What the left can learn from Labour's shocking election defeat

Last night, the U.K. had an election, and the Labour Party got absolutely creamed. It was an upset victory for the Conservatives in an election which was projected to be close — especially given that the Conservatives won an outright majority of seats, which they did not do in 2010.

Labour leader Ed Miliband has already resigned. So has Nick Clegg, the Liberal Democrats' leader who effectively destroyed his party through a disastrous alliance with the Conservatives in 2010. They won just 8 seats, down from 57 in 2010. The Scottish National Party, by contrast, almost ran the table in Scotland, winning 56 out of 59 seats there and becoming the third-largest party in Parliament by number of seats.

Now, I'm no expert in British politics, but I think there are a few general principles that might be gleaned for left-wing and center-left parties the world over. There is surely much handwringing going on at Labour headquarters right now over the direction of the party, which will be framed as whether to move right or left. I submit that the problem is much simpler: This is about austerity, nothing more. If Labour can't bring itself to run against austerity, which will require both a huge fight with the British media and a political education campaign, they will continue to lose.

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As British economist Simon Wren-Lewis points out, surely the biggest election issue overall was the economy, on which the Conservatives have enjoyed a consistent polling advantage. But that doesn't come from nothing: They have, with great assistance from the media, utterly misled the British public with austerian nonsense. Their narrative goes like this:

As Wren-Lewis explains in a series of detailed posts, this is garbage. The economic disaster of 2008 was not caused by government over-spending, it was caused by a global financial crisis and the collapse of aggregate demand, worsened in 2010 by the eurozone crisis. British interest rates were very low, and the obviously correct macroeconomic policy was to borrow and spend until full employment was restored and only then turn to the deficit.

In other words, the turn to austerity in 2010 was completely gratuitous and deeply damaging to the U.K. economy. Their "recovery" since 2013 or so has been one of the worst in British history, and only happened because austerity was mostly halted (when you flog yourself with a cat-of-nine-tails, it generally feels pretty good when you stop).

The austerian story is deeply familiar in U.S. politics too, of course. In 2010 it was all DC elites could talk about, similarly enabled by bonehead centrist journalists. As Ezra Klein once observed:

But here, though it's a constant struggle against deficit scoldery, left-leaning critics of many stripes have made substantial headway savaging austerian economists, journalists, and politicians. It's not nearly so common anymore to hear "objective" journalists propagandizing in favor of conservative causes.

Not so in Britain, where Labour ended up boxing itself in on austerity, promising that they'd cut the deficit, just somewhat less than Conservatives. I think we see here the power of the instinctive plausibility among most people that "borrowing money = bad," the general policy incompetence of the average journalist, and the power of money to influence media coverage.

At any rate, after losing two elections in a row Labour must conclude that this is an issue they must confront. The bogus narrative on austerity is both the Conservatives' greatest strength and potentially their greatest weakness. There will be something of an activation barrier to get over, fighting both the popular conventional wisdom and the furious incredulity of mainstream journalists, but it has to happen, and soon. Say it with me: "until full employment is reached, the deficit should be larger, not smaller."

A lot of political scientists will tell you this is pointless, that the party in charge when the economy is growing always wins and therefore voters are incapable of understanding even the simplest counterfactual. But I think such arguments are overblown — but there's nowhere else for Labour to go in any case. There's no way out but through austerity.