Dan Hind makes some astute observations here, on the need to break the coalition before the next election. He argues for a strategy designed to split the Liberals, and in so doing save them from historical oblivion. A few observations, then.

I would guess he rightly judges Labour's position, which is that the last thing they want at this point is political power. The Blairites are convinced that they would have to implement the same cuts as the Tories are doing, (ex-chairman Peter Watts has even bizarrely claimed that opposing cuts is hurting Labour), and that it would be much easier to allow them to get on with it. The Labour soft left doesn't yet have a coherent alternative, or at least not one they're able to articulate or willing to fight for. Neither side really wants to re-open an old civil war, though the Right are better placed to wage it if it comes. So, they are sitting it out, passively awaiting the Tory meltdown and their dream ticket in 2015. Their strategy would involve striking the correct poses in the face of catastrophe, while nonetheless doing little to prevent it. (Dan does not say, but we should note, that this has significant consequences for the conduct of the labour movement's resistance to austerity. If the trade union leadership subordinates its actions to the objective of getting 'their' party in government, then that most certainly entails an attempt to keep the lid on militancy).

Where I think Hind is wrong is in assuming that the Sage of Twickenham is some sort of radical liberal, a Yellow Booker rather than an Orange Booker, who could reconstitute the Lib Dems as some sort of progressive force. The source of this bafflingly, stunningly ridiculous idea is probably Vince Cable himself. Cable has been laundering himself as the 'left' conscience of the coalition for some time, though he has always been a continental 'economic liberal', a privatizing free marketeer, and a primary founder of the 'Orange Book' tendency. He has recently described himself as a 'social democrat', in an interview in which he seemed to vaguely rebuke the finance-led cuts strategy that he has participated in, with some qualms. But by his own account you can't believe a word the man says. More fundamentally, to attempt a rescue of the Liberals as a potentially reformist agency is to miss what is happening here. Dan fears that if the Liberals are wiped out, there will be some horrible stalemate, in which the Tories and Labour compete over an ever diminishing space in the middle ground, prosecuting the same basic neoliberal policies while the balance shifts periodically between social liberalism and authoritarianism. But if enough Liberal MPs can be tempted to break from the Orange Book freaks, then Liberalism can be reconstituted along '1908' lines, and electoral competitive pressures could still force the major parties to adopt beneficial reforms. Hence, save the Liberals.

The problems with this are various - we shall leave aside the disparity between ambitious ends and inauspicious means - but perhaps a good starting point is to look at the current electoral realignments. The haemhorrage of the Liberal vote in England, and the surge for the SNP in Scotland should be considered as parallel elements of the same process. This is not the first time we've seen such sudden, sharp alterations in political composition - consider the rise of the SDP after 1981 and the concomitant contraction of Labourism. It is the sort of realignment that Gramsci spoke of, regarding a period of 'organic crisis': "At a certain point in their historical lives, social classes become detached from their traditional parties. In other words, the traditional parties in that particular organisational form, with the particular men who constitute, represent, and lead them, are no longer recognised by their class (or fraction of a class) as its expression ... [this] occurs either because the ruling class has failed in some major political undertaking for which it has requested, or forcibly extracted, the consent of the broad masses (war, for example), or because huge masses (especially of peasants and petit-bourgeois intellectuals) have passed suddenly from a state of political passivity to a certain activity." (Emphasis added) A logical result is "the passage of the troop of many different parties under the banner of a single party, which better represents and resumes the needs of the entire class" at a speed "almost like lightning in comparison with periods of calm". ('Hegemony, The State & Civil Society').

The point here would be that the current recomposition of the electorate looks epochal rather than merely conjunctural to me. This does not mean it is irreversible, but that political solutions based on reversing such trends are conservative and perhaps oriented toward situations that are no longer pertinent. The Liberals' capacity to operate as a sort of surrogate social democracy reached its high point (and what a thrilling zenith that was) in 2005, oweing to the war, Blair's unpopularity, and a load of festering discontents over 'New Labour'. The war isn't over, but it's ceased to be foregrounded at the ballot-box; Blair is gone; and 'New Labour' has lost control of the Labour Party to a union-backed candidate. In the meantime, the Liberals had experienced an internal putsch against the mildly social democratic Charles Kennedy by the Orange Bookers. This process was mandated by the party faithful. In 2011, the Liberals are part of a privatizing, cutting, war cabinet, and show no signs of wishing to be anything but the Whigs to Cameron's Peelites. Beg their MPs, send them letters, petition and doortep them... but with their polling average at 10%, their leader a national hate figure unable to visit a daycare centre without being picketed, and their party mauled in local elections, is there any sign of anyone listening? The great majority of them have already voted for the cuts; they made their decision, knowing what to expect. And it isn't because they're masochistic - it's because they believe that if they hold on until 2015, growth will have resumed, people will feel prosperous, and the electorate will duly reward them.

This brings me to my next point, which bears on the sort of pressure that would be required to compel MPs to shift their position. Parliamentarians, as we have come to know, are effectively insulated from popular pressure by the institutions they work in. The ancient caricature of politicians chasing every vote, greasily promising all things to all people, vacillating to appease a mercurial popular will, doesn't even raise a smirk these days. Political careerism in this era means, above all, clinging doggedly to unpopular orthodoxy ('principle') and representing it as the only game in town ('realism'). Yes, they still worry about losing their seats, but as long as the general wipeout isn't too severe, then the effective ones can always be looked after. Since the Liberals are betting on a revival by the end of this five-year term, and since they almost all accept the argument in favour of cuts, they will calculate that pissing off millions of voters is a short-term risk they can afford to take. They certainly won't be inclined to take seriously the threat that the local anti-cuts committee will turf them out of office. Unless.

The only kind of pressure that could, for example, turn 38 cuts-supporting Liberals into anti-cuts radicals is the kind of disruption that would worry their bosses, and their bosses' bosses. We're not talking about protests, riots, occupying public or commercial facilities, or even big one day strikes. They've planned for that. They're ready to police it. We're talking about a fundamental, enduring and self-perpetuating realignment of leftist, labour and oppositional forces, their emergence as a militant political alliance such that capital began to worry for its ability to maintain control without making serious concessions, and such that the long-term viability of the parties making up the coalition was under threat. The coalition is, yes, highly unstable, fragile, comprising antagonistic components... but its breakdown would not have to work to the benefit of the anti-cuts Left. It could just as easily permit a re-polarisation of the Tory bloc, with perhaps some new Liberal allies incorporated, to the Right. Only if there were an anti-cuts campaign whose 'message' is being communicated with compelling force, and that campaign had something to do with the breakdown, would it benefit the Left. Yet, it is precisely such mobilisation that would hasten the contraction of the centre ground and thus help reduce the popular basis for Liberalism. It seems to me that at this moment in history, the destruction of the Liberals would be an aspect of our advance; and that to attempt to rescue them, even on a radical basis, even through threats and protest, would be a detour down an historical cul de sac.

I. The Right. The Right's response to the 2008 slump was fast and effective. They first participated in an enormous leveraging of the state, through the unprecedented bail out of financial institutions, then took every opportunity to explain that the problem was one of over-spending and indebtedness. It wasn't just the banks who had been too gluttonous. That old bogey, the socialist state, bore responsibility for burdening the British people with larcenous rates of taxation, in order to fund a useless and intrusive welfare state that left people miserable and dysfunctional. It's important to recognise how well-timed and well-pitched this was.

