Opposing Neo-Liberalism

The problematisation of the neo-liberal settlement has begun to slide us towards a paradigmatic shift in politics. This shift has been slow, and is still ongoing. Indeed, it is resisted by many, not least by European-driven austerity abroad and the Coalition’s squeeze on spending at home. Neo-liberalism, although arguably in decline, remains a beacon of light for British politics as much as it does in some quarters of Europe. [1] This is both surprising and concerning. It is surprising because it is the biggest crisis in confidence of the capitalist system for at least 80 years. It is concerning because it entrenches further economic inequalities and social injustices. Furthermore, the proponents of neo-liberalism have been able to reduce questions of (sustainable) economic prosperity and social justice to a simple cuts agenda. British politics is still guided by a specific ontological foundation of individualism and unfettered materialism. Both principles have pushed moral concerns and ethical dilemmas into the private sphere. It has hollowed-out the principles that underpin politics – debate, discussion and conflict – and replaced it with a logic of depoliticisation.

More urgently than ever before, we need an alternative to this agenda. The neo-liberal settlement emerged out of a number of dilemmas in public policy during the 1970s, ostensibly precipitated by the 1974 oil crisis. It took five years to turn academic theories (that existed as early as the 1940s) into policy ideas, and a further four years (at least) to cement neo-liberalism into a policy agenda under Margaret Thatcher’s leadership. [2]  1997 was a watershed moment because it recast the neo-liberal project and challenged many aspects of it. However, it was not able to challenge the fundamentals of the economic model based on individualism and insatiable consumerism. The centre-left was not anywhere near confident enough to challenge this agenda following the collapse of the left throughout the globe during the early 1990s. Furthermore, neo-liberalism was not problematised by a series of exogenous (and inevitable) dilemmas as it is today. Tony Blair and Gordon Brown therefore accommodated aspects of their communitarian governing project with neo-liberal concessions. [3] Having said that, New Labour did challenge the social settlement. It introduced a minimum wage, ensured nursery education for all three and four year olds, implemented a tax credits regime, invested in the NHS at record levels, brought peace to Northern Ireland and recognised civil partnerships. It corrected the excesses of neo-liberalism after-the-fact. It was patently not enough, but members and supporters of the Labour Party should be proud of what it got right in government.

The contemporary challenge for Labour is to offer an alternative that reaches beyond merely amelioration or accommodation with a discredited economic and societal model. Debates that had been buried under neo-liberal rhetoric have resurfaced, which means that the centre-left is able to expose some of its myths. The Policy Review under Labour’s Jon Cruddas has begun – although tentatively – to explore options that go beyond limiting the negative side-effects of neo-liberal capitalism. Ed Miliband himself has repeatedly called for a comprehensive re-think away from ‘irresponsible capitalism’ towards a more ethical capitalist system. Miliband has called himself a ‘responsible capitalist’. In his interview in Shifting Grounds he argues that ‘the way economies succeed is not by a few people at the top, but by supporting the many’ and that ‘unless you have the infrastructure that supports the many, government willing to reform the banking system to support the many, the skills system to support the many, the industrial policy, you’re never going to succeed’. A recent speech by Miliband highlighted that responsible capitalism has an agenda where companies pursue profit in tandem with an equal society, where power is in the hands of the many, and where citizens recognise responsibilities to each other. At a recent One Nation conference in London, Steward Wood, an advisor to Ed Miliband, built on this by calling for: ‘a different kind of economy, a determination to tackle inequality, an emphasis on responsibility (of the people at the top and the bottom), protecting the elements of our common life, and challenging the ethics of neo-liberalism’. [4]

Commentators, of the left and right, within Labour and beyond, have questioned much of the Policy Review to date. The Policy Review has come under hefty criticism for being slow, bulky and far from radical. This is, perhaps, because the review confronts the two most dominant traditions within the Labour Party – New (or Purple) Labour and Old (or Red) Labour. The two perspectives have dominated Party debates. Blue Labour, the new player of the game, does not have quite such prestige. And yet, this tradition opposes both the statism of the Old and the neo-liberalism of the New. Of course, the skirmishes between the three traditions are a sideshow, leaving the Policy Review to get on with its work rather calmly. Clearly, the problem is not that Labour is empty of ideas. Rather, the problem is that Labour has been too cautious to articulate its alternative vision for politics, society and economics – in part, no doubt, given the divisions within the Party about its future. However, it is time that Labour spells out its vision in unambiguous terms.  Taking the three headings of the Policy Review, Labour must go into a new direction and call for:

