had committed billions of pounds of tax payers money to shore up the banks after the 2008 financial crisis. It had also run a structural deficit during the boom years, rather than pay it down. The Conservatives and Liberal Democrats now in a coalition Government made a concerted effort to conflate the two and capitalise on public unease about Labour spending. They were successful. Polling found that a majority of the electorate blamed Labour for the national deficit. As in 1979 Labour’s stewardship of the country’s finances became the defining issue of it’s credibility to govern.

Labour repeated its reaction to its defeat in 1979. Ignoring the judgment of the electorate it tacked leftward and elected Ed Miliband as its new leader. The difference in 2010 was the absence of an organized hard left. The Party avoided an insurrectionary surge. Instead it descended into a state of torpor. Party unity was maintained by the ambiguity of what Labour stood for. There was neither a narrative nor a strategy that set out its purpose until Miliband’s One Nation conference speech in 2012. For a while the concept of One Nation was tactically deployed to host any number of interpretations and so provided an ersatz unity. It was soon dropped in favour of American advisor, David Axelrod’s focus on working people, the cost of living, and intervention in ‘broken’ markets.

The leadership sought to maintain Labour’s 2010 core vote and keep on board the Liberal Democrat voters who had deserted their party over the pact with the Tories. This was calculated to win 35 per cent of the vote, enough to give Labour victory in the 2015 election. But it was necessary to restore Labour’s economic credibility. This would mean acting against the interests that now constituted both its post 2010 membership and its greatly reduced electoral coalition: public sector unions and professionals, an altruistic metropolitan middle class, young graduates, and minority ethnic groups.

From 2010 onward Labour retained a polling lead over the Conservatives but this lead was never a trustworthy guide to its true political situation. It was consistently well behind the Conservatives on the top three salient issues of economic credibility, immigration, and welfare. All three were too controversial within the party to resolve without creating conflict. The party hovered and wavered around the austerity issue, sending out contradictory messages both supporting reducing expenditure and opposing the spending cuts proposed by the Coalition government. The leadership had a tendency to appease the party membership, rather than address the electorate. It expended its energy on tactical moves and retail offers that were ends in themselves rather than moves to open up strategic opportunities. The experience was akin to jumping from one part of an ice floe to the next as it melted and broke up. The goal was simply to avoid falling in.

With only weeks to go before polling on 7 May, the inadequacy of Labour’s approach to the deficit was too obvious to ignore. A last minute policy fix on the inside front page of the manifesto promised a Budget Responsibility Lock. To no avail, the result had been settled well beforehand and it suffered a second, devastating election defeat.

Labour lost everywhere to everyone. It was wiped out in Scotland because it was seen as a party of Westminster. It lost in England and Wales because voters believed Labour was anti-austerity and they did not trust it to run the economy and manage the country’s finances. They understood the economy was unfair, but they still supported the spending cuts of the Coalition. They rejected the idea of Labour forming an anti-austerity coalition with the SNP. Working class voters with small c conservative values deserted Labour believing it was ‘soft on welfare’ and had an ‘open door’ policy on immigration. On a range of electorally significant issues – the economy, immigration, spending, welfare, business, public service reform – Labour had spent the five years since 2010 distancing itself from the views of a majority of the electorate. If this wasn’t enough, a substantial numbers of voters simply had no idea what Labour stood for.

2015 Cartharsis

Labour’s defeat in 1979 was the end of its post war electoral coalition built around an industrial working class and a tax and spend politics. Defeat in 2010 confirmed this was a long term trend Labour ignored at its peril. Defeat however was not severe enough to trigger cartharsis and renewal. Labour meandered for five years, retaining its tax and spend politics, flirting with the idea of devolution in England, promoting various policies that never added up to any overarching purpose, and always skirting around its intractable political dilemmas, until it was crushed in 2015. Austerity had beaten it again.

