Tony Blair’s warning in The Sunday Times — that progressive politicians are enabling antisemitism through an “unholy alliance” with hardline Islamists — is characteristically eloquent. It is also a masterclass in moral hazard, the financial concept Blair himself would do well to study.

[https://www.thetimes.com/comment/columnists/article/tony-blair-end-lefts-unholy-alliance-with-islamists-vffq3sr2t]

In financial economics, moral hazard describes a situation in which an actor takes risks because someone else bears the consequences. The insured driver who parks carelessly. The bailed-out bank that resumes reckless lending. The politician who reshapes a nation’s demographic and ideological landscape, walks away to consultancy millions, and then writes op-eds about the resulting mess from a safe distance. The commenter beneath the LBC post who attracted 3,400 likes with seven words — “Said the man who opened the doors” — understood the concept intuitively, even without the textbook.

Blair’s substantive argument deserves engagement on its merits. He is correct that over 3,700 antisemitic incidents were recorded in the UK last year. He is correct that only 24 per cent of British Muslims polled during the Gaza war accepted the established account of October 7. He is correct that ritualistic condemnation by political leaders has failed to stem the tide. And he is correct that a strand of progressive politics has developed a remarkable capacity to suspend its own principles — on women’s rights, on free expression, on secularism — when doing so serves a coalition built around hostility to Israel.

But Blair’s analysis suffers from a structural flaw that any finance student would recognise: he has mispriced the option.

Consider the political coalition Blair himself constructed. New Labour’s electoral strategy from 1997 onward involved writing a call option on multicultural expansion — capturing the upside of a broader electoral base and the moral glow of an open society, while offloading the downside risk onto communities that would live with the consequences decades later. Mass immigration without integration infrastructure. Faith-school expansion without ideological scrutiny. The courting of community bloc votes without demanding liberal reciprocity. These were not accidents of governance; they were strategic trades. Blair captured the premium. The Jewish community of Golders Green is now living with the tail risk.

The problem was never immigration per se. It was the deliberate underpricing of its transaction costs. Blair’s government expanded faith schools — including those teaching curricula never stress-tested against liberal democratic values — while simultaneously dismantling the expectation that newcomers would integrate into a shared civic culture. His administration knew what it was doing: when Andrew Neather, a former government speechwriter under Blair, revealed in 2009 that Labour had pursued mass immigration partly to “rub the Right’s nose in diversity,” the political calculus was laid bare. The exercise price of those options was always payable in the currency of liberal values. October 7 was the volatility shock — the sudden, violent event that reprices everything — that brought them into the money.

Blair now sits on Trump’s “Board of Peace” for Gaza — a body whose very name reads like a structured product designed to obscure the underlying asset. His lucrative post-Downing Street career, built in part on relationships with regimes whose liberal credentials would not survive a moment’s scrutiny, represents precisely the kind of accommodation with illiberal power that he decries in domestic left-wing politics. The asymmetry is striking: when Blair cultivates such relationships, it is statesmanship; when the Greens attract Muslim voters concerned about Gaza, it is an unholy alliance. The difference lies not in principle but in who captures the premium.

None of this invalidates Blair’s core warning. The left’s failure to condemn October 7 with the same fervour it brings to condemning Israel’s response is a genuine moral failure, not merely an intellectual one. The tendency to treat Jewish communities as proxies for the Netanyahu government — making them, in Blair’s phrase, “fair game” — is as dangerous as it is lazy. When three-quarters of British Muslims polled reject the established account of October 7, that is not a communication problem; it is an ideological one that demands confrontation, not diplomatic avoidance. And when Jewish families pack suitcases in cities their grandparents rebuilt after the Holocaust, the word “pattern” barely covers it.

But the credibility deficit matters. In finance, we understand that the messenger’s position shapes the signal’s reliability. A short-seller warning about a stock’s fundamentals may be right, but the market rightly discounts the advice by the speaker’s book. Blair is short on accountability for the world he helped create and long on prescriptions for others. His piece reads less like a diagnosis and more like a put option — an attempt to profit from the very decline he helped engineer, this time in the currency of moral authority rather than consultancy fees.

What is needed is not another Blair intervention but an honest reckoning — one that traces the through-line from faith schools approved without ideological due diligence, through a Prevent strategy that was under-resourced and repeatedly diluted, to a political culture in which community bloc votes are still traded like derivatives, with the underlying communities bearing all the counterparty risk — the cost when the other side of the deal defaults on its promises. That reckoning would require the kind of accountability Blair has spent two decades avoiding.

Blair is right that there is an unholy alliance endangering Britain. He is simply wrong about when it began — and blind to his own signature on the term sheet.

© The Times of Israel (Blogs)