First posted on Ozzy’s Corner
Where does politics lie in 2012?
In this article I will argue that both Labour and the Conservatives both have a crisis of ideology. I also believe Labour in particular must look for a new framework to guide them, and that the answer to what shape a new Labour-led Government would take does not lie in the past.
Following World War 2, the post war consensus dominated all Governments until the 1970’s. This consensus was based on:
- The nationalisation of key UK industries
- A welfare state based on the Beveridge report
- Keynesian economics
The 1970’s saw the UK economy come under pressure from the 1973 oil crisis, inflation and industrial action. The post war consensus was failing.
In 1979 Margaret Thatcher led the Conservative Party to victory. She was a protégée of Keith Joseph, with whom she created the Centre Policy Studies. The CPS promoted free-market economic and monetarism, and was influenced by the works of the Economist Milton Friedman and Friedrich Hayek.
The next 18 years saw the destruction of the post war consensus. By the time Tony Blair led Labour to victory in 1997, Labour had accepted much of this free-market model and moved to the centre of politics.
I firmly believe that the post war consensus had already failed by the time Mrs Thatcher had entered Downing Street. It was born of a nation rebuilding from the ashes of war. The UK had a different, tighter class system. The world and UK economy were a totally different shape, and less global in nature.
The new neo-liberal economy also failed, falling off the edge of a cliff during the banking crisis of 2008. Economic inequality been growing for years, but when the banks exploded the world financial system ground to a halt. The system that said that the market will always deliver what people need and is efficient simply overheated and blew up. The effect is still being felt, with years of austerity looming.
What is apparent is that as Labour looks for a new policy framework, trying recreate the past, a new 1945, is totally futile. The world of 2012 is unrecognisable from that of 1945. The world is a large, fast moving economy. Technology has made the world a small place, allowing diverse global relations to be maintained at the speed on an email. Recreating 1945 now is as impossible as recreating Victorian Britain in 1945.
New Labour’s triangulation of neo-liberalism and the post war consensus was trying pick the ‘best’ parts of two failed systems, joining them together and hoping they would work together. The result was a neo-liberal financial system, with some papering over the inequality cracks with policies such as the national minimum wage and tax credits.
A car made of the best parts of two wrecks is a ‘cut and shut’. Thus, New Labour failed – it’s ‘cut and shut’ ideology couldn’t prevent the inequality and shifting of power and wealth to a small elite that neo-liberalism always delivers.
So where does a new left go from here?
Firstly, serious reform of the financial system is needed, and on a global scale. Capital controls are required to stop global capitalists moving huge sums at the touch of a button that results in huge instability.
Secondly, the ever increasing movement of powers from the nation state to the EU, WTO and so on must be reversed. Power needs returning to the individual countries and the democratic rights of citizens enhanced.
Thirdly, consumerism must be replaced by sustainability. The world’s supply of oil and the other resources is being consumed at an unsustainable rate. Within a few decade they could run out. Global warming threatens the whole planet. We need to stop measuring growth simply in terms of the size of our latest LCD television and the model of car we own.
Fourthly, inequality must be reversed. Globally:
- 1% of the world’s population owns 40% of global assets
- 2% of the worlds’s population owns 51% of global assets
- The poorest 50% own less than 1% of global assets
Nationally, inequality has also grown. Wealth needs to be shared more equally within nations and within the whole global community.
This is a difficult shopping list to deliver. It requires tenacity and standing firmly to principles in the face of vested interests. However, this is the only way. A policy of being Tory light is simply the path to electoral and moral oblivion.
We only need look as far as Scandinavia style social democracies?
More localism I think too. Westminster itself is too centralised and remote – devo-Max not just for Scotland but for the English regions too. (And Wales and Northern Ireland, naturally!).
I support you fully!
You say we can’t go back to the post-war consensus, but that seems to be in large part what you’re proposing. And quite right too, although this can only be a staging post on the road towards a fully socialist society.
As for New Labour, they weren’t in the centre, they were a right-wing, Thatcherite movement. Policies don’t lie and Blair kept Tory policies on tax, trade unions, public services and most other key issues. Raising public spending a bit is insignificant compared to that.
I do not think I am arguing for a return of the post-war consensus.
The UK is a rich nation, and we do not need to serious economic development to have a society that is much better. We need a better distribution of what we have.
As a planet we are on the edge of environmental catastrophe. We cannot keep up the consumerist race that we are still in. This means that the West must learn to cope with slow or no economic growth and share what it has more fairly, as the poorer parts of the world get’s the lion’s share of future economic development.
Organisations in the public sector are often as democratically unaccountable as private ones, and unresponsive to the needs of service users. We are currently having issues with our LEA, and it is like talking to a brick wall. We are as ignored as if we were talking to a major PLC. What is needed is a new approach where the states support services, but the management and accountability lay with local bodies, with a real voice of the service user being part of it. This type of model was not part of the post-war consensus.
So hopefully I have demonstrated that there is a difference between what I have proposed and the post-war consensus.
What is your objection to Keynesian economics? Why do you think it’s not relevant today?
I have no objection to Keynesian economics.
I argue that the way power is centralised is an issue. I think that Whitehall run state-funded services can be as blind to local needs as much as services provided by corporations.
Services can be funded centrally, but run locally with a genuine input by local service users. These can have input from local service users, perhaps charities and other community organisations.