Britain’s current political crisis has deep roots that go back 50 years.

I’m presenting on Britain’s fault-lines at an event organised on the theme of ‘FragmentNation’ by Kantar, my employer, this week. This is an extended version of the article I wrote for the event booklet.

The main dividing lines in British society have been clearly outlined in successive elections. The Brexit referendum in 2016 and the General Election in 2017 laid down the markers: younger vs older, core cities vs towns, country, and the rest; and to some extent, more educated vs less educated (this last one may involve some double counting because of the rapid expansion in university education over the last three decades.)

These, of course, are largely English numbers, because England represents such a large part of the whole. Scotland is also different, culturally, socially, and politically. (And, also, Welsh-speaking Wales.) In contrast, ethnic groups are less distinctive in this mix, partly because of their over-representation in the core cities.

FROM TOP: THE BREXIT ELECTION MAP, SHOWING STRENGTH OF VOTE AND POPULATION DENSITY (YELLOW IS REMAIN); ANALYSIS OF THE EFFECT OF EDUCATION AND AGE ON VOTING DECISION. SOURCES: MAP, CHRIS GREEN, OXFORD UNIVERSITY;  STATISTICAL ANALYSIS OF EDUCATION AND AGE, THE STATS GUY.

Even with such nuances, however, the story is almost too simple, and put like this, it takes us to simplistic places. Some commentators, such as Robert Peston in his book WTF, have jumped to the conclusion that British politics has become identity politics, with all the volatility that this would suggest. He is not the only one.

I argue here that, instead, these fault-lines originate in real and deep differences that have emerged in Britain over decades rather than in the few years since the financial crisis. Three long-run changes have combined:

  • The rise of the globalised and financialised economy;
  • The restructuring of advanced economies around services; and
  • A long-run shift in values.

To the extent that technology is a relevant part of this story, it is as an enabler, both for economic change and as a transmission vehicle for new values, and as an accelerator, creating new forms of social exchange.

Different values

It is the shift in values that commentators see first when they try to put the pieces together. We are in the middle of a long shift in our dominant social values, from “modern” values to “post-materialist” values, to borrow the language of the social researcher Ronald Inglehart. Modern values are about hierarchy, authority, and conformity; they capture accurately the social and economic world of much of the 20th century. From a consumer perspective, the phrase “keeping up with the Joneses” could have been invented as a slogan for the moderns.

In contrast, post-materialists value autonomy, creativity and self-expression. These values are often associated with Millennials (22-39 years old, in 2018) and are also seen in the older Generation X (40-54 in 2018). They were seen for the first time in The Beat Generation of the 1950s; the early adopters were the “soixante-huitard” student protesters, seen notably in their values and slogans. These values have steadily gained social traction with each succeeding generation; they are the values of the emerging experience economy.

Although measuring adherence to sets of social values is not an exact science, in western Europe and north America these two different and competing sets of values are now split more or less evenly—but the post-materialists are in the ascendant and the moderns are dying off. This may, of itself, be an explanation for our current political volatility, since such 50/50 values splits in society are always dangerous times.

Global Britain

The second fault-line is around globalisation, financialisation, and de-regulation, associated largely with the economic reforms of successive Conservative governments from 1979 to 1992, and mostly therefore with the Prime Ministership of Margaret Thatcher. There is a huge literature on this, but for our purposes it is the effects that are important: a restructuring of the British economy away from manufacturing and towards services, especially financial services; a significant upwards shift in asset prices, especially house prices, and a one-off jump in levels of inequality that has not been reversed; an opening up of the British economy and society; and a further concentration of the wealth and influence of London.

One effect was to reward existing asset holders, especially house-owners, a cornerstone of Thatcher’s political strategy. But, as Stein’s Law tells us, something that can’t go on for ever won’t go on for ever; rewarding one generation comes with a cost for the next generation.

There’s a further element to this part of the story. Without going too far into the nuances of Conservative politics, all of this represented good news for the element of the party that believed in economic liberalism, and bad news for those who were socially conservative. As Frances O’Grady wrote after Thatcher’s death,

Thatcher’s social instincts were always nostalgic conservative… [But she] helped create the amoral yuppiedom of 80s excess and an explosion of cultural resistance.

This same conflict played out again in the Brexit vote, but the balance of the politics was reversed.

Prime-Minister-Margaret-Thatcher-wilderness-walk-on-Teesside-12th-September-1987 (1)MARGARET THATCHER WALKS THE SITE OF THE FORMER HEAD WRIGHTSON ENGINEERING WORKS AT THORNABY, MIDDLESBROUGH, IN 1987. (IMAGE: TEESIDE ARCHIVE). MIDDLESBROUGH VOTED 65.5% LEAVE IN THE BREXIT REFERENDUM.

The new service economy

The third faultline is around the rise of the service economy. Again, this was prefigured forty years ago. Daniel Bell wrote The Coming of Post Industrial Society in 1973; Alvin Toffler wrote The Third Wave in 1980. In the UK (as in the US and France) services now represent around 80% of the economy. This matters for several reasons, but the most important one is that it has created a new type of relationship in the workplace; identity politics is rooted in a new type of social class.

The rise of services is as important as the decline of manufacturing, for three reasons. The first is that it is harder to find productivity gains in the services sector, so wage growth is flattened. Successive cohorts of young people are earning less money as they come into the workforce than the previous cohort. The second is that—drawing on the work of Enrico Moretti on the US economy–density, proximity and knowledge seems to be critical in creating value from services. (In other words, almost everything that has been written about the internet and the death of geography is wrong).  The cities that win are typically larger, and have better universities. The third is that an important part of the value that a services worker brings to work is their own knowledge and personality, as Scott Lash and John Urry argued in their book Economies of Signs and Space. Business value walks out of the door whenever workers leave work.

The critical point is that this is as true for retail workers and baristas as it is for software programmers and advertising creatives, as Mike Judge reminded us in a memorable couple of sequences in his film Office Space. Employers end up paying for something they have little control over. One reading of the so-called “gig economy” is that it is an attempt by business owners to use technology to manage this problem away. The series of legal cases about the status of such workers (Uber,  Pimlico Plumbers) is a sign of the conflicts over this.  

The landscape of FragmentNation

The combination of these three deep shifts has created the landscape of the FragmentNation. The core cities are increasingly different from everywhere else; London is floating away on its own. The wave of globalisation has had polarising effects because it has produced mirror image effects across generations.

For older generations, it has improved their wealth, while undermining the social values they cherish. For the younger generation, it has reinforced the more open values of the post-materialists but wrecked their economic prospects. One political outcome: for the first time in well over a century, neither of the main political parties represents the business class or the traditional financial sector in the UK.

For brands, this is a complex world to navigate, but in a polarised world, they have to choose. One result has been the rise of strong corporate statements of purpose, of a kind that would have been unthinkable when I was a financial journalist in the 1980s. This makes business sense, because cities are both more aligned with post-materialist values, and they are also where the money is.