Populism is the result of global economic failure

Larry Elliott in The Guardian


The rise of populism has rattled the global political establishment. Brexit came as a shock, as did the victory of Donald Trump. Much head-scratching has resulted as leaders seek to work out why large chunks of their electorates are so cross.

The answer seems pretty simple. Populism is the result of economic failure. The 10 years since the financial crisis have shown that the system of economic governance that has held sway for the past four decades is broken. Some call this approach neoliberalism. Perhaps a better description would be unpopulism.

Unpopulism meant tilting the balance of power in the workplace in favour of management and treating people like wage slaves. Unpopulism was rigged to ensure that the fruits of growth went to the few not to the many. Unpopulism decreed that those responsible for the global financial crisis got away with it while those who were innocent bore the brunt of austerity.
Anybody seeking to understand why Trump won the US presidential election should take a look at what has been happening to the division of the economic spoils. The share of national income that went to the bottom 90% of the population held steady at around 66% from 1950 to 1980. It then began a steep decline, falling to just over 50% when the financial crisis broke in 2007.

Similarly, it is no longer the case that everybody benefits when the US economy is doing well. During the business cycle upswing between 1961 and 1969, the bottom 90% of Americans took 67% of the income gains. During the Reagan expansion two decades later they took 20%. During the Greenspan housing bubble of 2001 to 2007, they got just two cents in every extra dollar of national income generated while the richest 10% took the rest.


Those responsible for global financial crisis got away with it while those who were innocent bore the brunt of austerity

The US economist Thomas Palley* says that up until the late 1970s countries operated a virtuous circle growth model in which wages were the engine of demand growth.

“Productivity growth drove wage growth which fueled demand growth. That promoted full employment which provided the incentive to invest, which drove further productivity growth,” he says.

Unpopulism was touted as the antidote to the supposedly-failed policies of the post-war era. It promised higher growth rates, higher investment rates, higher productivity rates and a trickle down of income from rich to poor. It has delivered none of these things.

James Montier and Philip Pilkington of the global investment firm GMO say that the system that arose in the 1970s was characterised by four significant economic policies: the abandonment of full employment and its replacement with inflation targeting; an increase in the globalisation of the flows of people, capital and trade; a focus on shareholder maximisation rather than reinvestment and growth; and the pursuit of flexible labour markets and the disruption of trade unions and workers’ organisations.

To take just the last of these four pillars, the idea was that trade unions and minimum wages were impediments to an efficient labour market. Collective bargaining and statutory pay floors would result in workers being paid more than the market rate, with the result that unemployment would inevitably rise.

Unpopulism decreed that the real value of the US minimum wage should be eroded. But unemployment is higher than it was when the minimum wage was worth more. Nor is there any correlation between trade union membership and unemployment. If anything, international comparisons suggest that those countries with higher trade union density have lower jobless rates. The countries that have higher minimum wages do not have higher unemployment rates.

“Labour market flexibility may sound appealing, but it is based on a theory that runs completely counter to all the evidence we have,” Montier and Pilkington note. “The alternative theory suggests that labour market flexibility is by no means desirable as it results in an economy with a bias to stagnate that can only maintain high rates of employment and economic growth through debt-fuelled bubbles that inevitably blow up, leading to the economy tipping back into stagnation.”

This quest for ever-greater labour-market flexibility has had some unexpected consequences. The bill in the UK for tax credits spiralled quickly once firms realised that they could pay poverty wages and let the state pick up the bill. Access to a global pool of low-cost labour meant there was less of an incentive to invest in productivity-enhancing equipment.

The abysmally-low levels of productivity growth since the crisis have encouraged the belief that this is a recent phenomenon, but as Andy Haldane, the Bank of England’s chief economist, noted last week, the trend started in most advanced countries in the 1970s.

“Certainly, the productivity puzzle is not something which has emerged since the global financial crisis, though it seems to have amplified pre-existing trends,” Haldane said.


