Economic liberals and free marketeers should resist celebrating Labour’s losses

Steve Davies

May 7, 2021

Faced with the Labour party’s humiliating defeat in Hartlepool, and bad performances elsewhere in the local elections, there is a strong temptation for economic liberals and free marketeers to gloat and enjoy the schadenfreude. They should resist this. Looked at from the correct perspective these results are actually more troubling for classical liberals and enjoyment of the wailing and gnashing of teeth going on, on left-wing twitter should not conceal that.

One point to emphasise is that Labour’s defeats in the North and Midlands are only half of the story. The other side of it is crushing victory in London and reasonable performances elsewhere, such as Wales. In addition, another remarkable feature of these elections is a strong performance by the Green Party and local revivals for the Liberal Democrats, as well as strong performances by localised parties. So, this is not a simple story of ‘success for the right’. For one thing, the category of ‘right’ is changing its meaning in ways that economic liberals will find disturbing.

All of these results are driven by one force. That is the realignment of politics in England and Wales (Scotland has had its own, separate, realignment). Since the 1920s voters have sorted into two sides depending on their position on the question of how active the state should be in economics. This pits free marketeers against social democrats and socialists. Now politics is increasingly aligned around different questions, of identity and historic and rooted identities versus cosmopolitan ones. The old economic divide persists but is secondary.

In terms of voting divisions, this means we have five broad groups of voters. There are those who are free market and traditionalist on identity. There are others who are anti-free market and very ‘woke’ on identity. Close to them but distinct are others who are sceptical about markets and cosmopolitan but not very ‘woke’. Then there are voters who are pro-market, and also cosmopolitan (and opposed to wokeness but not strongly). Finally there are those who are anti market and also traditionalist and strongly anti-‘woke’. We may call them conservative, radical, left liberal, right liberal, and traditional labour.

The problem for labour is that its traditional core voter coalition is made up of two groups (traditional labour and radicals) who agree on economics but nothing else. They also live in different parts of the country. The Conservatives meanwhile have got the Conservative vote locked up as well as the right liberals and have strategically moved to appeal to the traditional labour vote. This brings electoral success and puts the Labour Party in a very difficult position.

However, it is bad news for the right liberals and for free marketeers in general. The key swing voters here are the traditional labour bloc because they are the ones being encouraged to switch. The thinking about the right liberals is that they have nowhere to go – are they going to vote Labour? This means the Conservative Party is going to tack steadily to the left on economics and with its usual chameleon quality will convince itself that that is what it always believed. The free market liberals meanwhile will be left stranded and homeless.

Voting Bloc  Free Market/Social Democrat  National and Rooted/Cosmopolitan  Woke? 
Conservative  FM (2)  N (1)  NO (1) 
Trad. Labour  SD (1)  N (1)  NO! (1+) 
Right Liberal  FM (1)  C (2)  no (3) 
Left Liberal  sd (3)  C (1)  yes (3) 
Radical  SD (1)  c (3)  YES! (1+) 

 The numbers are a measure of the intensity of attachment to that position and hence its importance to political identification and allegiance. 

 3 = moderate attachment 

2 = strong attachment 

1 = very strong/core attachment 

1+ = visceral attachment 


Written by Steve Davies

Dr Steve Davies is Head of Education at the Institute of Economic Affairs.

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