Monday, 28 June 2010

Stiglitz on the Budget: Wrong!

Independent on Sunday, 27th June 2010
Osborne's first Budget? It's wrong, wrong, wrong!

Joseph Stiglitz, the Nobel prizewinner who predicted the global crisis, delivers his verdict on the Chancellor's first Budget and tells Paul Vallely it will take the UK deeper into recession and hit millions – the poorest – badly.

George Osborne will probably not be very bothered that there is a man who thinks he got last week's emergency Budget almost entirely wrong. But he should be. Because that man is a former chief economist at the World Bank who won the Nobel Prize for Economics for his work on why markets do not produce the outcomes which, in theory, they ought to.

Professor Joseph Stiglitz, who has been described as the biggest brain in economics, is distinctly unimpressed by George Osborne's strategy. This, he predicts, will make Britain's recovery from recession longer, slower and harder than it needs to be. The rise in VAT could even tip us into a double-dip recession.

Stiglitz, who was once Bill Clinton's senior economic adviser, is now professor of economics and finance at Columbia Business School. He was in the UK this week at the University of Manchester, where he chairs the Brooks World Poverty Institute, but he lifted his head from the detail of international development to scrutinise the economic strategy of the Conservative Chancellor whose Liberal Democrat partners recently reversed their judgement that massive public spending cuts now would endanger the economy and joined in the Tory slash-and-burn strategy. They were deeply wrong to do so, he believes.

It would be a mistake to ignore Stiglitz on this. He has a track record of getting his predictions right. He was one of the few economists who predicted the global financial meltdown long before it occurred.

"What happened was very much in accord with what I expected," he tells me when we meet for a coffee outside the Blackwell bookshop in the centre of the university. "The data was pretty clear about that." And the scale of the crash? "That wasn't a surprise," he adds, in a matter-of-fact manner. "The bigger the bubble, the bigger the burst.

"The thing most economists did not fully grasp was the extent to which the banks engaged in murky risk-taking activities. They were taking a risk with our money, their shareholders' money, the bond-holders' money," he says. Banks were demanding up to 40 per cent of the corporate profits, saying their innovative financing was adding value. But "all this talk about innovation was a sham" because it did not relate to any real increase in the economy's productivity, he says.

"There was a prima facie case of something screwy going on [with all the] perverse incentives that would lead them to take excessive risk. But there was no way anyone could know or believe that the banks were [conducting themselves] at that level of stupidity. I predicted that there was going to be a collapse because of the information asymmetry problems that were being created." His Nobel prize was given for exactly that – showing how markets fail because different people in them hold different levels of information.

Yet there is no hint of I-told-you-so about Stiglitz's tone as he asks the waiter for coffee. He orders decaffeinated, but suggests the British economy needs the opposite: a stiff stimulant rather than the "fiscal consolidation" which is George Osborne's economic euphemism for cuts.

Fiscal stimulus is out of fashion now. World leaders embarked on that strategy – injecting money to re-energise the economy – after the banking crash three years ago. It was widely perceived not to have worked because the money governments pumped into the banks was not passed on to ailing businesses or individuals in trouble with their mortgages.

"The problem was that, in the US, the stimulus wasn't big enough," he says. "Too much of it was in tax cuts. And when they gave money to the banks they gave it to the wrong banks and, as a result, credit has not been restored – we can expect a couple of million or more homes to be repossessed this year than last year – and the economy has not been restarted." Instead of producing a consensus that the government should have done more, it has created disillusion that the government can do anything, Stiglitz says.

The result is that, following the attacks by the financial markets on Greece and then Spain, everybody is now in a mood of retrenchment. "It's not just pre-Keynesian, it's Hooverite," he says. By which he means governments are not just refusing to stimulate, they are making cuts, as Herbert Hoover did in the US in 1929 – when he turned the Wall Street Crash into the Great Depression. "Hoover had this idea that, whenever you go into recession, deficits grow, so he decided to go for cuts – which is what the foolish financial markets that got us into this trouble in the first place now want."

It has become the new received wisdom throughout Europe. But it is the classic error made by those who confuse a household's economics with those of a national economy.

"If you have a household that can't pay its debts, you tell it to cut back on spending to free up the cash to pay the debts. But in a national economy, if you cut back on your spending, then economic activity goes down, nobody invests, the amount of tax you take goes down, the amount you pay out in unemployment benefits goes up – and you don't have enough money to pay your debts.