Bolshie trade unions certainly can’t be blamed for Britain’s lost productivity decade. The orthodox view in the 1970s was that attempts to make the UK more efficient were being thwarted by shop stewards who modeled themselves on Fred Kite, the character played by Peter Sellers in I’m Alright Jack. Haldane puts the blame elsewhere: on poor management, which has left the UK with a big gap between frontier firms and a long tail of laggards. “Firms which export have systematically higher levels of productivity than domestically-oriented firms, on average by around a third. The same is true, even more dramatically, for foreign-owned firms. Their average productivity is twice that of domestically-oriented firms.”

Wolfgang Streeck: the German economist calling time on capitalism

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Populism is seen as irrational and reprehensible. It is neither. It seems entirely rational for the bottom 90% of the US population to question why they are getting only 2% of income gains. It hardly seems strange that workers in Britain should complain at the weakest decade for real wage growth since the Napoleonic wars.

It has also become clear that ultra-low interest rates and quantitative easing are merely sticking-plaster solutions. Populism stems from a sense that the economic system is not working, which it clearly isn’t. In any other walk of life, a failed experiment results in change. Drugs that are supposed to provide miracle cures but are proved not to work are quickly abandoned. Businesses that insist on continuing to produce goods that consumers don’t like go bust. That’s how progress happens.

The good news is that the casting around for new ideas has begun. Trump has advocated protectionism. Theresa May is consulting on an industrial strategy. Montier and Pilkington suggest a commitment to full employment, job guarantees, re-industrialisation and a stronger role for trade unions. The bad news is that time is running short. More and more people are noticing that the emperor has no clothes.

Even if the polls are right this time and Marine Le Pen fails to win the French presidency, a full-scale political revolt is only another deep recession away. And that’s easy enough to envisage.

Until recently, to be anti-establishment you had to be opposed to the establishment. Not anymore.

Mark Steel in The Independent


From the way Donald Trump is trying to place Nigel Farage as British ambassador to America, it seems he must think part of his prize for winning the election is he can appoint whoever he likes to every single job.

Next he’ll demand Boris Johnson is made Prime Minister of Pakistan, Alan Sugar plays in goal for Brazil, and Farage combines his role as ambassador with being an underwear model for Marks & Spencer.

Then he can insist he chooses all official delegates at every summit, so the next G20 will be him and Farage, with a bloke he met in a lap-dancing club in Milan, a woman from Japan who was Miss Tokyo 2012 – until he realises she’s put on four pounds so is hardly suitable to discuss climate change – and his daughter, who can represent Mexico.

He can act like this because he’s anti-establishment which is why he’s such good friends with Farage. And there’s no greater sign of two mates bravely fighting against the symbols of wealth and power, than being photographed smiling in a solid gold lift that one of them owns so he can go up and down his tower. Jeremy Corbyn, look and learn.

This week Farage secured his position as spokesman for the common man by having a party at the Ritz, because he’s determined to stay rooted in the community.

Men of the people always have their parties at the Ritz, so this was Nigel’s way of keeping it real, with a homely affair for old friends and the neighbours, such as the Barclay brothers and Jacob ‘Salt-of-the-Earth’ Rees-Mogg, who must have got time off from an evening shift driving a forklift truck.

It reminds me of my Auntie Joyce’s do when she retired from the Co-op. And what a lovely moment it was when she said: “Ooh, look who’s popped in – it’s Lord Ashcroft who delivers the fruit and veg.”

Also there was Jim “down at the old Bull and Bush” Mellon who is worth £850m and is so down-to-earth he bases himself in the Isle of Man for some reason, probably because he is shy.

It is common for prominent people in independence parties to be based outside the country they wish to be independent, because they’ve been exiled, and the UK Independence Party follows this tradition.

In their case they all seem to be tax exiles but the principle is exactly the same.

So Nigel’s celebration must have been the grassroots event you’d expect, just like your brother-in-law’s 50th birthday upstairs in the pub. We’re all familiar with how these evenings end, with Lord Ashcroft trying to separate the Barclay brothers as they squabble over who had the last of the Twiglets, and journalists from The Times throwing up in the garden after a pint of Malibu and Crème de Menthe.