Labour was suddenly confronted with an existential question. What is it’s purpose when it is no longer the party of the working class and when there is no money to spend? A similar question confronts the Trade Unions . With membership now reduced to 25 per cent of the workforce (14 per cent in the private sector, 54 per cent in the public sector), they are becoming zombie organisations run by ideological elites. The leadership contest that followed Ed Miliband’s resignation, faced with these profound questions of historical purpose, collapsed into the worn out categories of the hard left, the Blairites, the Brownites and the middle of the roaders. None offered answers. None offered the possibility of victory in 2020. Defeat had not encouraged self-reflection. The mood in the party was for a strong dose of self-affirmation. Labour ignored history and repeated its political surge leftward.

Jeremy Corbyn , an unanticipated leader, attracted thousands to his rallies. He was backed by hard left factions within the larger unions and by the organising skill of Trotskyist sects. His ‘anti-austerity’ politics and his positions on welfare, immigration, and tax and spend had all been decisively rejected by the electorate in more moderate form under Ed Miliband. But he had run a powerful campaign and winning a General Election was low among the priorities of his supporters. They were wanted some meaningful expression of their values. The years of New Labour spin and control freakery, its descent into technocratic jargon and the disaster of Iraq, had left a bitter legacy. Corbyn offered political substance. He said what he believed and could communicate it to his supporters in a simple and direct manner. There would be no more hovering and wavering. Corbyn broke Labour’s torpor.

Tens of thousands joined the Party or registered as affiliates or supporters in order to cast a vote. A plebiscite of 550,000 transformed the balance of forces with the Party. In 1997 party membership had stood at 410,000. Today it stands at 350,000. Under Ed Miliband the party changed profoundly. Only 35 per cent of the 185,000 strong 2010 membership remain. 18 per cent had joined within two weeks of Corbyn winning. It is an extraordinary sociological flux revealing a party and culture that has lost its moorings and old loyalties.

Charismatic leaders draw their authority from ‘the people’. They emerge when conflicting political forces have balanced one another out and created inertia. These leaders rise above the political fray and appeal directly to the people. Marx in his essay, ‘The Eighteenth Brumaire of Louis Bonaparte’ describes the events of Bonaparte’s 1851 seizure of power from the French National Assembly. The Assembly, dominated by the Party of the middle class interest, had abolished universal suffrage and imposed a parliamentary dictatorship. Bonaparte, who had been elected as President in 1848, demanded the restoration of universal male suffrage and established himself as the voice of the peasants against the bourgeois parliament.

Corbyn’s rise to power is a symptom of Labour’s political impotence. The post war social democracy that utilized the central state to tax and spend to compensate for the failures of capitalism is redundant. None of the other leadership candidates were able to offer an alternative. What was there to do but turn back to some purer moment before the corrupting influence of the Third Way? Corbyn has broken Labour’s ambivalence on austerity. He has succeeded where Tony Benn failed. The Labour Party looked at itself and looked at the country and it chose in favour of its own interests over the electorate. Corbyn’s power does not lie in the institution of the PLP nor currently in the party machine. His legitimacy as leader lies in the plebiscite of Labour’s membership and supporters. Even as he speaks for the party he has broken its power. We are witnessing the Eighteenth Brumaire of Jeremy Corbyn.

The support for Corbyn is a distilled version of Labour’s shrinking electoral coalition. It is made up of the middle class, socially liberal, baby boomer generation who secured its influence in the public sector particularly the teaching profession, the arts, and academia. Its powerful moral politics of altruism provides it with limited but strong definition and intellectual consistency. It is a politics that valorises the ‘other’ – the oppressed, deprived and the immigrant – but without the actual involvement of these people.

A second grouping of younger voters includes their graduate children who are indebted with university fees, excluded from the housing market, and often employed below their educational status. A third is the public sector unions and professionals who have a producer’s interest in sustaining public spending and the governance of the public sector. During the campaign these interests groups were efficiently mobilised by hard left activists and the Trotskyist sects. The internationalism of this coalition is expressed in an anti-colonialist, anti-racist politics suspicious of expressions of national sentiment and patriotism. Guilt over Britain’s imperial past and anger at Israel’s treatment of Palestinians stretches it to apologies for Islamism.