"The old story is still true: you cut expenditures and the economy goes down. We have lots of experiments which show this, thanks to Herbert Hoover and the IMF," he adds. The IMF imposed that mistaken policy in Korea, Thailand, Indonesia, Argentina and hosts of other developing countries in the 1980s and 1990s. "So we know what will happen: economies will get weaker, investment will get stymied and it's a downward vicious spiral. How far down we don't know – it could be a Japanese malaise. Japan did an experiment just like this in 1997; just as it was recovering, it raised VAT and went into another recession."

Then why have we not learned from all that? Because politicians like George Osborne are driven by ideology; the national deficit is an excuse to shrink the state because that is what he wanted anyway. Because the financial market only cares about one thing – getting repaid. And because other European governments are panicking because of the market's wild attack on Greece and Spain, and they don't want to be next.

"But cutbacks in Germany, Britain and France will mean all of Europe will suffer. The cuts will all feed back negatively. And if everyone follows this policy, their budget deficits will get worse, so they will have to make more cuts and raise taxes more. It's a vicious downward spiral. We're now looking at a long, hard, slow recovery with the possibility of a double dip if everybody cuts back at the same time. The best scenario is long and hard ... and the worst is much worse. If any one of these countries is forced into default, the banking system is so highly leveraged that it could cause real problems. This is really risky, really scary."

So what should we be doing? "The lesson is not that you cut back spending, but that you redirect it. You cut out the war in Afghanistan. You cut a couple of hundred billion dollars of wasteful military expenditure. You cut out oil subsidies. There's a long list of things we can cut. But you increase spending in other areas, such as research and development, infrastructure, education" – areas where government can get a good return on the investment of public money. "I haven't done the calculation for Britain, but, for the US, all you need is a return on government investment of 5 to 6 per cent and the long-term deficit debt is lowered."

Taxes also need to be restructured. Osborne has increased capital gains tax for high earners from 18 to 28 per cent. "There's absolutely no reason why you couldn't tax speculative gains [from rising house or land prices] by 40 per cent. There's no social return on it and land is going to be there whether people have speculated or not. But you lower the tax on investment in things like R&D."

Stiglitz has one more practical solution to offer. Governments should set up their own banks to restart lending to businesses and save struggling homeowners from repossession. "If the banks aren't lending, let's create a new lending facility to do that job," he says. "In the US, we gave $700bn to the banks; if we had used a fraction of that to create a new bank, we could have financed all the lending that was needed."

Indeed, it could be done for far less. "Take $100bn, lever that at 10 to 1 [by attracting funds from the private sector] and that's a trillion-dollar new lending capacity – more than the real economy needs."

Such a move would help ordinary people more than all Osborne's rhetoric about being tough but fair. Stiglitz is sceptical, too, about the moral underpinning of a Budget which claims that "we are all in this together", but then hits the poorest hardest.

Analysis by the Institute for Fiscal Studies has suggested that the Chancellor's Budget will cost the poor 2.5 per cent of their income, while the rich will lose just 1 per cent. "I've not made an independent study on that point, but cuts in public services will have a disproportionate effect on the poor," Stiglitz says. Osborne's Budget "may be well-intentioned, but it takes an enormous amount of work to make sure that a package of public spending cuts of that magnitude doesn't hit the poor disproportionately".

His big fear is that overseas aid, which has been protected in this first round of cuts, will not escape a second. "Developing countries have redirected themselves towards Asia, and China in particular, in recent years, so growth in Africa will be more robust than one might have expected, given the severity of the downturn," he says.

Even so, aid remains vital to poor countries. "If aid is cut back, growth will be badly affected," he says. "China is providing aid, but its aid is all in infrastructure, whereas aid from the US and Europe is mainly in education and health – areas in which ordinary people will suffer most if there are cuts."

Joseph Stiglitz has come full circle. What the world needs now – developing and developed – is not retrenchment but greater economic stimulus. It is not a message many are in the mood to hear. But they didn't listen to him last time, either. And he turned out to be right, and they were wrong – and at what a cost to us all.

