In Late Soviet Britain, Abby Innes posits that the rationale of neoliberalism has driven the UK’s democratic and economic collapse, arguing that the Leninist and neoliberal projects fail for some of the same reasons: both are based on closed-system reasoning about the political economy. Innes’s combination of deep enquiry into the nature of these ideologies and empirical research into the consequences of putting them into practice makes this an original and eye-opening account of the UK’s path to destabilisation, writes Simon Arthur.

Read an excerpt from the introduction to the book, watch a short LSE Research Showcase presentation by Abby Innes about the book and read a feature for LSE Research for the World, Late Soviet Britain: how British politics is mirroring the failings of Soviet socialism.

Late Soviet Britain: Why Materialist Utopias Fail. Abby Innes. Cambridge University Press. 2023.

Neoliberalism has dominated the political-economic landscape in the UK since 1979, and has, Innes argues in her timely book, culminated in what has been described (elsewhere) as Polycrisis, leaving the UK government with nothing in the tank to try and resolve any of the multitude of issues facing it. While Liz Truss and Kwasi Kwarteng almost sank the economy overnight, Rachel Reeves is still choosing to tell us that public spending is not sustainable, and Keir Starmer shows little interest in looking for alternatives despite claims his government will deliver change.

A core element to both theories (neoliberal economists and communists) is that there is a truth that will eventually be revealed, either via the work of the revolutionary or the manoeuvres of the unrestricted market.

Innes, an associate professor at LSE lecturing in Political Economy, examines how a theory that was posited as the common-sense response to the ideological driven actions of Communist Russia has, despite (or rather because of) it’s utopian hopes, “corrupted a comparatively functional state and proved both immiserating and demoralising for millions of its citizens” (386). Innes makes at first glance a rather surprising claim: that the rationale behind the post war efforts of Stalinism is found equally at “the methodological frontier of neoliberalism” (149), yet as you read you discover it to be all too accurate. The rationale of neoliberalism, Innes finds, has driven the economic and democratic collapse of the UK, and helps us to further understand where we are now, including making sense of Brexit (surely an impossible task!).

The book is clearly divided in two elements – the methodological sections and the empirical sections. Despite there being an increasing number of books discussing neoliberalism, I doubt others start with a section discussing the ontological views that they, and the authors of neoliberalism, hold (often implicitly). When Innes states that “We cannot transcend the history of our curiosity to gain unmediated access to ‘the world-as-it-really-is”, I couldn’t help but nod in agreement. Yet materialist ideologies of the soviets and the neoliberalists seem to believe this.

A core element to both theories (neoliberal economists and communists) is that there is a truth that will eventually be revealed, either via the work of the revolutionary or the manoeuvres of the unrestricted market. In her conclusion, Innes comments that both systems “equate politics with the achievement of a form of being – of perfect universal rationality – rather than with the management of the human struggle” (391). This lack of engagement with empirical reality is what, she argues, has driven the UK to such a degraded state.

Dissecting neoliberalism, and as such Innes goes on to lay out the following: Camp One economists, as she calls them, “accept mathematical axiomatic deductivism as an orientation to science for us all and who regard any stance that questions this approach as misguided” (32). They assume perfect conditions and tend to ignore any market imperfections (to allow their models to work). If, like me, you have spent the last 20 years wondering how we have arrived at such a perilous position, and how those in charge cannot see that their project is failing despite the masses of empirical evidence, this book finally helps to make some sense of this. Simply put, their ideology does not allow them to do so.

Brexit is the logical conclusion of a theory that positions the EU as a bureaucratic leviathan that distorts market efficiency (rather than a large marketplace that benefits all inside it).

Not only does this world view assume that everyone has perfect information and act with perfect foresight, but as this system views the world as “closed” there can be no unintended consequences nor externalities that upset the market. Stalin allocated a similar role in Russia, but to his central planners, who were “supposed to create a rational system that would eclipse the ‘anarchy’ of the capitalist marketplace”, but instead “condemned all future generations of Soviet economists to prop up the system against the accumulating weight of its motivational, informational, logistical and political contradictions” (49). Equally, despite 40 years of evidence to the contrary, the “camp one” thinkers continue to cling to their closed world view, while camp two allow imperfections but simply believe you need more market to attain the goals that camp one believes will be achieved. The much smaller camp three offer a more heterodox vision, they are rarely allowed anywhere near power. (Innes comments that John McDonnell did work with this group, a relationship that was abandoned by Starmer, but the dominance of the orthodoxy is starting to wear away group think of economists is being challenged…)

The second part of the book then forensically examines how camp one has applied its theories to the UK and how it has caused major damage to society while also offering us actual solutions to some of the greatest problems mankind has faced. The section on education is a frustrating read, as Innes repeatedly shows the limitations and failures of trying to apply the market to a vital element of society. Innes tackles one of the UK’s greatest moments of shooting itself in the foot when she details the argument that Brexit is the logical conclusion of a theory that positions the EU as a bureaucratic leviathan that distorts market efficiency (rather than a large marketplace that benefits all inside it).

The comparisons to Leninism, and the planned economy in the USSR which saw a mass upsurge of bureaucratic decision making outside of empirical facts, surprise and force one to look at the closed world material utopianism of neoliberalism in a new light

While this cannot be the only reason that Brexit occurred (and acres worth of trees will be used to discuss it, possibly for ever), it is to me one of the clearest explanations yet as to why the free marketeers felt that leaving the EU would in any way be the superior option (of course, we know Johnson sat on the fence until the last minute). Meanwhile the section on climate change is terrifying, showing how little has been done to combat such an existential threat to our existence, via simply hoping that “nature’s equilibrium and an entirely fictional general economic equilibrium can be made consistent with each other” (287). The hope that by refusing to allow the state to intervene will allow actors to make rational choices instead, Innes argues, obscures the enormity of the issues faced. Despite the failures to deal with this crisis, the private sector is still claiming there “just wasn’t enough market”, and that Labour’s plans for a £28 billion green investment pledge was a poor use of taxpayer’s money, ignoring the fact that existing use of the private sector has, so far, failed to deliver the countries green goals.

One point where I disagree with Innes, is when she suggests that “The [B]ank [of England] now saw high competition and less regulation as key to the renewal of the City of London as an international financial centre” (250). During the 1980s, the Bank was unable to control capital flow into the UK due to the euro-dollar market, an unregulated space to trade currencies, and was essentially forced into an acceptance of the deregulation (which culminated in the financial ‘Big Bang’ of 1987) as it happening without or without the Bank. The Bank of England was searching for a new identity in the neoliberal world and has been a strong driving force behind the ideology of the markets being mainstreamed, but I would argue that the change was driven by external forces beyond the Banks control, and not a decision from within it.

This is a book that I wish I could have written. It engages with the neoliberals on their own terms, epistemologically and ontologically, and finds them lacking in both areas. The comparisons to Leninism, and the planned economy in the USSR which saw a mass upsurge of bureaucratic decision making outside of empirical facts, surprise and force one to look at the closed world material utopianism of neoliberalism in a new light, while the empirical evidence amassed in the second half of the book reflects how much of a failure this plan has been, but which the authors of such destruction are unable to incorporate into their world view. They may never be willing to, but now we have an additional tool in our hands to fight with.

Note: This review gives the views of the author and not the position of the LSE Review of Books blog, nor of the London School of Economics and Political Science.

Image: Margaret Thatcher visits the Berlin Wall sculpture in Fulton, Missouri in1996. Credit: Levan Ramishvili on Flickr. License: Public Domain

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