Thread by @shaunjlawson

Now then, here's a thread. Imagine if I was to tell you that financialisation in Britain didn't start in 1979 (or for critics of the Callaghan government, 1976) - but much, much, much earlier?

Imagine if I was to tell you that financialisation was part of Keynesianism?

Imagine if I was to tell you that neoliberalism itself wasn't the start of something or even a great break with something - but merely the inevitable next stage of a process which had been ongoing for decades?

A lot of people, quite naturally, have been asking "what has got into Shaun?" Well - what's got into Shaun is, chastened and appalled by the defeat, Shaun's been doing a LOT of reading and a LOT of thinking. Trying to fill in gaps in my own knowledge; trying to answer questions.

Questions which relate both to the history of the Labour Party and postwar Britain. Questions which include:

1. Why was the best government in British history kicked out after only 6 years?

2. Why did the Tories spend a full 13 years in government after that?

3. Why, as early as the late 1950s, was the Labour leader trying to amend Clause IV?

4. Why is Labour's electoral record so incredibly awful? 13 years of the Tories, then 18 years of the Tories, then at least another 15 years of the Tories?

Just what is going on here?

The other week, I mentioned Thatcher's dealignment of the electorate and effectively buying off working class voters for life. But what she did - and what Johnson's just done - was only an intensification of something that's been going on since... 1951.

The other week, I also mentioned a stat which, I suspect, is going to end up burnished in my brain, I've thought about it so much in the last few weeks. 64% of the population own their own home (either outright or with a mortgage).

Home ownership. It matters. Quite colossally.

Wanna know how much? It already mattered quite colossally by the start of the 1950s. Attlee's government had done absolutely incredible things; and thanks to rationing, the population was healthier than at any point too. But it was already starting to get fed up.

Many of them had improved their living standards significantly during the interwar period. They remembered that, and were impatient - but stringent credit controls and rationing remained.

So it was that at the 1951 election, Labour was already being portrayed as anti-prosperity

And - albeit thanks to FPTP delivering another ridiculous outcome (Labour got the most votes, but lost) - those portrayals worked. The Tories, who'd accepted the welfare state, campaigned on a massive housebuilding and home ownership programme.

Direct housebuilding controls were abolished in 1954. And from this point onwards, the Bank of England used mortgage credit to either relax or restrict the housing market.

Did you know there were 95% mortgages available in the late 1950s? I know I didn't!

Mortgage interest tax relief was brought in too - and the proportion of owner occupiers rose from 30% in 1951 to 43% by 1961.

The Tories also relaxed restrictions on hire purchase credit. The subsequent consumption boom explains this cartoon in The Spectator after the 1959 GE:

"Well gentlemen", read the caption, "I think we all fought a good fight".

This boom - which I'd paraphrase as people wanting stuff - more and more stuff - posed a huge challenge to Labour. Gaitskell saw it as existential.

His attempt to reform Clause IV came after a thumping defeat at the 1959 election. And also in 1959, in an editorial of extraordinary prescience, The Economist opined the following.

"Politically, socially and economically", the revolution of the "deproletarianised consumer" had begun. Consumption was altering "the indefinable balance of power within and between political parties.., towards men who have something to lose and who do not intend to lose it".

Remember what I mentioned about homeowners nowadays feeling scared of the left? This had already begun 60 years ago. And it was a clear strategy on the part of the Tories: by turning working class people into owner occupiers, they'd win them over.

The right was already demanding the Tories go much further in liberalising household access to consumer credit. The Institute of Economic Affairs was ALREADY signposting a debt-based financialised economy even at this point. So what did Labour do?

Labour did the only thing it possibly could. If it returned to its old values, it would lose - because it was seen as anti-affluence and anti-prosperity. Wilson had been a Bevanite - but he heeded the conclusions in 1959 about just how critical housing and home ownership was.

So the 1964 manifesto set out a four-point plan to 'provide more homes at a price ordinary people can afford', including lowering interest rates for first time buyers. Labour actually gained The Economist's backing as a result.

It built nearly 400,000 homes a year between 1964 and 1966: an astonishing rate. But fatefully, it also reduced funds for local authorities to provide mortgages, and failed to reduce mortgage rates significantly. Heath's Tories would attack this as a broken promise.

Between 1964 and 1970, 2.2m new homes were built. 100% mortgages (can you imagine it?!) were introduced too. Home ownership would reach 51% by 1971 - by when Labour was out, having suffered the following double whammy:

1. The famous 'pound in your pocket' devaluation of 1967 meant Labour had no choice other than to tighten consumer credit controls. But:

2. This gave the Tories, presenting themselves as the party of social mobility, an open goal. Which they converted at the 1970 GE.

Further, in 1966, Britain's first credit card, Barclaycard, was launched - and the following year, the Bank of England permitted extended, revolving credit and minimum payments. The kind of credit so many of us take for granted now via our credit cards.

All this had happened within Keynesianism. Specifically, the 'Stop-Go' cycle required policies which would restrict access to credit when the economy overheated; then relax and liberalise it when it contracted.

And something else also happened under Keynesianism. Something I find absolutely astonishing.

Between 1945 and 1979, household debt rose by 873%. EIGHT HUNDRED AND SEVENTY-THREE PER CENT. That's a higher proportion than the 663% increase between 1979 and 2016.

