Thinking with the Nation

This is the text of a paper for the Resources for National Renewal programme, National Economy Group, 5 March 2021. For the final report see: Labour’s Covenant (January 2022)

Being explicit and creative about the nation is a way of making Labour’s whole programme credible, different, and popular, as well as being true to its history.   While it carries dangers, it is the obvious way of developing a politics directed at making the country more democratic and more equal.

But the Anglo-British Left has a problem with the nation.  Nationalism is in its view a bad thing, the antithesis of a proper internationalism. In this the British Left are true descendants of British liberalism and imperialism which saw, correctly, that nationalism was the enemy of global free markets and of British imperialism.  To complicate matters, today’s British left (wrongly) sees imperialism as the purest manifestation of British nationalism, and is blind to non-imperial British nationalism, not least that of the Left. 

It really is time the British left understood its own history and stopped its liberal-imperialist sneering at Scottish, Irish and Welsh nationalism and pretending that the Anglo-British are above such things.  This implies understanding the intimate relations between nationalism and socialism in most parts of the world and taking a critical look at actually-existing British nationalism, including recognising the serious loss of legitimacy of the UK not only in Northern Ireland, but also Scotland and Wales.

Labour needs to know its history, and to recognise it is very different from the standard welfarist Spirit of ’45 saga it is so often claimed to be.  The great programmes of the British left from 1945 into the 1980s were nothing if not nationalist, and nothing if not productivist.   Labour was the party of the national economy, and a national capitalism too.   From Bevan to Benn, and from Attlee to Wilson the idea of a national economy and a policy of national reconstruction were central.  In the 1970s and early 1980s the Labour left was nationalist and Brexiter, seeking in effect a return to the Labour policies, and British practices, of the 1940s, 50s, and 60s.

Under post-war Labour we had a national politics of productivity and improvement. and it had a certain success.  We had a politics of the transformation of infrastructure, based on a notion of universal availability at national level.  And, up to a point, that worked.  A key aim of nation policy was also reduction in inequality, and that too, within limits, worked.   

 Nation as basis of critique

It is vital to understand that a national framing need not imply the crass sentimentalism, exceptionalism, and delusional revivalism it has come to be associated with in today’s England (elsewhere in the UK the nation increasingly means not the UK but Ireland, Scotland or Wales, and those nations are represented by very different images).   Indeed, historically the national has long been the central focus of the left critique of Britain and its elite.   Labour, and the left generally, was the party of the national critique of the Tories for being the party of property and self-interest rather than the nation.  The national focus is the basis for calling out private interests and policies which undermine the nation and the national community.  The nation is the antithesis of the selfish private interest. The national critique is also about who controls the internal economy, and to what end.   Emphasising the national is also to emphasise democracy, control by the people, rather than by the elite. 

Indeed, the core historical-political-economic thesis the Left has had about the British past and present is a nationalist critique of what it takes to be British exceptionalism. It is that imperialism, the City, and an internationally oriented elite associated with both made national economic reconstruction impossible, or at least difficult. Scottish and Welsh nationalism owes much to this tradition and thus attack the nature of power in Whitehall/Westminster not the English.

It is important to note that these left nationalist theses – from British, or Scottish or Welsh nationalists – were not anti-foreigner, or the case of the Scottish and Welsh, anti-English.  They were anti a very particular British elite.  Nationalisms of the right have obviously been very different.

Nationalism without the Nation

The British nation that existed between 1945 and the 1970s no longer exists. For the last 40 years we have had a different kind of politics, a politics of property, not a politics of productivity, a politics not of equality, but of inequality, of ‘flexibility’ in a globalised context. There has indeed been a politics of differentiation between parts of the country, and of classes. We have been living for a while with, high inequality in incomes and across regions, and to an extent a dual economy, and a rentier economy too, with huge disparities in wealth, and very high returns to property.  

Increased inequality was not the price paid for a more efficient economy; Thatcherism did not raise the economy to world leading level. It is still much less productive than the German or French.   It has not unleashed fresh British entrepreneurship. Thatcherism broke decisively with the general presumption that British consumers should buy British.  When the consumer became king, the nation of consumers, no longer had or felt any responsibility to the national producers. 

This programme has broken key elements of the nationalness of the economy.  The notion of the nation is changed if the territory of the nation includes people with radically different life chances, with people sharing more with the rich or poor of other places than with each other.  It is changed if one part of the country has an economic level closer to that of other countries, than to the rest of the same country.   There is very clearly a London and South East economy, and a rest of the UK economy.  There is also in many respects what might be called a dual economy – one of precarity, and the other of relatively stable work and radically better conditions. To speak of One Nation is today, at many levels, an absurdity.

