Jonathan Todd

I had this on Labour Uncut last week.

The epoch changing events in the Middle East, lest we forget, were precipitated by Tarek el-Tayyib Mohamed Ben Bouazizi. Just over a month later, Karim Medhat Ennarah, an Egyptian protester told the Guardian, with tears in his eyes, that:

“For 18 days we have withstood teargas, rubber bullets, live ammunition, Molotov cocktails, thugs on horseback, the scepticism and fear of our loved ones, and the worst sort of ambivalence from an international community that claims to care about democracy. But we held our ground. We did it”.

In the intervening period, the most that William Hague could do to respond to the beauty and bravery of these protestors was to mouth almost exactly the same measly words as Hosni Mubarak about an orderly transition. Britain managed to be dismissed as at best irrelevant, as Krishnan Guru-Murthy noted, both by the Mubarek regime and by those risking their lives to overthrow it.

Our Garibaldi, David Cameron, wasn’t content. He set off on a crusade for freedom. He was the first western leader to visit post-revolutionary Egypt. All very noble. But are arms really the first thing required in the birth pangs of democracy? And is the most fundamental right of British citizens not protection from indiscriminate violence?

At least two prime ministers, Anthony Eden and Tony Blair, became defined by the Middle East. The unanswered pleas for assistance of British citizens in Libya to the British government as Cameron set out on his freedom mission are the tragic loop of history. Its farce is the phalanx of arms dealers in which he shrouded himself.

Egyptians thought us pointless during their revolution. Cameron’s mantle of missile manufacturers mean they now think us grubby. Rather than demeaning us in this way, Cameron should have ensured that his government executed the same basic function that every government deserving of the name was capable: getting our citizens out of the hell that Libya has descended into. Turbine engineer, John Rouse, told The Evening Standard:

“We are going crazy because everyone is getting rescued but us. The Chinese, French, the Russians, Americans – everyone’s leaving but the British can’t sort it out”.

To minimise suffering in Libya, the UN should have implemented a no-fly zone at the earliest opportunity. But the ability of our prime minister to be doing what he should have been doing – leading the calls for a no-fly zone – is compromised by him not having fulfilled his duty: to rescue all British citizens from Libya. Our capacity to lead these demands is, obviously, constrained both because we almost certainly need to have further flights into Libya to recover our citizens, and because we therefore have such a pressing incentive not to spark reprisals against Britons by Colonel Gaddafi.

Cameron’s government is still addressing last week’s challenges. By now, our citizens should be safely home and a no-fly zone should be in place. Neither of these outcomes, tragically, has been brought about. The debate should now be focused on how many Libyans have to be killed by Gaddafi before we are prepared to risk our troops for them and how we might end the carnage enveloping that country.

Not that sending in troops is necessarily the best way for us to do this. President Obama is right, however, that all options should be considered. And we should now be assessing our options in this regard, not worrying about our fellow citizens stranded amid Gaddafi’s orgy of violence.

If we really want to honour Mohammed Bouazizi, we should always stand up for freedom. We didn’t do this while Egyptians stood up to Mubarek for their freedom. We lacked the competence to ensure the freedom of our citizens in Libya.

Some say that British foreign policy has lacked direction under this government. That the government’s “approach to foreign policy is to not have a foreign policy”. The truth is now emerging: gutless and inept leadership is painfully and needlessly squandering our most precious commodity.

Which is not arms or oil, but freedom.

I had this on Labour Uncut last week.

“Is not the lesson from the noble Baroness Thatcher that, when you have set an economic course, you should stick to it – ‘there is no alternative’”?

So asked Jacob Rees-Mogg at PMQs recently. The IFS cautions “a Plan B might be needed, potentially involving some reduction in the size and pace of cuts in the structural deficit”. But David Cameron knows best. He did not demur from the insufferable Rees-Mogg.

But for what did Thatcher think the grinding unemployment and dislocation of the 1980s was a price worth paying? Low and stable inflation. The NUM was, she thought, the enemy within and the wage/price spirals of the 1970s were part of the damage they wrought. She was right that high inflation is no basis for a dynamic economy. But her policies didn’t deliver this. In his memoirs, Nigel Lawson concedes that he should have raised interest rates in 1986. Instead, with a general election looming, he offered tax sweeteners. Inflation topped 8 per cent by 1988.

