Not so long ago, David Cameron and George Osborne were being described in Beijing as “the two posh boys”. In the glorious era of Anglo-Chinese harmony during the coalition government that has almost slipped from memory, Britain’s leaders were regarded with something not far from open contempt. Regime-friendly intellectuals saw them as instruments of Chinese policy whose usefulness was a function of their naivety.
When I visited Beijing during the Cameron ascendancy, it was hard to find anyone there who took him seriously. Yet, in some ways, the Chinese elite was also naive. In the run-up to the Brexit referendum, they never doubted that it would reaffirm Britain’s part in what, from a Chinese perspective, seemed like an inexorable process of European unification. The prospect of a successful democratic insurgency, if it was considered at all, was dismissed as far-fetched. Continued British participation in the European project was a done deal; the two posh boys would see to that.
No one in Beijing could have anticipated that Cameron would become a symbol of the passing of the neoliberal order he once embodied. The implosion of the Australian financial services company Greensill Capital, of which Cameron was a shareholder and for which he lobbied after leaving office, has shaken the British steel industry, German municipalities and a leading Swiss bank. Regulatory authorities insist the collapse poses no risk to the financial system: Greensill’s company may have operated outside of their oversight, but they are confident that the failure of its version of “supply chain finance”, in which the bills of its clients were paid early while they ran up hidden debts, will not trigger systemic risks of the kind that followed the meltdown of Lehman Brothers in 2008. These assurances may or may not prove to be well-founded.
In a statement issued on 11 April, Cameron accepted that there were “lessons to be learnt” after he contacted government ministers and, according to some reports, a senior Downing Street adviser to try to secure Greensill access to a pandemic loan scheme, the Covid Corporate Financing Facility. Greensill’s proposals were eventually rejected by the Treasury, but the company was allowed access to public money through a separate pandemic support scheme. In his statement, Cameron insisted he broke “no codes of conduct and no government rules”, and has been cleared of any breach of regulations by the lobbying watchdog.
Nevertheless, the government has announced that an independent inquiry will be set up to investigate lobbying by Greensill and Cameron. Even if the former prime minister is again exonerated of any formal breach of rules, his role in lobbying for the firm is surely the end of him as a credible public figure. Companies that recruit former politicians as advisers and board members will not want to be associated with one that is so toxic. Even Xi Jinping’s China may conclude his usefulness is exhausted. (At the same time, in a droll reversal of fortune, Nick Clegg – the hapless fall guy of the coalition years – is in Silicon Valley enjoying a lucrative afterlife as the frontman of Facebook.)
The media narrative which represents the Greensill affair as the worst lobbying scandal for a generation understates its importance. Cameron’s downfall is the tawdry finale of a project that began with Tony Blair’s New Labour, continued during the coalition years and still shapes the thinking of the floundering Labour leadership today. The centrist ideology in which the principal function of government is to re-engineer society as an adjunct of the global market has become the orthodoxy of a vanished age.
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Much of the coverage of the Greensill scandal has focused on Cameron himself. In parochial British terms, Cameron is a Widmerpudlian figure. The trend-chasing Etonian Kenneth Widmerpool in Anthony Powell’s 12-volume series of novels, A Dance to the Music of Time, is shown rising, and finally perishing, as he follows the spirit of the age. But the lessons that can be gleaned from the Greensill affair concern more than the fate of a politician who will soon be an awkward footnote in history – and they apply far beyond the small world of British politics.
Writing in these pages in 2015 (“The neo-Georgian Prime Minister”, 28 October), I described Cameron as a man without qualities, “who does not need to dissemble because there is nothing beneath the surface”. Too unreflective to be capable of hypocrisy, he has revealed his carelessness in the Greensill affair. It is not so much the spectacle of indolent, shambling greed that is remarkable; it was only to be expected that a life of mere affluence would fail to satisfy Cameron’s mammoth sense of entitlement. Instead, it is the credulity he displayed when he allowed himself to be caught up in what was, at best, a rather speculative scheme.