Someone else who went to the Ritz party was Ukip donor Aaron Banks, who has companies in the Isle of Man but also in Gibraltar. That’s because he’s so passionate about the United Kingdom he doesn’t want its tax officers wasting time counting his payments when they could be doing something more useful, so he gives a tiny bit to places abroad instead, to help Britain out.

As Nigel is so adamant he’s an ordinary chap, he’s transformed the way we see the establishment altogether. Up until recently, to be anti-establishment you had to be in some way at least in part opposed to the establishment. But now that stuffy rule has been destroyed, and in these more creative post-truth times anyone can be anti-establishment as long as they claim to be.

This Christmas, the Queen will start her speech: “This year, I for one have had just about enough of the establishment. It’s all right for some, lauding it with their posh crockery, and buying the latest Swarovski crowns rather than having to make do with hand-me-downs from Queen Victoria. But your la-di-da types can say what they like, and I can moan about immigrants whenever I fancy coz I’m a simple gal living in South London and I know what’s what.”

Then the politicians will try and copy Trump and Farage as it seems to work. Philip Hammond will start a speech about Brexit negotiations: “Yesterday evening I met with the German Chancellor Angela Merkel, who I have to confess I found a particularly cracking piece of arse.” Then all his front bench will groan “Hear, hear, hear” and wave bits of paper.

There will be a scandal as it emerges Michael Gove paid the proper amount of tax, but he’ll make a statement: “I can assure you these are malicious lies and I paid hardly any.” And there will be calls for Hilary Benn’s resignation, when it’s claimed he met his wife at a regional meeting of a Labour Party committee on road policy in rural areas. But he’ll deny this, saying, “I can assure you I met her in proper fashion, groping her in a taxi after giving her second prize in the competition for Miss Weston-Super-Mare 1996.”

Vince Cable will publish election leaflets showing him in a jacuzzi with a ladyboy, but his opponents will accuse him of having it Photoshopped. And the Conservative Party political broadcast will be a hip-hop video in which Jeremy Hunt stands by a swimming pool in a white suit with a gold cane pouring rum over Amber Rudd as she wiggles in a bikini.

Because at last we don’t have to obsessively cater for special interest exotic minorities such as people from abroad and women, and we can give the country back to the ordinary grafting working-class millionaire at the Ritz.

The Pakistan Establishment's Dilemma

Pervez Hoodbhoy in The Dawn

THE oligarchy which runs Pakistan, often called the establishment, is in a quandary. The problem is that whatever it says through its diplomats abroad — and with however much energy — the world insists on perceiving Pakistan as an ideological state wedded to exporting jihad. This is undesirable, but so also is the idea of changing course.

Writing in this newspaper, Ambassador Munir Akram admits that Pakistan has “few friends and many enemies” in Washington. Indeed, Trump’s victory can only worsen matters. But Europe, Russia, and Japan also see things similarly. Few there would be impressed by Akram’s frank admission that, “Lashkar-e-Taiba and Jaish-e-Mohammed participated in the legitimate post-1989 Kashmiri freedom struggle”, do not attack Pakistan, and “enjoy a degree of popular support” — or with his suggestion that no action be taken against such groups until things improve in Kashmir.

Akram’s views likely reflect the current thinking of a powerful section of the establishment. But what precisely is the establishment? Who can belong to it, and what does it want?

From Pakistan’s birth onwards, the establishment has set Pakistan’s international and domestic postures, policies, and priorities. Today it rules on the extent and means by which India and America are to be confronted, and how China and Saudi Arabia are to be wooed. It sanctions, as well as limits, militant proxy forces for use across borders; closely controls what may or may not be discussed in the public media; and determines whether Balochistan or Sindh is to be handled with a velvet glove or banged with an iron fist.