It wasn’t until Labour took politics out of monetary policy by making the Bank of England independent that the inflation dragon was slain. Now politics is back at the Bank and so is inflation. Not that Mervyn King’s grovelling praise for George Osborne’s ideologically-driven deficit reduction strategy has caused inflation to be persistently above target. But that that is not his job. The governor’s remit is to run monetary policy to defend this target. It isn’t to provide cover for Osborne’s politics.

The George and Mervyn show threatens to reprise the Ken and Eddie show, that 1990s classic. In the governor’s defence, the role afforded to him in this show reduces him to a bit part. It must be tempting to seek relevance by commenting from on high on fiscal policy. This used to work for Vince Cable.

King has been so reduced because four times he has written to Osborne to explain why inflation is above target and four times replies have been sanguine. Nominally, Osborne continues to set a target for King. But does Osborne really want King to take the steps necessary to meaningfully defend this target? Of course not. But how can Osborne be unmoved by hard working families seeing ever more of their modest wages – no higher now in real terms than they were in 2005 – stretched ever further by the weekly shop?

Because Osborne sees nothing besides what is needed to continue in government. To which the successful execution of his deficit reduction strategy is central. Osborne wants to be able say that he applied the tough medicine that the patient needed after getting drunk with the Labour rogues; and that the medicine has worked so well that the patient can now be afforded some tax sweeteners.

It stretches credulity that things will go this smoothly. Osborne’s plans require, as Liam Byrne has noted, record export and business investment performance in each of the next three years. Do you feel like you are living in a record breaking economy? We might be breaking records for youth unemployment and for length of time above inflation target. But, with the rest of the EU hardly best placed to suck up our exports and consumer confidence shrunken, exports and business investment seem unlikely to break the records Osborne seeks.

Things would be even less likely to go to plan had King acted to retain credibility in the target that Osborne purportedly wants him to defend. This would have meant following the recommendation of Andrew Sentance, a member of the monetary policy committee (MPC), and to have already begun raising the interest rate. Obviously, this hasn’t happened.

Mike Wickens, an economics professor at York University, “suspects that behind the scenes the chancellor has indicated that he doesn’t mind the Bank not keeping to its remit”. No shit, Sherlock. And, yet, as obvious as this seems, it remains shocking. The target is drained of credibility and the Bank sapped of independence on the altar of Osborne’s general election quest.

Yes, much of our inflation is imported (although, this is partly a consequence of a deliberate strategy on the part of the government and the Bank to allow the pound to drop in value to make our exports more competitive, which has had limited effect to date). And, yes, fiscal tightening (cuts) would still be happening if Labour were in government, which makes it more problematic than it otherwise would be for the Bank to be taking the actions required (raising interest rates) to defend the target. It would, however, be less problematic for the Bank to do so in the context of Labour’s fiscal consolidation than the government’s programme. This is because Labour’s cuts would have been less deep and fast than those of the government.

While our deficit reduction strategy would make it easier for the governor to do his job, we don’t need his endorsement. What the nation needs is for him to stay out of politics and do his job. Unless and until he admits that he is already redundant.

The real lesson of history is that low and stable inflation is hard won. It shouldn’t be squandered on something as squalid as Osborne’s election strategy.

I had this on Labour Uncut recently.

Francis Fukuyama is best known for confusing the period between the falls of the Berlin Wall and Lehman Brothers with the end of history. This was to be defined by the global triumph of liberal democracy and market economies. He recently conceded:

“The most important strength of the Chinese political system is its ability to make large, complex decisions quickly, and to make them relatively well, at least in economic policy”.

China is neither liberal nor democratic, but its state-directed model of capitalism is reshaping markets across the globe. Nonetheless, everyone from George W. Bush to Will Hutton is confident of the model’s limitations. It is thought that history hasn’t ended yet, but that it will, and on the lines that Fukuyama proclaimed.

“Trade freely with China and time is on our side”, said Bush. These economic freedoms will, ultimately, it is argued, require political freedoms. This is because per capita western incomes depend upon what Hutton calls the “enlightenment infrastructure” – pluralism (multiple centres of political and economic power), capabilities (rights, education, private ownership) and justification (accountability, scrutiny, free expression).

