The Slow Death of the Twentieth Century

Are liberal democracies sustained by debt, global trade and mass migration passing into history?

Towering Columns

In The Times, Juliet Samuel says historic gilt yields may suggest Britain’s capacity to sustain current borrowing levels may be running out.

Reeves’s fundamental mistake was to believe that by demonstrating the proper respect for bond markets she could get everything to go back to normal. She failed to confront the truth that the old “normal” is gone, banished by the Covid borrowing splurge, the return of inflation, the ineptitude of central banks and the can-kicking simply reaching the end of a very long road. The Truss fiasco wasn’t the cause of the change; it was simply the most reckless and destabilising way of revealing it. The proximate reasons why we cannot keep the show on the road any more are that our economy is not productive enough to sustain it, the state, in particular, is too inefficient, our population is ageing too quickly and migration is now costing the exchequer money instead of saving it. But looming over these considerable domestic concerns is a larger, even more intractable global problem in the form of US policy.

Starmer and co have plenty of reasons to loathe the Trump administration, but this week’s kerfuffle in gilt markets gave them yet another one. They could argue credibly that it is market anticipation of Trump economic policies that prompted the sell-off in gilts over here. When Reeves unveiled her budget in the autumn, the conventional wisdom was that global interest rates were generally on their way down, thanks to lower inflation and slowing growth. But the conventional wisdom was wrong, especially after the US election. Inflation does not appear to have been tamed as comprehensively as most investors thought and the usual suspects are now convinced that Trump will make it worse by cutting taxes, raising tariffs and deporting millions of migrant workers.

Whether or not this is correct (and such predictions proved wrong last time around), the US continues to suck in stocks of the world’s surplus cash to feed its vast spending on government programmes and consumption. Every other country that similarly relies on a constant inflow of money from elsewhere to finance itself, funded by constantly selling assets like bonds or houses, is in competition for the same cash. And Britain has relied on foreign cash for years. Our rising borrowing costs are an indication that we are having to work ever harder to keep it all going.

For UnHerd, Aris Roussinos says we are witnessing the death of Left-liberalism, the last of the Cold War ideologies.

Broken, dejected, for the first time self-doubting, America’s liberal establishment has come to accept the extinction of its political order. Had they taken their project — or their right to eternal rule — as seriously as they claimed to, no doubt they would have chosen stronger candidates than Joe Biden and Kamala Harris: that they could not do so itself speaks of a certain exhaustion. Beyond the rhetoric, at least as messianic and civilisational in scope as anything the further reaches of the Right could dream up, Left-liberalism — the last of the great 20th-century ideologies — possessed very little of substance to fight for. Bereft of ideas and confidence, American liberalism died from the head down: all that is left of it is an entrenched caste of bureaucrats to be weeded out and replaced. The old order is dead: but what is struggling to be born?

For a time, in the 2010s, confused and frightened liberals cycled through a series of personality cults, latching onto populist avatars of its own — Trudeau, Merkel, Ardern, Macron – who promised, like King Arthur against the invading Saxons, to hold back the waves of history for a time at least. Yet all of these are now politically dead, having achieved little but accelerating the incoming power of the waves that would wash them away: in Macron’s case, characteristically the most interesting, seemingly by design. No doubt, this cult of personality took root due to the absence of serious policy: it is an obvious fact of our present political moment that anyone concerned with shaping the world they actually live in can only now engage with “the Right,” simply because “the Left” is both intellectually and politically defunct. We see this in the intellectual Left’s new engagement, part fearful but increasingly curious in its own right, with the ferment of ideas on the Right. What is the Left’s project, what are its big ideas now it has broken its political and intellectual power through its catastrophic self-derailment into identity politics? It is a difficult question to answer, but also a pointless one: it simply doesn’t matter, and is unlikely to for the next few decades at least. One might as well ask what is next for Baathism…

…If it possesses any coherent, unifying purpose, the new Right consists merely of rolling back the liberal innovations of the Sixties onwards: and perhaps that is progress enough. Much of Trump’s initial appeal was that of the boy in the Emperor’s New Clothes, mockingly pointing out the nakedness of the West’s rulers. Had they taken the critique seriously — of their radical identity politics of race and gender, of their programme of economic self-destruction through a unilateral energy transition, of their commitment to an imaginary borderless Utopia in which the rest of the world dreams only of achieving its historic destiny as Western liberals — perhaps the destruction of their order would not be so total. The dying liberal order chose suicide through want not just of self-reflection but of pragmatism. And indeed, perhaps if the incoming order has a single defining characteristic, it is pragmatism rather than any coherent replacement ideology. Perhaps it is not just the great 20th century ideologies — fascism, communism, postwar liberalism — that are dead, but any all-consuming ideology at all.

