Keir Starmer delivers the leader’s speech at the annual Labour Party conference in Brighton on 29 September 2021. Is he Fabianism’s final hurrah?
In January 1884, seven men and two women who were by the standards of the time dreamers and eccentrics established an organisation to imagine a better future for the UK and the world.
They included the vegetarian poet and former Anglican priest Edward Carpenter and student of the paranormal Edward Podmore.
One of the women, Edith Nesbitt, wrote The Railway Children.
The association they formed was named The Fabian Society after Roman general Quintus Fabius Maximus Verrucosus who beat a bigger Carthaginian army led by Hannibal through persistence, harassment and attrition rather than in pitched battles.
Rejecting radical ideas associated with Karl Marx, a London resident since 1849 who had died the previous year, the Fabians sought to influence the Liberal Party government of William Gladstone with social research and actionable advice. Many Fabians were university graduates. Most were also self-consciously elitist and had little in common with the working class leaders of Britain’s growing trade unions they nevertheless counselled.
Despite its unpromising origins, the Fabian Society became in the following century history’s most influential think-tank.
It promoted the establishment of the Labour Party; founded the London School of Economics; published influential social and economic research and inspired men and women from British colonies who were to lead their countries to independence during the 20th century.
Every leader of the Labour Party since it was created has either listened to the Fabian Society, been a member or both. So it was unsurprising that Keir Starmer, elected Labour leader in April 2020, asked the Fabians to publish a 12,000-word essay setting out his vision in the run up to Labour’s annual conference the following year.
In a speech at the conference, Starmer affirmed he would do everything it would take to ensure Labour wins the next general election, due no later than 2024. This is music to the ears of the Fabian Society’s 8,000 members. A recent survey showed the majority put having a Labour government above all other priorities.
… Starmer is the ideal Fabian leader
In some respects, Starmer’s the embodiment of the modern Fabian ideal.
He’s technocratic rather than ideological; a manager rather than an organiser, and (unlike the founding Fabians) conventional in how he dresses and lives. A successful career at the bar followed by five years heading the UK’s prosecution services has equipped him with the skills needed to be a forensic parliamentary performer and a competent potential prime minister.
That’s the polar opposite of his predecessor Jeremy Corbyn, MP for an adjacent London constituency, who Starmer has barred from being a member of the Parliamentary Labour Party.
It’s one of the reasons why those who love him love him. And no one loves him more than a Fabian.
But how relevant is an organisation that was founded to address the challenges of what was the world’s first industrial society at a time of rapid urbanisation when Britain’s Empire spanned the world?
A Fabian would respond that the society’s successfully adapted to more than a century of unprecedented social change. Its resilience is the result of its relentless pragmatism.
Not everyone agrees with Fabian goals which include comprehensive education, the NHS and the welfare state. But it’s hard to hate a Fabian — though their seriousness can make them hard to love.
This is the first reason why Starmer, despite his many advantages, is struggling in the opinion polls. He’s dull compared to Prime Minister Boris Johnson, a journalist with a quick wit, a common touch and an approach to facts that’s symbolised by his dyed and permanently disheveled blonde hair. Having spent decades in barristers’ chambers and courtrooms, Starmer can look uncomfortable in the company of ordinary folk Labour says it wants to represent.
The second is due to his decision to prioritise the marginalisation of the Labour Left, an amorphous group of activists with little in common apart from an attachment to policies associated with Corbyn: high public spending, nationalisation and an unorthodox approach to foreign affairs.
It’s not yet clear whether silencing the Labour left and repudiating their favoured policies will be enough to get him into Downing Street. But there’s no doubt that Starmer’s support among Labour members has slumped in the past 18 months, though his backers say this is likely to be electorally inconsequential.
There’s a third factor. Fabianism’s foundations are crumbling.
