The Left After Growth

Andy Burnham’s speech at Labour Party Conference has met with an exceptional response. It was always likely to go down well in the aftermath of the Starmer years. But the skill with which it was delivered has clearly helped to define the terms of the national debate and sparked a discussion about the priorities of the left. Burnham signalled up front that he wanted to lead a conversation about political themes which were off the table under Starmer, and which have been neglected by every other Prime Minister since, perhaps, Margaret Thatcher. 

There is much to agree with in the new PM’s vision. Social care, his priority, is a running sore that almost anybody who has had contact with the system will know about. The same is true of electoral reform: our voting system is profoundly dysfunctional, handing Labour nearly two-thirds of parliamentary seats on only a third of the vote, and excluding parties of left and right that receive millions of votes from any effective parliamentary representation. Devolution has been one of Burnham’s defining causes since he became Greater Manchester’s first directly elected mayor. And of course there were the promises on public control of utilities, with an unprecedented critique of neoliberalism’s failures.

All this marks an attempt to bring Labour’s core vote back into its orbit. It will shape the conditions of left politics over the coming period. The problem, as others have pointed out, lies in turning any of this rhetoric into reality. Leave aside the capacity of the Labour Party — let alone the British state — to deliver on Burnham’s promises: his speech took place in a conference centre swarming with lobbyists and corporate sponsors, and his government is hemmed in by institutions like the Treasury and the Bank of England which are fiercely resistant to change. But even without these obstacles, there is a more fundamental problem — one which the Chancellor John Healey indicated in his conference speech on Monday. 

‘Without growth’, declared Healey, ‘there is no social democracy’. The implications of this insight cannot be understated, casting a shadow over some of Labour’s more ambitious policies. It’s clear that we are drifting into a world where growth is radically diminished, if not entirely erased. When we confront this fact, we can begin to understand what the left, both within and beyond Labour, could offer beyond Burnhamism — what kind of programme it could develop to meet the demands of our historical moment, when many of the old social-democratic certainties no longer hold. 

Goodbye Growth

Healey has identified the fundamental bind with perhaps more insight than he intended. In Britain, GDP growth has run at approximately half the rate achieved during the 2000s, and New Labour’s last period in government. Between 2008 and 2025, GDP per head grew by just 8.7 percent, against 43 percent over the preceding 17 years. The levels reached during the post-war boom now look hopelessly out of reach.  

This marks a new historical situation. During the so-called Great Acceleration from the 1950s onwards, the potential of industrialisation and of a mass consumption society began to be realised across society: an expanding wealth of increasingly sophisticated products, supplied by increasingly sophisticated producers. The driving force here was the world’s richer nations, whose growth was based on the mobilisation of resources on a scale never seen before. In the charts drawn by Will Steffen and colleagues, almost every indicator of human pressure on the earth system, from fertiliser and water use to energy consumption and atmospheric carbon dioxide, turns sharply upwards after 1950. Global material extraction has more than tripled since 1970, from 30 billion to 106 billion tonnes a year, or from 23 to 39 kilograms per person per day. Ed Conway’s Material World (2023), a brilliant chronicle of the use of those resources, notes that we dug more out of the earth in 2017 than ‘in all of human history before 1950’.

Alongside the application of those resources came the exploitation of a mass working class in the era of Fordist capitalism, followed by the spread of neoliberalism over the last 30 to 40 years, which created a global working class on a colossal, civilisational scale for the first time in human history. During this later period it was no longer the developed West but rather the rest of the world that became the primary growth engine, led by China’s extraordinary takeoff. Now, however, all these processes are now hitting insuperable barriers. 

The industrialisation of India, hailed as the next great frontier for capitalism as companies like Apple attempt to relocate their supply chains, is running hard into climate change: as temperatures soar, work outdoors becomes impossible whilst indoor work relies on expensive air conditioning. India risks becoming ‘too hot to work’, in McKinsey’s phrase. Supplies themselves are disrupted by extreme weather events, from the extreme heat that knocks out elderly equipment to the floods that close mines.

Stack all this up and the result is not the end of the world but a continual downwards pull on growth prospects. The same limits are now appearing all across the world as a result of resource depletion. In the US, the AI and data centre buildout accounts for roughly a third of GDP growth this year on ING’s estimate. Here, the transformation of the online economy from a relatively light user of material resources to one with massive material dependencies is imposing serious demands. We see this in the soaring price of memory chips, of copper dug up from mines in Chile, Peru and elsewhere, and of electricity to feed the data centres. The hard constraints on resources are getting even as the climate crisis deepens. How can growth be revived in such conditions?