However much its social media networks amplify the opinions and activities of this coalition, it is peripheral to the life of the country. The size of its rallies are in inverse proportion to its support in the country. A You Gov analysis of Labour’s plebiscite notes that it is ‘not remotely representative of the rest of the country’. It is socially liberal and progressive minded and predominantly from AB and C1 social classes. Its values tend to be universalist such as equality, sustainability and social justice. The party has become much more culturally exclusive and has lost its connection with large parts of the voter population who are either pragmatic in their voting habits, or who have a conservative disposition and hold to less abstract values around work, family, and country.

Labour’s renewal

It seems churlish to be critical of the extraordinary surge of enthusiasm and hope. Labour is in urgent need of spirit and energy. But in its present form, it is more like a charismatic movement in a declining congregation whose faith blinds it to a moribund church. Many who paid the three pounds to vote will fall away when confronted with a party in a state of decay. The organisation Momentum is designed to counter this disillusion and secure the ‘Bonapartist’ structure of leader and plebiscite. But any attempt to subordinate the PLP to a plebiscite will further undermine the Party’s already weak institutional structures of accountability, and further distance it from the electorate. Supporters of Corbyn must decide whether they want to do the hard work of political compromise and organizational renewal or spin off into permanent opposition.

Marx begins his essay on the Eighteenth Brumaire with Hegel’s comment that all great events and persons in history appear so to speak twice. He adds that Hegel forgot to add: ‘the first time as tragedy, the second time as farce.’

And so too for the Labour Party, trapped in its history of repetition and self-destruction. 1979 repeated in 2010 and repeated again in 2015. Caught on a treadmill of decline and loss, each crisis precipitates the same error of turning back into a familiar universe of moral revivalism and political purity.

Unable to make its own history, unwilling to confront its predicament, the Eighteenth Brumaire of Jeremy Corbyn has finally triggered Labour’s catharsis.

For some Corbyn supporters the future is about realizing the socialism that Labour’s past leaderships have suppressed and denied. For his many ‘soft left’ supporters it is a desire for generosity, decency and humanity in public life. Strong in morality, it is a politics drawn from Bunyan’s providential mission of the pilgrim journeying to the City on the Hill and rejecting the temptations of worldly compromise. For Socialist Action and other hard left sects that provide the intellectual rigour and who have shared the rise to power of Corbyn and McDonnell, it is an opportunity for ‘a minute by minute, hour by hour, and day by day confrontation’ with the ‘ruthlessness’ and ‘viciousness’ of the ‘capitalist class’. The 1980s taught us that a coalition organized around these kinds of politics cannot build the necessary broad based coalition to win an election. Our national political culture has always electorally punished political moves to the extremes. Corbyn cannot win.

The labour interest does not belong to absolutism. Its lineage does not belong to the moral intransigence of the Levellers and the 17th Century fundamentalist, puritan sects that are claimed as the origins of modern English democracy. Labour is more a product of the Restoration years, the birth of a moderate country that turned its back on extremism, valued its historical institutions and built a common good between Catholic and Protestant, middle and working class, and immigrants and locals. It built a democracy in which interests are balanced so that no one interest dominates another. There is no shining City on the Hill, only the virtues of ordinary life in which Labour’s traditions belong. Labour’s politics have always been paradoxical, both radical and conservative, and religious and secular.

Labour has been tipped upside down. 1945 was the culmination of the first period of the Labour movement. 1979 was the beginning of the end of the welfare state settlement it introduced. The transformations in capitalism called time on this model of social democracy. In 2015 we must let it go and begin a new era not by returning to the failed politics of the past but by first analyzing the ‘reasons, historical and otherwise’ for our failures and successes. If it is willing Labour has now, despite its parlous state, an opportunity to begin recovering its soul, its dynamism, and the historical initiative.

Jonathan Rutherford is a member of the Independent Inquiry into why Labour lost. He worked on the party’s policy review 2012-14.