Brexit has, for the first time since 1945, given the economic losers a democratic victory over the economic winners. It is a significant moment in the history of British politics and a potential disaster for the pro-EU Labour Party. The party’s core working-class vote supported Brexit: in England and Wales, seven out of ten Labour-held constituencies voted to leave. It is heading towards a third successive and crushing electoral defeat.

The leadership contest has failed to address Labour’s predicament. Like its predecessors in 2010 and 2015, it has had nothing of substance to say about the profound shifts in politics and culture taking place in British society, nor their implications for the Labour Party.

In the past decade the party has lost voters to the Conservatives, to the Green Party, to Ukip and to apathy. It has suffered a social death in Scotland. The towns and villages of England have turned their backs on it. The party only flourishes in London and the big cities, among the socially liberal middle class, public-sector workers and some minority ethnic communities. The recent extraordinary growth in membership is drawn disproportionately from the higher educated and ABC1 social classes. The larger the party has got, the more culturally exclusive and socially isolated from the rest of the country it has become.

The progressive, middle aged and middle class sustain Jeremy Corbyn in what has become a cultish leadership. Their political disaffection and need for inspiration outweighs the latter’s incompetence and political banality. A younger generation supplies the energy, but politically speaking it waits in the margins. Like the Bernie Sanders supporters in the States, it represents a resurgence of civic engagement. It offers the Labour Party a future but it is poorly served by the ideological dead hand of the hard-left cadres who control the political manoeuvring.

Among Corbyn’s opponents in the party who want the reasonable prospect of a Labour government are those with a similar reluctance to face realities. To them Corbyn is the problem, rather than a symptom of their own political and intellectual failure. They have presided over a technocratic and managerial Labour politics which embraced liberal market globalisation and large-scale immigration. Two electoral defeats later and they have little to offer but more of the same desiccated language.

From left to right the party is bereft of ideas. It needs fundamentally to rethink its politics for a new era.

Globalisation

Two conjunctures have occurred in recent history. The first postwar welfare-state settlement broke down in the economic crisis of the 1970s. Under the government of Margaret Thatcher, a new conjuncture that became known as Thatcherism took shape around the revival of liberal market economics. The banking crisis in 2008 brought about the beginning of its end.

The Brexit vote has exposed a society fractured along new political and cultural fault lines that confound the orthodoxies of the governing class and cut across the partisan loyalties of the main political parties. These fault lines represent the emergence of a new conjuncture and the renewal of politics.

Three decades of globalisation – the flow of capital, goods, information, people and services across borders – has brought about dramatic rises in living standards around the world. But globalisation has also created high levels of inequality between countries, generating waves of mass immigration across and into Europe. Societies have been divided into economic winners and losers, creating national plutocracies and populist nativist politics. Like a centrifugal force, globalisation has concentrated and polarised political extremes.

The US economist Dani Rodrik describes a “globalisation trilemma”: ‘‘democracy, national sovereignty and global economic integration are mutually incompatible: we can combine any two of the three, but never have all three simultaneously and in full’’. One option is to align democracy with global markets by opting for global federalism. A second is to align the nation state with global markets to pursue global economic integration at the expense of national democracy. Rodrik argues that more globalisation means either less national sovereignty or less democracy.

For 40 years British governments have been committed to more liberal market globalisation. Along with the governing elites, the higher-educated middle classes in the big cities have been the economic winners. They share a culture that is to varying degrees progressive, cosmopolitan and globalist in outlook. They tend to be socially liberal and hold abstract, universalist values such as equality, social justice and sustainability. Their social loyalties are widely if thinly spread and relatively unconstrained by parochial interests. The majority of the Labour Party membership, in respect of its values and identity, shares this culture with its support for Remain, the free movement of labour, free trade and multiculturalism.

The majority who voted to leave the EU rejected this globalist view of the world in favour of national sovereignty and democracy. Immigration was a significant factor in their decision. But an important underlying cause of revolt can be identified in the

“elephant curve” by the economists Branko Milanovic and Christoph Lakner. Using a data set of household incomes from across the world, they have measured the impact of 20 years of globalisation on real income growth at various percentiles of global income distribution.

This shows that the world’s poorest 5 per cent have gained little from globalisation. It has created a top 1 per cent plutocracy. But it has boosted incomes across the percentiles of the lower half of global income distribution. The curve reaches its peak with the biggest beneficiaries of globalisation, the new Chinese middle class. The sudden downward plunge represents the biggest losers, the lower middle and skilled working classes of the rich Western market economies. In reaction they have been deserting their social-democratic and labour parties and boosting the fortunes of nativist, anti-globalisation politics. In England and Wales the Brexit vote was won by a working class already disillusioned with the Labour Party and its globalist cosmopolitan politics.

