We like to remain as contemporary as possible in our comments so, before looking at what Mr. Cameron, leader of the British Conservative Party, is doing, let us see where we are in this uncomfortable economic crisis.

Bailing Out Duff Bankers?

The current problem seems to be distrust between banks. Those banks with cash are hoarding it for themselves and for their customers. They are refusing to lend to other banks.

Logically, this should increase the chances of runs from perceived weak to perceived strong banks (hence the recent hysteria over HBOS in the UK) and further serious threats to the system.

No doubt 'things' are happening behind the scenes to reduce the chances of this happening but special interests always come to the fore at times like this.

The bankers see government intervention as necessary to (in effect) guarantee interbank lending, but this of course represents (to taxpayer interests) responsibility without power.

Should the State use 'our money' (actually 'its' money) to bail out some pretty greedy and less-than-competent people to save a system on which we all depend? This raises serious questions about whether this is the right 'system' at all. After all, we hire these twits to protect us!

The economic anxiety lies in the fact that even the recent unprecedented Federal Reserve intervention has failed to stem the rise in interbank borrowing costs. US figures are also showing collapsing consumer confidence and have showed a record slide in house prices in January.

Responses

The Bank of England’s response is to ‘hint’ at future interest rate cuts and the availability of more liquidity. As always, much of this must be interpreted as the sending of signals into a market that is looking for ‘signs and wonders’.

The sign here is that the Bank is taking the crisis in credit availability seriously enough that it is placing it ahead of its other major concern – inflation – at least for the moment.

And yet, three major mortgage lenders yesterday reduced loans supply and raised rates so that higher bank loan rates for the public are moving in the opposite direction to Bank of England interest rates! Perhaps this is the wonder!

Whatever banks may want by way of intervention, the authorities in Washington/New York and London are clearly moving towards a different and tougher regime on bank supervision.

The conflict of interest between banks (who just want to be bailed out for business as usual), regulators (who just want the system to work without lurches and crises) and politicians (who want something for the money that is not going on roads, schools and hospitals) will soon come out into the open.

The Politics of All This

The electoral timetable is an important issue here – any regulation of capitalism that is required as a matter of urgency enters the US political process just as the two main parties compete for the Presidency (and Obama, if selected, is quite capable of introducing populist themes at the expense of unregulated bankers and of McCain's more establishment backing).

A troubled New Labour Government will probably have to go to the country in 2009 so it needs the crisis sorted and forgotten – with itself as heroes for averting meltdown and restoring stability – between the expected poor local election results on 5 May and the following Spring.

Cameron (for the Tory Pary), after some delay, has now entered into the economic debate (as have the Scots Nationalists from their perspective) by emphasizing economic stability over tax cuts.

This puts his Thatcherite irreconcilables on notice that they will not be allowed to come between him and his capture of the centre ground in British politics, sweetening the insult by targeting a European initiative – the EU Social Chapter – as a major error of judgement by the Blair-Brown government.

The European Dimension

Cameron is almost certainly correct in his critique of the Social Chapter in view both of the nature of the British economy, very different in structure from the corporatist cultures of Europe with their in-built small town sclerosis, and of national competitiveness requirements.

This refers back, possibly unintentionally, to Sarkozy’s lavish praise for the British economic system (which seems slightly odd to many natives at this time).

His call is for the UK to help move Europe towards a more liberal-conservative free market model by engaging in the EU as partner to France and Germany's conservative 'reforming' governments.

Sarkozy and (we suppose) Merkel are offering us a liberalized Europe that will be led by ‘soft’ Thatcherite reforms, close to the Blair-Brown model of ‘capitalism with a human face’. 

This is the Third Way, full of Germanic-style rights and duties - essentially liberal and free market in orientation and with more social and less economic regulation. It is equally New Democrat in inspiration.

But Sarkozy has not been well briefed. This appeals to the trades unions and big business but not to entrepreneurial capital, small traders, non-unionised workers or – and this is the new battleground – ‘victims’ of economic instability in the run-up to the next election.

It works when it works - that is, the middle ground supports it not for ideological reasons but because it is getting richer and more secure. Now, its internal logic has created a crisis of debt and global market correction ...

Cameron, meanwhile, is refusing to be seduced by Gallic charm and internationalism.  He is not that much different from New Labour but he offers a more national-capitalistic model in which ‘freedom’ (a core English national value) includes the freedom to trade as piratically as required to survive in the nation of Drake and Hawkins.