Also in The Times, James Marriott says the West is living through the end of the “long twentieth century”.

[W]e are living through one of the great shifts in cultural history. To future historians the most distinctive cultural feature of the 20th century will not be cinema or jazz but the mass literacy that flourished after late-Victorian education reforms abolished what HG Wells referred to as the social “gulf” that once separated readers from the “non-reading mass”. The long 20th century was the greatest age of reading the world has ever known: newspapers, magazines, self-help books, popular classics, airport bestsellers.

Literacy is now declining for the first time on record. A recent OECD report finds that adult reading proficiency is falling around the world. The crucial moment may not have been the arrival of the smartphone but the more recent dominance of short video. The first iPhone customers often used their 21st-century technology in a 20th-century manner — to read articles and news stories. But the advent of apps such as TikTok has created a new video-based culture that is truly indigenous to digital technology. As a consequence, Gen Z may be the first generation since the middle of the 18th century not to produce a bestselling literary novelist.

Inevitably, historical epochs are arbitrary and subjective. Cultural and political events do not emerge in neat patterns like flower beds in a formal garden. And it is only human to mourn a vanishing past. Nevertheless, I think the eerie sense many have that we are watching the page of history turning is correct, even if it is not exactly scientifically provable. Everyone born before the end of the 20th century is the product of a cultural and political order that is fading. We may one day seem like those Victorians who were recognisable in the mid 20th century by their out-of-time oddness. The world we were born into no longer exists.

In The Guardian, Dan Evans says graduate downward social mobility may create the conditions for a political revolution against the rentier economy.

Across the UK there are nearly 5 million graduates working in non-graduate roles. The much-vaunted graduate premium – the idea that graduates earn more than non-graduates over their lifetime – is in drastic decline. New research from the Resolution Foundation shows that new graduate salaries have fallen sharply in real terms over the past two decades, while the minimum wage has risen slightly. With the exception of Stem, law, finance and management, university is no longer a guaranteed ticket to social mobility and a better life.

The collapse of the graduate premium is part of a bigger story. The British middle-class dream is falling apart as new graduates are unable to join its ranks. There exists a shrinking core – Mike Savage’s “ordinary elite”, or Guy Standing’s “salariat” – who came of age when the graduate premium was still high and enjoy high wages, own their homes and remain insulated from the worst effects of government policy. But large swaths of young people, born in the 1980s and after, have been “proletarianised” and are experiencing the jarring shock of downward social mobility. Today’s graduates, facing stagnating wages and saddled with enormous debts and an exorbitant marginal rate of tax, are far less likely to have savings or to own assets than their parents. Hundreds of thousands of young people are either renting a tiny room in a city or living back home in their regional town with Mum and Dad. Many of these young people will gradually realise that their dream career is a mirage: all that work for a life of permanent debt and struggle…

…As industrial, productive capitalism is abandoned and Britain embraces an economic model based on finance and rentierism rather than making things, graduates and non-graduates will soon end up working alongside one another in call centres, Amazon warehouses or hospitality – the reality behind Britain’s Potemkin “knowledge economy”. But this also presents a political opportunity. A recent briefing by the World Economic Forum stated that if this new generation of devastated white-collar workers can link up with the blue-collar workers gutted by the first wave of deindustrialisation in the 1980s and 90s, we could have a political revolution on our hands.

In Compact magazine, Justin Vassallo warns against the re-emergence of neo-liberalism, supported by tech billionaires within the American MAGA movement.

Alas, the revenge of neoliberalism has been a long time coming. Incensed by Biden’s antitrust appointees and beefed-up labour regulations, several tech executives and venture capitalists threw their support behind Trump’s 2024 campaign. Outside of Lighthizer’s portfolio, Trump’s first-term priorities hadn’t fundamentally broken with Republicans’ laissez-faire doctrine; the possibility of a more populist second term, they evidently reasoned, could be easily quashed. As Compact founder and former editor Sohrab Ahmari warned this past summer, Silicon Valley’s sway over Trump world promised to dilute any purposeful fusion of Jacksonian and Hamiltonian ideas in today’s GOP.