Earning and belonging

In Western market economies old industrial jobs have been exported to low-wage economies or lost through new technologies. The social stability won by the skilled working class during the industrial era has gone for many. Since 2005 there has been lower relative growth in wages. Added to which, wages suffered a 10 per cent fall between 2007 and 2015 following the financial crisis and George Osborne’s faltering recovery. Workers once on middle incomes find themselves struggling to make ends meet in the rapidly growing services sector where work is low paid and unskilled. The life they had expected is not the life they now lead. The culture they remember that belonged to their parents and grandparents, the neighbourliness, community and reciprocity sustained by hard work, has gone.

For many middle-income workers globalisation has brought uncertainty and insecurity. They do not share the socially liberal values of the governing elites or the higher educated middle class. They are more socially conservative in valuing family, work, fairness and a sense of decency. Their social loyalties are concentrated closer to home. They want government to protect their communities and livelihoods from global market forces. They want an end to the free movement of labour. They are patriotic and they fear they are losing their national culture. They put Britain first – increasingly it is England – but they do not feel that government, whether Labour or Conservative, has valued the things that matter to them.

The referendum was an opportunity to make their voices heard and they took it. The Brexit vote exposed the cultural fault line dividing the economic winners from the losers, the globalists from the nationalists. These two archetypal social groups with their contrasting sets of cultural values define the class interests and shifting loyalties that have fractured Labour’s electoral coalition in England and Wales, and divided the party from its voters.

The sociology of the country is being transformed. Historically unprecedented levels of immigration have created a demographic revolution in a very short time span. The relationship between men and women has changed, shifting the balance of power within many families. Technological innovation is creating new sources of wealth and opportunity in some parts of the country, while inequality diminishes the life chances of millions in others. The institutions and solidarities which workers created out of long, historical struggles to defend their livelihoods and families against the power of capital have disappeared or become outdated and ineffective.

The Labour Party has been profoundly affected by these changes. In little more than two generations the large workforces, large productive units and traditional working-class cultures that sustained the party have disappeared. Its model of politics shaped by the industrial era and revised by mid 20th-century social democracy is as redundant as the factory workforces it once represented.

Labour’s historical purpose is to be the party of the labour interest. It must defend working people by redressing the balance of power between capital and labour. The party has lost this sense of purpose. To renew itself and prosper it must rediscover it.

A new public philosophy of Labour politics

The principal driver of democratic politics is not ideology, it is the partisan loyalties of social groups that are rooted in ways of life inherited across generations. Social groups reflect how individuals understand their lives and the traditions and culture they have inherited.

The political scientists Christopher Achen and Larry Bartels argue in Democracy for Realists (2016) that the most important bases of political commitments and behaviour are “group ties and social identities”. For the great majority politics is not about assessing the policies of one party against another. It begins with the question, ‘‘Where do people like me fit in?’’ And then, ‘‘Which party is for people like us?’’ Globalisation and the transition from an industrial economy has left millions uncertain how to answer these two questions. They do not see politicians who share their own life experience nor political parties that can make sense of it.

Reciprocity was once at the heart of the relationship between the Labour Party and its working-class voters. Each recognised itself in the other. In return for working people’s commitment to their work and their contribution to the country, Labour’s obligation was to protect their interests. This mutual sense of obligation has broken down. While Labour can still command 25 per cent of the national vote, millions have abandoned the party. They believe Labour has broken its obligation to them and they no longer recognise the party as their own.

Labour’s political coalition is fragmenting as it loses the partisan loyalty of the working class. Its crisis lies in the fact that it can neither reverse this trend nor renew itself. The party’s exclusive liberal progressive identity separates it from the everyday experience of a majority of the electorate. Political renewal begins with listening to what people have to say, and understanding what matters to them in their everyday lives. But the party is out of touch and is losing the ability to hear social groups that do not share its own narrow progressive values. This social deafness is compounded by a culture of “correct” political thinking and the moral judgement passed on those who do not comply with it.

Jonathan Haidt, in his book The Righteous Mind (2012), identifies six moral intuitions that can be found in all cultures. They are: care, fairness, liberty, loyalty, authority and sanctity. Labour’s liberal progressive culture is narrowly focused on care and fairness. Even then, its notion of fairness is distributional justice based on need, in contrast to the popular view that social justice is reciprocal and based on contribution. It has little to say about the value of loyalty. It is ambivalent about liberty and authority, and indifferent or sometimes dismissive of sanctity.