Here, Cameron was not unusual. The enthusiasm with which he embraced Greensill’s gospel of innovative finance is reported to have been shared by the late Jeremy Heywood, Cameron’s cabinet secretary from 2012 and head of the civil service from 2014 to 2018. When Cameron succumbed to Greensill’s schemes, he was in eminently respectable company. His lobbying campaign failed, but the fact he could take it so far shows how deeply the view of government he represented had become ingrained.
[see also: How the Greensill scandal has become more dangerous for the Conservatives]
The origins of the Blameron world-view are political more than they are intellectual. Parties of the centre right and mainstream left responded to the victories of Ronald Reagan and Margaret Thatcher and the fall of the Soviet Union by accepting that capitalism had won. The future centrist programme would be about softening the market’s hard edges while remodelling society to serve its imperatives. Blair represented this as pragmatic common sense: his view was that a progressive party uses what works. But it was not long before the market came to be seen as the basis of society. Centrism became the doctrine that every institution should be reorganised according to market norms.
What this centrism failed to perceive is that it was not capitalism that brought down communism but the forces of nationalism and religion. It was the trade union Solidarity and the Catholic Church in Poland and an unconquered sense of national identity in the Baltic region that toppled the Soviet state. Economic stagnation may have been a factor, though for most of Soviet history much of the population was impoverished even by comparison with the last decades of tsarism. Gorbachev’s attempt to reform the system triggered its collapse.
The end of the Cold War ushered in not a new order but an interregnum. Gripped by geopolitical rivalries and the struggle for natural resources, the world today has more in common with that of the late 19th century than the late 20th. Thirty-odd years after the fall of communism, the dominance of market values in Western states makes them dangerously vulnerable to new kinds of despotism.
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John Major prepared the ground for Blair and Cameron by creating the NHS internal market in 1990. In the recent past it had been accepted that public services should operate according to a non-market ethos. Thatcher had rejected the advice of libertarian think tanks urging the marketisation of the NHS. By the time Blair came to power in 1997, the “monolithic” NHS could be attacked as wasteful and inefficient, though it was one of the world’s most cost-effective healthcare systems. Supposedly moderate centrists became committed to a market-based vision of society that was more simplistic and fundamentalist than that which dominated the Thatcherite Eighties. It became cross-party orthodoxy that healthcare, higher education, law and order and the armed forces all had to function according to market incentives.
The end result, now visible in the Greensill affair, was that government became a part of the market. If the state is at bottom a business like any other, why not outsource it to the cheapest private provider? That was the rationale for the disastrous quasi-privatisations that were imposed on the probation service, the prison system and army recruitment, and for recurrent market-based reorganisations of the NHS. It was also part of the argument for adopting Greensill’s scheme, despite some civil servants pointing out that early payment schemes already existed within government.
New Labour was committed to high levels of public spending. Yet austerity flows almost inevitably from viewing the state as a business. If the basis of society is not shared values but market exchange, cost-benefit analysis must be the chief – if not only – guide in organising core services. The upshot is a state that is enfeebled, hollowed out and lacking in legitimacy, as was the case in Britain at the end of the Cameron years.
The centrist world-view takes little account of the loyalties that give governments their authority. If states are not much more than enablers of markets, their historic values and borders can only be irrational and dysfunctional from the point of view of economic efficiency. How much better if these ramshackle relics were replaced by a universal regime of rules. This was the logic of market-driven globalisation, and of the EU as a continent-wide space in which capital and labour would move freely without interference by elected governments.
The past decade has demonstrated the political limitations of this logic. In a doltish comment made not long after the Brexit referendum in December 2016, Cameron declared: “The rise of populism cost me my job.” The possibility that movements derided as populist might be responses to the ideological excesses of centrist governments like his own did not occur to him. Resistance to transnational governance could only be an expression of atavistic instincts, a backward-looking protest against an inevitable future.
