Economic crisis 1: Wales needs radical transformation

Tim Williams says we will only achieve it if we smash the graveyard consensus that afflicts our political class

We should all welcome the advent of Gorwel, the new ‘centre-right think tank’ to Wales if only for the novelty value. Wales is economically on the rack and things are going to get a whole lot worse. So contestation between left and right, so normal and healthy elsewhere but so lacking in suffocatingly social democratic (if broke) Wales, is a positive development.

Of course, there was a time when Wales had a vigorous if eccentric radical right. And it is typical of a-historical modern Wales that no-one in this debate has pointed out yet that having a right wing intellectual force in Wales is not that novel. Saunders Lewis’s Plaid Cymru was clearly part of the European Right in the 1920s and 1930s and self-consciously so. Lewis himself despised modern, industrial, protestant, increasingly English-speaking, social democratic Wales and saw the problem as having its origins in the separation of Wales from Catholic Europe. 

Tomorrow: Offa’s Gap

In Part 2 of this debate we publish Offa’s Gap: Roots and Remedies of the Welsh Growth Collapse, by Adam Price, former Plaid MP for Carmarthen East and Dinefwr, and now co-chair of the party’s new Economic Commission which is being launched today. 

His contempt for modern Wales led him into dark territory, still never fully or honestly acknowledged, in a Wales so suffused with social democratic values that it is literally unthinkable for a Welsh politician to have been as radically right wing as Lewis actually was. “Hitler knows that Wales is a nation,” screamed an editorial written by Lewis in the Plaid paper, Y Ddraig Goch just after the Fuhrer had mentioned positively the burning of the bombing school in Lleyn at a Nuremburg Rally in the late 1930s (I kid you not).

Lewis aligned Plaid with the far right in the European civil war as it was just about to burst into world conflagration in 1939. Throughout the 1930s Plaid supported the dictators who crushed democracy along with the Left – Salazar, Franco, Mussolini and Hitler. Plaid may have favoured the Catholic reactionaries over the atheists in that list, but that never stopped them showing sympathy to all of them.

And when it came to the Second World War the official position of the Welsh Nationalists was that Wales had no quarrel with Hitler. They supported Vichy against the Resistance. If you’d read the Plaid newspaper in the 1930s you wouldn’t be surprised at their stance because they’d argued for some time that Jewish financiers were behind the war momentum in England and France. Lewis had conventional Rightist views on Jews by the way: having previously denounced Lenin as a Jew, he saw Jews as the embodiment of the modernity he fought against. How Lewis got away with his anti-Semitism in post-war Wales is a mystery and every time I have raised it I have been rebuked. 

Yet the evidence is overwhelming. Read what he wrote in the 1930s. Read what his opponents were saying about him at the time. He was fingered as a fascist from early on by his peers but that level of understanding and historical memory was lost in the 1960s. Although Gwynfor Evans may have opposed the War from a pacifist perspective – though he was not averse to giving protection to a Breton nationalist collaborator after the war, on the run from French justice – this was certainly not Saunders Lewis’s position. Lewis was a fellow traveller of the Axis powers and so was his Party under his leadership.

I mention all this not to vilify Lewis, though he did have some unpleasant views. Lewis was a serious if exotic person who raised issues of fundamental importance. He was no British style Conservative. He was what has been termed a ‘Revolutionary of the Right’, like many who returned from the First World War disillusioned with bourgeois democracy and the old guard who ran it. His spirit was closer to the Marxists and Communists than to anyone else – though, of course, he saw them as the real enemy of civilisation. And, despite his ‘nationalism’, like them he felt himself to be part of a wider European movement. Like them, too, he was no democrat.

Of course, being closer to the Catholic wing of European Reaction meant that, in fact, Lewis had little positive to say about capitalism. It’s a Communist myth that fascists everywhere were on the side of Big Capital against the workers. Hitler made a tactical alliance with German big business. However, for every Hitler there was a Salazar or a Franco who saw in capitalism just another form of anti-social modernity. So Lewis was no supporter of Hayekian, neo-liberal economic views. He would have regarded such economics as just another form of godless materialism.

Apart from his influence over the non- and indeed anti-parliamentary methods of the Welsh Language Society, Lewis was too exotic a bloom to take root in Wales. His Welsh Rightism was a dead end. But then so was Welsh Leftism of course.

