Sunday 2 October 2011

Ed Miliband is right to cast a critical gaze at capitalism; without this, Labour will struggle to matter

In its history, the Labour Party has been most successful at two particular moments: 1945 and 1997. For just six short years after the Second World War, Labour was successful in framing the shape of public policy for over three decades. In 1997, of course, the party was successful in another way: this time consolidating a pre-existing consensus, rather than building a new one.

Underpinning both settlements were different political approaches to the management of capitalism. In 1945, Labour had the political conviction, historical circumstance and intellectual grounding to challenge and control the economic system. It saw as its central task the challenge to make capitalism work for social – not just economic – ends. The economic system would be used to build a more democratic, cohesive and just society. From these convictions flowed many of the public welfare institutions which social democrats hold dear.

By 1997, Labour faced a double quandary. First, many of the aims of the 1945 social democrats had been achieved: universal health and education, workers’ rights and conditions, widespread pension provision, social security and so on. Many on the Left would have preferred more generous institutions, but the fact remained that they had been achieved. If the historic task of the post-war centre-left was to tame capitalism for the wider benefit of society, then it is arguable that this had been – to an extent - achieved.

However, the second quandary for the late twentieth-century Left was the changing nature of capitalism. After the regulated and controlled capitalism of the post-war era, a new and more unruly system arose from the ashes of the economic crises of the 1970s. This was an economic system which, in its global nature, was much harder for the Left to deal with and, in neo-liberalism, social democrats found a much more pugnacious intellectual opponent.

The general achievement of social democratic aims on the one hand and the rise of a new, unpredictable capitalism on the other pushed Labour towards a defensive conservatism. In facing an economic system which (a) it found difficult to contend with and (b) threatened many of its cherished institutions, Labour retreated to an uncomfortable position of accepting the new economic consensus but striving to defend and protect the social gains which it threatened. Thus, what was once the party of change and progress became one that merely sought to protect the gains of the past against the tide of the free market tsunami.

In this incarnation, New Labour gave the British centre-left a party capable of winning elections but impotent in making these victories matter. Labour once cast a profoundly critical eye on capitalism and sought to challenge the inequities and injustices which it produced. New Labour, on the contrary, had few answers to the expansion of free markets and, ultimately, adopted to embrace them. Labour became a profoundly pro-market party, distancing itself from the Right by a relatively stronger social programme.

But although the party won elections, millions of those sympathetic with the labour movement ended up feeling deeply underwhelmed. The reason for this seems that under New Labour social democracy aspired to little more than the protection of public services and a vague commitment to a very liberal form of equal opportunity.

In the end, this approach was quite clearly insufficient. To ignore free-market capitalism was to simultaneously undermine the very institutions and ideals the centre-left holds dear. For as each year passes, the profit motive encroaches further and further into the triumphs of social democracy. New Labour’s failure was to pretend that capitalism was irrelevant, yet history –as Marx argued – tells us precisely the opposite. For Labour to be truly relevant once more, it must examine, study and critique capitalism. And ultimately, it must aim to change it.

1 comment:

  1. It has taken me far to long to get around to commenting on your blog. But for what it's worth I think the risk taken by Ed Miliband in coming out with what is now (sadly) radical comments will eventually pay off. It's hard to accurately gauge if our political leaders have cottoned on to it, but I find it an inescapable conclusion that this the end of the neo-liberal model that took hold 30 years ago. That goes for both New Labour's embracing of free-market principles and creaming off taxes to fund progressive social policy and the Tories deregulation binge and trickle-down economics. The really interesting question, and certainly one that Ed, uniquely of the three leaders, is actually trying to look at. I just hope it kickstarts a reasoned debate (although i fear we may be heading for greater polarisation as those on the Right refuse to countenance anything but the established order.

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