Hutton made this argument in a debate with Meghnad Desai in Prospect just before the credit crunch. Desai scoffed: “For you, there is only one road to capitalism – the Western one – and only one political system – ours”. The crunch must place at least a question mark next to Hutton’s Whiggish confidence.

Perhaps the most important way in which 11 September 2001 changed the world was in making more apparent what few had already perceived: the ambition of Al-Qaeda’s threat to the west. Similarly, the significance of China’s rise wasn’t widely understood before the financial crisis. Now it is more obvious.

Zhu Min, special advisor to the international monetary fund, coined the phrase “three-speed” recovery in the opening debate at Davos this year. This involves emerging economies growing at more than 6 per cent in 2011, the US by 3 per cent and Europe by less than 2 per cent. Negative growth in the fourth quarter of 2010 puts the UK in the slowest of the slow. China is among the quickest of quick. It isn’t a global crisis anymore. It’s a European crisis.

While Fukuyama applauds the efficient rapidity of Chinese decision making, the Eurozone is sluggish to confront its big choices. Not that the UK should be smug. We’ve allowed banks “too big to fail” to morph into banks that increasingly seem “too big to save” – without correcting the causes of these banks becoming too big to fail. We’re also guilty of failing to match lofty rhetoric on climate change with effective policy and of drifting towards dependence on Gazprom in an ever more resource-stretched world. To say nothing of our geriatric-paced policy response to demographic change.

Yes, a plan for growth is essential. But for this to be meaningful it needs to chart a trajectory for the state to stop being a featherbed for bankers and start being a catalyst to a more energy-efficient and innovative economy.

All of this is painfully clear, as is the inability of David Cameron to offer anything like an adequate response. All politicians are in the gutter, but Cameron isn’t staring at the stars. Hu Jintao is. Mark Leonard in Renewal credits him with leading a campaign of “asymmetric warfare” against the west: “finding and exploiting the enemy’s soft spots”.

After international financers, like George Soros, humbled the “Asian tigers” in 1997, Chinese intellectuals, Leonard notes, pondered: “If a lone individual like Soros could unleash so much destruction simply for profit, how much damage could a proud nation like China inflict on the USA with its trillion dollars of foreign reserves”?

China and America’s condition of mutually assured economic destruction means this theoretical proposition is unlikely to be soon tested. It does, however, expose the vulnerability of the west, particularly if the uber-pragmatists of Jintao’s generation are succeeded by a more assertive cadre. That the question is even asked shows that Chinese leaders are capable of doing what our leaders struggle to: coldly assessing strengths and weakness and, given these strengths and weaknesses, ruthlessly pursuing objectives.

Al-Qaeda are world leaders in asymmetric warfare as it is conventionally understood. Guantanamo Bay and Bagram are the weakest parts of the west’s response, because they compromise our defining values. Privatising the upside of banking, while socialising the downside, also rejects the fundamentals of capitalism. Chinese-style, forensic assessment of the West’s strengths and weaknesses would rank our values – the “enlightenment infrastructure” – as our greatest strength and anything that belittles them as corrosive weakness.

Leadership is required for this betrayal to be averted – most pressingly in relation to Egypt. True leadership would also see it as analytically inadequate and careless with the hopes of millions simply to presume that Hutton is right and Desai is wrong. Hutton is right insofar as the “enlightenment infrastructure” is the richest inheritance and the seed of the innovation that can allow the West to prosper in a century in which China will be much more globally consequential than before.

However, in addition to this infrastructure, leadership will be necessary for the west to so prosper. Real leadership isn’t just about rhetoric or grand promises to be fulfilled years hence, but about the policies that will concretely advance these promises: the prose as well as the poetry. In respect of the key challenges that confront them – banking, energy, climate change and ageing – western leaders provide little of either. In particular, they struggle with the prose, which comes so easily to the Chinese. This needs to change if history is, after all, to end.

I had this on Labour Uncut last week.

Tony Blair made adaptation to globalisation a Labour leitmotif. Yet the existence of the “squeezed middle” is a symptom that he did not finish the job. Today’s globalisation is more about the rise of Asia than was the case when Blair became party leader. Easing the squeezing requires better adaptation to this Asian age.