Prior to 2008, the Tories could not have made this argument and anticipated making any headway with it. Instead, their strategy was to match Labour's spending totals and conduct a war of position over the priorities within that accepted framework. But in a sequence notably punctuated by the quasi-comical (underwhelming, on its own terms) parliamentary 'expenses' scandal, the Right engaged in a series of manouevres which blamed Labour 'over-spending' for the deficit - 'over-spending' which, until then, they were committed to continuing. And they were given credence by a majority of the British people for a period of time. There was something very Thatcherite in the manner in which the Right sought to mobilise a certain residual culture of masochism behind austerity - you have over-indulged and must now repent. They operated on a series of connotative linkages, eg, between household and state expenditure, in which the private fear that one has borrowed more than one can afford to pay back is bonded to the ideologeme which holds that the state is always inefficient, always over-spending, necessarily unproductive, and always in need of perpetual down-sizing. This is the petit-bourgeois manner of thinking, univeralised - the nation imagined as a corner shop that has to balance its books and keep an eye out for thieves. Of course, no recipient of state largesse is more inefficient, and less productive, than the 'benefit scroungers'. Tory propaganda duly worked on this theme, and Osborne swung the axe heavily in the direction of the welfare lifeline. Polls tended to find that people approved of this aspect of the cuts agenda.

II. The Left. Until the student protests, the Left was beset on all sides by a pervading dysphoria and utter perplexity. We know the script after all. The capitalist system goes into an unprecedented global crisis, every stable co-ordinate of the political-ideological universe is unsettled, governments start borrowing and spending like crazy to stave off a complete collapse, suddenly the bastardised Keynesianism of 'old Labour' is back in vogue. In such circumstances, the Right should be on the back-foot and class struggles should take off. And by 'class struggles', I don't simply mean strikes and factory occupations. It is in the nature of capitalism to multiply sites of antagonism, and in each of these class will be present in different ways, whether it's over healthcare, supermarket chains, women's oppression, immigrant labour, the media, or war. Notably, the struggles that did emerge, in Vestas, Visteon, the Lindsey oil workers dispute, the Tower Hamlets lecturers' strike, etc., cannot be reduced to simple labour-management disputes over jobs, pay and conditions. Rather, each contained a pronounced 'political' element - the environment, pensions, education, immigration, etc.

Given an organic crisis in capitalism, a crisis in productive relations that could not be localised, but necessarily radiated to every political and ideological relation embedded in the system, the Left should have been aggressively making advances on multiple fronts. The Left should have been taking territory and hostages, leaving opponents reeling. But this is not what happened, barring the few flare-ups which I mentioned. And the case of Lindsey, which resulted in thousands of workers marching for "foreigners out!", showed that such struggles as did take off did not have to benefit the Left. This is the point at which, traditionally, one warns against 'vulgar economism' and 'workerism', but this is only a real temptation among a few hold-outs of the Left influenced by traditional labourism - recall that Gramsci's critique of 'economism' was aimed at the reformist trade union leadership. The more prevalent error today is to think that Leftist politics can be conducted without any orientation toward class. Still, it's hard to see how the Left, even discounting for its currently depleted, scattered state, could have done much about the level of class struggle. It was forced into a positional struggle, an ideological battle, in which the 'common sense' of neoliberalism initially prevailed over the competing 'common sense' of social democracy.

III. The War of Position. While we anticipate major social struggles continuing over the next few years, with no certainty of avoiding catastrophe much less of attaining victory, the 'war of position' will continue to be as important as outright combat. Indeed, ideological, parliamentary and cultural struggles do a great deal to prepare the pre-conditions for more militant forms of combat such as the withdrawal of labour, factory and university occupations, and other disruptive actions. Here, the Right has long understood something that the Left will do well to remember. Whatever the plane of crisis, whatever the axis of struggle, the issue can always be put another way.

The crisis of capitalism became a crisis of over-spending, just as the crisis of poverty became a crisis of social dysfunction, and a crisis of authority in the British state became a crisis of 'multiculturalism'. The Right didn't win all the arguments in 2008-9 - far from it. If the washout of yesterday's right-wing 'Rally Against Debt' is any guide, and it was plugged in the media far more than it deserved to be, there is hardly any enthusiasm for the latest assault on welfare and public services. But the Right doesn't have to win all the arguments, or generate enthusiasm. Its near monopoly of the popular and broadsheet press, along with the complicity of the centre-left, allowed it to operate on genuinely popular assumptions, absorbe the elements of popular discontent and polarise them to the Right.

The majority do want to keep some sort of well-funded public sector, don't favour privatization in the NHS, support state education, and blame the bankers for the recession. But distrust of the state (for some good reasons - the Tories focused a lot of their fire on New Labour authoritarianism and centralisation) is also widespread, as is discontent with how money is spent (again, for some good reasons - think of the PFI boondoggles). Anti-immigrant sentiment is at an all-time high, disdain for beggars and benefit recipients is widespread, and support for redistributive politics after thirteen years of New Labour in office is now a minority pursuit. Meanwhile, local councils are often encountered as some of the most inept, obstinate, and coldly indifferent bureaucracies in the country. So, with a near Pravda-esque capitalist realism propagated through the state and capitalist media - and one is struck by how often it is still taken as 'obvious' that some cuts have to be made somewhere - it only remained for the Tories and their allies to furnish the popular imagination with endless examples of alleged 'waste', incompetence, and fraud. Local councils spending your money on Muslim-only toilets, benefit fraud, illegal immigration, 'health tourism', etc. But things don't have to be this way.

IV. Winning. Left-wing campaigns have focused on reminding people that they hate the rich, really resent them and their power and arrogance; that they don't trust the Tories; that they like having free healthcare and schools; that the despised bankers caused the crisis, and not ordinary people; that mass unemployment is a social ill for which they will suffer; that they're against the wars for which there is endless government money; and that if they think the state is inefficient, they have already tried the private capitalism of Enron, Worldcom and Lehman Brothers. Since it is normal for people to entertain conflicting ideas and ambitions, the aim is firstly to shift the weight of emphasis along the continuum away from reactionary resentment and toward popular and class-based anger. Secondly, it is to destabilise the austerity alliance by attacking their weak links, and shaking free some loose elements ripe for re-appropriation. For all that we repeat that the ruling coalition is a Thatcherite one, we also have to constantly bear in mind its historical specificity. It is an unstable government, binding Whigs, Peelites, and High Tories, Thatcherite mods and rockers, Europhiles and Atlanticists, social liberals and reactionaries, have-a-go-heroes and hoodie-huggers, finance capital, producers, the petite-bourgeoisie and the progressive middle class. Attacking the unity of this coalition and dispersing its constituents is a precondition for any meaningful advance. Thirdly, the aim is to re-articulate many of the same elements operated on by the right into a new majoritarian leftist political mobilisation.

UK Uncut is an interesting political intervention in this respect. It can never fulfil the latter two remits, but look at its contribution to the former. There's been an awful lot of focus on its method of organising, which may be facing a crisis as it comes under the steamroller of police repression, but far more important is what it has said, the way it has interceded in the ideological field, drawing attention to the underfunding of the state by the rich, the state's leniency toward the rich, and the fact that cuts are not inevitable or necessary but rather a class-loaded 'ideological' project. From a peevish, sectarian perspective, one could write it off as a sort of middle class 'people power' movement that will change sfa. But that would be to miss the point entirely. It already has changed what it set out to change: the field of signification. This advance is highly circumscribed, was not achieved by UK Uncut alone, and leaves much work to be accomplished by other forces - but it's still not to be sniffed at.