Neither had much useful to say about the most important event to hit modern Wales: the crisis of the economy after 1921 when the world’s first industrial nation became the world’s first welfare nation, a fate that it never fully escaped during intermittent boom years and which the current recession will confirm.

This Wales has a GDP that’s 74 per cent (and falling) of the UK average, has so many places which have struggled for generations to provide even a bare majority with jobs, and loses 50,000 young people a year to economic emigration. Our population has stagnated for almost a century, having previously seen the fastest growth of any region in the UK. We are poor. We do not need not hand-outs, but rather hand-ups. We need that best of anti-poverty campaigns – a wealth generation campaign. 

The complete failure of devolved government in Wales to develop any kind of economic strategy needs a more considered analysis than is afforded by an essay of this kind. But then the complete failure of any university department in Wales to fill the gap is also worthy of review. Add to this the failure of any political party in Wales to develop an alternative economic strategy – and the space for Gorwel is clearly there. The need to develop this economic thinking is certainly there. I add: while the IWA has done some good work I feel that it has dissipated its effort in too many directions.

Essentially, the task for any such thinking is about how to make Wales wealthier. Everything else is a detail. In the modern era, beyond welfarist thinking or crude neo-classical economics, this means working out what the role of government in and for Wales is in creating effective markets and enabling competitive and productive enterprises to emerge.

The Welsh political class has recently got itself obsessed about getting hold of ever-greater power for the National Assembly without actually seeming to know what they would do with it. Gorwel and the IWA need to work on the agenda of how we use what powers Wales has now to achieve a radical economic transformation over the next 25 years. Nothing else matters.

My worry already about Gorwel, apart from not having serious resource to make a serious contribution, is that it won’t be radical enough. Whatever one thinks about the Institute for Economic Affairs it was fearless and changed the UK fundamentally as a result. That’s what Gorwel needs to aspire to for Wales, otherwise there is no point.

Last point. While Saunders Lewis had nothing to say of any importance about the economic regeneration of Wales – his call for a return to medieval guilds and an agrarian economy bounced off modern Welsh reality for good reasons – his radicalism and fighting spirit had something going for them. Wales needed revolutionising whether from the Right or the Left. Instead it got welfarism and palliatives. In contemporary terms we got neither the Washington Consensus (radical anti-state) nor the new Beijing Consensus (radical use of state). We got the consensus of the graveyard. Someone needs to smash this consensus in Wales – and it matters less that it comes from the Right or the Left than that it comes from somewhere.

Tim Williams who blogs here, is director of the Publicani consultancy and is currently working on projects in Australia, where he now lives, and the UK. He is a former special advisor to the Blair government and the Welsh Government. Prior to moving to Australia in December 2010 he was managing director of Navigant Consulting.

11 thoughts on “Economic crisis 1: Wales needs radical transformation

  1. The author has a strong ideological chip on his shoulder, which is out of kilter with Welsh thought (which he well knows, of course) and increasingly, patterns of thought in the West. ‘The task for any such thinking is about how to make Wales wealthier’ is a phrase that encapsulates this; surely ‘the task’ is not how to make Wales wealthier, which is a meaningless proposition for most of the population, but rather ‘how to improve the lives of people in Wales’. Indeed, pursuing the former may make the latter ever less attainable!

  2. Good stuff, very thought provoking albeit unfair to Lewis given the context of his times (photo of the England football team making a Nazi salute anybody?)

    What I find most frustrating is the seemingly endless lack of critique of the Labour party’s record in Wales. As we approach what is virtually a century of dominance by Labour of Welsh politics at all levels, 14 years of London government, we are poorer, sicker and have greater social problems than virtually anywhere in western Europe yet the party’s riding high in the polls again, without any real recognition of failure either within or without the party.
    Very demoralising, I must admit.

  3. I’m genuinely delighted that Tim “Dr No” Williams is back and up to his old rhetorical scheming. There is so much to deconstruct here that we’d really need a conference to dissect this article. Nevertheless, Tim’s overall observations are demeaning to Saunders Lewis and Welsh political and economic thinkers in general. Lewis built a philosphical position that questioned capitalism and all its tentacles. The author may dismiss this but he offered options of decentralisation and rurbanism that are only now beginning to be discussed – 70 years on. Making light of David Melding’s think-tank is moderately entertaining, but all progressive nations require a myriad of research groups in order to foster fresh perspectives. Surely, that is the democratic option. Having said all that, if this article contributes to our national debate then it is good to add it to the mix. However, we must remember that it is currently the political silly season, and Tim’s sophistry remains as amusing as ever.

