Learning from Europe.

Author:Wilson, Robin
Position:Features - Essay

The real reason for Labour's dire predicament is not just Brown's leadership. It is that, after more than a decade of New Labour, nobody in the party knows what it stands for. Jackie Ashley (1) The leadership speculation is clearly taking serious risks with the public's patience. But, whatever the Labour parliamentary party does now, they should at least realise that opening up the question of the leadership would resolve very little if we can not define what Labour wants to stand for and against. Sunder Katwala (2) There is a very real danger that history will repeat itself with the current Labour leadership crisis. That the party leadership needs to change is not in doubt. But this is only a necessary, and by no means a sufficient, condition of renewal.

This was the disastrous mistake made in 2007-to think Blair, rather than Blairism, was the problem. For its consequence was to assume that Brown, absent any debate about where the party should go, was the solution.

The mistake, of course, was above all Brown's: he thought Blair was the problem more than anyone else, even though he had been least as much the architect of 'New' Labour. And he invested huge energy in displacing his rival from Downing Street--energy that should have been devoted to elaborating the content, when he moved into No 10, of what turned out to be his empty promise of 'change'.

What needs to happen now is that the agenda moves on to the challenges to which Labour must find answers if it is to re-establish public credibility. In that context, a more collegiate Labour leader can and must play a key role.

The ABC of social democracy

After the euphoria of the 1997 landslide had dissipated, it became evident during the first term that the 'third way' which underpinned 'New' Labour as an idea was charting a wrong course. Symbolised by the orchestrated spectacle of flag-waving for the Blairs' arrival in Downing Street, it betrayed what can most charitably be described as complete ignorance of what would more broadly in Europe be understood as social democracy or liberal socialism (Wilson, 1999).

Key to this philosophy is a recognition, which 'New' Labour grasped in only the fuzziest way, that yes, it is important for social-democratic parties to be able to recruit middle-class support beyond their core, working-class constituency if they are to secure electoral majorities--but they do so by being liberal as well as left, rather than by falling into an authoritarian-populist competition with the right which only disillusions their progressive supporters.

The successive electoral successes of the PSOE under the leadership of Jose Luis Rodriguez Zapatero in Spain--despite, or because of, intense confrontations with the Catholic Church over liberal reforms towards gender equality--contrast with the evaporating support for 'New' Labour. The real error of the Labour Party in the early 80s was not to be 'left' but to lose liberal support to the Social Democrats by dogmatic, and spuriously radical, hostility to European integration and proportional representation--keys elsewhere to progressive coalition-building.

'New' Labour made a virtue out of being philosophy-free, claiming its only interest was in 'what works', implying that left and right were no longer meaningful political landmarks. But this led to two defining wrong calls, respectively in terms of international relations and domestic governance, as had become clear by the second term (Wilson, 2003).

Lacking a clear compass, 'New' Labour lost its place on the geo-political map, reinventing a 50s Atlanticism based on a concept of the 'special relationship' famously rubbished by John Foster Dulles when, as secretary of state, he suggested that Britain had lost an empire and was yet to find a role.

This led inevitably to Britain's cavalier involvement in the Iraq adventure, in the face of the intelligence evidence and with no apparent thought for the human consequences. The scale of the anti-war demonstrations, way beyond what the left can normally mobilise, indicated just how successfully 'New' Labour had alienated the liberal centre.

Keynes famously remarked that anyone who disparaged theory was usually in thrall to some dead economist. And, domestically, 'New' Labour was certainly in thrall to Adam Smith--its 'pro-business' boosterism reliant on the ideological belief that the 'invisible hand' of the market would align the pursuit of private interests with those of society as a whole. Markets were unleashed into the public realm under the banner of a (dated) New Public Management to keep supposedly rent-seeking 'knaves' on their mettle, replacing reliance on networks of professional expertise by populist political pitches.

Yet increased investment in public services thus failed to secure the anticipated social and political return in effectiveness they anticipated. Discounting any employee commitment to a public service ethos and reducing users to passive 'customers' undermined the very goodwill and capacity for 'co-production' on which public services depend. This led ever more desperately to ever more arbitrary central targets and the haemorrhaging of core political support.

It was an object lesson on how to destroy the 'historical bloc' on which Labour depends for election. Hence the paradox that 'New' Labour, presented as the only route for the party out of the political wilderness, had become by 2005, and still more since, a toxic electoral brand.

Yet Brown endorsed without question the new faith, in America and markets. A tubthumper for the American model of 'flexible' labour markets--which have seen median wages hardly rise for decades--Brown also refused to hand monetary policy to the European Central Bank by joining the euro but, as with the Federal Reserve, handed it to the Bank of England instead. Those struggling with their mortgages might reflect that interest rates have been consistently higher--currently 0.75 per cent higher--than in the euro zone as a result.

Supposedly committed to ending 'Tory boom and bust', Brown thus presided, Lawson-like, over an unregulated explosion of private credit which not only saw the savings ratio collapse but sooner or later was bound to end, alongside the 'sub-prime' recklessness in the US, in a shuddering re-equilibration. And market dogma led to his relentless pursuit of the Underground public-private partnerships against London's elected mayor, despite the gigantic transaction...

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