Britain has got socialism bad, and that’s not good

According to the old story from the Great Crash of 1929, when shoe shine boys started suggesting share tips to their customers, it was the final indication that a disaster was coming soon. In the run-in to the bursting of the dot com bubble, and again in 2007 ahead of the financial crisis, observant sceptics in New York knew their feeling of alarm was justified when they heard from cab drivers taking them to JFK who had borrowed on their credit cards to buy shares and loaded up with four mortgages on houses that had gone up so much in value in the late 1990s and early 2000s they could not lose. You know what happened next. They and a lot of other people did lose. By the time the mania has reached the mainstream, it is too late. When it all too good to be true, it usually is too good to be true

To that I can add the “bubble deflating” tale of the taxi driver who took me home the other evening from work in central London. He liked the area near where I live, and he used to live there himself. He had kept hold of his property and rented it out, he said, but several years ago he moved east and back into his other house, a large but dilapidated Victorian property he had bought for around £250,000 at the turn of the century, pre-regeneration. The area has changed in a dramatic fashion since. There are, he said in wonder, lesbian neighbours and bankers and basements being dug out in the street now. His house there is worth – for now – around £1.5m, he claimed.

Good on him and all who have done well in the explosion of property prices in London, the South East and beyond. Realising early on the power of property and working multiple jobs to keep up the payments down the years, he has built a decent-sized empire, although he lamented it all being tied up in bricks and mortar.

The question left hanging uneasily in the air was simple. Where will his children live when they leave home? How will they ever afford a house remotely near him or somewhere pleasant, unless he sells off some of his empire? It is a concern – what chance do the next generation have? – that dominates contemporary British politics ten years on from the financial crisis and explains much of the current turmoil. And why it is in the process of going bang.

It is as though in the last two decades the connection between the generations has been stretched, a little more year upon year, until it has finally snapped. The overwhelming majority of the young (I mean those below 40) were annoyed by Brexit. It was an insult to their values. Incidentally, those arch-federalists Jean Claude Juncker and Guy Verhofstadt are an insult to my values as a sceptical common law Brit wary of excessive Napoleonic codification and other utopian pish, but there you go. We had this debate last year and Leave won. As a result we’re leaving the EU, and this week it became clear that Michel “sensible” Barnier is in partnership with David Davis and they’re getting somewhere. There’s a deal involving two years of transition to be done, and we’ll know soon whether it is possible, or if hard Brexit is the only option to leave.

Anyway, I swore I wasn’t going to write about Brexit this week, and, there, I did.

Back to housing, the favourite subject of all Britons. If the Tories had set out to design a set of circumstances better suited to incubating next generation socialism, they could not have done any more to create resentment. Quantitative easing, employed post-crisis to keep the show on the road, has inflated asset price bubbles in the south, and that combined with weaknesses in house building policy and flat-lining wages, has made cold fury the default position of millions of British voters. Simultaneously, the government has increased student tuition fees to £9,000 per year, and added in compound interest of 6.1% with the debt clock rolling from the day they first start going to lectures. (We got it for free but didn’t go to lectures. That was the deal.)

But the current expensive system is fair, progressive and working, say its defenders in think tank land and government. This is the public policy equivalent of claiming, on the deck of the Titanic, that as the water laps around the ankles of the players in the orchestra, there is certainly space in lifeboat “Collapsible B.” Oh, no, it’s been rowed away over the horizon. Now, where did you say lifeboat “Collapsible C” is again? Don’t all run at once.

If the Tories remotely understand the scale of the problem, and the roots of the contempt in which they are held by those under 40, they’ll turn up at their annual conference next week in Manchester offering a reduction in fees to £6000, a review of repayments and a fair interest rate. Anything less than that start will just bounce off.

The toxic cocktail on housing and fees has legitimised Jeremy Corbyn and made him and his policies popular with the voters he needs, who seem impervious to the lessons of history. Socialism always fails. It never works. It never has, but it has new adherents impressed by answers that sound fresh and are not.

To watch the unfolding storm is to watch a recreation of Orwell’s Animal Farm. Incidentally, who in the re-run is playing the part of the smooth-talking Squealer? The propagandist who interprets and communicates what the revolution means on any given day according to the decisions of the leadership. Some say the Guardian’s Owen Jones is Squealer in this sequel, but that’s surely unfair.

Squealer and Co are winning. The public’s move against markets and profit is real, as a study undertaken by the pro-market think tank Legatum with the help of pollster Populus makes clear. The findings, published this week, are stark. Statism is wildly popular. The first stages of a socialist overhaul are approved of by a clear majority.

In a word association task, the proportion of the public who most associate communism with the word ‘corrupt’ (36%) is only 4% higher than the proportion who say the same of capitalism (32%).More than 75% say that water, electricity, gas and railways should be nationalised.

They are split 50-50 on nationalising the banks. Let that sink in. Half of the British think that the basic means by which money is loaned, capital matched to the need for profitable investment, saved and recyled into growth fuelled by the search for profit, should be run by the man or woman in Whitehall.

Even those who voted Tory in the election this year tend to favour statist ideas when asked. NHS funding through higher taxes is a priority, and they are ambivalent about whether it is preferential to pay higher taxes and have bigger government or pay lower taxes and have smaller government. The public overwhelmingly wants pay capped by government too and more regulation of business.

How is this to be responded to? It is going to come down to crowdfunded organisation, a regeneration of non-Socialist civil society and adaptation to the digital age. The government may survive longer than expected, even going the whole five years, but what is needed is a regeneration that goes well beyond the Tory party.

The super-rich will be fine in all this even if the socialists do win, by the way. They’ll find somewhere to sit it out. Their wealth is highly mobile. The little written about but widespread reluctance of the very richest – with a few honourable and patriotic exceptions – to assist anyone trying to hold back the socialist tide in politics or the “ideas space” is almost becoming funny now. They seem either to spend their time preparing an escape or blaming the leadership of the Tory party which has, it is true, made a complete horlicks of the last few years.

Still, speaking as someone who likes Britain, who will stay even if Corbyn makes Owen Jones propaganda minister authorised by his bosses to unleash two minutes’ hate on enemies of the revolution, it would be the most terrible shame to see the country turned step by step into a socialist hell-hole – nationalisation, appropriation, plunging investment, capital controls, tyranny – modelled on Venezuela. I think it’s worth fighting back.

Anyone else feel similarly exercised?

Email me on iain.martin@reaction.life if so. I would be interested to hear your thoughts on what feels like a dangerous moment. Reaction will write a lot about this in the years ahead.

Have a good non-socialist weekend, while you still can.