We are about to return to normal politics. After 14 years of Tory corruption and misrule, a Labour government will put this country back on track. Justice and decency will resume, public services will be rebuilt, our global standing will be restored, we will revert to a familiar state. Or so the story goes.
What is the “normal” envisaged by pundits and politicians of the left and centre? It is the most anomalous politics in the history of the world. Consciously or otherwise, they hark back to a remarkable period, roughly 1945 to 1975, in which, in certain rich nations, wealth and power were distributed, almost everyone could aspire to decent housing, wages and conditions, public services were ambitious and well-funded and a robust economic safety net prevented destitution. There had never been a period like it in the prior history of the world, and there has not been one since. Even during that period, general prosperity in the rich nations was supported by extreme exploitation, coups and violence imposed on the poor nations. We lived in a bubble, limited in time and space, in which extraordinary things happened. Yet somehow we think of it as normal.
Those “normal” politics were the result of something known to economic historians as the “great compression”: a drastic reduction in inequality caused by two world wars. In many powerful countries, a combination of the physical destruction of assets, the loss of colonial and overseas possessions, inflation, very high taxes, wage and price controls, requisitioning and nationalisation required by the wartime economy, as well as the effects of rising democracy and labour organisation, greatly reduced the income and assets of the rich. It also greatly improved, once the wars had ended, the position of the poor. For several decades, we benefited from the aftermath of these great shocks. Now the effect has faded. We are returning to true “normality”.
The history of many centuries, including our own, shows that the default state of politics is not redistribution and general welfare, but a spiral of accumulation by the very rich, the extreme exploitation of labour, the seizure of common resources and exaction of rent for their use, extortion, coercion and violence. Normal is a society in which might is right. Normal is oligarchy.
In his magisterial book The Great Leveler, published in 2017, the historian Walter Scheidel explains that only four forces have ever significantly reversed inequality: mass-mobilisation warfare (such as the two world wars), total and violent revolution, state collapse and devastating plagues. Decisions, decisions.
He shows how warfare economies have been turned into welfare economies, sometimes by force. For example, following the defeat of Japan, the US occupation government, led by General Douglas MacArthur, sought what it called “the democratization of Japanese economic institutions” to ensure “a wide distribution of income and ownership of the means of production and trade”. To this end, it imposed high property taxes, with a top marginal rate of 90%; broke up business conglomerates; demanded a labour union law enabling the right to organise and strike, and higher wages for workers; organised comprehensive land reform, which dissolved large holdings and distributed them to peasants; and introduced fiscal reform that led eventually to taxes on the highest incomes of 75% and an inheritance tax on the largest estates of 70%. These programmes resulted in the near-total destruction of income from capital and the creation in Japan of a political and economic democracy, almost from scratch.
All the major combatants were similarly transformed. In the US, the top rate of estate (inheritance) tax rose to 71% in 1941, and income tax to 94% in 1944. The National War Labor Board raised workers’ pay while holding down executive pay. Union membership soared. In the UK, the top rate of income tax was held at 98% from 1941 to 1952. It took decades to decline to current levels. A purchase tax on luxury goods was introduced in 1940, with rates that later rose to 100%. The share of incomes captured by the richest 0.1% fell from 7% in 1937 to just over 1% in 1975.
In the absence of one of the four great catastrophes, income and capital inexorably accumulate in the hands of the few, and oligarchy returns. Oligarchs are people who translate their inordinate economic power into inordinate political power. They build a politics that suits them. Scheidel shows that as inequality rises, so does polarisation and political dysfunction, both of which favour the very rich, as a competent, proactive state is a threat to their interests. Dysfunction is what the Tories delivered and Donald Trump promises.
Oligarchs seek the destruction of oversight, which is why UK bodies such as the Environment Agency and the Health and Safety Executive have been comprehensively gutted. The same desire was the driving force behind Brexit. They want the cessation of protest. They want a failing NHS, to justify privatisation. They want malleable politicians and a tame BBC. They get what they want, distorting every aspect of national life. They pour money into neoliberal and far-right political movements, which help capital to solve its perennial problem: democracy. The arc of history bends towards injustice. But every so often it is broken over the knee of catastrophe.
If you want a return to the rich nations’ “normality” of 1945 to 1975 – in other words, to redistribution, a shared sense of national purpose, robust public services and a strong economic safety net, high employment and good wages – and I think most people would, you need a politics that is not just abnormal, but unprecedented. Snapping the arc of injustice would mean going way beyond Jeremy Corbyn’s 2019 manifesto, let alone Keir Starmer’s limp offering, which treads so carefully around the interests of the rich. We would need to do what the world wars did, without the violence and physical destruction: a peacetime MacArthur programme for overthrowing the oligarchs.
Political parties would need to overcome their fear of economic power: of the newspaper barons, the property developers, the fossil fuel companies, hedge funds, private equity bosses and assorted oligarchs who now fund and influence our politics. The longer we leave this confrontation, the more extreme and entrenched oligarchic power becomes. If we want even a modicum of democracy, equality, fairness and a functioning state, we need not the accommodation with economic power that Starmer seeks, but the mother of all battles with it.
George Monbiot is a Guardian columnist