Sure enough, Trump, in defiance of his base, has blithely agreed with Elon Musk and other tech moguls on the benefits of H-1B visas for skilled immigrants. This betrays populist rhetoric about investing in American labor and signals a retreat from the restrictions on H-1Bs that Trump pursued in his first term. An agenda that championed American workers would overhaul a program that discriminates against them and compels them to train their foreign replacements, not expand it. But as Trump endorses the views of Big Tech, it has fallen to Bernie Sanders to point out H-1Bs are part of the same exploitative playbook that led to NAFTA, the China shock, and rampant outsourcing.

Meanwhile, the incoming administration’s promises to unshackle innovation and entrepreneurship seem bound to succumb to cronyism and conflicts of interest, given the wide-ranging business interests of Elon Musk, Trump’s pick along with Vivek Ramaswamy to lead the Department of Government of Efficiency (DOGE). Nonetheless, some Democrats have recently acknowledged the need for cutting red tape and wasteful spending, including Rep. Ro Khanna (D-CA), Gov. Jared Polis of Colorado, and The New York Times’s Ezra Klein. The housing shortage and slow roll out of clean energy projects, in particular, have compelled progressives to scrutinize regulations that fetter crucial infrastructure. Still, many Americans, and not just Democrats, are wary of DOGE’s potential scope and the deregulatory zeal uniting tech and finance. Slashing government is plainly not a solution to regional inequality, the skilled trades shortage, or the cost-of-living crisis afflicting working families.

Finally in The Times, Gerard Baker says the media is undergoing a long-overdue correction, not a right-wing takeover.

In any case a quick perusal of X, Facebook or the Post will prove that none of them is suppressing left-wing voices. A little rebalancing of the media, a little more variety in the choice of news and the way it’s reported, a little more representation of the views of at least half the population of this and other western countries might not be such a bad idea — and that’s what these tech and media honchos are promising. None of these resolutions represents even the slightest threat to the myriad voices that will continue to be heard loudly across the political theatre.

But second and more importantly, if it’s true — and it surely is — that we now live in a world in which alternative information, much of it of dubious reliability, is widely available and consumed by audiences, who is responsible for that? The collapse in trust in the legacy media has been brought about not by unscrupulous and politically submissive tech villains undercutting the traditional news providers but by the traditional media themselves.

Here are a few articles of truth the trusted and authoritative media on which our democracy has relied for so long has brought us in the last decade: Trump colluded with Russia in order to get elected and as president was a de facto agent of Moscow; any suggestion that Covid may have escaped from a Chinese laboratory was a racist lie and needed to be suppressed; women can have penises and men can chestfeed babies; all white people are collectively guilty for the historic oppression of minorities; reports that Hunter Biden used his position as the son of the then US vice-president for his own lucrative and possibly criminal ends were the work of a Russian intelligence campaign; racist police officers across America have been murdering black people in vast numbers; thousands of indigenous Canadian children had been abducted by Catholic schools, suffered early deaths and were buried in mass graves. These are not stories of marginal interest propagated by some fringe voices. They are just a few of the biggest and most resonant stories of their time, promulgated as unchallengeable truths. If you did dare challenge them you were labelled an agent of misinformation (or sometimes of an enemy power).

Wonky Thinking

On his Substack, Tory MP Neil O’Brien says Labour’s Schools Bill endangers years of progress in British educational standards.

Over the last 30 years, schools in England have been improved by the magic formula of freedom plus accountability.

Instead of politicians in Westminster trying (and failing) to improve schools through micro-management from the centre, we decided to let those who actually knew what they were doing - teachers and school leaders - do what worked.

Freedom meant that instead of having to jump to attention and waste time on the latest ministerial fad, they could get on and use their initiative to improve things for pupils.

On the other hand, there was no free for all. Where schools were failing, they were taken over by other people: be it as sponsored schools or by joining a new trust, so they got the support of a successful family of schools.

Accountability went hand in hand with parental choice. Parents could vote with their feet, creating a powerful force for improvement and innovation.

The improvement of England’s schools relative to the rest of the world shows just how powerful that formula freedom plus accountability can be…

…England’s schools are an unusual thing in politics: an area where there was significant cross-party agreement, where successive generations of ministers drove through structural reforms which worked. We can see that alternative strategies pursued in Wales and Scotland had just the opposite effect.