  • An ethical politics. Labour must reject the simplistic rational-choice individualism that has been a crucial foundation for neo-liberalism. The greed-based model has destroyed faith in politics. Power must be radically decentralised to local councils and regional assemblies. The liberal commitment to depoliticisation must come to an end immediately.
  • A fairer society. Passions over welfare reform run high, but Labour must be bold and challenge the divisive language espoused by many on the right. Labour must reduce inequalities by tackling our inefficient tax system and ensure that living standards lie at the heart of a Labour programme for reform.
  • Sustainable economic growth. The challenge for a sustainable recovery dominates public discourse.  Labour must re-balance the economy in a radical way – something that New Labour never dared to do. The real test, however, is the extent to which this is sustainable. Not simply in material terms, but environmental ones, too.

Some of these are in strong opposition to the Red Labour (statism versus localism) and Purple Labour visions (Keynesian versus Polanyian economics). [5] Crucially, many of the aims chime together. Challenging unfairness and inequality are things that have united all three shades of contemporary Labour traditions, which is why it must be at the heart of Labour’s governing vision in 2015. The Party leadership has failed to be bold in its critique of the status quo. This is somewhat perplexing, given the resounding support Miliband has received in the past for taking on vested interests. 2015 could be a watershed moment, if Labour wants it to be.

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[1] C. Crouch (2010) The Strange Non-Death of Neoliberalism, Cambridge: Polity Press.

[2] Thatcher was guided, for instance, by Friedrich Hayek’s The Road to Serfdom, originally published in 1944. The book itself led to numerous libertarian critiques of the welfare consensus.

[3] M. Bevir (2010) Democratic Governance, Princeton: PUP, p.130.

[4] For a summary of Wood’s speech, click here.

[5] See, for example, A. Finlayson (2013) ‘From Blue to Green and Everything in Between: Ideational change and left political economy after New Labour’, British Journal of Politics and IR 15:1, pp.70-88.

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Pinning Colours to the Mast

It is now the middle of 2013, and we have surpassed the half-way point of this Parliament. David Cameron and Nick Clegg have presided over a turbulent three years with mainly negative evaluations (to put it mildly). We constantly hear of a crisis: within the Conservative Party, the leadership of Cameron has been rocked; within the Coalition, the relationship between the Tories and the Liberal Democrats is increasingly strained; and, within the Treasury, economic forecasts remain as bleak as ever. However, it would be misguided to call these ‘crises’. We are not in a crisis or even going from one crisis to another. We are in a period of social, political and economic malaise. We are faced with a breakdown of stability that has guided British politics for the past 30 years or so under a discredited banner of neo-liberalism. [1] Whilst this is going on, the Labour Party is hammering out its long-term response. In 2010, Labour polled just 29 percent of the popular vote, which understandably provoked a debate about what the Party stands for. Three years down the line, are we seeing a close to this debate? Far from it. Despite Labour’s lead in the polls, the electorate failed to endorse the Party in local elections. It seems that Ed Miliband’s leadership, although cemented, has yet to take a decisive turn towards a coherent governing project with which voters can identify.

Clearly, the Party’s debate is an internal one (at times, one could suggest add the adjective ‘parochial’). However, what is not often ignored is that Labour is made up of a broad coalition of forces that is far more nuanced than most people – Party members included – are willing to admit. The debate is not about Old Labour and New Labour. Both traditions are, without doubt, dominant in many discussions. However, it is possible to characterise many more strands, some of which overlap and some of which diverge radically. Some of these include: Blue Labour [2], Fabian statists [3], ‘Red’ Labour [4], Purple Labour (i.e., Blairites) [5] and Compass, all of which are informed by a proliferation of other ideational networks found in think tanks that include Demos, the Institute for Public Policy Research, the New Economics Foundation, the Resolution Foundation, Policy Network, and many more. [6]

These are competing traditions, and only one specific mixture can emerge out of this coalition of forces in 2015. If this does not happen, then the Labour Party will implode (much like the coalition within the Conservative Party at present). Not only are Labour traditions competing, they are also in opposition to one another, with high-flying accusations. Progress is often accused of a soulless neo-liberal approach to politics and economics. Those opposing austerity are accused of being nothing more than a ‘repository for people’s anger’ [7] or a ‘voice of protest’. The Blue Labour tradition has been attacked as ‘toxic’ and out-of-date. And statism is seen as ‘power hoarding’ that prevents empowerment of the people. Rarely have these attacks been constructive (as some of the examples highlight). It is true that some organisations have begun thinking about strategy, and others have come up with policy ideas. [8] But on the whole, numerous factions within Labour have become increasingly vocal in questioning the calmness of the Policy Review, from New Labour grandees to stroppy trade unionists. What is telling, and should reassure many, is that Ed Miliband is not willing to be pushed around by either New Labour or the trade unions. He is sticking to his own convictions to re-found the principles of the Labour Party in a holistic fashion.