It will take more than David Cameron hawking UK PLC from one rising Asian power to the next. The prime minister is listless in the face of power seeping from the over-indebted West to the resource-rich East, so neatly encapsulated by FIFA’s world cup decisions. His PR smoothness is no substitute for leadership in urgent debates about the architecture of globalisation. It seems that his only reason for attending the G20 was, unsuccessfully, to press the flesh for England’s world cup bid.

Perhaps Cameron confused diary entries, and we lost the world cup after he confronted FIFA president, Sepp Blatter, on macro-prudential regulation. After all, the Tory-Lib Dems’ bail-out of the Irish demonstrates that we live in an interconnected age. It exposes their myth: that our economic predicament is solely Labour’s fault.

While Cameron cannot afford himself a robust response to Asia’s rise, leading centre left thinkers are looking at the bargain Labour struck with globalisation. On the one hand, it was relaxed about the filthy rich. On the other, it recycled tax revenues into public services and redistributions, like tax credits, at unprecedented levels. But the most striking feature of this economic model is its dependence upon secondary redistribution. The middle is squeezed because we have not got to a more equitable distribution of market rewards.

John Humphrys may find it bizarrely incomprehensible, but the squeezed middle is not just a British phenomenon. In the US, the annual incomes of the bottom 90 per cent of US families have been essentially flat since 1973. It used to be middle-class aspiration that Labour needed to tap into. Now the middling sort across the whole of the West is anxious. It is even possible to understand the tea party movement when you realise that at its core is anxiety, not guns and bibles.

Tea partiers, like Essex men, are more focused on keeping what they have than wanting more. They want to take their country back, not look for answers from the great beyond. They are resentful of any perceived threat. Whether that is losing their health insurance to Obamacare or their jobs to the oilfields and factories of the East.

Politicians across Europe are increasingly willing to bemoan minorities and immigrants, other governments and Brussels. There are many corners of foreign fields that seem forever Mrs. Duffy. Tackling the squeeze is a precondition of curbing this.

Globalisation will only go into reverse if an open currency war follows banks and states defaulting. Almost any amount of squeeze for the middle and anxiety for Mrs Duffys is worth it to avoid this 1930s scenario. And the more squeezed the middle becomes, the more politicians will struggle to resist protectionism and competitive currency devaluations. These would be the seeds of a cataclysm of 1930s proportions. We cannot sustain globalisation without improving social justice both domestically and internationally.

In the UK, we must recognise that income distributions that are skewed towards the rich minority are a practical menace, as well as morally questionable. Countries with lower Gini-coefficients (a measure of the inequality of a distribution – the higher the score, the more unequal) are more likely to increase consumer demand in sustainable ways. This means that median workers will not find their wages squeezed, and their maxed-out credit cards will not create booms and busts. Labour must find ways of achieving this while scaling back government to control the deficit. Here – after the public spending largesse of the Blair/Brown years – we start with a blank piece of paper.

Even if social democracy means that the state consumes an ever-larger slice of GDP, it cannot mean it now, in such fiscally straitened times. That states, as well as markets, fail should not leave social democrats bereft of hope. It should inspire a radical pragmatism for whatever truly works. A pragmatism never abashed by cross dressing or reformers and one unafraid to deploy state or market wherever it is best suited.

Advancing social justice internationally won’t be achieved by Cameron’s glad handing. His G20 failure, which Brown would have avoided, was far more of a dereliction of duty than his failure to deliver, in contrast to Blair, a global sporting event. Not least thanks to Brown, world leaders were quick to come together effectively in the early stages of the global crisis.

The extent to which the fundamental causes of this crisis have been addressed is debatable. Global leaders must maintain their engagement in order to tackle these causes. Not just applaud what good chaps Prince William and David Beckham are. Cameron offers vapid PR stunts instead of leadership. Whereas Labour must find practical ways of advancing social justice here and internationally. Only then can the globalised middle end up slightly more eased than squeezed.

I had this on Labour Uncut before Christmas.

The front page of the Spectator Christmas special depicts Nick Clegg crushed between David Cameron’s foot and ice. This captures the conventional wisdom. Cameron is doing well out of the deal that created his government. Clegg isn’t; and Ed Miliband isn’t in sight. The Tories hover around 40 per cent. The Lib Dems have shrunk beneath 10 per cent. Labour leads these polls, but we are told that Miliband is insufficiently visible.