The second goal, of shattering the coalition, which the Tories depend on to impose their version of austerity, is not something that one could just assume would happen as a result of the 'contradictions' of the coalition. It is something that has to be worked on. The student protests rightly targeted Nick Clegg and the Lib Dems as much as the Tories, turning the renegade Liberal leader ("wolf-eyed replicant"...) into a national hate figure, running the Liberals down in the polls, and ultimately making it difficult for them even to show their faces in public. I cannot understand the approach of those who say that the Tories are the real enemy and that therefore the venom toward the Liberal leadership is a waste of good spleen. It's because the Tories are the 'real enemy' that they have to be isolated, and this coalition broken. As of now, the Tories still don't have enough support to win an election by themselves. They briefly commanded an electorally viable plurality in the period from 2007 to 2009, but have since 2010 been back to their normal range votes, tending to be somewhere between the low to mid-thirties - this despite the astonishing ineptitude of a Labour leadership that never misses an opportunity to miss an opportunity. Every time the Tories come out with some right-wing poison about immigration or 'integration', it places the coalition in danger. The harder they push for the deepest cuts, for privatization, the more the Liberal leadership has to placate its shrivelled 'social liberal' conscience. When the Tories hammered the disastrous AV campaign, it consistently put the Liberals on the back foot. Now they have nothing to show for their gambit, a sort of queen's sacrifice - bar the cuts, and the steadily accumulating ranks of knights, bishops and pawns on the Tories' side. The only rational thing for the Left to do in such circumstances is to keep hammering away, by every available means, until the coalition splits, or enough Liberals defect to trigger an early election.

The third goal, that of re-articulating the elements of popular discontent into a majoritarian leftist response to austerity, has proved more difficult. Let's not deny what has been achieved. The turnout for the big TUC rally was amazing, as deep as it was broad, truly representative of the British labour movement and its periphery - and what a powerful movement that could be if it decided to move all as one. There are real pressures for mass, coordinated strike action coming from below in every trade union. This hasn't turned into independent, rank and file initiative in most cases. Largely, the direction remains in the hands of the bureaucracy. But the pressure is there, and is contributing to the build-up for a mass strike on 30th June. But the attempt to build a national political campaign against cuts with similar social depth is taking time. Actually, there are several competing vehicles, and not one of them is adequate on its own; not one capable of extending beyond its party basis and periphery. While each broadly has the same analysis of the cuts, they all operate in different ways, relate to different constituencies, and address a different aspect of the same problem. Such parcellization almost guarantees that these vehicles will remain confined to the extant left, unable to harness wider forces. This isn't to play the sad old finger-wagging game of simply denouncing 'divisions on the Left', wryly referencing 'Life of Brian' for the boreteenth time, as if anyone is actually in favour of such divisions. Sometimes, these divisions are necessary, or have a legitimate basis, or are unavoidable; sometimes they aren't. There's no way, at any rate, to simply over-ride these. So, somehow, the different groups have to find the appropriate level at which they can engage in unified action, in order to coordinate publicity and solidarity campaigns, locally and nationally. One could envision, for example, a multiplicity of possible structures (more or less centralised, or federal, depending on the degree of agreement between the factions involved, and the degree of democracy each mode of organising permits) to which different campaign groups could agree to affiliate for a fee, and which would seek the funding and support of the trade unions, etc.. The alternative is to allow the political direction of the anti-cuts movement to be fixed somewhere between a Labour leadership that actually argues for (slower, less savage) cuts, and a trade union leadership some of whose big battalions have resigned themselves to doing the bare minimum to oppose cuts.

Of course, it isn't just about merging the vessels of the extant left into a single flotilla, at least not for its own sake. It is only worth doing if it increases the combined efficacy of the forces involved. But the point is to coordinate ideological and cultural counterpoints to the politics of austerity, which task seems to require a pooling of resources and combination of forces. As and when struggles emerge, unpredictably as they will, the aim is that they will not emerge in a socio-symbolic field cultivated exclusively by the Right, so that they merely appear as law and order problem, but in one where their actions are intelligible as logical and worthy responses to a widely apprehended injustice. This will be particularly important as, increasingly, we're forced to operate in the space between purely impotent civil society protest and illegal and potentially dangerous adventurism. The state hasn't been able to operate through cooptation and consent since the 1960s, and has thus tended increasingly toward the authoritarian end of the spectrum of rule. The criminalisation and suppression of protest, however peaceful and formally within the law, is consonant with that. The police will need to continually justify their mode of highly repressive policing without being seen as the armed wing of a particular government, which would be a threat to their legitimacy. Thus, they have to turn a growing number of protests into heavily fortified battlegrounds, with their opponents pre-designated as violent criminals. The propaganda battle is, of course, partly dependent on class struggles taking off. That is why some of the propaganda stunts are themselves miniature 'actions', forms of deliberate disruption. But even as they do, there can always be simultaneous work going on to reinforce the principles of articulation, the political logics by which diverse contestations are brought into a coherent whole. Opportunities for parliamentary mobilisation may come into this, although recent election results seem to have indicated that in most cases it's close to useless for left-of-Labour forces to stand their own candidates. But there will be other elections, where it is more plausible to stand: student and trade union bodies, local councils, etc. Certainly, legal battles will be important, as the recent G20 verdict demonstrates. Anti-fascist and anti-racist work will be important, as a desperate Tory party is apt to shore up support by attacking minorities. All of this can be done best if it is done with a constant focus on shifting the balance of common sense away from the neoliberal pole, and in the process transforming the contents of mainstream social democratic thinking in a leftist direction.

The results from the Barnsley Central bye-election:

This is a huge vote against austerity. The Liberals crashed from second to sixth place and lost their deposit - this in a seat where the Labour MP had been forced to resign due to his imminent imprisonment for fraud. Both the Liberals and the Tories saw their vote share slashed, from roughly 17% each in the general election. That is, the coalition parties saw their vote share cut by almost two thirds. The BNP vote is also down by three percentage points, though this can partly be attributed to the fact that UKIP more than doubled its vote share.

This means that not only is the electoral base of the Liberal component of the coalition shattering as working class voters rally to Labour as the only available parliamentary obstacle to the cuts, but the Tories' hard right base isn't dependable either. UKIP represents the defection of a racist, nationalist, Europhobic and hyperglobalising segment of the Conservative Party, based disproportionately on small businessmen, lone traders and the insecure newly affluent, initially concentrated in the suburbs and rural areas of south-east England. Its voters include many 'strategic defectors' from the Tories outside of general elections, middle class right-wingers who want to register their hostility to immigration and European integration without risking a Labour government if possible. However, the party has also assembled support from skilled workers in collapsing industrial areas, and its core support is demographically similar to that of the BNP, excepting that BNP voters tend to be a bit younger.

The Cameron-Clegg coalition was based on the existence of a large centre vote, as millions of voters looked for an 'honest broker' amid the crisis and after the dreadful New Labour years - but that centre ground is predictably collapsing. The austerity agenda is producing a rapid polarisation, with Labour consolidating its hegemony over the left vote (excepting in Scotland, where the SNP is consistently out-performing Labour as a rival reformist bloc based on soft left nationalism), while the right-wing fragments in multiple directions. With racism on the rise and about half of the electorate theoretically willing to consider voting for some kind of anti-immigrant party, the danger is of the most reactionary elements on the right using the support redistributed to them in order to polarise the agenda further to the right. The temptation for Cameron will be to steer to the hard right as his coalition crumbles - he can't really do without the Liberals, but he can manage even less without the Tories' core vote and in his despair he may have to gamble on re-pivoting his whole agenda on the basis of some reactionary-populist cynosures.