If the government were just drifting, that would be bad enough - we should be doubling down, helping the best trusts to grow.

But it’s worse than that. The Schools Bill is an onslaught on the combination of freedom and accountability that has driven improvement.

• Ending freedom over teacher pay and the curriculum

• Ending freedom over QTS and making recruitment harder

• Taking sweeping powers to give orders to academies on any subject

• Taking away the freedom of good schools to grow

• Stopping the academies revolution and moving back towards LA-run schools

• Bringing back micromanagement

There are real challenges we should be focussing on - recruitment, discipline, attendance. But instead we have this Bill, with its retro priorities.

I remember what schools were like in the 1980s and 90s. It was chaotic, with kids getting dangled over high stairwells and loads of fights. Hopeless methods meant loads of people in my class couldn’t read well, even by GCSE year. Decent teachers seemed ground down. We flushed away the life chances of a lot of people I knew.

Schools today are generally much better. But that isn’t an accident: it’s the result of reform.

But the world is getting more competitive: we need to keep going. Instead we are turning back.

And on his Substack, David Skelton says Britain is stuck in a political “interregnum”, with neither major party responding to the emergent electoral realignment.

The politics of the realignment has, in part, emerged from decades of declining trust and a feeling that politics hasn’t been delivering. Deindustrialisation left too many towns and entire regions devoid of hope and hollowed out. The Iraq War diminished trust in government and the impact of the banking crash and its subsequent austerity led to continued declining trust and rising public anger. This was followed by a perception that governments failed to deliver on their promises.

Too much of recent years has seen politics being driven purely by a campaigning mentality, rather than making the realignment a philosophy of government. This is why Conservatives lost the trust of their new voters so quickly having promised to control immigration and “Level Up” before presiding over record immigration and a failure to Level Up.

Conservatives stuttered with the politics of the realignment because they saw it as a campaigning vehicle, rather a vehicle for delivering lasting change. Fundamentally, they lacked a plan and they lacked sufficient believers in the politics of the realignment.

Having long been described as a Tory heretic for pushing the politics and economics of the realignment in a party too often absorbed by Thatcherite nostalgia, it was enlivening to see reindustrialisation and tackling regional inequality being pushed to the front of the stage. But it rapidly became clear that this was a campaigning device, not a governing philosophy or a plan for government.

Once again, people voted for change but got more of the same. Indeed, when it came to immigration and industrial policy, the governments of Truss and Sunak actively pursued policies antithetical to what they had promised the voters.

The same is proving true with Labour. A clear lack of a plan for government that goes beyond “not being the Tories” or soft-left cliche is leading to rapid disenchantment and a failure to deliver on change. And they seem determined on giving up hard to recover political capital on nonsense like the Chagos Islands and binning the successful education reforms of recent Labour and Tory governments. Growth and better public services can’t just be wished into being, whilst politicians struggle with the statecraft needed to deliver governing change. Indeed this recent piece by Lord Blunkett suggests that there is already nervousness about Labour’s ability to deliver meaningful change.

Lasting change needs more than slogans and winning the news agenda.

Meanwhile, Reform seem committed to an economic model that has been found wanting (questionable economics and even more questionable politics) and any new ideas coming out of the emergent parties of the left seem equally lost in nostalgia and short of anything beyond vague generalities.

So, voters have repeatedly voted for a post realignment politics, but political parties remain rooted in the comforts of pre realignment certainties. This has resulted in voters repeatedly voting for change and politicians repeatedly failing to deliver.

This would be a concern if failure to deliver happened in a relatively benign environment. It’s catastrophic when the UK is facing the kind of multiple challenges that they haven’t faced for generations.

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It’s all well and good for politicians to sing the familiar songs, but repeated electoral events have suggested that voters want and expect more than that. Promises of change need to be delivered. Transforming decades of decline and stagnation needs more than status quo ideas.

The realignment has, in part, risen because of the sheer scale of the challenges facing the country and the failure of politics to come close to addressing those challenges.

Economic growth, productivity growth and real wages have been stagnating since before the Great Financial Crisis and our politics is lacking any substantial ideas about how to address this decline and stagnation. Britain faces sliding down the growth league table of nations, reducing money to spend on the public services needed in an ageing society. This is happening just at the time that many elements of public services have been clearly stretched.