Tuesday, 22 June 2010

Compass Conference 2010: A New Hope

A galaxy but no stars Jun 21st, 2010
WILLIAM BROWN reports from the Compass annual conference where the Labour left considered the post-election political landscape

(from ILP)

In a conference hall not so far away, the labour left gathered on June 12th for the Compass annual get together. Launching this year’s event, optimistically titled ‘A New Hope’, Compass chair Neal Lawson set off on a slightly curious note declaring ‘we’re not rebel fighters, we’re building a death star’. If that was slightly off-key, much of the rest of the conference followed, exposing a Labour left that is only slowly getting to grips with the new politics of opposition.
Of course, Compass by its nature is a very broad organisation and its conferences are interesting partly because of this, a large (1,000 people), comradely forum for the exchange of quite divergent views. In fact, over time, two ideas seemed to form a core of opinion at the conference: that proportional representation is essential for the future of left politics and that Labour should be a ‘pluralist, not tribalist’ party.

The first of these is a long standing one on the left and has been central to the efforts of those – from Blair and Ashdown leftwards – to fashion a realignment of politics around the centre left. Current government plans for a referendum on the AV system, with Tories campaigning against, leave this aim tantalisingly out of reach for those who see it as essential.

The second pillar – for a Labour politics that is not tribal but pluralist – is becoming a frequent refrain in Compass, among Labour leadership contenders and among the wider commentariat.

But there are very different versions of this call for pluralism. At the level of party politics, one explanation is that it is a reaction to the perceived failure of Labour to fashion an anti-Tory ‘rainbow coalition’ in the wake of the general election. The ‘tribal’ interventions of David Blunkett and John Reid, both of whom came in for considerable stick over the course of the conference, were seen by many to represent an ‘old politics’ that we need to move away from in the new coalition-dominated future.

There were also those present on the Labour left who clearly feel some empathy for the small parties that are seen as more left wing than Labour – such as the Greens’ Caroline Lucas who, despite having defeated a Labour candidate in the general election, was given an enthusiastic reception by this clearly non-tribalist crowd.

However, it was Lucas who presented the least compelling case for pluralism and highlighted the limited vision of this variant of political pluralism. Teaching the assembled grannies to suck eggs, she pronounced on how remaining in the Labour Party meant many people had to make difficult compromises to accommodate the distance between their own beliefs and the Labour’s policy. No shit. Her solution, for a flowering of smaller parties (like her own in fact!), in which members can feel comfortable in their purity leads down a strange path, however. The left knows something about this, having taken the purity strategy to absurd People’s Front of Judea lengths in the past. But it also ignores the question of what then? What happens after this party pluralism has blossomed and PR has delivered a parliamentary mosaic of principled representatives? Presumably there are real issues of principle that necessitated the creation of separate parties in the first place? Don’t they then have to engage in the very same dirty compromises that she was lamenting a few moments earlier?

Some even asked whether you would want to see a majority Labour government again, with the clear implication that if your answer was ‘yes’ then you were obviously still wedded to the ‘old politics’. But what is so inherently progressive about having to make deals with the David Laws of this world? or in giving concessions to Alex Salmond’s narrow, particularistic, nationalist demands?

Rather more convincing and carrying greater potential, is the idea of a pluralist politics that connects the Labour Party and parliamentary politics generally in a more open and constructive way with non-party groups and campaigns. A party that is active on a local level, engaged and engaging, and at the forefront of campaigns around opposition to cuts would indeed help reinvigorate Labour’s internal politics. Such ideas are clearly having some purchase on leadership candidates debates with both Milibands arguing for a revitalised, active campaigning party. Even here there may be dangers however, and the Blairite dream of a dissolution of party memberships into looser networks of supporters, clearly still has some adherents. Internal party democracy still ought to matter, and for that to mean anything then membership has to become again something real.

A progressive alliance?
On other issues the conference veered wildly in its reading of the contemporary political scene. Throughout there was a persistent sense of denial about the formation of the ConDem coalition which clearly shocked some speakers quite profoundly. Compass’ political strategy, such as it is, has centred on the formation of ‘the broad progressive coalition’ and one feels that the group still has to come to terms with the fact that this notion has been blown out of the water by the Liberals’ post-election choice. The continued adherence to PR and pluralism does look a bit less convincing in world in which a Lab-Lib coalition is no longer the central element.