He wants us to trade out of crisis by reducing regulation that affects the mid-sized business and small trader (and the individual through taxation levels which it is his long term aim to reduce) but which often gives, in practice, competitive advantage to very large scale business.

The difference in regulatory structures is important - one seeks to reduce regulation in itself, the other seeks to change the regulation regime from when in which special interests are protected (historically jobs and national champion profits) to one in which economic interests are provided with social obligations but are otherwise free to follow the market.

The question is - is the second model necessarily left wing in practice? and is the first model necessarily right wing if social problems are resolved without the necessity for regulation at all?

Government Gets Into A Fix

The Government has behaved quite oddly in current economic circumstances. It has seemed indecisive on national macro-regulation and seems to be over-prepared to use taxpayer money to subsidise a system which it seems imperfectly to understand.

In the eyes of some, it seems to be ‘selling out’ British interests to a global economic policing model within which it is a very moot point that the British national interest is best served.

And it has undertaken token left-wing fixes (leading to the non-dom fiasco and increased corporate taxation, easily evaded at the top level of business) in order to try and persuade the Left that it ‘feels its pain’ when all it has really done is bring forward corporatist ‘reforms’ that were intended in any case.

These 'reforms' are designed to create general rules for the capitalist system, often driven by the OECD and so, ultimately, the US Treasury and Administration.

The EU often gets the blame for these changes but, in fact, the changes are designed to create the right EU, so let us not put cart before the horse. Multilateral institutions are, of course, part of the current Western mantra.

A Confused Left

The Left is confused. It welcomes the ‘fixes’ to transfer funds from the wealthy to the poor (although it really was fairly minimal stuff) as a step in the right direction, but it senses that something is going very wrong at the macro-level. 

This is not only about loss of power in itself because of a miscalculation about the British (or rather English) people, but a more profound unease that an entire model of capitalism is floundering, that the Clinton-Blair ‘third way’ has implicated them in it and that authoritarian solutions to crises in capitalism are corporatist rather than democratic.

There is also tension between the trades union interest and the conviction Leftist. These two wings of the British centre-left have often squabbled – most noticeably over ideological Marxism – but they have always seen themselves as safer together than separate: better to hang together than be hanged together.

Unfortunately, their interests really are diverging now. Conviction Leftists have difficulty coping with this because they are politically the weaker party. They know that they have no significant independent electoral or financial power base.

As a result, they are steadily being dragged into complicity with a corporatist system that (with its EU Social Chapter) makes them uncomfortable on democratic and libertarian grounds – and it is doing nothing substantive about the growing poverty levels in ‘out’ groups, lone parent families, pensioners, the non-unionised.

It is, in effect, a system designed for social stability by and amongst the elite (including trades unions) and for a model of economic growth in which ‘trickle down’ into the unrepresented community, through taxation and subsequent redistribution, is expected to be sufficient to cure social ills.

But if the cash is not there (an old theme of ours), there is no trickle-down and 'security concerns' (the cost of maintaining the proto-world government to enable the system to work) are pulling money away from social spending at a time when the pot of money is getting smaller.

Cameron Unnerves the Edges of the Left

Cameron is unnerving this community. It is dividing into the depressed, the stupid (those who just do not get it), the consciously loyal (the backbone of New Labour, often Marxist in origin) who believe that there is no alternative and those now drifting towards the Liberal Democrats on process issues like electoral reform (whose guns will be spiked soon by Jack Straw's reform programme).

But there are those who are thinking the unthinkable, that social policy is safer in the hands of a Tory 'one nation' Government than in an ostensibly left-wing New Labour Government.

You can forget Cameron's attempt to appeal to trades unionists – this is just performance art designed to unnerve the system further. The trades unions are in with New Labour to the end.

What is more threatening to the Labour coalition is Cameron's espousal of social capital theory, his social libertarianism, his clear commitment to the NHS and his recognition that the ordinary family is in crisis under market pressure. 

This makes him personally (if not his party in its raw state) actually more left-wing than the old right of the Labour Party!

Of course, this is partly illusory – the man is not the party and if he was ousted (which is possible if he fails to win an election or loses an election later), the middle class party of little englanders and class sneering lurks unreformed behind him.

Its troops in local government and the constituencies are no less stupid in their analyses and loyalties than those of any other party in which tribalism is more important than free thought.

The new wave of younger MPS are more liberal than those who underpin the party in the country. This does not bode well for a permanent political realignment.

