mast image

Impact Investing

IPE special report May 2018


Politics needs a longer lens

It is necessary to come to terms with the end of left and right

Professional investors have come to take a worryingly predictable approach to geopolitics over the past tumultuous year. Typically, their procedure is to examine the pronouncements of each political party before working out which would best suit the financial markets and the investment industry.

Of course, there is nothing wrong in principle with examining political claims. On the contrary, it is part of the democratic process. The problem is that the exercise is inherently limited. It can only tell a small part of a bigger story.

This month’s report on the changing landscape of European politics (pages 57-64) is an attempt to take a longer-term perspective. It examines the consequences of the breakup of the political categories that have defined politics since the French Revolution of 1789 – the idea of left and right. There is a particular focus on France (with the recent election of Emmanuel Macron as president), the UK (facing a general election on 8 June), Italy (widely seen as politically vulnerable) and Spain (where a populist party often described as left wing has won substantial support).

In fact, the end of left and right has been widely recognised since the 1990s but the discussion has somehow lapsed back to the old categories. The challenges of developing a new political vocabulary have seemed too daunting.

politics needs a longer lens

But the French presidential elections show that the traditional approach to political analysis is no longer adequate. Representatives of neither the mainstream left or right succeeded in getting into the second round. That is the first time that has happened since the advent of the current system of government in 1958. 

It is also notable that Macron himself says he represents neither left nor right. By his own account, the president of France belongs to neither camp.

In some European countries the trend has been apparent for longer. In Italy, for instance, the Christian Democrats, the traditional party of the centre right, collapsed in the early 1990s. A personality-led politics has replaced the old categories of left and right.

Sometimes parties that are nominally on one side continue in zombie form. For example, the UK’s Labour party ceased to play its traditional role as political representative of the organised working class in the 1990s. It still exists as an organisation but it is no longer left wing in the old sense. Meanwhile, the Conservative party is at pains to distance itself from the stridently pro-market rhetoric that was prevalent when Margaret Thatcher was its leader.

The end of left and right is an historic shift that cannot be captured simply by examining recent political pronouncements. There is only one certainty: politics has become a lot more fluid than it was a few years ago.

Daniel Ben-Ami, Deputy Editor

Have your say

You must sign in to make a comment


Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2435

    Asset class: CLOs.
    Asset region: Global.
    Size: USD 50m.
    Closing date: 2018-05-22.

  • QN-2436

    Asset class: Real Estate - Core Open-ended Real Estate Equity Fund (non-listed).
    Asset region: Asia Pacific.
    Size: Approx. CHF 70-100m per investment.
    Closing date: 2018-05-25.

  • QN-2438

    Asset class: High Yield Bonds.
    Asset region: US.
    Size: USD 300 million.
    Closing date: 2018-05-25.

Begin Your Search Here