Even so, Compass also continue to reject the Blairite notion that the country is essentially conservative with a small c. Their, and much of the left’s, argument against New Labour centred on this claim. Where New Labour used the ‘conservative’ nature of public opinion as a reason to move rightwards, those further to the left argued that this reading of the public’s values was mistaken. A different option that neither takes, is that New Labour was right on its assessment but wrong in not seeking ways – long term, hard and slow – of shifting that opinion. Lawson even commented that over thirteen years in government Labour did nothing to build a progressive movement. The left, one suspects on this evidence, would now rather take the easier option of thinking that the country is with us and build a political strategy on that assessment.

Indeed, several speakers cited the combined vote for Labour and Liberals as evidence of a ‘progressive majority’ in the country. Yet much in Labour and the Liberal manifestos was anything but progressive: both argued for substantial and damaging cuts, neither gave a convincing case for the public sector and against the private, neither presented a convincing critique of the financial sector, both indulged in anti-immigration gutter politics to pander to the ‘bigoted women’ (and men) of the country. Most amazing was New Statesman political editor, Mehdi Hassan, who cited the polling that 1 in 4 LibDems were unhappy with the coalition as evidence of a progressive opportunity, seemingly ignoring that that means 3 in 4 are happy with rampant expenditure cuts, the dismembering the public sector and the creation of a two-tier schools system.

In a warning that ought to give Compass and all on the left pause for thought, John Harris argued that ‘if your argument is also the one you are most comfortable with, it is probably wrong’. Maybe some in Compass fall prey to reading from the political landscape what they are comfortable seeing – a country that is ‘with us’ and a political strategy that seamlessly mobilises a coalition to bring the progressive majority into power through PR.

Coalitions and cuts
Opinions also differed markedly on the prospects for the ConDem coalition and what the appropriate response to the cuts should be. In a seminar on the cuts there was much debate over the appropriate balance between raised taxes and reduced expenditure. Only one speaker made a serious case for limiting cuts, arguing that the widespread austerity policies now being enacted in Europe would trigger a renewed recession. Some contributions from the floor were predictably simple – ‘we say no to cuts!’ – but in the main Polly Toynbee, who chaired the session brilliantly, did not allow simplistic answers, or questions, to go unchallenged.
A more serious omission was of any quid pro quo that the left should ask for in return for reduced public expenditure. If cuts are to be something other than a process of making the poorest pay for the sins of the financial sector, then they must be accompanied by some attempt to challenge the power of financial markets over the longer term. Several speakers cited ‘market reactions’ as a key reason why cuts were necessary, yet none signalled any discomfort with that situation. The irony that the very credit ratings agencies who acted so irresponsibly in the build up to the crisis should now be arbiters of what the government should or shouldn’t do did not seem to register with the speakers. Next to that, all the talk of a ‘Canadian-style’ consultation over the cuts, even democratic politics, comes to nought if markets have the final say.

How soon these questions bite will in part depend on the fate of the governing coalition. Here too, opinions differed. The coalition was, Lawson said, ‘the thing none of us expected’, a claim that betrays a certain lack of foresight if nothing else. Yet both he and John Harris were, rightly in my view, alert to the changed terrain that the coalition may bring into being, an ‘audacious grab’ for the centre-right ground that shared considerable continuities with Blairite policies and which could leave the left looking very isolated. Others, notably Mehdi Hassan of the New Statesman, were more hopeful of a quick end to the coalition, calling it ‘a strategic disaster for the Lib Dems’.