Establishment members are serving and retired generals, politicians in office and some in the opposition, ex-ambassadors and diplomats, civil servants, and selected businessmen. The boundaries are fluid — as some move in, others move out. In earlier days English was the preferred language of communication but this morphed into Urdu as the elite indigenised, became less cosmopolitan, and developed firmer religious roots.

Arguably, most forms of government anywhere are reducible to the rule of a few. In Pakistan’s case how few is few? In 1996 Mushahid Husain, long an establishment insider and currently a senator, had sized the establishment at around 500 persons plus a list of wannabes many times this number.

Stephen Cohen, an astute observer of Pakistani politics over the decades, remarks that establishment membership is not assured even for those occupying the highest posts of office unless they have demonstrated loyalty to a set of “core values”. That India is Pakistan’s archenemy — perhaps in perpetuity — is central. As a corollary, nuclear weapons are to be considered Pakistan’s greatest asset and extra-state actors an important, yet deniable, means of equalising military imbalances. These, and other, assumptions inform Pakistan’s ‘national interest’.

National interest means differently in different countries. For example the post-War American establishment considered the export of American values — particularly free trade — as America’s national interest. Stalin’s Russia and Mao’s China competed to implant their respective brands of communist ideology overseas. On the other hand today’s China is purely pragmatic. So is India. Not being ideological states, they are not mission-driven. They just want to be modern, rich, powerful, and assertive.

Let’s compare Pakistan’s national interest with the above. Just what is it in the eyes of its establishment? In search of an answer, I recently browsed through theses and articles in various departments of universities, including the National Defence University in Islamabad.

What I found was unsurprising. National interest is defined exclusively in relation to India. This means resolving Kashmir on Pakistan’s terms, ensuring strategic depth against India via a Talibanised Afghanistan, nurturing the Pakistan-China relationship to neutralise Indian power, etc. To “borrow” power through military alliances against India is seen as natural. Hence, switching from America’s protection to China’s happened effortlessly.

Missing from the establishment’s perception of national interest is a positive vision for Pakistan’s future. I could not find any enthusiastic call for Pakistan to explore space, become a world leader in science, have excellent universities, develop literature and the arts, deal with critical environmental issues, achieve high standards of justice and financial integrity, and create a poverty-free society embodying egalitarian principles.

This lopsided view has distorted Pakistan’s priorities away from being a normal state to one that lives mentally under perpetual siege. To its credit, Nawaz Sharif’s government attempted — albeit only feebly — to make a break and concentrate on development. It knows that the use of covert jihad as an instrument of state policy has isolated Pakistan from the world community of nations, including its neighbours. Diplomats tasked to improve the national image are rendered powerless by the force of facts.

Keeping things under wraps has become terribly hard these days. For example, Pakistan denies any involvement in the Uri attack. But, to commemorate the dead attackers, Gujranwala city was plastered with Jamaatud Dawa posters inviting the public to funeral prayers, to be led by supremo Hafiz Saeed on Oct 25, for the martyred jihadists who had “killed 177 Hindu soldiers”. I did not see any Pakistani TV channel mention this episode. The posters were somehow quickly removed but not before someone snapped and uploaded them on the internet.

To conclude: while the rise of the hardline anti-Muslim Hindu right and India’s obduracy in Kashmir is deeply deplorable, it must be handled politically. One cannot use it to rationalise the existence of non-state militant groups. Such groups have taken legitimacy away from those fighting Indian rule in Kashmir. They have also turned out to be a menace to Pakistan’s society and armed forces.

Today’s crisis of the establishment can lead to positive change provided gut nationalism is subordinated to introspection and reflection. It is a welcome sign that a significant part of the establishment — the Nawaz Sharif government — is at least aware of the need for Pakistan to reintegrate itself with the world. Concentrating on our actual needs is healthier than worrying about matters across our borders. One can only hope that other parts of the establishment will also see this logic.

