JEREMY Corbyn’s re-election changes nothing fundamentally regarding the Labour Party, today’s political equivalent of RMS Titanic. The composition of political parties always reflects social and economic change.

The United Kingdom is in deep, elemental crisis and with it therefore the main political formations, including Her Majesty’s Official Opposition. Uniting to oppose the Tories means you have to have a common vision of an alternative – which the SNP have. Contemporary Labour, on the other hand, consists of warring factions divided by class allegiance, national sentiment and personal ambition. Labour’s Humpty Dumpty will never go back together.

We should not be surprised by Labour’s existential crisis. Most of the big, traditional left parties in Europe – those founded in the late 19th and early 20th centuries – have undergone the same implosion. Italy’s main Communist and Socialist parties are now extinct. True, their linear descendent, the Democratic Party, holds office under the technocrat Matteo Renzi. But the Democrats have been overhauled in the Italian polls by the eclectic, if not eccentric, Five Star Movement.

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In France, the Communists – the country’s leading party in the post-war period – now administers only one local department. The governing Socialists are looking electoral death in the face in next year’s presidential race. Leading in the polls is Marine Le Pen’s populist National Front, which has only recently been sanitised of its semi-fascist past. Le Pen will certainly reach the run-off in the presidential contest, eliminating the Socialist incumbent Francois Hollande, who will be lucky to get a pathetic 15 per cent of the popular vote. In fact, Le Pen – anti-EU, anti-euro, anti-immigrant – could snatch the presidency from whoever is the standard-bearer of the mainstream right.

In Spain, in June’s inconclusive general election, the once proud Socialist Workers Party slumped to 85 seats in the 350-seat chamber – its lowest tally ever. That was only a whisker ahead of the seats gained by upstart Podemos, a free-wheeling, anti-corruption movement that pioneered campaigning by social media in Spain. The Netherlands Labour Party, a hardy perennial in Dutch coalition governments since World War II, slumped to five per cent in opinion polls earlier this year. In the cacophony of political parties that now vie for a place in Holland’s fragmented political system, traditional social democracy is being squeezed as much as it is in the UK.

The central cause of this international eclipse of traditional reformist parliamentary movements lies in global economic change – and the failure of mainstream social democracy to adjust. In the last quarter century, manufacturing jobs shifted to Asia while the dizzying rise of financial capitalism in Europe and America created a need for hordes of well-educated service workers. As a result, the industrial working class base of the traditional mass social democratic parties was destroyed.

A new progressive voting alliance could have been sought by the traditional social democratic left - of the dispossessed and politically alienated, of those on static, low incomes, and of professional young people increasingly forced to work long hours. Just such a movement was created very successfully in Scotland, by the SNP. But for much of the past three decades, mainstream social democracy has had a different – now failing – strategy to recover its failing electoral fortunes.

Mainstream social democracy is reformist. It accepts the free market as the mechanism to allocate investment and create jobs. As a result, it also accepts an inequality of power and wealth. Rather than challenge this political and economic status quo – whether out of fear or out of opportunism – mainstream social democracy accepted a grand compromise. Elected to government, Labour would tolerate – even aid – local capitalism in return for a redistribution of income through the tax system.

This produced great gains for working people: free education, the NHS, and even a rise in the share of national income going to wage labour. Industrial capitalism was also happy (for a time) because social democratic governments boosted national productivity through funding infrastructure and research. But to succeed, this model also needed the muscle of the industrial trades unions in the big, exporting industries to provide social democracy with electoral clout and social weight. When those unions disappeared, why would the Establishment bother with social democracy? And disappear it did with the rise of neoliberalism and globalisation in the 1980s.

Enter the Blairites, in the UK and also (in various guises) abroad. Their cunning plan was to create a new “centrist” force that would win enough votes to form reformist governments, as in the past. But without an organised industrial proletariat, who would form this voting bloc? And what could be offered to the new financial capitalism in the West that would buy its blessing? The latter was easy: deregulating the banks and turning the UK into the world’s biggest offshore tax-haven. Thank you, Gordon Brown!

Also, the bankers and Blairites (here and abroad) could agree on manipulating low interest rates. Result: a debt-fuelled consumer boom that made ordinary folk feel temporarily richer – until the banks went kaput in 2008. But while the borrowing merry-go-round was spinning, it generated huge tax revenues so that social democratic finance ministers could bribe ambitious middle class voters with tax cuts. This latter dodge helped T Blair and his emulators to win elections. Of course, when the credit bubble burst, so did social democracy’s ability to buy electoral favour.

During the Blairite epoch, social democratic governments did absolutely nothing to rebuild their manufacturing economies. Under Saint Gordon Brown, between 1997 and 2010, the UK lost over two million manufacturing jobs. This meant that ordinary working folk were either forced out of the labour market altogether or pushed into low-paid employment. Real incomes stagnated leading to a slow-burning popular resentment among nominally Labour voters that “the system” was not working for them. They were right: it wasn’t.

Meanwhile, large numbers of immigrant workers flooded in to provide cheapish labour for London’s decadent financial metropolis. True, low wages afflicted immigrant and local workers alike – caused not by labour competition but rather by the collapse of productivity growth in the UK and most Western economies. But with social democracy dallying with the bankers – remember “Sir” Fred Goodwin’s knighthood? – it was easy for new populist parties like Ukip to play the immigration card to stoke up indigenous working class resentment – a resentment that would lead, inexorably, to the Brexit vote.

The result has been Labour’s self-inflicted electoral decline. It was not Jeremy Corbyn who led Labour to ignominious defeat in last year’s general election. It was the centrist duo of Ed Miliband and the increasingly ludicrous Ed Balls. While north of Hadrian’s Wall, Scottish Labour can’t even press the correct voting button at Holyrood never mind win an election contest.

Blair and Brown’s Faustian pact with the bankers and neoliberalism has led to electoral doom – a fate shared by most Western mainstream social democrats. Now the global neoliberal model is on life-support, held together only temporarily by quantitative easing. Labour’s myriad factions – Corbyn’s Momentum, the old Blairites in Progress, or the newly revived, centre-left Tribune – are struggling to find a radical alternative. Logic says they won’t find one they can all agree on. Which suggests this summer’s Labour leadership contest won’t be the last.

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