… The theory of the market powered Fabian thinking
Five years after the society was founded, Cambridge University professor of economics Alfred Marshall — a supporter of the co-operative movement and social reform — published Principles of Economics. It’s considered to be the first economics text book and one of the profession’s most influential works. It distilled what remains the core of economic theory and practice: the idea that a stable and efficient equilibrium can be delivered by the interplay of supply and demand (Marshall’s book also contained the first geometric depiction of a supply curve and a demand curve).
Subsequent theorists identified reasons why that equilibrium might not be reached: natural monopolies; various other forms of imperfect competition; public goods, and externalities such as pollution. They included John Maynard Keynes, who was taught by Marshall at Cambridge and famously asserted unemployment could be the result of market failure at the macroeconomic level.
Marshall provided the Fabians with vital intellectual validation.
Before Principles of Economics, poverty, ignorance, bad health, slums and crime among the working class were seen as morally lamentable but inescapable. Thomas Malthus argued it was due to unchangeable human nature. Marx located the blame in the inevitability of exploitation under capitalism. Even David Ricardo, a liberal reformer, was pessimistic about the system’s capacity to survive.
After Principles of Economics, it could be coherently argued for the first time that targeted reforms which helped the market operate closer to the Marshallian ideal could simultaneously deliver economic growth and social progress. State education addressed market failure brought about by the cost of going to school. Health and safety measures in factories made workers feel safer and would consequently increase productivity. Decent housing made a similar contribution. The NHS free at point of use and paid for through progressive taxation was good for both supply and demand.
There seemed no social ill beyond the reach of Fabian-inspired, market-managing government action.
Fabian influence reached a peak after it encouraged Labour to stand independently — rather than in alliance with the Liberals — in the November 1918 general election.
Just over five years later, Labour formed a minority government and naturally turned to the Fabians for advice. Defeated in less than a year, Labour formed a second minority government in 1929 but that collapsed when it split over how to respond to the great depression.
It was only in 1945 when Labour won in a landslide that Fabian thought could be fully deployed. In the following six years, Labour transformed the UK into a country with the NHS, an integrated public education system; public ownership of strategic infrastructure and progressive taxation to finance permanently higher spending on government services. All were Fabian ideas.
The Conservative Party was affected by the Fabian tide and adopted many of its priorities as its own.
… The decline of the Fabian dream
Fabian intellectual dominance, however, only lasted 25 years. Quickening inflation in the 1960s was increasingly attributed to excessive government spending. In 1971, the US left the Gold Standard and prices rocketed. Opec oil price rises in 1973/74 delivered the final coup de grace to the post-1945 Fabian consensus.
In 1979, Margaret Thatcher led the Conservatives to a sweeping general election victory promising deregulation, tax cuts and privatisation. Out of office for the next 18 years, Labour adapted to the new pro-market consensus, though Fabian influence continued to be extensive.
Like Starmer this year, Tony Blair after becoming Labour leader in 1994 chose to use the society to publish his vision for the UK. In 1997, he won a massive general election victory which brought no fewer than 200 Fabians into the House of Commons.
Blair working in partnership with the Fabians seemed to have permanently redefined Britain’s direction: government spending on public services — heavily financed by tax income delivered from booming finance industries — increased while growth was consistently high without inflation.
It was a second golden moment for Fabian thought, but it couldn’t last.
In 2008, the financial crisis threw the UK and the world into depression. Labour, badly beaten in the 2010 general election, was replaced by a Conservative-Liberal coalition that set about cutting state spending.
A further shock came in 2016 when the UK voted to leave the EU which most Fabians admire.
The society was by then already grappling with Labour’s new direction after the election as its leader the previous year of Jeremy Corbyn. Corbyn shared many of the principles of its founders; he’s a vegetarian who loves gardening, a parliamentarian who passionately believes in public services and a champion of the global south. Objectively, he’s a radical Fabian, but almost no Fabian backed him.
Corbyn’s crushing 2019 general election defeat was therefore seen as an opportunity to restore conventional gradualist Fabianism to Labour through Starmer who Fabians almost universally support. Labour’s new leader in return is looking to the society for ideas and advisors.