The Untold and Unofficial History of Pakistan

By Hamid Bashani

Part 1 (In Urdu)

The establishment uncovered: how power works in Britain

In an exclusive extract from his new book, Owen Jones explains how the political, social and business elites have a stranglehold on the country

• 
• • Owen Jones
  • The Guardian, Tuesday 26 August 2014 18.00 BST

How the establishment connects all areas of life in modern Britain. Photograph: Christophe Gowans/The Guardian

Definitions of "the establishment" share one thing in common: they are always pejorative. Rightwingers tend to see it as the national purveyor of a rampant, morally corrupting social liberalism; for the left, it is more likely to mean a network of public-school and Oxbridge boys dominating the key institutions of British political life.

 

1.   

Here is what I understand the establishment to mean. Today's establishment is made up – as it has always been – of powerful groups that need to protect their position in a democracy in which almost the entire adult population has the right to vote. The establishment represents an attempt on behalf of these groups to "manage" democracy, to make sure that it does not threaten their own interests. In this respect, it might be seen as a firewall that insulates them from the wider population. As the well-connected rightwing blogger and columnist Paul Staines puts it approvingly: "We've had nearly a century of universal suffrage now, and what happens is capital finds ways to protect itself from, you know, the voters."

Back in the 19th century, as calls for universal suffrage gathered strength, there were fears in privileged circles that extending the vote to the poor would pose a mortal threat to their own position – that the lower rungs of society would use their newfound voice to take away power and wealth from those at the top and redistribute it throughout the electorate. "I have heard much on the subject of the working classes in this house which, I confess, has filled me with feelings of some apprehension," Conservative statesman Lord Salisbury told parliament in 1866, in response to plans to extend the suffrage. Giving working-class people the vote would, he stated, tempt them to pass "laws with respect to taxation and property especially favourable to them, and therefore dangerous to all other classes".

The worries of those 19th-century opponents of universal suffrage were not without foundation. In the decades that followed the second world war, constraints were imposed on Britain's powerful interests, including higher taxes and the regulation of private business. This was, after all, the will of the recently enfranchised masses. But today, many of those constraints have been removed or are in the process of being dismantled – and now the establishment is characterised by institutions and ideas that legitimise and protect the concentration of wealth and power in very few hands.

The interests of those who dominate British society are disparate; indeed, they often conflict with one another. The establishment includes politicians who make laws; media barons who set the terms of debate; businesses and financiers who run the economy;police forces that enforce a law that is rigged in favour of the powerful. The establishment is where these interests and worlds intersect, either consciously or unconsciously. It is unified by a common mentality, which holds that those at the top deserve their power and their ever-growing fortunes, and which might be summed up by the advertising slogan "Because I'm worth it". This is the mentality that has driven politicians to pilfer expenses, businesses to avoid tax, and City bankers to demand ever greater bonuses while plunging the world into economic disaster. All of these things are facilitated – even encouraged – by laws that are geared to cracking down on the smallest of misdemeanours committed by those at the bottom of the pecking order – for example, benefit fraud. "One rule for us, one rule for everybody else" might be another way to sum up establishment thinking.

These mentalities owe everything to the shared ideology of the modern establishment, a set of ideas that helps it to rationalise and justify its position and behaviour. Often described as "neoliberalism", this ideology is based around a belief in so-called free markets: in transferring public assets to profit-driven businesses as far as possible; in a degree of opposition – if not hostility – to a formal role for the state in the economy; support for reducing the tax burden on private interests; and the driving back of any form of collective organisation that might challenge the status quo. This ideology is often rationalised as "freedom" – particularly "economic freedom" – and wraps itself in the language of individualism. These are beliefs that the establishment treats as common sense, as being a fact of life, just like the weather.

Not to subscribe to these beliefs is to be outside today's establishment, to be dismissed by it as an eccentric at best, or even as an extremist fringe element. Members of the establishment genuinely believe in this ideology – but it is a set of beliefs and policies that, rather conveniently, guarantees them ever growing personal riches and power.