This is the terrain on which the anti-cuts left is going to be operating in the short-to-medium term. It is one in which the struggle against racism and fascism will inevitably be a crucial aspect of the fight against the cuts. The fire-fighting against the EDL mobs, the doorstepping in BNP target constituencies, and the painstakingly constructed cultural interventions of Love Music Hate Racism are currently retarding but not stopping the growth of the racist right. They are preventing the racists from fulfilling their latent potential, and thus keeping a space open for the Left. But it is when the anti-cuts movement takes off as a force in its own right, as when the student demos rocked Britain, that the far right looks weakest and least relevant. The EDL's impotent, foot-stamping fury at the way in which radical youths stole the agenda and limelight for the Left illustrates this beautifully.

It also means that those who think you can exclude Labour from the anti-cuts movement are kidding themselves, and would do well to free themselves from the Procrustean bed of formally correct but useless slogans. Rather, we should be operating on conflicts at the core of social democracy: the central conflict being between the Labour Party's aim to represent and convoke the working class as an agency for reform, and its inevitable drive to gain 'credibility' with capital, whose cooperation will be required once Labour is in office. In practise, this means that anti-cuts activism will involve interventions within Labourism itself, uniting coalitions of Labour members and supporters with those to their left, the better to oppose any concessions to the Tory agenda by the leadership, resist the 'realist' pro-cuts politics of Labour-supporting intellectuals, and put pressure on Labour councillors not to simply capitulate and vote for 'humane' cuts.

There you go. That's my short hand analysis of the Barnsley Central bye-election. Don't say I never do anything for you. Or at you.

On the VAT reversal: "We were trying to score a point against the Conservatives, if you like. Okay, well that was in the election. We have now moved past the election."

I don't find myself refreshed by the Sage of Twickenham's honesty about his dishonesty, any more than I'm charmed by any of his fatuous nicknames - aside from the 'Sage' tag, he is garlanded with 'Dr Doom' and 'the Prophet Elijah', the harbinger of judgment. For all his lamentations about the moral cesspit of the City, he consistently shows himself to have the mindset not of a prophet, but of a spiv, an opportunistic trader for whom any lie is good enough. Lacking talent or charisma, he makes a small electoral killing by misrepresenting his wares, banks the votes and splits.

Two of the last, pathetic, arguments mounted in the Liberals' defence is that they are if nothing else humanising Tory policy, and are, at any rate, honest brokers. Cable and Clegg are thankfully determined, in their exultant glee at finally being among the big boys, to trash those illusions. The only sense in which the Liberals have helped to humanise Tory policy is by lending their weak saffron brand of 'social justice' to the sales literature, and that is losing traction rapidly. And honest brokers? They've made their bona fides clear: they are at their most direct and brazen with us when admitting they've been lying to us.

It has come to a pretty pass when the most free market of free market liberals, the most hawkish, pro-austerity member of an austerity coalition, launches what is billed as a blistering attack on "capitalism". The planned speech is being widely described in the press as "left-wing rhetoric". Predictably, the CBI are reacting with feigned outrage, the Daily Heil insinuating that Cable might in fact be a closet Marxist, and the scum Express is leaping to the defence of free enterprise.

It's crap, of course. What Cable favours is a better regulated capitalism with a humbled financial sector, but he knows he can't even deliver that while he's a helpmeet to George Osborne, the trust fund chancellor who is one of the many millionaires in the Tory front bench, and who is committed to defending a robust, liberated financial sector. The "capitalism" that he impugns is a particularly rapacious form of financialisation, and I don't believe he's winning the policy arguments in the cabinet. Still, he feels he has to name and shame the system in a way that most bourgeois politicians haven't done for decades. Undoubtedly this is intended to staunch the flow of defecting voters, members and councillors, while re-asserting Cable's reputation as a sort of maverick - a reputation that has already been soiled and bloodied due to his involvement in this savage and unpopular austerity agenda. Undoubtedly, it is meant to reassure the dissenters that the 'instincts' of the Liberal leadership are still basically decent and socially conscious, and that they have not been captured by 'sectional' interests, ie those of capital.

Whether anyone buys it or not is almost secondary. That capitalism is a system that people acquiesce in and tolerate for want of an organised alternative is increasingly obvious. That the vast majority of people blame capitalists and bankers for the austerity agenda, more so than they blame anyone else, is also clear in the polls. The interesting thing will be how Labour MPs respond. I am certain that the reflex of most of the leadership candidates will be to defend "capitalism", and to complain about Cable's empty promises and to agree with Lord Turner that it's policy that counts not greed, etc etc. So it is that a right-wing, senior cabinet member in a hard right government perpetrating an unprecedented attack on the welfare state ends up saying what few social democrats have dared say since the defeat of the miners.

The poor must accept benefit cuts. The welfare system isn't there to compensate them for their predicament, but to catapult them into new opportunities. It's time to end welfare dependency. Thus Nick Clegg recites from the soiled manifesto of neoliberalism, with its tired catechisms about dependency. This stifling orthodoxy is a sure sign of the exhaustion of our governing institutions, the near complete enervation of their democratic potential.

Anyone who has been on jobseekers' allowance, for example, would be entitled to feel both insulted and threatened by Clegg's trite remarks. The amount given to those seeking work is just the bare minimum that the government deems will cover a 'basket of goods' (food, travel, toiletries) to enable an individual to live a relatively spartan life while seeking employment. No one is being compensated - they are being kept alive. The system prevents high structural unemployment from wiping out much of the population, or forcing it into criminal, black market activities. Cutting those benefits is an attack on the life chances of millions of unemployed workers.

On top of that, if it weren't for a whole network of other public goods, such as libraries with free internet access and newspapers, this level of income would indeed be a trap. After all, how can one compete for jobs in today's labour market without regular internet access? Few people on benefits actually have internet in their homes. Or public transport. How could one travel to and from job interviews, if it weren't for an effective public transport system? How could one afford the journey, or a suit to wear, if it wasn't for various kinds of reimbursement that one can claim from the job centre? And healthcare. People living on jobseekers' allowance tend to have poorer diets and are vulnerable to illness. If it wasn't for free GP access, and free prescriptions for those out of work, their life chances would be sharply reduced. Which makes it all the more ironic that this is a government that is attacking not just benefits, but all of the various components of the welfare state, while at the same time removing the public sector investment that is sustaining employment. At the same time, they will be seeking to raise the pension age, so that more people are in the labour market for longer, thus increasing the amount of structural unemployment. The spiel about 'welfare dependency' is a crock - they are knowingly making it so that more people find it more and more difficult to escape unemployment.

Before the election, Clegg was seen by many as an honest broker, a fresh face unbeholden to 'sectionalism' in the best tradition of liberalism. But he has emerged as yet another spokesperson for the interests of capital. He is part of a Tory government, therefore part of a government of big business. That was the basis of the coalition pact. And, moreover, this isn't an unnatural position for the Liberals to be in. It is alleged by certain parties to the Lib-Lab negotiations back in May that the Liberals proved even more hawkish in negotiations than the Tories were in public, pushing the agenda on cuts well to the right. I find this all too believable. And thus, the Liberal leadership grabbed with both hands the opportunity to shed that aura of centre-left probity painstakingly accumulated by Charles Kennedy in the tradition of Jeremy Thorpe and Jo Grimond. Their standing in the polls has for now stabilised at between 12 and 14% - still too high in my opinion, but, if it holds, their lowest standing since the 1979 general election when David Steel crashed to 13.8% in the polls. In short, the long-term benefit to the Liberals from the division in the Labour coalition in 1981 is being reversed by this apparently very short-sighted Orange Book leadership.