Furthermore, since the 1970s the Union has been under strain, exacerbated radically by the politics and economics of Thatcherism.  Devolution within the EU has kept the UK afloat, but the afront to the nations of  an imposed Brexit has opened up the question of secession of Northern Ireland and Scotland in fresh ways. Whereas until quite recently the Tories were an English and Welsh, Scottish and Northern Irish party, and Labour a Great Britain only party, today both are essentially England and Wales parties only.

Brexit and the Nation

Since the financial crisis, and Covid, the state has had a large economic role. The economy has been running on supercharged intervention. The question is not whether or even on what scale the state should intervene, but how and to what effect, and in whose benefit the state intervenes.  It is also crucial to note that as far as Covid health measures are concerned it a question of the policies and programmes of four nations, not one.  Labour cannot not simply be the party of the larger state – it should be the party of a different state, and in practice an English or English and Welsh state only.

Since Brexit national economic controls have become a live issue. But Brexit itself does not make the economy more national, not least in the senses discussed above.  There are important choices to be made about tariffs (the tariff regime for non-UE is much the same as it was), NTBs, and policies for subsidy and procurement.   There are many post-Brexit possibilities here for the creation of a much more national or indeed a much less national economy.

For the Brexiters Brexit has been, and continues to be, a radically globalist politics shamelessly and mendaciously dressed up in nationalist garb. The thrust of policy is towards developing free ports and ideologically the talk is of free trade implying minimal protection, lower that is than the protections the EU gave (and current tariffs and NTBs broadly replicate).  Any trade deals beyond the current crop of continuity deals will involve (obviously) reductions in protection, most notably NTBs in food.  The net effect so far is reduction in exports, and a distinct weakening of the position of British-based production, but one should not assume that a reduction of trade and increased home supply is in fact the policy of the government.   Furthermore, in all probability the effect of current trade policy will be greater inequality, including regional inequality, worsening the current situation.   While Brexit has damaged UK to EU exports, it has not affected (yet) imports from the EU.

 Brexit reality, for all its overt nationalism, is deeply antithetical to any sort of national economy Labour would want to build.   

Might a national critique have traction against the post-Covid, post-Brexit Tories?  The answer is surely yes.  It has destroyed much of the fishing industry, and real Brexit is hardly good for British agriculture or manufacturing. But it needs to be noted there is no national solution to these problems, which arise from loss of export markets.  Lurking here is a key and complex issue – the EU is more national and less globalist than the Brexiter UK.  At the same time the more UK-national the programme the greater still will be the pressure for secession of at least two nations (as well as the costs).  

Brexit has also separated the Tories from business as a whole, giving Labour an opportunity to become the party of national business.  But Labour would face the difficulty of selecting out those businesses which are doing the right national thing.   It would need to be the party critical of the studiedly non-British orientation of the great Brexit businessmen has been extraordinary (Ratcliffe, Dyson especially).  More than that it needs to remain critical of the many British-owned businesses in the UK are hardly paragons of nation-building.  In other words, there is a need to highlight the non-national nature of much of British business, so much of which is concerned with extracting rents and sending them to tax havens.  

Thus it is very important not to engage in a nationalist-populist critique of foreign ownership per se.  In many important areas of the economy there are only foreign businesses, and in many cases foreign businesses have been more interested in building for the long term than ‘British’ ones.  The car industry is foreign. Siemens manufactures in the UK; Dyson does not.   Again, a more national political economy might well imply a more pro-EU one.

Thinking Nationally

Questions of business and trade and national protection are only part of the story.  We need to get away from the whole idea of the nation as competing with other nations; or the notion that every part of the nation is involved in world trade and needs to be ‘competitive’. Most of the economy is not exposed to external markets.  This is especially true of services, though much less so of manufacturing and agriculture. There is a misunderstanding that services exports are crucial because the economy is 80 percent services.  Service exports are highly concentrated in a very few areas, and most services are not traded internationally at all.  Although goods production is a very small share of output, it represents more than half of all exports.  Indeed many of the worst problems of low wages and precarity are to be found in precisely those already national sectors of the economy, including public services.  Recognising the importance of the non-traded economy, and its essential nature, is a key insight of the Foundational Economy approach, which also of course includes high capital intensity sectors which are likewise fixed to locations. 

Thinking nationally about the economy allows one to focus on the bulk of it which is already national in orientation (even if foreign owned). It allows us once more to ask the fundamental social democratic questions about the difference between collective and private outcomes, about the mutual interaction of consumption and production, that have been forgotten. People need services of many kinds, most of which are supplied by local production.  Here there could be a bringing together of the national consumer and the national producer in new more productive ways.

Emphasising and conceptualising the national is a necessary part of a new infrastructural revolution too, a green industrial revolution, which has to be done nationally, or at least at a level higher than the locality or the enterprise, leveraging the power of the nation for the common good, something the private sector, or local agencies, cannot do on their own.  The foundational economy is through network effects at least a local or national thing. 

