Britain back to business as usual is austerity over

Marxist Analysis · 2026-05-13

Core Argument¶

The article argues that austerity is not a contingent political choice driven by neoliberal ideology, but an inevitable structural feature of capitalism in its period of senile decay. The pandemic-era spending spree was a temporary, forced concession to prevent social collapse, not a genuine break with austerity. As the ruling class judges the immediate danger past, it is resuming its offensive against the working class — and this return to "business as usual" is precisely a return to austerity, not an escape from it. The central claim is that those on the left who celebrate the end of neoliberalism and austerity are mistaking a tactical retreat for a strategic shift, and in doing so are spreading dangerous illusions about what the working class can expect from a Johnson or Biden government.

Theoretical Grounding¶

The analysis is grounded in the Marxist understanding that state policy under capitalism is ultimately determined by the imperatives of capital accumulation, not by the ideological commitments of the party in office. It draws on the classical Marxist critique of reformism — the notion that capitalism can be tamed or steered toward a "nicer" form through political will or ideological change. The article explicitly rejects the idea that the post-war boom was the norm and that neoliberalism was an aberration; instead, it inverts this: the post-war period of Keynesian demand management and welfare state expansion was historically exceptional, made possible by the unique conditions of post-war reconstruction, a temporarily favourable balance of class forces, and the breathing room afforded by a rising rate of profit. Austerity — the systematic transfer of wealth from labour to capital through cuts to social spending, regressive taxation, and wage repression — is presented as capitalism's default mode in its epoch of stagnation and crisis.

The article also implicitly draws on the Marxist theory of the state as a committee for managing the common affairs of the bourgeoisie. The ruling class is not monolithic — the article notes genuine divisions between those who fear inflation and debt and those who fear social unrest — but both wings ultimately serve the same class interest. The state's pandemic spending was a form of crisis management, not a conversion to Keynesianism.

Conjunctural Relevance¶

The article was written in September 2021, at a precise conjuncture: the end of the £20 Universal Credit uplift in Britain, the expiry of eviction moratoria in the US, and the winding down of pandemic-era support schemes across Europe. It names specific data points to ground its case:

The cut to Universal Credit would cost six million families £1,502 a year.
The Tories' own budget contained an 8.5% cut to most departments.
The education "catch-up" plan allocated £50 per pupil in Britain versus £2,500 in the Netherlands.
750,000 US families were expected to be made homeless as eviction protections ended.
Three-quarters of Euro area governments let debt holiday policies expire by July 2021.
The National Insurance rise was a regressive tax falling on workers, not capital.

The article also situates this within the longer trajectory: austerity began in Britain under Labour in 1976, not under Thatcher; the Maastricht treaty imposed austerity on the EU but was routinely ignored by the largest states; the post-2008 bailouts were accompanied by brutal austerity, not a departure from it. The conjuncture is defined by a ruling class that is split, confused, and without a coherent plan — but whose structural imperative remains the same.

Where the Argument Continues¶

This article is a snapshot of a particular moment — the transition from pandemic emergency spending to the resumption of austerity. The argument continues in several directions within the IDOM corpus:

On the nature of the post-pandemic crisis: Later articles examine the cost-of-living crisis, the inflation surge, and the wave of strikes in Britain from 2022 onward, testing the article's prediction that austerity would intensify.
On the "levelling up" agenda: Subsequent pieces dissect the actual content of Johnson and Sunak's regional spending promises, showing they are crumbs compared to the scale of cuts.
On the international dimension: The article's claim that the same dynamic is playing out across the US and Europe is developed in pieces on Biden's "Build Back Better" agenda and EU fiscal rules.
On the reformist left: The critique of James Meadway and others who argued austerity was ending is part of a running polemic against left-Keynesian and reformist perspectives within the broader Marxist tradition.

The argument also connects to the broader Marxist analysis of the tendency of the rate of profit to fall and the overaccumulation of capital, which provides the underlying economic logic for why austerity is not a choice but a compulsion — though this article does not develop that theoretical framework in detail.

Connections¶

James Meadway's writings in Novara Media — the article's primary polemical target, representing the left-Keynesian position that neoliberalism is ending and that a new era of state intervention is possible.
The Marxist analysis of the 2008 crisis and its aftermath — particularly the observation that bailouts and quantitative easing coexisted with brutal austerity, refuting the idea that "fiscal orthodoxy" is a coherent ideology.
The post-war boom as historical exception — a theme developed in Ernest Mandel's Late Capitalism and in the broader Trotskyist tradition's analysis of the "long wave" of capitalist expansion.
The 1976 IMF crisis in Britain — a key historical reference point showing that Labour governments impose austerity when capital demands it, regardless of ideology.
The Grenfell Tower disaster and the cladding scandal — used as a concrete example of how Johnson's "anti-austerity" pose collapses when tested against the interests of property capital.

Key Quotes¶

"Austerity is not a 'choice', it is an inevitable product of capitalism."
"If we try to look at this through an 'ideological' lens, it makes no sense. Austerity is supposedly a product of neoliberalism, but this ideology is also supposed to be strictly opposed to massive increases in the money supply and bailouts, both of which occurred to a massive extent after 2008."
"The point is that 'neoliberalism' did not represent an ideologically driven aberration for capitalism. Actually, it was the post war boom and the reforms that came with it that were abnormal for capitalism."
"What really defines the current moment is the fact that the ruling class is split and has no real plan. The ruling class were forced to open the taps and spend to prevent a social explosion at the start of the pandemic in 2020."
"This political situation made Johnson to pose as anti-austerity, and that is a profoundly important fact which the labour movement must understand - they must take advantage of the mass opposition to austerity, inequality and even capitalism as a whole to fight for socialism, instead of spreading illusions in Johnson."
"But the economic need for austerity under capitalism, once workers can be made to go back to work, is stronger than ever, hence the fact that Johnson and other leaders are actually returning to austerity."