I take delight in the Liberals' woes. This is not just because of my burning hatred for this coalition, and my probably unwarranted shock at the Liberals' decision to team up with the Tories. It is mainly because the defection of millions of voters from the Liberals is most likely to be a class conscious act, by former Labour supporters in working class heartlands. I take heart from that, and from the prospect of the centre vote being destroyed by the worst capitalist crisis in living memory. The coalition's 'mandate' is weak. The majority of people do not support the coalition's plans. 22% of people back the government's cuts. 37% support the lesser, more gradual cuts that Labour proposed at the last election. 37% of people don't want any part of the cuts, and favour protecting jobs and the vulnerable above tending to the deficit. This suggests that the arguments of the Left and the unions are starting to have an impact, despite having precious little coverage in the media. These arguments, favouring a version of left-Keynesianism, are entirely incompatible with the official programme of any of the three major parties, but they provide a good basis for some sort of 'action programe' that the left can unite around, and which can inform the practise of community activists and trade union militants.

Of course, it helps that Labour's current leadership race is forcing some of the contenders to sound a little bit more left on the cuts than they actually are, adapting to Diane Abbott's argument that the cuts are not necessary. While the Milibands are sticking pretty much to the cuts package announced by Labour at the last election, hedged with a lot of mealy mouthed language about 'credibility', Ed Balls, who sunk his own campaign early on with his crass, racist intervention on immigration, has said that we shouldn't even be talking about cuts at this point. But as is often the case, opinion is solidifying against the government's austerity agenda without much lead from national politicians, and amid a near Orwellian campaign in the media to advise in the most shrill, strident terms that "there's no money left".

If 'public opinion' is turning against the government, industrial action is likely to weaken its position further. Polls have recently suggested that 35% of people at the moment favour industrial action to fight cuts, and 45% of people would oppose it. Caveats apply to these, as to all poll findings, and no industrial strategy should be exclusively based on such evidence. But in my opinion, this does mean that the argument is wide open. 35% of people saying they back strike action when, as the poll was taken, only the left-wing trade union leaders and the revolutionary left had openly called for it, is quite a good number to work with. All of the anti-cuts coalitions springing up locally can take heart in this, in the negative approval ratings for the coalition, in the polls showing majority opposition to the cuts, and in the growing but very substantial and potentially organised minority who advocate a completely different programme altogether.

National strike action, coordinated to some degree, is now inevitable. The coalition is making it so. Socialist Worker's analysis argues that the TUC is moving to the Left, propelled (all too slowly) in that direction by the sheer aggression of the Tory cuts and the anger of the rank and file. The conference in Manchester has been marked by almost complete unanimity on the seriousness of the threat, and the need for united action including joint industrial action as well as community campaigning to resist these cuts. Trade unionists recognise that they have a fight for survival on their hands. But so do the young, pensioners, the unemployed, students, and those workers who aren't represented by a union.

That is why it is essential that these anti-cuts coalitions continue to be built, from the ground up, involving all of those affected, and everyone who wants to fight, such that when the workers go out on strike they do so with established roots in local communities, as part of, with the support of, and on behalf of those communities. But they should not stop at the local level. The working class has been too divided and atomised over recent years to put up adequate resistance to the neoliberal agenda. The aim must be to combine all of these coalitions and groups into a national movement that can both defeat the Tories long before their term expires, and form a popular bulwark against sell-outs by whatever Labour leadership emerges after the elections. Because if labour history has taught us anything, it is that what the Tories fail to do by aggression, Labour can often do through cooptation. Whether or not the goal proves possible, it is unrealistic to aim for anything less. Either the left and the labour movement get their act together at this pivotal moment, or they will be destroyed by the coming onslaught, and we will have a future in which Nick Clegg occupies the farthest left of bourgeois politics, with a right-wing increasingly defined by petit-bourgeois reactionaries and fascist provocateurs. Imagine - it would be like living in America.

Good to see further proof that the Liberals are the achilles heel of the ConDem coalition:

As the Yougov comment piece points out, the Tories have held up their support rather well so far - it's Liberal voters abandoning the party for Labour that is bringing down the coalition's support overall. My etch-a-sketch analysis: this is the inevitable result of the collapse of the centre ground as the opening shots of the cuts battle are heard. Liberal voters in Labour's former working class heartlands are probably deserting en masse, back to Labour. At the same time, middle class voters who have supported the Liberals in the past now feel better about supporting the Tories (because Clegg has lent Cameron his 'progressive' aura). What is more, they now have a decided class motivation to do so, since their income is invested in house prices, shares and speculation. If the Tories can rescue the City, and the housing market, they will win back much of the long-term loyalty lost in 1992.

I would be surprised, though, if the Tory support didn't also start to collapse very shortly, and Labour didn't end up with a clear lead. I suppose it depends on whether the Bank of England's polyanna-ish stance on spending cuts holds true, or whether the economists' sceptical stance proves more accurate in the end. It may also depend on whether Ed Miliband is the unelectable weirdo that I suspect he is, because he's probably going to win the Labour leadership contest.

Some aspects of the cuts debate are continuing under my last rejoinder, which you might want to check out. I want to flesh out an important point regarding the mythologies about class and politics that became a New Labour mainstay. These include the myth that the majority had abandoned class consciousness, instead becoming 'aspirational', and as such had embraced core aspects of Thatcherism ('popular capitalism'), moved away from social democracy and were turned off by appeals to egalitarianism and public ownership.

That these are indeed myths, I will show in due course. But they have origins particularly in the right-wing lurch in the higher echelons of the trade union leadership and the Labour Party in the early 1980s, that was sometimes known then as 'the new realism'. They did not originate from within the labour movement, but rather are an adaptation to ideas developed by the right-wing of the Conservative Party since the late 1960s, and aggressively pushed by segments of the capitalist media, most famously represented by the Selsdon Group, a 'free market' pressure group set up by Nicholas Ridley in 1973. How they came to be currency in the right-wing of the labour movement has to do with the failure of the 1974-1979 Labour government.

I've written elsewhere of how the New Left emerged in response to the collapse of the post-war consensus. It coincided with the emergence of a radical left-wing leadership in the trade union movement, and the arrival of a militant shop stewards' movement. But what it did not do was feed into a movement to build an alternative to the Labour Party, as people like Ralph Miliband thought was necessary. The forces of the revolutionary left were too small, and the numbers of people on the left prepared to break with Labourism were insignificant. Rather, it fed into a surge in the Labour Left's fortunes, whose hopes were pinned on a Labour victory, delivered twice in 1974.

Let's consider the manifesto that Labour won on in February 1974, and again in October 1974. It included the commitment to price controls, a wealth tax, caps on rents, and protection for tenants against eviction. On health, it promised to abolish prescription charges and democratise local health authorities. On racism and imperialism, it promised to eliminate racist discrimination in nationality laws, end Britain's involvement with apartheid, and reduce defence spending. On industry and employment, it committed to an exansion of public control of industry including in profitable industries (socialising gains as well as losses), making existing nationalised industries more responsible to workers and users and properly "socialise existing nationalised industries" (interesting distinction). The 25 leading companies would be nationalised, according to the Alternative Economic Strategy upon which the manifesto was substantially based. It pledged to create a National Enterprise Board to further socialise industry, the intervention of the state and notably it pledged its support for "industrial democracy", wherein (as per the Labour Programme 1973) workers would have a direct representation through trade union channels in the management of industries.