Hopes are consequently rising that Starmer represents the start of a new era of Fabian dominance and he will appeal to voters tiring of Brexit and Johnson’s erratic improvisations. Starmer is additionally stoking Fabian enthusiasm by signaling he’s embracing New Labour’s moderate Fabian legacy.
…Where there’s a market, there’s always a Fabian way
But the UK and the world in 2021 are radically different to what they were in 1994.
The Soviet Union had collapsed less than three years previously inspiring the view that the sole option was the free market under light-touch regulation by skilled public servants. But Fabianism adapted. After all, where there’s a market, there’s always a Fabian way. But that illusion was shattered by the Asian financial crisis, then the dotcom bust, followed by the 9/11 war against terror, the financial crisis and now by Covid.
Government expenditure everywhere has been massively expanded. And there’s a renewed enthusiasm for direct government investment in physical infrastructure. Both trends are expressed in President Biden’s spending plans.
Big government’s back in favour. This would seem to be good news for Fabianism. The state competently managed, tinkering with market regulations, intervening where required but abjuring radical change has always been the Fabian solution.
But it may not be enough. Income and wealth inequality which steadily declined in the UK from the end of the 19th century has been rising since the late 1970s (see chart below). Government responses to the financial crisis and Covid designed to protect everyone have disproportionately benefitted owners of land, property and shares. Latest research suggests that Britain’s wealthiest 10 per cent own more than 70 per cent of the nation’s wealth and the proportion’s rising.
There was nothing in Starmer’s Labour conference speech to suggest he recognises the challenge this trend constitutes or has policies to contain it.
Growing inequality in most advanced economies is fueling resentment that found an early expression in Donald Trump’s shock presidential victory and was at least partly behind the UK’s 2016 Brexit vote.
The malaise is global. The relative underdevelopment of the nations of the global south compounded by insecurity and conflict are behind ever increasing numbers seeking a better life in wealthy countries, including in the UK. Since 1990, the number of migrants from low-income nations has doubled to almost 300m. The numbers are expected to grow rapidly with an added boost being given by the Covid crisis and climate change. Anger about migration was a key factor in Trump’s appeal and is boosting the electoral attraction in Europe of right-wing, xenophobic and authoritarian parties. China, after decades of apparent submission to market ideas, is reverting to Communist orthodoxy. In Afghanistan, the Taliban is back with unknowable consequences for hopes of liberal democracy and the market across the Islamic world.
Domestically and internationally, economic and social problems are growing in scale and more rapidly.
It’s all beyond the imaginings of the original Fabian nine who believed a new world was possible through slow and consensual change within the market system. The priority their 21st century counterparts attach to gradualness is inherently ill-suited to the times. The looming horror is that Starmer as prime minister guided by Fabian advice will be overwhelmed by events, disappointing as a consequence his supporters and enraging Fabianism’s opponents on both right and left.
The problem was identified in an article about Starmer’s economic policy options published in September by Fabian Society general secretary Andrew Harrop himself.
“Right now Labour cannot sign up to plans for big, permanent spending increases because we are about to see the highest tax rises in two generations,” he wrote. “The revenue hike of £40bn announced by (Prime Minister Boris) Johnson is almost as much as Jeremy Corbyn proposed in 2017 for the whole of a parliament…That means Labour will have to prioritise ruthlessly when it comes to making firm spending commitments. Other ideas for expenditure will have to become long-term ambitions that are contingent on how the economy performs.”
Harrop’s words were composed to depress expectations. But they could also be the knell of doom both for Starmer’s electoral prospects and his chances of success in government.
The intellectual underpinnings of Fabianism meanwhile are being undermined by growing doubts about the validity of the entire Marshallian model. As Economics 2030 argues, in economies like the UK’s — where services dominate — markets not only don’t work. They don’t actually exist.
The death of the idea of the market spells the end of the Fabian dispension.
It’s said that Starmer is Labour’s last chance. If he can’t lead the party to victory at the next general election, no one can.
But Starmer may not just be Labour’s last credible candidate to be prime minister.
He could be the final hurrah for the dying Fabian dream.