Dickson Igwe. Photo: VINO/File

The grand divisions in global economic thought played out in the arguments for and against both Demand Side Economics and its Stimulus Model, and Supply Sided Economics with its Austere Culture. Albeit, these arguments were played out through the back and forth of political chivalry, rivalry and opportunism, as is frequently the case in an election campaign.

The politics of the election stressed English Conservatism and British Regionalism, as much as it threw up the whether or not of greater integration with the European Union.

Prime Minister David Cameron’s Conservative Party win on May 7, 2015 was a win for England and a return to the values of Margaret Thatcher. Austerity won the day.

However, the Conservative Party win may trigger Britain’s exit from Europe. It could also mean a second Scottish Referendum and Scotland’s exit from Britain, if the Conservative Party’s Euro skeptics win the day at the European Union Referendum to be held in the coming months.

Prime Minister Cameron has his work cut out if Britain is to remain a United Kingdom. Britain appears to be entering a period of self examination as she settles into her status as a second level power.

Power in today’s world increasingly means belonging to one of three power polarities: the Asian Pacific with a rising China at one end and a Russian Bear at the other, the European Union with Germany as Primus Inter Pares, and the Americas, led by the USA.

The following story assesses an expert opinion of the British General Election.

Now, David Gow is Editor of Social Europe and former Editor of the Guardian Newspaper. Gow wrote a story on the day of the Conservative Party victory of May 7, 2015. It was titled, 'Seismic Change in the UK and the European Union Political Landscape'.

Gow stated in his opinion piece that as a result of the Conservative Party election victory of May 7, “there is a serious prospect that Scotland will pull out of the 300 year union by the end of this decade, and that Britain will quit the European Union even earlier.’’

At its core the general election was an economics war. The British Labour Party is the party of John Maynard Keynes. The party campaigned on “tighter regulation of financial and consumer markets, the breakup of the banks, increased taxes on the rich, and a higher minimum wage.”

What sapped Labour Party support was that despite the Conservative Party love for the Supply Sided economic culture of austerity, which is not a very popular culture, especially for Britain’s working classes, “economic growth sapped Labour’s case that living standards were in decline.”

The vote was heavily divided, with the Conservative English Vote concentrated in the South East and Midlands where the majority of the UK population resides. The Scottish National Party took the majority of the vote in Scotland, while the Labour Party was retrenched to working class areas in the North of England.  

The Austerity versus Stimulus debate is the central intellectual argument within the European Union at present. It is an argument that underlies all politics and social discourse. Austerity is more popular in richer northern European states. One writer put this down to a “culture of contentment".

Populations in rich countries are happy with the way things are so to speak, so they tend to be more conservative. Stimulus on the other hand is much more attractive as an economic culture where there is economic crisis and stagnation. Austere economic policy is given as one reason Southern Europe remains mired in an “economic funk” this May 2015.

Bear in mind that recent economic growth in austere Britain is not the rendition to good economics as it may appear. Britain faces an economic paradox. It is the fastest growing of the G7 countries. But Britain also harbours the lowest productivity growth with a severe decline in the financial services sector. This is the result of the aftermath of the financial meltdown of 2007-2009. Britain is marching into a long term economic fog without any idea of how things will work out. 

This is because Economic growth based on an austere economics of public spending cuts, the export of capital, trickledown, outsourcing, job insecurity, and the threat of unemployment, may have damaged Britain in ways that may prove irreparable.

Britain’s South East is a bastion of speculative economics and a crucible for trickledown and the consequent wealth inequality austerity creates. This is further symbolised by the City of London’s culture of financial risk, global investment banking, love for financial deregulation, and motley of esoteric financial products. There is a culture of short term planning and parochial thinking embedded in austere thought: “a not being able to see beyond the navel”.

Austerity damages a country’s social and physical infrastructure, leading to long term economic and social decline. Recent economic growth in Britain appears to be more about getting up from the bottom of the Great Recession of 2007-2009.

It is becoming increasingly evident that the Great Recession has changed Britain’s long term economic trajectory, limiting Britain’s present and future growth potential, especially in areas of research and development, and innovation: two factors crucial to GDP and enhanced quality of life. One example of this is that a good education in Britain is becoming increasingly difficult to obtain for the working and lower middle classes.

Stimulus on the other hand is a culture of investment in the social, economic and physical infrastructure, especially in periods of slow economic growth. Stimulus aims to generate stronger economic growth in the short and medium term.

Fiscal stimulus may leave a country better prepared to build a strong economy in the long term, as a result of building up the country’s physical and social infrastructure. FDRs New Deal was a great example of Stimulus. However, Stimulus must be smart, well targeted, and planned over a specific time period.

OK. Labour appears to have made an error. The Labour Party borrowed from the Conservative Party script that proposed cuts in immigration and welfare spending. It could be argued that Labour should have gone all the way left to have made an impact on its base supporters, not wallow in a half hearted rendition to specific right wing policies while remaining a left wing social democratic organisation.

Paradoxically, a Labour Party that was painted as too left wing in England collapsed in Scotland because it was painted as too right wing. Labour failed in trying to be all things to all men.

Gow describes how the Scottish National Party, the SNP, ran on an anti Austerity campaign that, “offered hope and a revitalised sense of national unity that could bring social and economic renewal.” There was a clear dichotomy. England went one way, Scotland the other. Scotland went for stimulus, England for austerity.

On Europe, Nicola Sturgeon, the Scottish National Party Leader has made it clear that, “an English vote to leave the European Union would trigger a second vote on Scottish Independence  as Scotland is in full support of European Union.”

For all the triumphalism of the British Conservative Party, the main “takeaway” from the May 7, British General Election is the fact of two nationalisms, English and Scottish. Nationalism is the opposite of union and the trigger for greater separation and the greater autonomy of Scotland, England, Wales, and Northern Ireland, leading to full Scottish independence and ultimately the breakup of the UK.

The British Conservative Party won by conducting a nationalistic and xenophobic campaign. It used fear and nationalism to win a majority in the English heartlands. The Conservative party also holds a strong Euro Skeptic culture: hence the upcoming referendum on whether or not to stay within the European Union.

Gow believes that, “David Cameron’s campaign to treat the Scots as an untrustworthy, illegitimate, bunch of lefties, has put the Union 0f 1707 at risk.”

The Conservative Party general election win of May 7 was a victory for England, but a loss for the United Kingdom.

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