Much of that programme owes itself to Tony Benn, who took on board the New Left's criticisms of social democracy, and urged the party leadership to move to the Left in order to win the election and effect a fundamental shift in the balance of wealth and power in British society, such that no government could feasibly turn it back without facing the resistance of a powerful grassroots democracy. It is fair to say that he over-estimated the ability of a Labour government to achieve a fraction of this, and under-estimated the ability of the state and private capital to resist it. Leaving the bulk of economic power in the hands of private capital, Labour nonetheless expected them to meekly accept tax rises, more government oversight, a workers' share in the control of industry, the socialisation of profitable companies... there was no way they were allowing this to happen.

It was a utopian programme in the strict sense that no thought had been given to the range of social forces it would be necessary to assemble and mobilise in order that its goals could be achieved, and its accomplishments protected. It was simply assumed that an elected government could bring these changes about, and that once implemented the ruling class would have no alternative but to accept them. What Benn was attempting was a radicalised version of Labour's traditional mission to bridge the gap between nation and class - that is, to tie the improvement of working class living conditions to the improvement of international economic competitiveness. Even so, the ambition the programme is a tribute to the way in which successful struggles had fired up the radical imagination. The atmosphere was such that even the traditionalist, pragmatist, right-wing Labour leadership felt compelled to accept it, and millions of working class people put their faith in it.

***

The 1974-1979 Labour government produced a terrible disillusionment. This opened the way for the split in the post-war Labour electoral coalition that took place between 1979 and 1983. Why? A number of things. Firstly, Labour didn't deliver. It found itself compelled to impose spending cuts to win loans and stabilise the currency, and pay cuts to restore profitability, and thus competitiveness, to British capital. Senior civil servants, the Labour Right, and the IMF worked in different ways to block the most radical of Labour's proposed reforms. Treasury officials worked to frustrate the radical policies promised in the Alternative Economic Strategy. The CBI threatened an investment strike if Tony Benn got his way, and considered illegal measures to subvert the government. That proved unnecessary in the end. 'Industrial democracy' was dropped as a policy goal, and the ambitious public ownership programme produced only a few nationalisations mainly to prop up failing businesses. Far from the rich being squeezed, it was wages that were held down.

Secondly, the supposed means of delivering a new society became the means by which working people suffered - the social contract, for example, which restricted wage increases to 5% at a time when inflation soared far higher, sometimes as high as 20%. The real terms pay cuts were deeper than those Heath had achieved. It was the institutions of the labour movement, the TUC General Council in lock step with a Labour government, that imposed this austerity, and it was more effective for that. Similarly, the idea of workers having a share of control in industry was commuted into the goal of 'participation', which basically meant that union officials presided along with management over harsh productivity deals. The victimisation and sacking of the famous Communist Party activist at Longbridge, Derek 'Red Robbo' Robinson, was driven in part by a special branch campaign against him. However, his involvement alongside management in enforcing productivity deals made his isolation possible. As did his encouraging workers to cross picket lines when the union leadership decided not to back a strike. 'Participation', far from democratising industry, coopted the union convenors, stewards and leadership in a harsher and more exploitative work regime, at just the time that wages were falling.

Thirdly, Keynesianism - upon which the Labour Left staked its alternative economic strategy - experienced a profound crisis. In theory, there was a trade off between prices and employment. As long as unemployment remained at around 2.5%, or thereabouts, inflationary pressures would subside. Therefore, it was entirely possible to spend one's way out of a recession, creating jobs and stimulating investment. But the 1970s showed that you could have high inflation, and high unemployment together. That is, there would be a rise in inflation followed by an economic slump in which inflation would only dip slightly while unemployment soared. High energy prices and the ability of monopoly capital to jack up consumer prices were jointly responsible for this. James Callaghan explained, as he was made Prime Minister in 1976, that it was no longer possible for governments to spend their way out of recession. Each time they did so, they merely added inflation to the system, and increased the level of unemployment that would follow in any future slump. As chancellor, then, Denis Healey focused on counterinflationary policies, pioneering the monetarist doctrine that Thatcher would briefly take up as her mantra. The ensuing bust-up with the labour movement, which the union leadership did everything it could to avoid, became known as the 'winter of discontent'.

***

The period from 1975-77 was characterised by a lull in strike actions, with days lost in 1976 the lowest for a decade. This had been because of the cooperation of the trade union leadership. The imposition of stage IV of the social contract, which pegged pay rises at 5%, produced a flood of strike actions, with more days lost in 1979 than in any year since 1926 (though, to be clear, the general strike still dwarfed the 1979 struggles), and higher than during the miners' strike in 1984. But the high level of militancy didn't necessarily reflect strength. During the post-war period in which organised labour had been powerful, strikes had been brief because they won easily - hence strike days lost were relatively few. The high level of industrial conflict reflected an employers' offensive that, moreover, was winning - with the labour movement increasingly demoralised and fragmented.

In that year, Labour was a hopeless shambles of a government, easy meat for Thatcher's Conservatives. Having lost MPs in bye-elections and become a minority government by 1977, it had held onto power through parliamentary contrivances, including a pact with David Steel's Liberals. It had no solutions, no alternative, no hope, no way, no how. Given the failure of the main left alternative, much of the public moved to the right. Majorities supported drastically reducing trade union power, though that did not last. On an increased turnout, the Tories won with 44% of the vote.

Right-wing Labourites, who had supported Roy Jenkins in the 1976 leadership contest, were preparing a split that would end up joining with the Liberals. Their Campaign for a Labour Victory later joined with the Social Democratic Alliance, a group formed by academics and others to fight the Labour Left, and in 1981 became the SDP. The rightist split was grossly irresponsible. with damaging long-term effects on British politics, but it was not an act of malice. The problem was that the liberal wing of the Labour Party was, like the Liberal Party, committed to conserving the post-war compromise, while the Labour Left was unsuccessfully trying to transcend it. As the liberals saw it, the Labour Left's ability to mobilise the party's machinery was forcing the party to adopt wildly unrealistic policies that would never be implemented, thus leading to demoralisation and defeat. This was partially based on a paranoid over-estimation of the Labour Left's forces, which - notwithstanding the brief upsurge of Bennism as youth riots spread across British cities - was in retreat. But they also believed that the union link was preventing Labour from adopting realistic policies, and that the idea of having a class-based party was at best outmoded. Hence, their goal was to realign British politics with the balance of power held by a centrist, cross-class party.

However, they would have got nowhere had the post-war compromise not been in meltdown since the late 1960s, during which time the Liberal vote first started to recover as an alternative to the big two parties, and had the government upon which the Labour Left pinned its hopes not turned out so disastrously. The emergence of a large centrist vote in the early 1980s was the culmination of a long-term trend, but it was compounded by the bitterness with the Labour Party and disappointment with the failure of late 1970s militancy. It produced the catastrophic defeat of 1983, and marked a long term split in the post-war Labour coalition. The fact that almost a third of trade unionists backed the SDP-Liberal Alliance, and only 40% voted for Labour, confirmed the damage that the 1974-79 government had done to its base. In fact, many of the new trade unionists were 'white collar'. Though their working conditions were not fundamentally different from those of 'blue collar' workers, they emerged during the period in which Labour had been in government and imposed many of the policies which they themselves had been compelled to combat. Therefore they did not, unlike previous generations of unionised workers, automatically identify Labourism as their natural political expression.