To reconnect with the country Labour has to recognise the limitations of its liberal progressive politics. It lacks the range of virtues to represent the depth and breadth of human experience. Progressive politics has become over-reliant on its abstract values that exist prior to people’s everyday experience and which it superimposes on their lives. The result is a politics of altruism that uses the state to administrate and manage groups of people towards an already defined ideal. Labour must always stand up for the poor and those who suffer injustice, but instead of creating agency in the powerless its mix of paternalism and altruism ends up uncritically favouring minority social groups over the majority and imbuing them with the virtue of victimhood. Disorientated by its own cultural isolation and virtue signalling, Labour no longer knows who or what constitutes the labour interest, nor what the majority of its individuals consider their best interests to be.

For politics to grow out of the experiences of ordinary everyday life it has to open itself up to the full range of moral intuitions. What are the social groups that constitute the labour interest? How can the party renew its politics around this conception? It will not find the answers in the abstract ideals of Corbynism, nor the managerialism of social-democratic tax-and-spend politics, nor the rationalistic individual choice of liberalism.

Labour needs a new public political philosophy in order to build a broad coalition of social groups that can share a sense of national community. Instead of obsessing about policy it first needs to understand the chronic failure of its own brand. It needs to understand why individuals need identity and belonging and how groups work. Individuals are social beings made in the culture of the social groups they belong in; they make their political allegiances to confirm their identity. To win them over Labour has to recognise their social group and its cultural values and begin a dialogue even when it involves incompatible points of view.

This democratic practice of the common good is about forging a shared commitment to institutions that order a national common life. It is about building relationships, working with estranged interests, and engaging with cultural, religious and ethnic conflicts to improve social integration. It calls for a revival of democratic politics with its power struggles, negotiations and compromises. To renew itself Labour will need to recognise the importance of building relationships and doing things with people, not to or for them. Its politics and policies need to be shaped by values widely shared in the country: family, hard work, fairness, decency and patriotism.

Labour’s future

Since 2008 globalisation has been stalling. The banking sector has been deglobalising; the predicted rate of economic growth, already weak, has been revised downward by the Office for Budget Responsibility. World trade has slowed. Across most sectors of the economy, productivity (which is output per hour worked) collapsed after 2008 and is not recovering.

What does the future hold? Some economists promise a technological revolution of hyper-productivity. Others warn this is wishful thinking. They point to the data that forecasts low growth, hampered by rising inequality, an ageing population, high government debt and poor education.

To counter economic stagnation, Labour needs a vision of a post-Brexit economy framed by the traditions and cultures of the country, not by the pursuit of abstract principle. Shared national traditions provide the language of collective experience that creates a powerful bulwark against the ideology of laissez-faire. Transnational institutions are important but they are weak. In an important analysis of the “elephant curve”, Adam Corlett of the Resolution Foundation concludes that domestic policy choices “remain crucial determinants of living standards”. The nation state for all its faults remains the political unit best equipped for managing globalisation, boosting living standards and rebuilding the national economy for shared prosperity.

The “neoliberal” conjuncture is breaking apart, but not in the way the left imagined it would happen. Cultural identities, social groups and people’s feelings about where they belong are shaping the new political settlement. The political right has been making the running with its language of “our people” and its valuing of cultural inheritance. The liberal progressive left, with its deracination of culture and its rationalistic policy solutions for meaning of life issues, is shrinking into an electoral conclave. Corbynism, a moral revolt against its failure, is rapidly accelerating the left’s national demise. Labour no longer knows who it is talking to or what it is talking about.

The future of the Labour Party is in the balance. If it is to survive it needs a collaborative project of revisionism. It needs a new post-Brexit political economy. It needs a revision of its political practice. Domestic politics can no longer be framed by the territoriality of Britain and the national identity of being British. The union is becoming increasingly federalised. Labour has to win in England and appeal to the English people.

Labour needs a leadership attuned to the country with the empathy, creativity and authority to build bridges across the cultural and economic divides and grow a national coalition of social groups. And it needs to use this coalition to link together big cities, small towns and countryside, north and south, business and workers, liberals and conservatives, immigrants and settled, young and old, in a sense of national community. But first it must understand who it speaks for and what they want. It doesn’t know. l

Jonathan Rutherford is part of Labour Together