Leadership election
How well Labour responds to the coalition will depend on a revitalisation of the Party’s politics and so far the leadership campaign has not revealed any clear direction either. At a hastily arranged hustings, a packed hall listened to the assorted Eds, Milibands, Burnham and Abbott set out their stalls and answer the predictable questions on PR, cuts and schools. While the greatest cheer during the opening statements came for Diane Abbot, a walking embodiment of tokenism in this election, enthusiasm for her waned as the debate proceeded, possibly reflecting the vacuity of Abbott’s politics. More encouragingly, both Milibands and Andy Burnham emphasised revitalisation of the party and its membership as key aims though as yet none as spelled out a convincing programme of democratic reform of Labour’s internal structure.
Showing some in Compass what might have been, John Cruddas rounded off proceedings with a forceful and at times powerful speech. His attack on the ‘sour, shrill, hopeless politics’ of attacking the poor and immigrants was a direct and timely counter to those arguing that Labour lost the election by not being tougher on immigration. Cruddas’ alternatives, of a thorough ‘1987-like’ policy review, a revitalisation of Labour’s values and culture and a politics based on progressive English nationalism, are clearly based on his energetic campaign against the BNP and his view that Labour has fallen into a ‘moral and intellectual coma’. Whatever the shortcomings of his politics, Cruddas showed a passion and vision that is lacking from much of the race so far and his absence from the contest clearly disappointed some in Compass.
However, Lawson’s recognition that ‘the time perhaps is just not right’ for his kind of politics was an appropriate acknowledgement of where Labour and the left currently is. Looking rather more like a rebel band that has just taken a thrashing at the hands of imperial stormtroopers, the Compass conference was nevertheless an energetic and welcome moment to reflect on the options facing the left.

‘A New Hope is Forged’, a report of the Compass conference on its own website, is here.
For news of the Labour leadership campaign and information about the candidates, go here.

Friday, 18 June 2010

Erik Olin Wright is a grand old figure in radical sociology - anyone studying class in then 1970 or 1980s should be familiar with 'Class, Crisis and the State' and there's been a host of work on what class means since then. For several years one of his projects has been around 'Real Utopias' and his latest book is called Envisioning Real Utopias.

The excellent blog project New Left Project (please visit frequently) carries an interview with Wright

Edward Lucas: Why do you think there is a need for visions of social arrangement very different from those that we have now? Why is there a specific need for ‘real utopian’ visions?

EOW: There are really two somewhat questions here: why do we need to look for fundamental alternatives to existing social institutions, and why should these alternatives be framed as “real utopian” visions.

First, the issue of the search for alternatives: We live in a world characterized by deeply troubling, if familiar, contrasts: poverty in the midst of plenty; enhanced opportunities for some people to live creative, flourishing lives alongside social exclusion and thwarted human potential; new technologies to cure disease, enhance health and prolong life along with untreated, devastating illness. There are, of course, many possible explanations for these facts. Some people believe that poverty in the midst of plenty constitutes simply a sad fact of life: “the poor will always be with us.” Defenders of capitalism argue that this is a temporary state of affairs which further economic development will eradicate: capitalism, if given enough time, especially if it is unfettered from the harmful effects of state regulations, will eradicate poverty. Many social conservatives insist that suffering and unfulfilling lives are simply the fault of the individuals whose lives go badly: contemporary capitalism generates an abundance of opportunities, but some people squander their lives because they are too lazy or irresponsible or impulsive to take advantage of them. If you accept any of these diagnoses, then there would not be much point in elaborating visions of social arrangements very different from those we have now. But if you believe, as I do, that there is very strong social scientific evidence that these morally salient forms of inequality and deprivation are mainly consequences of fundamental properties of the socioeconomic system, then it is imperative to understand alternatives to the existing world which would mitigate these harms.

But why should the search for alternatives be cast as envisioning “real utopias”? The idea of this apparent oxymoron is to combine a commitment to our deepest emancipatory values and aspirations with a serious attention to the problem of how institutions really work. The “real” in the couplet forces us to continually worry about the problem of unintended consequences and hazards of social engineering; the “utopia” keeps the moral purposes of social transformation and social justice at the forefront. In the absence of a theory of fundamental alternatives, struggles against the harms of existing institutions will generally be limited to those changes which are immediately accessible – reforms of institutions which might in fact be desirable in and of themselves, but which don’t necessarily constitute steps towards the longer term goal of human emancipation. A theory of fundamental alternatives enables us to ask two questions of any proposed transformation of existing institutions – first, does this improve the lives of people now, and second, does it move us in the right direction along a trajectory towards a more profoundly humane and just society.

EL: You present the ideas and aims discussed in your book as socialist. However, your conception of socialism is novel, focusing on ‘social power’, rather than the abolition of private ownership of the means of production. Why do you think socialism needs to be re-conceived in this way? Is it really necessary to call the conception of emancipatory change that emerges ‘socialist’?

