The Labour leader's sanity on cuts is what the economy needs. But long term, a healthy democracy needs real opposition
A double-dip recession is a national emergency, or it should be. If there were no coalition already in place, something like one would surely be demanded. It worked for Ramsay MacDonald in 1931 and Winston Churchill in 1940. Now that Labour's Ed Miliband and Ed Balls acknowledge the need to remedy the excesses of the past and find a measure of economic truth and reconciliation, a wider coalition is sort of in being. Is that a good thing?
The Unite union leader, Len McCluskey, thinks not. In yesterday's Guardian he damned Miliband and Balls for their general support for the government's cuts, deriding them for trying "to get capitalism back on its feet". He sees the credit crash as caused by Tony Blair's "City-first deregulation", rather than by excessive private and public borrowing, and wants no part in wage freezes or job cuts. It is strange that no sooner do the Tories' banker friends demand to be excused from the rules of crisis economics than the unions follow suit. If a tri-party coalition were to become reality, bankers and unions would make intriguing bedfellows in the opposition camp.
Yet McCluskey puts a fair question. How should a democracy deploy its forces in such an emergency? Miliband and Balls have acknowledged that the economy is entering a war zone. They have endorsed George Osborne's determination to reduce the rate of increase in public spending by 2015, to a degree only marginally different from Labour's Alistair Darling in 2009/10. And they have not offered any off-budget measures to boost demand, such as scrappage schemes or printing and distributing money direct to consumers. Perhaps they will soon join cabinet committees on welfare reform and housing benefit.
Custom and practice hold that governments propose, while oppositions oppose. Governments have so much power to enforce policy that their victims are entitled to defenders. Yet throughout the locust years, from roughly 2003 to 2008, there was no opposition crying caution. The government was reckless, and no one seriously challenged it. I cannot recall a single mainstream speech, editorial or BBC interview that accused ministers of spending and borrowing too much. Whatever the topic, the charge was always: "Why not spend more?" It was the age of the appeasement of excess.
Even today, while there is general agreement on the need for fiscal responsibility, there is hardly a lobby for any specific cut, and fierce resistance from those affected. Open any paper today and you will read of cuts leading to more crime, hardship, disease and even death. In today's war of fiscal responsibility, doctors, teachers, police officers, housebuilders, the unions, the banks and the arts have all declared themselves conscientious objectors. Would someone else please go to the front?
It is the same in Greece, where rioters win sympathy for defending a bloated and corrupt public sector. It is the same in the United States, where Republicans and their Tea Party allies refuse to countenance rises in taxation or cuts in defence to reduce a ballooning deficit. It is reflected in the eagerness of Americans to find a foreign war to escape from domestic troubles – a cycle of confidence, over-confidence and expensive failure well described in Peter Beinart's book The Icarus Syndrome.
Even in triple-A-rated Britain anyone surveying Osborne's personal wish list – Olympics, aircraft carriers, high-speed trains, wind-farm subsidies, free schools, wars of choice – could be forgiven for thinking that austerity is not for him. He accuses objectors to his extravagance of being selfish nimbys rather than worried taxpayers. The concept of a taxpayer lobby, let alone a balanced budget one, still seems quaint.
I confess myself torn. The failure of European democracies to act in concert is now the single greatest threat to continental prosperity, largely because they cannot act in concert within themselves. Hence the internal threats to new regimes in Greece and Italy. Back in the 1970s, members of the Callaghan government worried whether social democracy could ever curb the public-sector unions and professional interests that undermined balanced budgets. Electors would always vote to borrow and spend, culminating in the widely held view by 1979 that Britain had become "ungovernable".
Nation states are not so much ungovernable as unfundable, essentially bankrupt and therefore vulnerable to political upheaval. In a trenchant essay in the current Political Quarterly, the social scientist David Runciman points to the paradox that, in the 1980s, free markets were deregulated to compensate for the failures of democracy, while today democracy is expected to compensate for the failures of free markets. Democracy, he writes, "is supposedly the long-term solution to our present difficulties", yet it is proving hopeless at thinking long term. It simply votes to saddle its children with debt, "as if it were nothing but a giant Ponzi scheme".
For the moment, coalition seems a necessary vehicle to enforce the disciplines of fiscal responsibility, a political entity coherent enough to withstand the hysterical aversion to any and every cut. Yet healthy democracy requires institutional challenge. It might have seemed absurd for Miliband and Balls to attack the ambulances sent by the coalition to clear up after their own car crash. But now that they have relented, who speaks up for the McCluskeys of this world?
In the present circumstances I go for coalition, even grand coalition, and welcome Labour's onset of sanity. But not, please, for too long. If there is one lesson to be learned from history it is that when all sides in a democracy agree they are probably wrong.
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