Labour’s Politics of Anti-Neoliberalism from Corbyn to Starmer

In his New Year’s speech, Labour leader Keir Starmer struck an ambitious note: ‘Britain needs a completely new way of governing... I’m utterly convinced about this.’ Of what exactly has he been convinced, and what is this new way of governing?

Many would suggest answers to these questions lie with New Labour. Starmer stood for leader on a left-wing agenda but appears to have moved rightward on various issues. However, he has simultaneously advanced a platform continuing the aspirations of Corbyn’s Labour to remake the political-economic order via structural reform. Thus, to view Starmer as a Blairite and allergic to anything Corbynite would be misleading. Whilst there is some truth here—Starmer is uninterested in Corbyn’s socialist internationalism—it overlooks the anti-neoliberalism which has endured the leadership succession.

McDonnell’s Anti-Neoliberalism

John McDonnell used his Shadow chancellorship to advance a theoretically well-developed critique of the UK’s economic model. In a 2018 essay collection, Economics for the Many, he defined neoliberalism as a ‘set of policies and beliefs about the economy that have dominated government thinking in Britain (as across the world) since the crisis of the late 1970s.’ Informed by economists like Mariana Mazzucato, Joseph Stiglitz and Thomas Piketty, McDonnell argued that neoliberalism empowered a global financial elite who hoarded wealth and undermined democracy. The upshot of this model was the 2008 crash and its painful aftermath; fundamental reform was necessary.

Accordingly, leading figures in Labour developed a response—both economic and political. In 2017, McDonnell commissioned a report, Alternative Models of Ownership. Its authors argued that regional inequality, alongside declining productivity, investment, and democracy, could be countered by fostering forms of ownership other than private property, including cooperative, municipal and local-led ownership. Labour had been looking at how to bring private assets into public control in ways that avoided direct management from a strong state, an approach criticised in the report for empowering central government over local institutions. Labour under Corbyn was considering a radical institutional revision of the British economy, looking away from the central state and towards local communities.

A Communitarian Left

These concerns were not just the reserve of the radical left. In her 2018 pamphlet, The Everyday Economy, Rachel Reeves argued that the next Labour government would ‘need to support new forms of economic ownership’ and welcomed Alternative Models of Ownership. The pamphlet blended standard criticisms of neoliberalism with a communitarian conservatism. In revising the fundamentals of economics, she argued that politicians must remember the ‘everyday economy’: ‘the services, production, consumption and social goods that sustain all our daily lives’. She developed her argument by reference to Karl Polanyi’s The Great Transformation, in which the economic anthropologist argued that laissez faire capitalism uprooted the economic basis of communal life.

Reeves also cited Tory philosopher David Hume whose emphasis on social bonds she used to argue that a socially rooted philosophy was necessary to replace the neoliberal model. This perspective led her to frame the problem facing Labour and the country not only as socioeconomic inequality, but as a cultural chasm between the winners and losers of neoliberalism. In response, ‘Labour should adopt the principle of subsidiarity—decisions should be taken as close to the people they impact as is… possible’, because the UK was too centralised. By 2018, both McDonnell and Reeves were seeking constitutional correctives to neoliberalism.

Lisa Nandy, meanwhile, future leadership candidate and Shadow Secretary for Levelling Up, delivered a speech in 2017 in which she argued that progressive defeats in the Brexit referendum and elsewhere owed to failures to address entrenched cultural divides between town and city: ‘Diverse, liberal, fast-changing cities have often been at odds with the stability, (small-c) conservativism and communitarian values that are much more prevalent in towns.’ As such analysis reveals, these cultural fissures led progressives to reassess philosophies and institutions they might otherwise view with scepticism, hence the sudden relevance of figures like Hume. This reasoning allowed the politics of anti-neoliberalism to survive the Corbynites’ demise, even if it had an added layer of cultural conservatism.

Globalisation and Reform under Starmer

Brown and Blair had accepted globalisation as an established feature of the British economy. By contrast, growing scepticism is now evident on the Labour benches. Reeves has often seemed inclined to make UK-based enterprise competitive or even privileged over international alternatives. At the 2021 party conference, she declared Labour’s intention to ‘level the playing field’ between high street business and ‘online giants’ by equalising the tax they pay. Her ongoing reassessment of the world economy logically culminated in her May 2023 speech in which she noted that ‘frictionless global trade did not have the answers’, called globalisation ‘dead’, and outlined a new ‘securonomics’.

The November 2022 report, A New Britain, further reflects these ideas about globalisation. The way it explains falling living standards places it firmly within Labour’s new communitarian socialism: “At the root of this failure is not just an outdated neo-liberal economic dogma, but also an unreformed, over-centralised way of governing that leaves millions… complaining they are neglected, ignored, and invisible…” A New Britain is not a New Labour aftershock, despite being directed by Brown, but an articulation of Labour’s decentralised, communitarian and institution-focussed agenda.

A Post-Neoliberal Britain?

Labour has a far-reaching vision for Britain. Unlike New Labour, which pursued redistributive policies within a neoliberal model, Shadow ministers have called for the transformation of that model, partly through constitutional reform.

This politics of anti-neoliberalism is evolving and the precise form it may take in government is open to question. Starmer is difficult to read, and Nandy’s replacement by Angela Rayner as Levelling Up Secretary suggests a governing agenda leaning more towards the strengthening of labour rights than emphasising communitarian ideas.

Regardless of the precise form this politics takes, its potential appeal is considerable. Given global dislocations caused by the pandemic, the Ukraine war, and cost-of-living crisis, a policy agenda assuming Britain’s economy to be essentially dysfunctional no longer seems radical. With public perception and the outlook of Shadow ministers increasingly converging, the possibility of drastic change under a Starmer-led Labour government cannot be discounted.