Fundamental elements of future growth are also lacking. We have consistently failed to build the infrastructure needed to rocket-boost growth, most recently evidenced by the depressing capitulation over HS2. The startling success of the Elizabeth Line is a reminder of the difference infrastructure can make if only we overcome our national reluctance to build almost anything.

The number of new startups are at a six year low. UK venture capital isn’t sufficient to provide enough risk-bearing capital, particularly to those areas that need it the most, with UK start-ups much less likely to scale up than their US equivalents. As Monzo founder, Tom Blomfield, noted the UK also has much less of a risk-friendly mentality than the United States. We have historically been unable to translate research excellence to economic application and this continues to be a hindrance on growth. Private and state driven R&D (often a great driver of productivity) trails countries like the United States, Korea and Germany…

Book of the Week

We recommend Out: How Brexit got done and the Tories were undone by Tim Shipman. The final instalment in the “Brexit quartet”, it tells the story of Boris Johnson and Dominic Cummings’s plan to extract Britain from the EU and ultimate fall from power.

Brexit was not always a clean fight. Some people deceived the public, others just as surely deceived themselves. In the introduction to her trilogy on the English Civil War, still the best narrative of a conflict even deeper than Brexit, Veronica Wedgwood wrote, ‘The day-to-day events of history arise at least in part from error and misjudgment. On this level falsehood is itself part of truth.’ This applies equally well to the period 2016 to 2024 as it does 1637 to 1649.

While at times Brexit seemed like a modern civil war, it was not. In the end, a democratic vote was upheld. However, in the twenty years that I have been reporting from Westminster, the period of Out was the most toxic. Witnessing - on both sides - fanaticism, incompetence, constipated communication, strategic ineptitude and bad faith was draining for MPs, ministers, their aides and, yes, journalists. Friendships were strained or even shattered; people’s mental health suffered.

Yet I was conscious as each new madness unfolded that I would look back and conclude that these were the glory days of political journalism. I think of the words of Alistair Cooke, whose Letter from America was a lodestar for this budding hack. In the torrid summer of 1968, another time when political passions spilled over into something darker, he found himself in the kitchen of the Ambassador Hotel in Los Angeles seconds after Bobby Kennedy was assassinated. Cooke’s description of RFK’s deathly pallor (‘like the stone face of a child, lying on a cathedral tomb’) is vivid and shocking but what I remember most is how he felt about being present. ‘It would be quite false to say, as I should truly like to say, that I’m sorry I was there’, he wrote. Nothing I’ve ever read better captures the grim voyeuristic fascination that journalists feel about their seat at history’s ringside. It was a privilege of my working life to watch these events unfold and to be trusted by so many of the participants with their thoughts and feelings.

To misquote Macbeth, it would be quite wrong to say - as this book makes painfully clear - that Brexit was done well, let alone done quickly and, as events unfolded, a growing number of people doubted that it could or should be done at all, but this (as best I can reconstruct it) is how it was done.

Quick Links

UK gilt yields hit a record high, pushing up the cost of government borrowing…

…and the £10 billion of fiscal headroom the Chancellor gave herself at the last Budget may now be as low as £1 billion, analysis suggests.

Business confidence has fallen to its lowest level since the aftermath of Liz Truss’s Mini-budget.

Following the Pakistani rape gang scandal, police were told children are at risk ‘from all races and genders’.

Foreign nationals are three times more likely to be arrested for sex crimes than British citizens, according to newly released data.

President-elect Trump is planning to impose tariffs on all imports.

Social media giant Meta ended its use of independent fact-checkers, shifting to a community notice model more similar to X.

A typical graduate now earns just 1.6 times the wages of a minimum wage worker, compared to 2.5 times twenty years ago.

A lawyer speaking for fast fashion giant Shein refused to comment on whether the company uses Chinese-made cotton, which may be the product of forced labour camps.

Per pupil schools funding remains below 2010 levels in real terms.

89,500 farmers will be hit by inheritance tax following Labour’s rule changes - around 20% more than thought.

75% of British voters think it’s unethical to invest in Russian-owned companies and 55% say the same of Chinese-owned companies.

71% of voters would support using private sector providers to bring down NHS waiting lists.

American fast food chain Chick-fil-A has saved thousands of hours of manual lemon squeezing through automation.

A majority of graduates who went to university since £9,000 per year fees were introduced say their studies were poor value for money.

A 40 million ton lithium mine was discovered in the US.