That's what happens when you have more and more people wanting to own a home; and when their political demands mean you liberalise access to credit for them to do so. Britain was ALREADY a financialised economy based on debt.

In political terms, what you get is a runaway train. Labour had to tighten access to credit following devaluation... so it lost. Tories then abandoned Keynesianism altogether - politics moving further right step by step - emphasising deregulation and promising the Right to Buy.

Yes, really. In 1970, that's what they were already pledging. Heath wanted to ‘encourage local authorities to sell council houses to those of their tenants who wish to buy them’ - and maintained the 100% mortgage scheme. And went even further too.

Competition and Credit Control policies were introduced: which abolished ceiling controls on bank lending (including term controls for hire purchase and consumer credit), and providing much greater independence for banks to determine their lending practices.

All this was just the inevitable next step. Once people started having access to some forms of credit in the 1950s, they were hardly going to want to stop having access to it. Presented with this fait accompli, what could Labour do other than enable the home ownership boom?

It'd never have got back in at all if it hadn't. And in response to Labour, if you like, matching the Tories, the latter just took it to the next level: abandoning Keynesianism, if not yet implementing monetarism.

Such massive liberalisation and a huge expansion in the money supply led to a housing price bubble and major inflation. Coupled with the disputes with the unions - the Three Day Week and all that - Heath had to pull back and reimpose restrictions. Losing him two GEs in 1974.

But Labour weren't back by popular acclaim. They were back more or less by default. Initial attempts at liberalising access to banking credit were kyboshed by the IMF; we all know the rest.

Interestingly, in 1979, the Tories completely reframed the whole argument around home ownership. Not through materialism, but by conveying it as supporting family life and providing a source of self-respect and real security. Frankly, no wonder Thatcher won.

Given all this - especially the eye-watering rise in household debt between 1945 and 1979 - why do we all treat the latter as Year Zero? It very clearly wasn't; it was a continuation and intensification of a long, long process. Frankly, it was an inevitability given the backdrop.

There's a constant theme running throughout the entire period. Britain only chose socialism right after the war; right after an existential threat to it brought everyone together. Its people were already demanding more for themselves by the early 1950s.

Home ownership and access to credit meant that class divides were already fraying by the 1950s' end. It's all very well asking people to vote for others; but when a home gives them lifelong security and an ability to make much more on top of it, they'll vote for their families.

Deproletarianisation. That's been the story of postwar Britain - with the demise of the Red Wall just the latest episode of a very long running series. People will not vote according to their class when they're offered the chance to escape it.

What did New Labour do? It understood this and embraced it. Electorally, it had little if any choice in the matter. Labour cannot win without a coalition of working AND middle class voters; a disparate coalition of varying interests at that.

So the runaway train, demanded by an electorate which rejected Labour four times in a row, simply continued... until CRASH! 2008. But by this point, there were so many homeowners that no party could win while pissing them off. Hence the Tories' subsequent lack of housebuilding.

Which has been shameful, immoral, despicable... and politically, quite hideously smart.

What does all this mean for Labour now? As I said the other day, it very obviously means that we can't get socialism until many old homeowners have died out. They won't vote for it.

Very obviously, it means that we cannot ONLY appeal to the poor, the disabled, those on universal credit, the homeless, even just on the NHS. What we have to promise is to build, build, BUILD - and frankly, make it the central plank of our whole strategy going forwards.

And the reason we have to promise to build, build, BUILD is to win the support of EVERYONE who cannot get on the housing ladder; EVERYONE being overwhelmed by suffocating rents. In other words, to quite massive numbers under 55 now, under 65 a decade from now.

That's what Keir Starmer means by 'opportunity'. That's what Rebecca Long-Bailey means by 'aspiration'. Starmer is right; this WAS the Labour dream for so many. Harold Wilson, above all others, recognised this, embraced it, and built, built, BUILT.

It's us who have to be the party of social mobility. It's us who have to give people the dream of a better future for them and their families - and that future can only be realised, more than anything else, in their owning an asset.

We cannot simultaneously highlight what a catastrophe the housing market is; that each generation will now be poorer than the last, while castigating anyone who talks about 'opportunity'. Are you nuts? Opportunity is what EVERYONE wants. And what everyone deserves too.

The reason capitalism's in so much trouble is very simple. Capitalism doesn't work if so many people have no access to capital. We're not going to change that through class struggle; class struggle's been a political misnomer in Britain since the 1950s in many ways.

We can only change it by reaching out to a vastly larger group of people than we've been doing. Good lord: the Tories have been doing that for 70 years now. We either take them on on their own turf... or we fail.

THAT's what's motivated the shift in me. Reading and reflecting and analysing and absorbing. I dare say, it's probably part of what's motivated @ParkerCiccone's announcement today too - and that of Simon and Kat Fletcher.

@ParkerCiccone Keep the radical policies - we need them. They're important. But reach out. Stop viewing the unpersuaded as your enemy. Stop thinking that we can somehow win by only appealing to ourselves. It's absurd.

Housing. Housing. HOUSING. Because everyone needs a place called home.

@ParkerCiccone cc @graceblakeley @Frances_Coppola

Very interested in both of your takes on the thesis above!