As well as focussing on these key issues for people’s lives the national focus forces us to ask, what is best for the nation and its individuals collectively.  Getting things cheap might be what we are forced to do as individuals, but collectively we can arrange to exploit the benefits of longer life of high quality products, the greater productivity of the well trained, and so on.  Well paid producers are better consumers.  Remaking these connections this requires a commitment to do things in new ways, to be measured by new yardsticks.  The essence of the social democratic case is that efficacy and efficiency go with equality and requires an intervention by the state, meaning in effect the national state.

Perhaps most importantly of all a national focus can help restore Labour’s historic programme to speak for workers, the producers,  and to increase equality.  The nation is the obvious (though not the only)  level at which to make the case for greater equality. Indeed a strong sense of nation implies a strong sense of equality, of common purpose.  In this framing building the nation means raising the level of wages and benefits, it means creating high wage work in poor regions, it means reducing regional inequalities.  The focus on the nation also raises the question of who has power in the nation, and over the nation, and how that might be changed through the national vote.

It is telling that the term ‘British’, either within the country, or outside it, is not taken to mean low inequality, high productivity, high benefits or good health.  The UK is a country with particularly high inequality, low productivity, low benefits, and indeed poor health outcomes.  

And that is in part because it has ceased to think as a nation about these things, the political nation has ceased to about much of the population, and things of the wealthy as offshore ‘investors’ and ‘wealth creators’ even when they are not.  

For Labour thinking through the nation matters for it is through the nation that democratic control is enacted, and its underlying programme is one that practically can only be a national programme.  Despite this Labour has been singularly bad at it.

Dangers

One result of this is that is has been tempted to adopt the nationalism of the right. The national is not neutral territory.  The nationalism of Conservatism and Brexiters has been of a very particular sort, essentially a combination of radical economic liberalism (now with a willingness to spend huge sums for political advantage) with a rhetorical anti-foreigner/anti-EU nationalism.  

There are dangers of simply buying into the Tory story of the nation, a propagandist-celebratory account which brooks no criticism.  Labour cannot in good conscience follow the revivalism of the Tories which sees the nation blooming since Thatcher.  Nor can it say that today’s UK  is a model for the world. Nor can it say without qualification that ‘Britain has been a force for good in the world’.  Too much of British foreign and defence policy has been in neither the British interest, nor the interest of the world. There are also great dangers in buying into ‘Global Britain’, and notions of British leadership. Indeed we need to rescue our politics from the damaging delusions of global grandeur.

There are also enormous problems for Labour because of its attachment to the British nation (though tending to ignore Northern Ireland). The language of British nationalism may be what the aged voters of England want to hear, but it no longer works for Scotland.

It should also in both a national and internationalist spirit recognise the national interests of others, as much as we recognise a global interest.  And that means recognising the British nation as just one of many. More to the point it means recognising the national interests and concerns of Northern Ireland, Scotland and Wales.   We need to be reconciled to the reality that the UK’s weight in the world, and England’s too,  is that of France, or Spain and Mexico combined.  It is at best, a big Canada, not a small USA. In less than five years of growth China adds to itself the whole UK economy.   It is time to stop talking about the UK as a bridge between the US and Europe.  It is time to recognise that Germany and France are big or bigger players on the world stage, perfectly capable of dealing directly with Washington.  It is time too, to stop indulging in the belief that the UK has military ‘leadership’ in Europe.  

If we don’t address these issues there are real dangers of falling into two very obvious elephant traps.  The first is focussing a nationalist policy on higher defence spending and more nationalistic procurement in the belief that the UK has a special military mission in the world, or even Europe.  That is a live issue: John Healey stated (26/2/21) that

‘Fourth, Labour’s determination to see British investment directed first to British industry is fundamental, not just to our thinking on defence, but to our vision of the kind of society we want to build. When done well, we believe defence spending has a multiplier effect. As the Party of working people and trade unions we see spending on defence as a force for good in the country. It strengthens our UK economy and, as Covid has exposed the risks of relying on foreign supply chains, it also has the potential to strengthen our sovereignty and security. We want to see a higher bar set for decisions to procure Britain’s defence equipment from other countries.’

That is a road the UK left many decades ago, before the EU. A return would be economically retrogressive.  Labour cannot seriously believe that spending on defence is a force for good.  It might be necessary, but a force for economic good, no. And Labour has known that since 1951, at least.  Bringing the consumer and producer together is generally a good idea, but unless one is going to pursue a seriously Gaullist defence policy, it is preferable to buy arms abroad, and produce trains, or green technology, instead. Labour must not return the UK to being the western European ‘Upper Volta with Rockets’.

The second is the temptation to overinvest in high R&D in the belief the UK has exceptional strengths in innovation.  Even if this were true, and it is nowhere near as true as many believe, the chances of it generating production and employment in the UK is low.  The UK, above all England,  needs a new politics of imitation, of emulation, not invention.   Not of leading, but of copying.  Shocking as it may seem, Labour should embrace the idea of England as a modest nation, with much to be modest about.