Unfortunately, this is seemingly not enough as factionalism amongst student societies, at public meetings and across the Internet remains steeped full of emotive anger and frustration. Given this, in addition to the malaise facing politicians, it is now more important than ever that Ed Miliband and the Labour Party identify a governing project. [9] This is not about creating a credible economic alternative to the Conservative Party. This is about a vision for politics, economics and society. Without this, the electorate will not vote Labour into government.

One Nation Labour is the banner under which the Party will attempt to unite competing traditions at the general election. Yet few people know what this slogan entails despite the bourgeoning articles, speeches and conferences. Opposition to Labour – from all sides of the political spectrum – is united in calling the Party hollow. This is, perhaps, a curious accusation given that there are so many different centre-left traditions and networks identified above. This has been caused by the fact that the differing coalition forces within the Party and beyond have begun to set out their own appeals for the direction of Labour without fully engaging in dialogue with one another. We have seen the publication of The Purple Book by Progress followed more recently by a new website calling for a Campaign for a Labour Majority. [10] We have an alternative book called The Socialist Way (edited by Roy Hattersley and Kevin Hickson) outlining a statist, social democratic vision. [11] And finally, we have a trail of articles and speeches by Maurice GlasmanMarc Stears and Jon Cruddas that are united by an appeal towards Blue Labour that found their way into an ebook.

The factions within the Party have begun to cluster around these three reference points: Purple Labour, Red Labour and Blue Labour. All three are beyond the traditional Old and New divide that gripped Labour’s path to victory in 1997. [12] Yet it remains to be seen if any of these interact to form a winning formula. Peter Kellner has recently argued that the Labour Party faces a tough struggle to be viewed as a strong, passionate force, rather than a bunch of ‘nice but dim’ policy-makers. [13] The problem is that all three contemporary strands have offered little more than opposition, squabbling and futile accusations. We need to move beyond critique, and form a governing project. This was recognised as far back as 1945, in which the then Labour Manifesto warned: ‘It is very easy to set out a list of aims. What matters is whether it is backed up by a genuine workmanlike plan conceived without regard to sectional vested interests and carried through’. [14] Thus far, Ed Miliband’s leadership has been received with lukewarm interest, which has failed to combine the widespread opposition to the Coalition into a unifying vision. Is this the reason that Labour failed to make further inroads on 02 May? We have pinned our colours – blue, purple, and red – to the mast. The question remains whether that mast is a governing project worthy of the gauntlet One Nation.

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[1] C. Crouch (2010) The Strange Non-Death of Neoliberalism, Cambridge: Polity Press.

[2] M. Glasman et. al. (eds.) (2011) The Labour Tradition and the Politics of Paradox, ebook available here.

[3] See, for example, Y. Roberts (2012) ‘The Relational Reality’, Fabian Review 124:2, pp.7-8.

[4] R. Hattersley and K. Hickson (ed.) (2013) The Socialist Way: Social democracy in contemporary Britain, London: I.B.Tauris.

[5] G. Cooke et. al. (2012) The Purple Papers, London: Progress. Available here.

[6] Taking the issue at the broadest conceivable level, there is also a trade union movement that is ferociously against cuts, an Occupy movement that sought to emphasise the ‘99 percent’, and members of hard-left parties – the Socialist Party, the Socialist Workers Party, the Communist Party, and so on (ad infinitum?).

[7] T. Blair (2013) ‘Labour must search for answers and not merely aspire to be a repository for people’s anger’, New Statesman (12-25 April), p.27.

[8] See, for example, the articles in Fabian Review, 125:1, pp.1-30.

[9] R. Philpot (2013) ‘Remember Wilson’, Progress, pp.10-1.

[10] R. Philpot (ed.) (2011) The Purple Book, London: Progress.

[11] R. Hattersley and K. Hickson (ed.) (2013) The Socialist Way: Social democracy in contemporary Britain, London: I.B.Tauris.

[12] Although Old Labour and Red Labour are obviously linked, as are New Labour and Purple Labour. But importantly, both movements have moved on and re-articulated their visions given the 2008 economic crises.

[13] P. Kellner (2013) ‘Majority rules’, Progress, pp.14-21.

[14] The Labour Party (1945) Let Us Face the Future: A declaration of Labour policy for the consideration of the nation, London: Labour Party. Available here.