***

As always, the Labour right used the defeats to argue for a conservative retrenchment. In this, they were backed by the 'Eurocommunist' faction of the Communist Party, including luminaries such as Eric Hobsbawm. The capture of the NEC by the right-wing in 1981 was followed by Neil Kinnock and Roy Hattersley taking the leadership for the Right in 1983, and thus began the process of crushing the Left, witch-hunting the Militants, and abandoning policies with a left-wing semblance. Just as the trade union leadership embraced a 'new realism' with respect to industrial relations, emphasising cooperation with the Thatcher government, so Labour embraced a 'new realism' with respect to its key policies. Ron Todd, head of the TGWU, was cited by Kinnock in support of his right-wing stance: "What do you say to a docker who earns £400 a week, owns his own house, a new car, a microwave and a video, as well as a small place near Marbella? You do not say - let me take you out of your misery, brother."

It was a complete fabrication. No docker earned that much per week. But it perfectly encapsulated the narrative of 'popular capitalism', developed by the Thatcherites in the 1970s and repeated ad nauseum by the mass media in the 1980s. People owned shares now, or wanted to. They owned property, or aspired to. Rather than advocate public ownership of industries, it was better to support public private partnerships or share options for employees, as the Liberal-SDPers advocated. Workers, they said, were accustomed to high living standards, and thus less given to solidaristic politics. They were doing well, or confident about doing well - even in an era of mass unemployment, growing poverty, and the re-emergence of homelessness. The forward march of labour was not only halted, but in reverse, because the comforts of capitalist society had led to an embourgeoisement of the proletariat, such that they aspired not to socialism, but to greater capitalist success. Labour had no choice, according to Kinnock, Hattersley, Hobsbawm, and the right-wing union leaders, but to adapt to this emerging situation and craft policies to appeal to the aspirations of those workers.

The sociologist Huw Beynon has written of how pro-government advertising campaigns in the 1980s, often by public bodies, sought to convey the impression that Britain was becoming a classless nation of consumers. These campaigns appropriated the reassembled iconography of the Left, and working class counter-culture, using images of miners or Karl Marx, to communicate the new 'popular capitalism'. At the same time, the government changed its gathering of data, so that the Office of Population Censuses and Surveys announced in 1987 that it was no longer going to collect data on classes - a decision that was later revoked. (New Labour came up with a more subtle initiative in 1998, simply changing the definition of class so that the great majority would fit into the category, 'middle class'). In short, these myths were self-consciously created to obscure the deep unpopularity of Thatcherite policies, and the surprising resilience of core left-wing ideas.

***

Contrary to the myth of popular capitalism, only 4% of workers owned shares in 1987, and only 13% of the population as a whole. Today, individual share ownership accounts for 10% of total share values, with most accounted for by overseas owners in the US and EU, and institutional investors such as banks and financial institutions. The Department of Work and Pensions maintained in 2005 that 20% of households owned some shares but, as the UK Shareholders Association pointed out to its members, "the vast majority hold only a few shares".

Home ownership is one thing that did spread a little with 'right to buy', but it was not much more widespread in 1990 than it had been in 1980, and home ownership had been rising at a steady rate since the 1950s. What Thatcher did was not to radically increase the number of homes owned, but to ration housing, so that prices continually rose and so that the housing market could become a speculative entity enabling owners to borrow against the soaring value of their property to sustain consumption. But even this did not fundamentally affect people's voting habits.

The British Social Attitudes Survey of 1987 found that attitudes on the conflict between workers and management, on class conflict, on welfare, price controls, job creation, import controls, defence spending and a whole array of topics, remained basically social democratic, and this was especially among working class voters. Rather than evincing enthusiasm for a party of 'popular capitalism', most people thought the Tories represented only one class, and this was reflected in the fact that most did not vote for Thatcher. Majorities continued to self-identify as working class, and continued to believe that, as the social attitudes survey question has it, "there is a class war going on in this country". As Gordon Brown acknowledged at the time, Thatcherism never made much of an impact on British public opinion.

The myth of popular capitalism was allowed to take hold largely because the Labour Party itself abandoned the politics of redistribution and public ownership, and embraced Thatcherism. Public attitudes on class, inequality and welfare didn't fundamentally change in response to 18 years of Tory rule - in fact, the evidence is that they moved to the left somewhat. However, the Labour Party has a decisive ability to shape popular attitudes because of its relationship to working class voters, the trade union movement, and its hegemony over most forces left-of-centre. New Labour shifted public opinion to the right on, eg, redistribution, welfare and race, far more successfully than the Tories did. Even so, it was unable to shift opinion to the right on everything. For example, its privatization agenda was never popular, and 67% of people favour renationalising all public utilities privatised in the last 25 years. The point, though, is that the politics of abandoning and de-emphasising class, prevalent among the centre-left in the New Labour era, has been built on myths prepared by the Right. It was supposed to enable the renewal of social democracy with the possibility of an electoral coalition between Labour and the Liberal Democrats - such was the aim of Labour's right-wing 'modernisers'. But far from consolidating a progressive twenty-first century coalition, it has led to the profound degeneration of social democracy, the entrenchment of reactionary social policies to cope with the fall out from rising inequality, crackdowns on civil liberties to contain protest movements, and ultimately the emergence of a shabby ConDem coalition that could - if the Orange Liberals have their way - realign British politics further to the right. Reinstating class as a central heuristic and organising principle for the left is vital.

Mehdi Hasan of the New Statesman asks if this press release from the Institute of Economic Affairs calling, of all things, for the self-regulation of bankers and investors, is a parody. Or are they really free market 'fanatics'? In a word, yes. Yes, they are free market 'fanatics'. They more Hayekian than Hayek, staking out the hard neoliberal right in opposition to the ConDem government. But I think it's actually an example of something far worse. Why, after all, did the IEA ever exert any influence, and why would anyone listen to it now? Short answer: because the bankers have held on to their power. The pressures for a thorough reigning in and regulation of finance capital since the credit crunch began some three years ago have borne little fruit, while governments have felt compelled to orchestrate the largest bail-out of the banks in history. Even now, as austerity measures threaten the wider economy, the banks are baying for blood. And the ruling class shows no sign of having, or interest in pursuing, an alternative accumulation strategy to the one pursued for the last thirty years or so. Given this, the ability of finance capital to resist encroachments on its power is still redoubtable, and the ideological space for such rightist, free market polemics will remain wide open for as long as the ruling class finds it useful.

I just wanted to express some satisfaction at this:

This is part of a long term trend, and the collapse of the Liberals has been the silver lining around the dark cloud of this administration. They are the weak link in a coalition with the approval of about 40% of voters. As pollsters have pointed out, the fact that the government has the approval of less people than would vote for the constituent parties is in stark contrast to the approval rates for New Labour for most of its first term, which remained well above the number of people who would actually vote for the party.

Prior to the election, I wrote:

Given the prevailing ideological disorientation, the absence of mass resistance to the recession, the hatred for the bankers, the contempt for the MPs who like big expense accounts and are on sale to American lobbyists, and the utter alienation from the main parties - well, given all this, a space is naturally opening for an 'honest broker' who can appear to transcend the "special interests" and efficiently manage our way through the present crisis. The trouble is, whoever governs for the next five years is about to watch that space disappear.

The Liberals' participation in what is openly a radical rightist attack on the welfare state has completely undermined their position as an 'honest broker', far more rapidly than the social polarisation produced by the cuts might have done had they not been part of the coalition. Much as I understand why some people were tempted by the Liberals before the 2010 election (less so why some thought the Liberals would complete some half-finished bourgeois revolution, Charter 88-style), I take sincere pleasure in their self-destruction.