  4. Once again Tim Williams has hit the nail firmly on the head.

    There is no question – as he has argued in other articles – that what Wales needs is a hand up; a “wealth generation campaign” as he so well puts it. The idea of such an approach is of course far too revolutionary for our government and for that matter much of the opposition – a rich and productive Wales built on enterprise and business, perish the thought!

    The government is up to its eyes in reports, sectors, railways, cooperatives (the latest gimmick) and city regions. Where is the over-arching, complete economic policy and strategy?

    Tim noted the need for an appropriate strategy. In 2008 the IWA published a monograph written by me; A Strategy for the Welsh Economy. Now I am not pretending for a moment that this was the be all and end all, far from it. The idea was to stimulate ideas and raise issues for discussion. So far, despite copies being made available to all Assembly members and Welsh MPs (and all corporate members of IWA), not a single comment, good, bad or indifferent, has resulted. But I live in hope…

  5. The piece by Tim Williams is very factual. One wonders how it ever saw the light of day in a Wales which is gripped by a ‘welshification’ mania that defies logical analysis. The facts about Lewis and Evans will have the Welsh language fanatics and nationalists in a tizz and Williams can expect villification from the usual suspects. It is to be hoped that we create as many ‘think tanks’ as are needed to correct the slow decline in our economy and social life, however I genuinely do not believe that Welsh Labour has any intention whatsoever in any radical thinking to change the status quo, i.e state monopoly. It was clear that PM Blair clearly understood the problems with the 1945 model of state provision, however with the creation of devolution he allowed us to be trapped permanently in perma frost. There are truly very excellent Welsh people throughout our economy/medicine/arts/sports etc., however they must come up against a political doctrine which appeals to the mass of Welsh people like a comfort blanket for children. There are people looking at medium future and can see huge structural problems like Barnet Council who in 20 years sees the social welfare budget taking all its resources, and leaving none for refuse collection etc. If that’s true in Barnet it must be so in Wales, with our huge social problems and complete absence of growth in our economy. We have created in the Bay a class of politicians who probably cannot believe their luck with current incomes/expenses etc and there is no way that they will want to frighten the populace with what’s coming down the line. The FM is peddling the line that all our problems rest with the awful Tories who want to see children in bare feet and hungry, whereas the facts are that the Labour Government in Westminster were going to cut public expenditure pretty dramatically had they won the election. It’s only my very humble and not well educated opinion that devolution should be turned on its head, and rather than Wales demanding/getting powers, be looked at as the English are slowly getting fed up with us, and glad to see reduced political representation where it really matters, but can easily control us by cutting public money/subsidies to Wales.

  6. Iron ore and coal led to a huge increase in the population of Wales, way beyond what its domestic agriculture and trade had been able to support. With the decay and final collapse of the extractive industries Wales is not able to support a population of its present size, hence steady out-migration and low rates of ecnomic activity. Nothing unusual; geographical regions go up and down. Without devolution, that would have continued because no government would have been responsible for combatting those market forces. With devolution it is continuing anyway because though we have a government it does not know what to do about the situation. That isn’t a consensus you are looking at Mr Wiliams; it is general bewilderment. Like most commentators your remarks amount to saying: we must do something dramatic – anything. But “anything” is not a policy. We can all see the patient is losing weight, we might even be able to agree on a diagnosis. With respect to Dr Ball no-one has come up with a cure that looks plausible. I am fairly confident the answer does not lie in psychoanalysing Saunders Lewis and his ideology.

  7. The link Tim Williams makes between Saunders Lewis, David Melding and the Welsh economy today seems pretty non-existent, but as a pure piece of rhetoric this is an entertaining read. I can’t help reading Adam Price’s piece though and thinking it’s a lot more grounded. The trends that show marked relative decline in the Welsh economy are not really related to devolution. They started way before the Assembly was created. To deal with Wales’ economic problems we need to understand them properly and not resort to crass generalisations. Adam’s piece seems to do that in an honest way, whereas Tim Williams seems just out to dredge up Saunders’ admittedly unworldly views.

