Labour’s future: more Tony Crosland and less Tony Blair

Labour needs to win back poor voters who think it won’t do enough, and prosperous voters who fear it will do too much and wreck things. The next leader’s biggest battle will be to convince voters that Labour hasn’t just run out of road.

My review of Peter Hain’s Back to the Future of Socialism was published in the Summer 2015 issue of Public Service Magazine.

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It’s up to Europe’s democrats to save capitalism from itself

Battered by the economic crises of the 1920s and and 30s, European politicians clung to the gold standard because it was the only thing they knew. The gold standard dictated permanent austerity and relentless downward pressure on wages. The result was stagnation followed by collapse, soaring unemployment, and massive social and political upheaval. The dead hand of the gold standard was only lifted when European voters began to flex their muscles and put the austerity parties out of office. It didn’t end happily.

Today’s European leaders are in the same position, trapped inside a similar orthodoxy. For the gold standard read ‘German’ monetary policy – an obsession with the phantom threat of inflation and a scorched-earth approach to reducing debt. The austerity and wage cuts follow as a matter of course. Voters can see this, which is why they are felling incumbents across the continent like old dead trees.

Europe’s leaders have no political strategy, just a defunct economic one. And without a political strategy there is no hope. It doesn’t matter if orthodoxy dictates that austerity is the ‘right’ economic policy. Parties who keep offering up the same meagre fare will be pushed aside. People who think they can preserve our existing form of capitalism and democracy are deluding themselves in a bubble.

Democratic parties – on the centre-left or centre right – must either reinvent capitalism or be swept away by wilder forces who are no friends of either free-market capitalism or democracy.

Some on the democratic right (mostly in the UK it has to be said) want seize this opportunity to impose more free-market reforms, more deregulation of labour markets, deeper and deeper cuts in government spending. They dream of completing the Thatcherite revolution on the broken backs of the Eurozone economies. We can argue the toss about the economic consequences of this, but politically it’s a dead letter. It’s not the way European voters are facing.

European voters can’t make up their mind whether to turn left or right in response to the crisis. But even those turning to the right are not voting for more of the same. They are flocking to parties like the Front National in France, Geert Wilders’s Freedom Party in Holland, the True Finns in Finland, even the openly pro-Nazi ‘Golden Dawn’ in Greece. These aren’t free market parties. Their economic programmes often have more in common with the resurgent left-wing groups like Jean-Luc Mélenchon’s Front de Gauche or Alexis Tsipras’s Syriza movement in Greece.

Take Marine Le Pen’s Front National, which is locked in a battle to the death with Nicolas Sarkozy’s UMP for dominance of the French right. Leave aside the casual racism, xenophobia and repressive social and penal policies that would fill France’s jails with half its workforce (I exaggerate, but only slightly). She also wants to end the European single market, introduce protectionist trade barriers, stop the free movement of European labour, impose capital controls and nationalise banks.

This is not exactly communism, but it’s no free market nirvana either. Sour, insular and repressive, if you want to know what Marine’s Le Pen’s France might look like, look at Putin’s Russia.

But these ideas are gaining hold with European voters because they at least try to address people’s fears. Because they seem to be a genuine break with the past. Unencumbered by economic orthodoxy, parties like Le Pen’s can offer a explicitly political programme.

If Europeans on the centre-left and centre-right, who have more in common than they usually admit, want to preserve liberal democracy and a mixed economy, they need a political strategy to address (among other things):

Insecurity – austerity and free market ‘reforms’ create insecurity which leads to the instability which markets hate. Fearful people do not make contented or industrious workers. Or voters.

Disenfranchisement of working class people – these are the voters who are turning in increasing numbers to the undemocratic parties of the right and left.

Falling/stagnant wages – in the last 30 years too little a share of economic growth has gone into wages. Working class incomes have been largely stagnant in Europe (and the US) for many years. Now they’re falling off a cliff. In a democracy, this is unsustainable.

Globalisation – those who say we must buckle under and cut our wages to compete with China and India can forget it: you will be swept away long before that happens.

If we can’t reinvent liberal-democratic capitalism so it works for ordinary people, what right do we have to expect that it should survive? Decide now: are you for democracy or the free market? You might not be able to face both ways for much longer.