As well as a shared mentality, the establishment is cemented by financial links and a "revolving door": that is, powerful individuals gliding between the political, corporate and media worlds – or who manage to inhabit these various worlds at the same time. The terms of political debate are, in large part, dictated by a media controlled by a small number of exceptionally rich owners, while thinktanks and political parties are funded by wealthy individuals and corporate interests. Many politicians are on the payroll of private businesses; along with civil servants, they end up working for companies interested in their policy areas, allowing them to profit from their public service – something that gives them a vested interest in an ideology that furthers corporate interests. The business world benefits from the politicians' and civil servants' contacts, as well as an understanding of government structures and experience, allowing private firms to navigate their way to the very heart of power.

Yet there is a logical flaw at the heart of establishment thinking. It may abhor the state – but it is completely dependent on the state to flourish. Bailed-out banks; state-funded infrastructure; the state's protection of property; research and development; a workforce educated at great public expense; the topping up of wages too low to live on; numerous subsidies – all are examples of what could be described as a "socialism for the rich" that marks today's establishment.

This establishment does not receive the scrutiny it deserves. After all, it is the job of the media to shed light on the behaviour of those with power. But the British media is an integral part of the British establishment; its owners share the same underlying assumptions and mantras. Instead, journalists and politicians alike obsessively critique and attack the behaviour of those at the bottom of society. Unemployed people and other benefit claimants; immigrants; public-sector workers – these are groups that have faced critical exposure or even outright vilification. This focus on the relatively powerless is all too convenient in deflecting anger away from those who actually wield power in British society.

To understand what today's establishment is and how it has changed, we have to go back to 1955: a Britain shaking off postwar austerity in favour of a new era of consumerism, rock'n'roll and Teddy Boys. But there was a more sinister side to the country, and it disturbed an ambitious Tory journalist in his early 30s named Henry Fairlie.

 Henry Fairlie, the journalist who popularised the term 'the establishment' in the 1950s. Photograph: Associated Newspapers/Rex

Early in his career, Fairlie was mixing with the powerful and the influential. In his 20s, he was already writing leader columns for the Times. But, at the age of 30, he left for the world of freelance writing and began penning a column for the Spectator magazine. Fairlie had grown cynical about the higher echelons of British society and, one day in the autumn of 1955, he wrote a piece explaining why. What attracted his attention was a scandal involving two Foreign Office officials, Guy Burgess and Donald Maclean, who had defected to the Soviet Union. Fairlie suggested that friends of the two men had attempted to shield their families from media attention.

This, he asserted, revealed that "what I call the 'establishment' in this country is today more powerful than ever before". His piece made "the establishment" a household phrase – and made Fairlie's name in the process.

For Fairlie, the establishment included not only "the centres of official power – though they are certainly part of it" – but "the whole matrix of official and social relations within which power is exercised".

This "exercise of power", he claimed, could only be understood as being "exercised socially". In other words, the establishment comprised a set of well-connected people who knew one another, mixed in the same circles and had one another's backs. It was not based on official, legal or formal arrangements, but rather on "subtle social relationships".

Fairlie's establishment consisted of a diverse network of people. It was not just the likes of the prime minister and the archbishop of Canterbury, but also incorporated "lesser mortals" such as the chairman of the Arts Council, the director general of the BBC and the editor of the Times Literary Supplement, "not to mention divinities like Lady Violet Bonham Carter" – the daughter of former Liberal prime minister Herbert Asquith, confidante of Winston Churchill and grandmother of future Hollywood actor Helena Bonham Carter.

The Foreign Office was, Fairlie claimed, "near the heart of the pattern of social relationships which so powerfully controls the exercise of power in this country", stacked as it was with those who "know all the right people". In other words, the establishment was all about "who you know".

But important facets of power in Britain were missing from Fairlie's definition. First, there was no reference to shared economic interests, the profound links that bring together the big-business, financial and political elites. Second, his piece gave no sense of a common mentality binding the establishment together. There was one – although it was very different from the mentality that dominates today, despite the fact that, then as now, an Old Etonian Conservative (Anthony Eden) was in Downing Street. For this was the era of welfare capitalism, and an ethos of statism and paternalism – above all, a belief that active government was necessary for a healthy, stable society – was shared by those with power.