There's a complimentary, but critical, review of my latest book in the summer edition of the Socialist Review here. Though the reviewer considers the book "brilliant" in some respects, he takes issue with one aspect of it, namely that pertaining to the balance of class power in the UK. Rather than take the huff, as would be my natural inclination ("does he know who I am?"), I will take this as an opportunity to discuss what The Meaning of David Cameron does and does not set out to claim.

First of all, the reviewer is quite right to say that the power of organised labour has not been completely "broken", but it is a misunderstanding of the book to think that it says otherwise. Were that my contention, the passages in the book dealing with union resistance to New Labour, even acknowleding that there continues to be a trade union movement at all to speak of, wouldn't make a great deal of sense. I suspect that the only context in which it is likely that such a state of affairs would actually come about would be under fascism. There are degrees, however. The reviewer is right to say that union density hasn't reached the lows of the 1920s, when it reached just 23%, but unionised workers currently represent less than a third of the workforce, a fall from a peak of 55% in 1979. It is true that this is partly because the workforce has expanded, but the inability to reproduce past rates of organisation is part of the problem - and I suggest that it is in part due to the recomposition of the working class and the defeats that I mention in the book. The recomposition of the working class, by the way, did not just entail a shift from manufacturing to services. It was a spatial recomposition, with production increasingly shifted to geographical areas with lower rates of unionisation, both in the UK and internationally - think of the shift in production from the 'snowbelt' to the 'sunbelt' in the United States, for example. It is true, as the reviewer says, that manufacturing has not always been the vanguard of the working class, and that the sharp falls in manufacturing employment doesn't doom working class organisation. But the rate of organisation that has persisted in manufacturing has not been reproduced in the service economy - as yet. And I certainly don't suggest that "the basic social contradictions" (ie, class conflict) have somehow disappeared with the shift from manufacturing - quite the reverse.

The militancy of the working class, moreover, has experienced a precipitous decline, with days lost to strike action reaching an historic nadir in 1998. During the 1920s, when union density was historically very low, the lowest number of days lost to strike action was 1.17m in 1927 - this, a year after a record high of 162.2m in 1926. In 1998, the number of days lost to strike action was 282,000, and this in a decade in which the number of strike days rarely exceeded a million. In the 2000s, the figure increased somewhat, but still remained historically low, peaking when New Labour picked a fight with a group of public sector workers. The figure of 900,000 strike days lost in 2004 was at the time considered unusually high, because it doubled the figure from the previous year. The loss of more than a million days in 2007 was also unusually high for the last decade. Last year, less than a half a million days were lost to strike action, in the middle of huge job losses. Would it not be fair to say that, to some degree, relative to its previous condition, the British ruling class succeeded in breaking the power of organised labour?

Secondly, I do maintain that neoliberalism as a class project was overwhelmingly "successful in its own terms". The attack on the working class, some of whose effects I discuss above, enabled a new spurt of accumulation by suppressing wage claims, permitted successive rounds of efficiency 'downsizing' and 'rationalising' (because of the reassertion of "management's right to manage"), produced new systems of work discipline and organisation that increased the rate of exploitation, enabled/compelled social democracy to adapt to neoliberalism, and opened up new avenues for profitable investment in previously socialised sectors either through full privatisation or private finance initiatives. The result is that profit rates in the advanced capitalist countries, while never recovering to their historically anomalous pre-1973 levels, did improve dramatically on the lows resulting from the systemic global crises in 1974-5 and 1980-2, and a new period of growth - centred on south-east Asia - was initiated. In the UK, that period of growth was interrupted only once before the credit crunch, with the 1991-2 recession. In global terms, there have been localised, and sectoral crises, but there hasn't been the kind of systemic, global crisis of capitalism seen in the mid-70s and early 1980s until the collapse of Lehman Brothers. This is not to say that neoliberalism didn't throw up its own problems, perpetual instability and the constant requirement for state intervention to shore up finance among them. Nor does it imply that the pace of neoliberal accumulation wasn't shaped and constrained by continued opposition - New Labour's battles with the PCS union show that it has been. But it does suggest that neoliberalism succeeded in its principal aim of restoring profitability by increasing the rate of exploitation.

While I'm on this subject, one aspect of this story that I don't give due attention to in The Meaning of David Cameron is imperialism, and the war against the global South which enabled a hugely increased rate of exploitation outside of the core capitalist economies, thus enhancing profit rates without necessarily resulting in stronger growth or robust rates of investment inside the core economies. Obviously, the narrative's focus is mainly on the United Kingdom, but a large part of the recovery in profit rates for British capitalism was due to Brittania's ability to hang on the coat-tails of the American empire. That is an aspect of the neoliberal assault that you may wish to bear in mind when reading The Meaning Of....

Thirdly, I referred to neoliberalism as a "hegemonic" project, but I did not foresee that this would be a controversial point. I think I'm using the concept of hegemony in its conventional marxist sense, first popularised by Plekhanov and taken up by Gramsci. It accounts for the way in which ruling classes in bourgeois democracies achieve the acquiescence of workers to their rule which, though the threat of force always lies behind it, is not merely coercive. Gramsci noted that mature capitalist democracies are not usually susceptible to sudden, catastrophic revolutionary assaults because behind the armed forces of the state lies a robust, complex civil society bloc that is capable of conserving the status quo. The rulers didn't merely have the armoury of the state to rely on: they had hegemony. A hegemonic bloc is one that incorporates fractions from multiple classes into a particular mode of class rule, not merely by winning them over in the battle of ideas, but by at least appearing to meet the interests of the incorporated groups at some level. In this context, I note that Thatcher, though she admired Pinochet, acknowledged that she could not import his methods to the UK. It would be "inappropriate", she said. Hence, it was not enough to defeat organised labour, nor was it possible to create a "police state" as some alarmed critics claimed - she had to produce a constituency favouring her policies, ostensibly benefiting from them, that extended well beyond the ruling class. The hegemonic bloc created by neoliberalism comprised high finance, internationally oriented services and manufacturing industry owners, a section of the professional middle class, most of the petit-bourgeoisie and a segment of workers. This doesn't mean that the ruling class got everything its own way. There remain counter-hegemonic forces, which are not negligible. But that is the normal state of affairs in a hegemonic regime.

Lastly, when I wrote of Cameron benefitting from a "taboo on class politics",this was in a context in which I pointed out that the majority were unconvinced by Blair's "the class war is over" spiel, that most still identify as working class, that class is still the crucial motivator in voting behaviour, and that Cameron provokes a class hatred which Labour has sought to capitalise on. So, my argument isn't rebutted by pointing out that class hatred helped deprive Cameron of an overall majority. The "taboo" I speak of doesn't really operate among the majority of people, but among the intelligentsia, politicians and the commentariat. For example, the sociologist Huw Beynon has pointed out that just when a record number of people registered the view that there was a class war taking place in Britain, social scientists, historians and other scholars were coming to precisely the opposite conclusion. Such shifts in intellectual culture profoundly shape normal political discourse, in that its products are then filtered through the capillaries of the capitalist media, pundits start to echo its conclusions, and the majority of elected politicians who worry about being demonised by the media soon learn to obey its norms. The New Labour politicians who expressed anxiety and embarrassment over the party's 'class war' strategy are an example of what I am talking about.

Now, I think the reviewer's overall concern is that I may be doom-mongering, offering a stilted perspective that oversells the achievements of neoliberalism and thereby precludes the possibility of working class resurgence. But as I have sought to outline, that rests on some profound misunderstandings of what I have written. Empirically, the situation of the working class and the Left is difficult, but there is no reason why this can't be reversed, provided the problem is given due recognition.