Chris Dillow: Playing by the rules

Many of us are frustrated by Labour’s stupid economic talk of “black holes“, spending “money we didn’t have” and likening the public finances to those of a household; the latest idiocy (as I write) being Lucy Powell’s claim that not cutting winter fuel payments would have caused “potentially a run on the pound, the economy crashing.”

It might help reduce our blood pressure if we understand why Labour talks such nonsense – and it’s a reason that has nothing to do with economics.

It lies in something that might seem like a cliche. Sir Keir Starmer has for years stressed the importance of “playing by the rules”. He has written (pdf) of “a contribution society: one where people who work hard and play by the rules can expect to get something back”. And in his first speech as PM, he said “if you work hard, if you play by the rules, this country should give you a fair chance to get on.”

Note that the phrase is “play by the rules”, not “obey the law”.

“Playing by the rules” was the essence of his electoral strategy. This was to exploit the first past the post rules to the max, sacrificing votes in Labour-held metropolitan seats in order to pick them up in marginals. And, except for a handful of losses, this worked remarkably well*. Although the party won only just over one-third of the vote it got almost two-thirds of the seats. In playing by the rules it did indeed get something back.

Labour’s wider strategy is to play by the rules. These rules are unspoken (for reasons that’ll become clear!) so we have to infer them from Starmer’s and Reeves’ behaviour. Here, in no order, are some.

1. Accept the media’s framing of economics.

The media, including the BBC, spoke of the “nation’s finances“, “black holes” and “the nation’s credit card” being “maxxed out” before Starmer became leader. It is of course gibberish. But it’s not the job of the media to educate people about economics: POSIWID. Nor is it the job of politicians to educate journalists: “Never attempt to teach a pig to sing; it wastes your time and annoys the pig”, said Robert Heinlein. Instead, they must operate in the environment as they find it. As Enoch Powell said, “a politician complaining about the media is like a fisherman complaining about the sea.” Reeves’ language makes sense in this context: she’s not even trying to talk to economists but is swimming in the sea of media-speak.

2. Don’t challenge the power of capital.

This means more than merely keeping nationalization off the agenda. It also means rejecting policies that even the centre and right might support such as increasing market competition, fighting back against regulatory capture – Ed Miliband recently reacted to Ofgem’s decision to raise energy prices as if it were an act of nature rather than a mutable human decision – or serious tax reform. Yes, there’s a possibility that capital gains taxes will rise, but it’s unclear that Reeves will even go as far as Nigel Lawson did and equalize CGT and income tax rates.

It’s in this context that we should understand the party’s enthusiasm for public investment. Yes, this would help increase economic growth, if only slightly. But talk of infrastructure investment serves another function. It distracts us from discussing other ways to increase productivity and therefore stops us asking the question: might it be aspects of capitalism itself – such as rentierism, vested interests and inequality – that are holding back growth?

3. Increase profits.

If Labour were consistent about regarding government finances as like those of a household, it would act like a household in insisting upon borrowing at the lowest interest rates possible and looking for value for money. But Labour isn’t doing this. Its plan to use PFI will add to borrowing costs and the pledge to increase the share of GDP spent on the military pays no heed to whether this will give us value for money. Both violate basic principles of good household management.

They make sense, however, in the context of sustaining corporate profits. PFI contracts increase those of the financial sector and higher military spending means nice profits for BAE Systems.

This helps explain why Labour doesn’t talk about job destruction. Logically, it should do so because when we’re near full employment more housebuilders, carers, teachers and doctors must mean fewer workers elsewhere. But where? Obvious possibilities are in a bloated and socially useless financial sector; in bullshit jobs; in the lawyers and accountants sustained by an excessively complicated tax system; or in the environmental and risk pollution industries. To cut these, however, is to threaten the profits of some industries. Hence Labour’s silence.

4. Don’t engage with the left.

There are good arguments against nationalization or fiscal expansion. But Reeves doesn’t make them, preferring to dribble about their incompatibility with fiscal rules. This makes no sense if you think she wants an intelligent debate with the left. But she doesn’t. She wants to pretend that the left doesn’t exist. That’s why she feels no need to engage with other leftist ideas either such as a maximum wage or economic democracy.

5. Let money talk.

Labour has lost 150,000 members since 2019, and the proposal to deprive members of the right to elect Labour leaders would continue the decline.

You might think the leadership would worry about this given that it entails a significant loss of revenue.

But no. A mass party is harder to control. As Phil says, a small party “makes politics easier” for the Labour right. A shrinking party, he says, “will be another step along the road of making Labour a party that can always be relied on, as far as capital is concerned.”

Although ordinary people armed with ground truth about the economy, public services and society should not have a say, others should – those with money. The Labour leadership might be squeamish about party members, but it is not about lobbyists – even those with interests one might naively think antipathetic to Labour values such as private healthcare or oil and gas producers.

There’s a common theme linking all these rules. It’s that Labour must accept and defer to existing power structures. This is why, for example, it thinks a slum landlord a more appropriate MP than one who supports striking workers; why it has resiled from a Leveson II enquiry; and why it doesn’t raise obvious questions about the quality of British management. It’s also why it talks about reforming the NHS but not the police, despite evidence that NHS reforms don’t work and that the police are misogynistic, racist, corrupt and incompetent. It’s because reform has nothing to do with evidence and everything to do with deferring to those with power.

What Labour is doing, then, makes sense if we regard it not as engaging in intelligent debate but as playing by a few simple rules. POSIWID, and Labour’s purpose is to play by these rules.

Why is it doing this?

One reason lies in Starmer’s moral psychology. A clue to this is in the fact that he gave up playing the flute: “If I can’t be the best, I’ll leave it in the cupboard.” This suggests, in Macintyrean terms, a commitment to external goods rather than internal ones; he would rather win (“be the best”) than play music for its own sake. And winning means playing by the rules. This, however, can easily shade into fetishizing rules; he regards fiscal rules as a good thing not because they’re good economics – they’re not – but simply because they are rules.

And here’s the thing. Playing by the rules does indeed win the game: Starmer won a big majority by playing to the rules of FPTP. By contrast, Corbyn’s attempt to challenge the unspoken rules of politics led to failure. One of the great rules in life is to not start a fight you can’t win. Starmer has learned this well. Rather than criticize him for this, the left should ask the question: what conditions would have to be in place for a Labour leader to be able to fight successfully against these rules?

* Perhaps by the good luck of the right-wing vote being split between Tories and reform more than by Labour’s strategy, as Phil explains here. 

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