[see also: Podcast: What the David Cameron lobbying scandal reveals about UK politics]
Here, again, Cameron was voicing a ruling consensus. The defining follies of the age –the calamitous invasion of Iraq, the damaging effects of the euro, the transformation of Libya into a zone of anarchy fought over by jihadists and people smugglers – occurred only because the ideology was not applied consistently enough. As Blair insisted in a New Statesman interview with Jason Cowley (“Tony Blair’s unfinished business”, 24 November 2016), history has a direction and governments must be on its right side. It followed that any attempt to resist the advance of globalisation was futile. As Blair put it in a 2005 conference speech, two years after the invasion of Iraq: “I hear people say we have to stop and debate globalisation. You might as well debate whether autumn should follow summer.”
In one sense this is true. If we think of globalisation as the increasing interconnection of the world through technology and trade, there is no going back. Societies that try to stand aside – like pre-invasion Tibet and many indigenous peoples – will be enslaved and destroyed. But if it means the project of a universal free market, globalisation may well break down, as it did in the years after the First World War, or else morph into a form very different from that which prevailed in the late 20th century.
Both of these shifts are under way at present. The pandemic has promoted de-globalisation by shortening supply chains and spurring moves towards national self-sufficiency in strategically vital goods. At the same time, China is asserting itself as globalisation’s champion. Xi Jinping aims to replace the global order that developed under Western hegemony with a new version dominated by China and its satellites.
The Beijing intellectuals who mistakenly took for granted Cameron’s victory in the 2016 Brexit referendum did not question the inevitability of globalisation, or its desirability. But it was not the Blairite version of globalisation they had in mind. In the new order they envisioned, trade would serve the objectives of the Chinese state. Government would be the master of the market, not – as in the Britain revealed by the Greensill affair – an extension of it.
The Blameron illusion was that “liberal values” would follow market forces in spreading throughout the world. Following his abrupt departure from Downing Street in the wake of the Brexit referendum, Cameron became head of a £750m investment fund aiming to promote road, rail and shipping networks between China and the countries it trades with. In China, however, trade is a tool of state power.
There are too many unknowns to forecast China’s inexorable advance. President Xi’s aggressive vaccine diplomacy has suffered a setback as China has admitted that the home-produced product is less effective than Western vaccines. Taiwan, the world’s single largest manufacturer of microchips, is under growing threat from China. If the island democracy is invaded or somehow absorbed, Western markets will suffer cataclysmic upheaval. But so could the Chinese economy, which in many ways continues to be dependent on the West. India and Japan will do all they can to curb Chinese expansionism. Russia, increasingly a Eurasian regional power operating under Chinese leadership, is making menacing moves towards Ukraine. But how Vladimir Putin’s shaky popularity in Russia would be affected by a hotter war there cannot be known. China and the West are competing for control of rare-earth metals in Africa and the Arctic. As yet, the balance of advantage in the contest is undecided.
The only certainty is that a “rules-based” liberal order is history. This is undeniably a period of Western decline, but a new order will not emerge any time soon. The result may be a world without any dominant power for the foreseeable future.
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From the outset, Cameron’s electoral strategy was based on the supposition that unless it was “modernised”, the Conservative Party could not win power again. That was the lesson of the takeover of Labour by Blair – “the master”, as Cameron liked to call him – and his long years in power. The prognosis seemed to be vindicated when the 2010 general election produced a hung parliament. The resulting coalition with Clegg’s Liberal Democrats was not just a tactical move, but confirmation of the Tory conversion to liberal modernity.
An 80-strong majority for Boris Johnson’s reshaped pro-Brexit Conservatives confounded the Cameroon analysis. But something very like it continues to guide Keir Starmer in his struggles to remake Labour as a party of the centre ground. Pursuing this objective, Starmer has accepted that Brexit is irrevocable, avoided culture wars and unconvincingly ventriloquised a discourse of patriotism.