There is also a rather dangerous bloc of Thatcherites, hard-line Atlanticists and unreconstructed terror-warriors lurking in the Party's hinterland which should cause concern to anyone seduced by the thought of a more humane Cameron Tory Government. 

These latter are very dark forces indeed, with their own intelligence and security links, though no worse than their equivalents inside New Labour. Other countries have been manipulating our politics for sixty years on both sides of the fence and are not about to stop now.

Nevertheless, there is already a small drift of left-wingers (all currently doing so privately and with their discretion respected) into the Cameron camp as advisers on practical social policy matters.

Reports are now coming back. They like what they see – they believe that social capital theory is a genuine intellectual effort to re-build one nation thinking and that the man is genuine.

I do not believe that we can dismiss this marginal drift of the Left-leaning persons towards Cameron as trivial or uninteresting.

Will Cameron Win Over The Left?

If it has to be faced that traditional democratic socialism has no purchase whatsoever on British politics through any of the two 'liberal' centre-left parties, then a one nation Tory Party may actually be one way forward.

There have even been brief if unsatisfactory precedents in history for this - Disraeli's famous 'Young England' attacks on the treatment of working people in the liberal-backed industrialisation of the 1840s, his later extension of the franchise to the respectable working classes (his 'angels in marble') and even Tory acceptance of 'one nation' thinking [Butskellism] between the 1940s and 1970s.

Realistically speaking, very few on the Left will actually take the step to ‘cross the floor’ (none in positions of authority) but, silently, many will not be wholly outraged by a Tory victory in 2009 if only to force (as they believe) some sort of re-balancing against the centralized right-wing control of the machine of New Labour.

This idea that New Labour can return to some mythical Golden Age is rather futile for technical reasons related to party organization but it will sustain many depressed party workers who, psychologically, cannot cope with the reality of New Labour and its permanence.

The real choice for democratic socialists seems to be fairly stark - give up on your dreams for a small slice of the New Labour model of regulatory capitalism, cultivate your garden and get out of politics like Candide, neurotically waste your life in sectarian fringe organisations holding the guttering candle alight - or rethink everything wherever it may lead.

One option could have been a new Labour Movement Party operating in the interstices of politics in a reformed system, co-operatively with the Liberal Democrats and the Greens.

This has been blocked off by the refusal of the trades unions to countenance revolt and the tribalism (or, when they do split, the transcendent egoism) of leading Left figures. 

A new Party would also lack of a coherent ideology and a social base, at least ones that do not hark back to an older vision of socialism. 

This is just not what the British people want, wierd abstract language and history lessons that they don't understand, led by unworldly academics and obsessives of, frankly, limited intellect and imagination. 

We are now seeing the slow strangulation of a once powerful movement by its inability to face reality. 

It becomes harder by the day to see the 'real' Left surviving the next century as anything other than an apparatchik element in a machine for running the English State, institutionalised as part of the State and expressing the State's interests, and putting itself up for plebiscites every four or so years.

From this perspective, thinking the unthinkable includes comparing minority status within New Labour and minority status within the Conservative Party - and no longer necessarily assuming that you will get a better hearing or more influence on policy within the former than the latter.

Closing Note - Obama and Cameron

This brings us briefly to Obama. Soundings from both the UK and the US tell us that something very odd is going on. Support for Obama is increasingly looking as if it is generational and not necessarily a matter of Left and Right.

Some liberal Republicans (worried about McCain’s temper tantrums and the legacy of Bush) are following many younger liberals and Leftists into his camp. Many British conservatives are open about their admiration for the man and his platform.

The common denominator between Leftist and high conservative interest in Obama is the sense of a need for a change (but not a revolution) away from a generation of politicians that has failed, that has disappointed. 

Think socialist in 1997 Britain and conservative in 2000 America and you can see the scale of the disappointment and why attitudes are converging.

Cameron is not Obama and Obama may prove a man of straw. The convergence of a mildly communitarian conservative critique and a liberal and even democratic socialist critique of the current system will not cause spectacular headlines. It may not be very solid.

However, the arrival of both at the same time may change the Anglo-Saxon world in the next decade through the electoral process and affect the centralising and authoritarian project of late capitalism in unexpected ways - in favour of national sovereign rights, democracy, anti-imperialism and social equality ...

But if the generational challenge fails because the 'good old boys' cheat them of victory through some manipulation of the system they command, then change may come more explosively later, as disappointment and crisis turns to a more inchoate rage that democracy cannot assuage.

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