EOW: There is, of course, always a variety of words that can be used to identify any underlying concept. While I do think it is appropriate to deploy the word “socialism” for the theoretical and political purposes of my analysis, this isn’t “necessary” in the strong sense of being logically entailed by the arguments themselves. Indeed, some people have argued with me that the word “socialism” has become so contaminated by its association with heavy-handed state control – or even worse, in the United States ideological context, authoritarian statism – that I should abandon the word altogether. Words do have histories, and sometimes that history can destroy the usefulness of otherwise attractive terms.

In spite of this, I feel that the word socialist can be effectively retrieved for a progressive, democratic egalitarian political agenda. There are two issues in play here. First, while in the United States and perhaps some parts of Europe, the word “socialist” has lost traction in popular social movements, in much of the world it remains the broad umbrella term for anti-capitalism in the interests of ordinary people. I hope the audience for Envisioning Real Utopias is left intellectuals throughout the world, not just in the richest countries, and in this broader context socialism remains a positive symbolic anchor. Above all it signals not simply a complaint about specific features of existing institutions, but a criticism of capitalism as such. Second, the conceptualization of a “social” socialism is fully congruent with the normative ideals that have animated many socialists throughout the history of socialism. The real bottom line for most socialists is not really the abolition of private property in the means of production as such. That was always instrumental to deeper moral commitments. The real normative commitments were for a radically democratic and egalitarian social order. I could, therefore, call the political project underlying my project on real utopias, democratic egalitarianism (or perhaps, to give it more edge: radical democratic egalitarianism), and sometimes in fact I do use this expression as a way of identifying the normative foundations and conception of social justice. But because I argue throughout the book that realizing these values requires opposing and transforming capitalism, “socialism” remains the best term available for signaling this transformative agenda.Perhaps it would be useful at this point to briefly pause from directly answering the questions and explain a little what I mean by “democratic egalitarianism” and how this is connected to the idea of socialism as social empowerment.

First, equality: Equality is a complicated problem, and there isn’t really a strong consensus among socialists as to precisely what this value means. A great deal of very productive and interesting philosophical debate has occurred over the past quarter century or so on this issue. Here is how I define the egalitarian ideal in the book: In a socially just society, all people would have broadly equal access to the necessary material and social means to live flourishing lives. This conception is a variety of the “equality of opportunity” conceptions of equality. I prefer “equal access” to “equal opportunity” because the equal opportunity terminology is so strongly associated with what is sometimes called “starting gate” equality, whereas equal access emphasizes more the life-long problem of having access to the conditions to live a flourishing life.
Second, democracy: The core value underlying democracy is that people should, to the greatest extent possible, be able to control the conditions and decisions which affect their lives, both as separate persons and as members of broader communities. We can call this the value of self-determination. When we apply the value of self-determination to the choices and actions of individuals that affect their lives as separate persons we usually call this “liberty” or “freedom”. When we apply the value of self-determination to those contexts in which our lives are bound together through interconnection and interdependency, we call this “Democracy”. Democracy and individual freedom are therefore rooted in the same value: people should be able to control the conditions and decisions which affect their lives to the greatest extent possible. (Apparent conflicts between democracy and liberty occur not because of an underlying conflict in fundamental values, but because of the inherently difficult practical problem of creating institutions to realize this value.) In a fully realized democracy all people have broadly equal access to the necessary means to participate meaningfully in the exercise of political power over those collective decisions which affect their lives as members of a broader community.

This definition has two critical elements:
• The first is an egalitarian principle – all people have equal access to participate in the exercise of political power. A shallow democracy is one in which people have very unequal access to the means of effective participation; a deep democracy is one which approaches equal access.
• The second element concerns scope of decisions that is subsumed under the idea of democracy: a narrow democracy is one in which only a limited range of decisions are subjected to democratic decisionmaking; a broad democracy is one which democratic decisionmaking extends to all matters of collective interest. As I have specified it here, democracy should cover all decisions which affect the lives of people as members of a community. The word “community” here refers to all social contexts of social interaction and interdependence. A family is a community, a factory is a community, a city is a community, and so is a nation. Increasingly, I think, we should think of the world as a community. We can meaningfully talk about democratizing the family just as we can talk about democratizing a factory or the state. What democracy entails, then, is that all of the decisions which affect people’s lives as members of these different kinds of community should be under the collective control of the members of these communities.