The differences between Fairlie's era and our own show that Britain's ruling establishment is not static: the upper crust of British society has always been in a state of perpetual flux. This relentless change is driven by survival. History is littered with demands from below for ruling elites to give up some of their power, forcing members of the upper crust of British society to compromise. After all, unchecked obstinacy in the face of demands for change risks bringing down not just individual pillars of the establishment, but the entire system of power with them.

The monarchy is a striking example of a traditional pillar of power that, faced with occasionally formidable threats, has had to adapt to survive. This was evident right from the origins of a power-sharing arrangement between crown and parliament struck in the aftermath of revolution and foreign invasion in the 17th century, and which continues to exist today. Many of the monarchy's arbitrary powers, such as the ability to wage war, ended up in the hands of the prime minister. Even today, the monarchy's role is not entirely symbolic.

"The Crown is a bit of a vague institution, but it is kind of the heart of the constitution, where all the power comes from," says Andrew Child, campaign manager of Republic, a group advocating an elected head of state. The prime minister appoints and sacks government ministers without needing to consult the legislature or electorate because he is using the Queen's powers: these are the Crown's ministers, not the people's. In practice, too, members of the royal family have a powerful platform from which to intervene in democratic decisions.

 Prince Charles, as next in line to the throne, has a powerful platform from which to intervene in democratic decisions. Photograph: Picasa

Prince Charles, the designated successor to the throne, has met with ministers at least three dozen times since the 2010 general election and is known to have strong opinions on issues such as the environment, the hunting ban, "alternative" medicine and heritage.

In contrast to other European countries, Britain's aristocracy also managed to avoid obliteration by adapting and assimilating. In the wake of the industrial revolution it absorbed – much to the disgust of traditionalists – some prospering businessmen into its ranks, such as the City of London financier Lord Addington and the silk broker Lord Cheylesmore. The aristocracy continued to wield considerable political power throughout the 19th century, supplying many prime ministers, such as the 1st Duke of Wellington, the 2nd Earl Grey and the 2nd Viscount Melbourne. But following parliament acts passed by MPs in 1911 and 1949, this power was curtailed when the elected House of Commons enshrined in law its own dominance over the aristocrats' House of Lords. The legacy of centuries of aristocratic power has not vanished, though: more than a third of English and Welsh land – and more than 50% of rural land – remains in the hands of just 36,000 aristocrats.

Although less influential today than it has ever been, the Church of England retains the trappings of its old power. Indeed, the word establishment is testament to its one-time importance: the term is likely to derive from the fact that the Church of England is the country's "established church", or state religion, with the monarch serving as its head. The church's most senior official, the archbishop of Canterbury, is appointed by the prime minister on behalf of the monarch.

Even though Britain is one of the most irreligious countries on Earth, with just one in 10 attending church each week and a quarter of Britons having no religious beliefs, the Church of England still runs one in four primary and secondary schools in England, while its bishops sit in the House of Lords, making Britain the only country – other than Iran – to have automatically unelected clerics sitting in the legislature.

The establishment is a shape-shifter, evolving and adapting as needs must. But one thing that distinguishes today's establishment from earlier incarnations is its sense of triumphalism. The powerful once faced significant threats that kept them in check. But the opponents of our current establishment have, apparently, ceased to exist in any meaningful, organised way. Politicians largely conform to a similar script; once-mighty trade unions are now treated as if they have no legitimate place in political or even public life; and economists and academics who reject establishment ideology have been largely driven out of the intellectual mainstream. The end of the cold war was spun by politicians, intellectuals and the media to signal the death of any alternative to the status quo: "the end of history", as the US political scientist Francis Fukuyama put it. All this has left the establishment pushing at an open door. Whereas the position of the powerful was once undermined by the advent of democracy, an opposite process is now underway. The establishment is amassing wealth and aggressively annexing power in a way that has no precedent in modern times. After all, there is nothing to stop it.