The Legitimation of Post-crisis Capitalism in the United Kingdom: Real Wage Decline, Finance-led Growth and the State

Abstract

ABSTRACTSince the 2008 financial crisis, capitalist development in the UK has been marked by both continuity and change. Whilst the Coalition government effectively re-established the UK's ‘finance-led’ growth model, it simultaneously broke with the legitimation strategy which New Labour had advanced in the pre-crisis conjuncture. The Coalition advanced a distinctive ‘two nations’ strategy which sought to secure a limited but durable base of support in a context of fiscal consolidation. This strategy was conditional upon the deep and unprecedented period of real wage decline which took hold in the post-crisis conjuncture. However, the Coalition successfully transformed this potential liability into a political asset, constructing a series of ‘moralised antagonisms’ between wage earners and welfare recipients, on the one hand, and private and public sector workers, on the other. Whilst this strategy secured a limited base of popular support, it also re-embedded a series of structural weaknesses within post-crisis UK capitalism. These imbalances are likely to undermine the stability of the UK’s finance-led growth model in the future and will condition British politics as the country embarks upon the process of leaving of the EU.