While Cameron may glide over the ice on The Spectator’s cover – just as he glided away from the bullets that Clegg took on tuition fees – this ice masks ideological differences in all three parties. The strategic questions are obvious. How should Cameron consolidate his dominance, Clegg recover and Miliband become more prominent? The answers, however, reveal deeper ideological fissures.

John Kampfner urges a bolder articulation of Clegg’s liberal beliefs in the face of the existential threat to his career and party:

“He has to produce a radical narrative that differs from the Tories’ ideological opposition to the notion of government as an economic actor, while maintaining his distance from the overtly statist instincts of Labour traditionalists”.

Clegg will campaign for AV, while his Tory ministerial colleagues defend the status quo. Kampfner demands, additionally, a full and distinctive articulation of liberal principles from Lib Dems in government.

The more principled Lib Dems have been thought those who stayed out of government, voted against tuition fees and who have been wooed by Miliband. Tim Farron leads this cadre from the backbenches, as Graham Brady, chairman of the 1922 committee, leads what Tim Montgomerie calls mainstream Conservatives. Kampfner wants Clegg to prove that Lib Dem principles aren’t the exclusive preserve of the backbenches.

For Clegg to do this he needs more policy wins to justify his cohabitation with Cameron. However, these wins would threaten liberal conservatism, the counter point to mainstream conservatism. As a Cameronian minister put it to Daniel Finkelstein:

“The narrative might easily develop that anything progressive comes from the Lib Dems, and that is very dangerous to us”.

Liberal Conservatives, like Nike Boles, want Tory/Lib-Dem government to last into the next parliament. Maybe they see more to like in Clegg than Brady. However, the Conservative brand may retoxify (assuming it ever fully detoxifies) if they allow liberal conservatism to seem only capable of delivering progressive outcomes in combination with Cleggite liberalism. The Lib Dem ideological renewal that Kampfner wants is not, therefore, without risk for Cameroons. Particularly if this renewal combines with louder and more organised complaints from mainstream Conservatives about dilution of Conservative principles on tax, crime, immigration and Europe, the need for liberal Conservatives to flesh out a principled argument for continued Tory alignment with the Lib Dems may become more pressing.

Two-party government is unusual in this country. Two parties clearly setting out ideological differences in government is more unusual still. The likes of Farron and Brady may sit on the same side of the House but they are sure to make ideological arguments of quite different flavours over the next year. Kampfner illustrates the pressure Clegg is already under to demonstrate the ideological consistency of decisions taken in government. Cameronian ministers may come to face similar pressure. How will they react?

In last year’s Spectator Christmas special James Forsyth wrote:

“The most important thing Cameron should think about over Christmas is why he wants to be prime minister. As the Times — normally favourable to Mr Cameron — opined last week, he has not yet conveyed a clear sense of this to the public”.

The failure of the Conservatives to win an outright majority shows that Cameron never managed this. Abandonment of Conservative principles is unconvincingly blamed for this by mainstream Conservatives. Cameron displayed agility in forming a government having failed to secure a Conservative majority. But it remains bizarrely unclear why he wants to be prime minister. It may be out of belief in the same things as Brady. It may be out of belief in the same things as Clegg. Or does Cameron stand for a liberal Conservatism that is distinct from both Brady’s mainstream Conservatism and Clegg’s liberalism?

He seems likely to believe whatever is necessary for him to remain PM for as long as possible. Undoubtedly, there is scope for Miliband – leader of the most ideologically united of the three parties – to make mischief. He should build bridges with disenfranchised Lib Dems. And encourage the disgruntlement of mainstream Conservatives.

But, first, this Christmas, Miliband should answer the question that Cameron didn’t answer last Christmas: Why does he want to be prime minister? He doesn’t want to be prime minister to make unhappy Lib Dems feel better. He doesn’t want to be prime minister to resurrect policies rejected by voters in May.

He wants to be prime minister to prove that Labour’s best instincts are in tune with the best instincts of the British people. That when the native genius of these people combines with the liberating force of Labour government, great things happen. Finding a way of successfully communicating this, and embedding Labour’s authenticity, is a more important strategic challenge than the tactical games of pulling at the ties that bind the Tories and Lib Dems together. This is, fundamentally, about ideology.