  8. I’m surprised by this talk of outmigration. We had the first release of the Census 2011 figures a few days ago, and the headline was that between 2001 and 2011 the Welsh population grew by 5.3 per cent – its fastest rate since 1921, largely driven by migration within the UK. So the parallels with the 1930s are misplaced. And I don’t want to be complacent but when you look at the unemployment stats, joblessness in Wales is broadly similar to the North East, Yorkshire and Northern Ireland, and it hasn’t reached the levels that it did in the last recession.

  9. Saunders is always good copy isn’t he? Though, what this has to do with the economy of Wales today, I’m not sure. Tim seems to bemoan the lack of radical thought and policies for the economic challenges facing Wales today by quoting Saunders Lewis from the 1930! Thereby contributing, in Tim’s own way, to the very lack of policies and prescriptions which he accuses others of.

    On Saunders, then, yes some of his views were distasteful to say the least, but he was more of a modernist than given credit for. He was a great advocate and campaigner for Welsh media way back in the 1920s and 1930s – in both languages against the British prejudice of the BBC. When we see the success of Cardiff in the media sector today then this is one concrete example of SL in his own way helping the Welsh economy and having more foresight than many more acceptable left-wing economists who believed in the old industrialist model for Wales.

    To accuse SL of being a snob is probably correct, but isn’t this a part of SL’s psychology? He saw Welsh-speakers all around him turn their back on the Welsh language, seeing it as a language fit only for chapel and simple things. He saw the prestige which Shakespeare and Dickens and the other great writers in English and the association with the Royal Family (which afflicts social democratic Labour as much as any one) and believed this. If he could give some of that ‘status’ and majesty in terms of literature, history, society in the Welsh language, then many of the people (Welsh-speakers as much as any one) who belittled Welsh, who didn’t pass Welsh on to their children, who wouldn’t stand up for Wales, would see that Welsh (and Wales) wasn’t a poor, peasant society but one which could be ‘free’ (independent within a larger dominion) as it was briefly in the Middle Ages. Isn’t that where SL was coming from? He wanted to create 400 years of literary tradition in Welsh. The kind of tradition and prestige which English speakers (of all backgrounds and political thought) could use to belittle Welsh and which made English and Britishness so appealing to ordinary Welsh people.

    After the pomp of the Jubilee and Labour’s aping of it, it ill behoves a Labour supporter to accuse SL of medeivalism and wanting to create a medeival Wales!

    But, hey, there we are, discussing SL again and not the Welsh economy!

    And isn’t that the point, Tim? To deflect discussion over the Welsh economy from today and the legacy which 90 years of Labour rule in Wales has bequethed us, and discuss rather, the thinkings of Saunders Lewis?

    It’s a nicely written article by Tim – they always are. But it doesn’t say much about Wales today and maybe there’s a reason for that, because if it did then part of the blame would have to rest at Labour’s door. After all how can one blame Wales’s lamentable economic policies on a man who held no political post and who by his own admission had ‘failed totally’, and a party which has only held power as a juniour party for 4 short years in the Assembly?

  10. Reading the comments, once again, Tim Williams proves himself to be a man more sinned against than sinning. Introducing this piece with a riff on Saunders Lewis and Fascism has perhaps distorted people’s appreciation of what he actually wrote.

    As so often before, Tim has shown himself to be a free thinker, not constrained by party dogma or sensibility. You can’t always agree with him (sometimes you can’t ever agree with him), but his analysis and opinions are his own, not second hand.

    Far from “Making light of David Melding’s think-tank”, he takes it seriously, and what’s more welcomes it. I don’t see how welcoming this development can be seen as consistent with being a tribal party apparatchik, though some choose to dismiss him thus.

    As with Blake’s description of Milton: he is “of the devil’s party without knowing it” (except that Tim knows very well that he is and always has done).

  11. Llaregubb, I don’t believe the immigration figures imply that the Welsh economy is either booming or self-supporting. Too many of those incomers were of late middle age and heading for retirement. Within Wales that effect would be even more marked if you excluded the border area of North East Wales and the Cardiff area. Unemployment was pretty bad in Jarrow in the 1930s too; Wales was not uniquely hit even then. If you look at the male employment rate as opposed to unemployment, things are not much better now than they were for much of the inter-war years. The big difference is that society as a whole is richer and benefit levels do not leave people starving as they did then, though they do leave them poor. In those days too people believed that education and socialism would provide solutions. They don’t believe that any more and so demoralisation is widespread.

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