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How Austerity Won the Election, and What This Means for Labour

26/05/2015 15:13 BST | Updated 25/05/2016 10:59 BST

Austerity policies were an economic failure and a social disaster but the Tories still managed to win an election with them. The question of how this was possible is crucial if Labour or anyone else on the left ever wants to win an election again.

This election was not only about economic policy and elections never are but austerity was central to the last government's agenda and its continuation was a crucial plank in Tory's election program. How then is it possible that a policy that has changed the live of many for the worse finds such broad support?

Shortly before the election Paul Krugmann argued in the Guardian that George Osborne won the austerity debate because he cunningly eased his wrongheaded policies just in time to produce an economic upswing around election time. The short memory of the public together with deliberate disinformation from right-leaning media allowed economically flawed policies to become a political success.

While the first part of this explanation is convincing the second part is more questionable. The UK is notorious for having many aggressively right-wing media outlets but it also has many others and critics of austerity have had plenty of occasions to express their criticism.

But if the critics of austerity were right and got a fair hearing why did they fail to convince the public? Keynesians like to point out that their theories are in part counterintuitive because their logic is at odds with the experience of private households. Quite a part from being a rather patronizing attitude this is also an exaggeration. The basic ideas of Keynes are easy enough to grasp and many other theories in economics and other fields that are widely accepted are counter-intuitive.

The real reason that the Tories could turn an economic failure into a political success is that they were not effectively challenged. Labour failed to present the electorate with a plausible alternative. Yes, the consequences of austerity were denounced. Ed Balls castigated the government for slow growth and the Tory-made social misery was highlighted. However, at the same time Labour figures said into every microphone that was held in front of them that they were fiscally responsible and would seek to balance the budget. In the final phase of the election campaign Ed Miliband even tried to rebrand Labour as the party of fiscal responsibility. This is not a coherent position. You cannot deplore the economic and social consequences of contractionary fiscal policy and then turn around and promise to do the same only slower and with nicer touch. The problem is not that the public does not understand Keynesianism. Rather voters understand enough of it to see that Labour's position makes no sense.

The problem is that there is no Keynesianism in Labour's political program anymore. Since the Blair years the party has started to define left-wing policies based on the positions in other policy areas. Environmental and civil rights arguments have played a central role in distinguishing Labour from the Tories and other parties. But as far as economic policies were concerned Labour has accepted the same analysis and language that the right uses. As a consequence the party has become largely incapable of mounting a principles opposition and coherent alternative in a central field of politics.

'It's the economy stupid' may not be the key to all elections but most of the time it is and no party can win an election if it does not have a policy alternative to offer in this area. Unless Labour re-injects some Keynesianism into its political DNA and thinks about how it can square legitimate concerns with the environment and with civil rights with the need for economic growth it will find it very hard to win any election.