The problem is not that this archetypal metropolitan liberal lawyer looks transparently inauthentic to the voters in the de-industrialised north, the Midlands and Wales he most needs to convince – though he does. It is that the centre ground he aims to occupy is itself a metropolitan mirage. Resembling Old Labour more than it does anything else, the actual centre ground in Britain combines “left-wing” economics with “right-wing” cultural values. Starmer’s problem is that he is unable to adopt either of these positions, let alone both.
One of the lessons he takes from the Jeremy Corbyn debacle is that Labour must stand for economic orthodoxy. But it was Corbyn’s evident dislike for this country and his inveterate fondness for its enemies that produced the electoral disaster of 2019. His economic policies were, on the whole, popular among working-class Labour voters, and remain so today.
Unlike Starmer and the Conservatives’ neo-Thatcherite rump, Johnson has grasped this fact. His government has stumbled into applying something not unlike the Modern Monetary Theory touted by some of Corbyn’s supporters, according to which public borrowing can be financed simply by creating the money that is needed to pay for it. Obviously, the pandemic and lockdown have facilitated this move, but its origins go further back.
The bankruptcy of the hedge fund Long-Term Capital Management in 1998 was a precursor of the systemic crisis that erupted ten years later. The fund was bailed out by the Federal Reserve Bank, and artificially low interest rates have been maintained ever since. Plainly, there will someday be a reckoning. But how this gigantic experiment in money creation can be ended without upheaval is an insoluble conundrum, and there is no prospect of Johnson’s ultra-Keynesian bonanza being wound down before the next election, which is likely to be in 2023.
Terrified of departing from economic respectability, Starmer cannot emulate Johnson’s brio. Nor can he identify his party with cultural conservatism. Moulded by the intellectual monoculture of contemporary universities, the middle-class graduates that form the bulk of Labour’s activist membership believe their prejudices form the only rational world-view. As a result, they lack the conceptual flexibility needed to understand a society that harbours quite different views of the world. That is why they have so often been left squinting stupidly, as events they believed could never happen unfolded before their eyes. An invincible attachment to a closed way of thinking is not confined to the fringes of politics.
The forthcoming Hartlepool by-election provides an interesting case study. Selecting as the Labour candidate an identikit Remainer, Paul Williams, and sending in others like Anneliese Dodds to campaign for him, Starmer was putting two fingers up to an electorate, nearly 70 per cent of which supported Brexit. By-elections are notoriously tricky to call, but it will not be surprising if the gesture is reciprocated in the polling booths and Labour loses the seat.
The attitude of much of Labour’s membership towards the party’s traditional working-class supporters has something in common with that of colonial rulers to their subject peoples. Working men and women are valued not for what they are in themselves, but for what, given a proper education, they may someday become. But educating recalcitrant populations can be a thankless task, and it is not hard to detect a growing impatience with the unschooled masses. Merging with the Liberal Democrats, and perhaps the Greens, in a so-called progressive coalition would relieve Labour centrists of the need to feign solidarity with communities whose values they despise. But this relief would come at a price.
Whether a united progressive party could hold on to Labour’s existing vote is doubtful. The collapse of the Red Wall may have only just begun. A party whose heartlands are in London and a scattering of woke university towns is hardly the base for a workable national majority in Britain, especially with nationalists being so dominant in Scotland. The new progressive party would, in effect, be a scaled-up rerun of Change UK, which vanished without a trace at the last election. Any prospect of power would be sacrificed for the sake of preserving an entrenched world-view.
In Britain as in the wider world, the Blameron interregnum is over. David Cameron’s self-immolation is a fitting end to the era he carelessly embodied, and a warning about what happens when government is subordinated to the dictates of the market.
[see also: The man who broke Britain]
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This article appears in the 14 Apr 2021 issue of the New Statesman, Careless people