The Civilisational Question

Some speculate that artificial intelligence will solve the problem of stagnation. But while while we have seen the transformation of some labour processes, it remains unclear how this might lead to the reconstruction of a mass consumption society on a new and more technologically advanced basis, or how it would even be possible to rebuild that society in a way that would restore previous growth levels. And in the context of resource depletion, there is no guarantee that such technologies will be able to operate on the necessary scale. 

The breakdown of the old global growth model now means that American and European prosperity have been decoupled: the economic expansion of one no longer drives the other. The same applies to China: where once growth across the world would pull in Chinese exports and pull Chinese growth up with it, that mechanism is now stalling. Chinese exports are soaring, but not enough to compensate for weak domestic demand, where wages and incomes remain suppressed. 

Put all this together — technologies less transformative than they appear, resource constraints biting harder than ever — and the conclusion is obvious: the world of the future is likely to be one of lower growth and higher costs producing higher inflation. The limits on growth place limits on social democracy, since a smaller pie is more difficult to divide up. 

This is the broader, civilisational question the left must start to address. With the Labour leadership unwilling to confront it, this falls to the wider left. At present, the most clearly articulated alternative comes from the Green Party, new economic programme makes a number of important points: that fiddling with interest rates is no longer adequate for tackling inflation; that the financial services industry has an unnecessary and unhealthy dominance in the British economy; and that a bolder approach is needed to change this balance of power. But even this falls into a familiar and outdated pattern: putting all our problems down to the excessive influence of high finance, understanding the world through the lens of the 2008 financial crisis, rather than facing up to the realities of escalating climate breakdown. 

The real question is not whether another ‘2008-style crisis’ is looming, but something that may well be worse: a major climatic event, like a super-strength El Niño, for instance, which could trigger a major debt crisis in the Global South as the real costs of essentials soar and debt repayments cannot be met. 

Towards Adaptation

In our age of catastrophe, we must learn how to think about the economy and the planet as one. It is essential to adapt to a world that is being rapidly physically transformed. As floods heatwaves become more frequent, we need to redesign our social and technical systems to cope: tree planting in cities to cool them in summer, the provision of air conditioning where necessary, and the creation of a welfare state that will provide for people when they are unable to work because it is too hot, or too flooded, or because some other environmental shock has hit. 

Adaptation must also respond to worldwide geopolitical shocks of the kind that Washington and Israel have caused through their criminal war on Iran. A resilient economy is needed to protect people from a deeply disordered and unstable world. That means the domestication of energy production and of food production, and indeed the domestication of large parts of production in general: even reindustrialisation, to use the fashionable term. Alongside this we must build a care economy far broader than only the social care Burnham talks about. If we are not framing our economic demands around these central and increasingly urgent needs, to preserve and sustain the capacity of humanity to deliver a good life, then we are missing the point — for Britain, and for everywhere else.

In this country, that would require a major shift in the balance of economic power: out of its concentration in the citadels of finance, primarily located in the City of London and Canary Wharf, and out of the hands of the Treasury and the Bank of England. Britain is quite close to enjoying what you might call a ‘privilege of backwardness’: decades of failure by Westminster and big business has left room for relatively quick and easy wins, for example in public transport investments in the North of England. But we must not stop, as Burnham will, at investing in infrastructure and increasing the power of local authorities. We must also change how power operates inside our companies and corporations. This extends to the difficult task of redistribution, of taxing extreme wealth properly. 

That could be an opportunity to place new technologies in the hands of ordinary people, collectively organised up and down the country. Large language models are best used on a smaller scale: an open weight LLM can be run on a far smaller system than a hyperscale data centre (for which there is no need). Every library could provide the facility, with access made available for community use. This kind of reindustrialisation would need to happen on a socially and environmentally sustainable basis. The principles of a circular economy could help us to avoid the failures of earlier industrialisation processes, and instead embrace worker and community ownership. 

This is surely what a radical economic programme of the left must strive for in 2026. If we now have a Labour government speaking some of the left’s language, our task is to show that this path leads far beyond anything Burnham and his frontbenchers have articulated. The Budget due at the end of the month may yet expose some of the practical limits of Burnhamism in a world that is getting warmer, more volatile and more expensive — at which point it is up to us to seize the mantle. If social democracy relies on increasingly elusive growth, then something genuinely new is needed.