The full realization of this principle would be, of course, an extremely complex matter, both because different people have such different stakes in the outcomes of any given decision within a community and because the interdependence of communities means that there are generally ramifications of the decisions made within one community on people in other communities. In practice, therefore, it is really not possible to fully realize the ideal of self-determination: people will always confront conditions not of their choosing and will be affected by decisions not of their making.

Nevertheless, we can still judge alternative institutional arrangements by how much they facilitate or impede the ideals of democracy as collective self-determination. Capitalism, in these terms, inherently obstructs fullest realization of democracy. By definition, “private” ownership of means of production means that significant domains of decisions that have broad collective effects are simply removed from collective decision-making. While the boundaries between the aspects of property rights that are considered private and the aspects that are subjected to public control is periodically contested, in capitalist society the presumption is that decisions over property are private matters and only in special circumstances can public bodies legitimately encroach on them. The private decisions of owners of capitalist firms often have massive collective consequences both for the workers inside of the firm and for people not directly employed in the firm, and thus the exclusion of such decisions from public deliberation and control reduces democracy. A society in which there are meaningful forms of workers democratic control within firms and external democratic public control over firms is a more democratic society than one which lacks these institutional arrangements.

Of course, there may be good reasons for the exclusion of non-owners from such decisions, either on the grounds of economic efficiency or on the grounds that people have the right to dispose of “their” property as they see fit even if this has large consequences for others. Democracy, after all, is not the only value we have, and it could be the case that in some circumstances other values, such as efficiency, might be sufficiently important to justify a reduction in self-determination. These considerations, however, do not change the fact that capitalist property rights reduce democracy.

EL: The advance of democracy, therefore, requires transcending capitalism. But how? And what does this really mean?

EOW: This is where my conception of socialism as social empowerment enters the analysis. “Social power” is power rooted in the capacity of people for voluntary association in pursuit of collective goals – what sociologists call “collective action”. Social power is contrasted two other more familiar forms of power – state power and economic power. You can think of these three forms of power as different ways of getting people to do things: bribing them, forcing them, or persuading them.

In the ordinary use of these terms, “democracy” is the label we use for the subordination of state power to social power: In a democratic state, considerable power is exercised by the state, but the purposes to which it is used are, supposedly, dictated by “the people”, which in practice means through the various ways in which people become organized associationally to influence the exercise of state power, especially through political parties, social movements, and labor unions. One of the pivotal mechanisms for this translation of social power into effective subordination of state power is elections. This is equivalent to saying state power is subordinated to social power. In an authoritarian state, on the other hand, social power is subordinated to state power. “Socialism”, then, is the word for the subordination of economic power to social power.

All economic systems involve all three forms of power. While we can construct three ideal type “pure” economic systems connected to the three forms of power – capitalism is based on the dominance of economic power, statism on the dominance of state power, and socialism on the dominance of social power – all actual economic systems are hybrids that combine in different configurations all three forms of power. The term “capitalism”, therefore, is a shorthand for “an economic system within which economic power is the dominant form of power and limits the scope and operation of state power and social power.” In this conceptual framework, transcending capitalism in the direction of socialism means increasing the weight of social power within the hybrid configuration along a variety of different “pathways of social empowerment”. The institutional proposals for “real utopias” are all situated within these multiple pathways of social empowerment.

EL: You discuss a range of different real utopian proposals for political and economic transformation. Can you describe what you see as the most important of these?

EOW: I hesitate to anoint any specific proposal as “most important” since the actual importance of a proposal depends on historical context, both in the sense of the political conditions which make different proposals more or less achievable, and in the sense of the existing institutional and social structural conditions which make given proposals more or less viable. So, instead of describing the proposals that I think are the most important, what I will do is briefly describe four or five proposals that I think reflect the diversity of institutional designs for moving along the pathways of social empowerment.
(1) Participatory Budgets. Participatory budgeting is a redesign of municipal government that was first instituted in the Brazilian city of Porto Alegre and has since be instituted in one form or another in over 1000 cities worldwide. While the details vary enormously across cases, the basic idea is that ordinary citizens directly decide budgetary priorities for cities in various kinds of participatory assemblies. This constitutes a form of social empowerment because collective resources are allocated to different purposes by decisions made through voluntary association of people in civil society.
(2). Wikipedia. Wikipedia is a profoundly anti-capitalist way of producing and disseminating knowledge. It is based on the principle “to each according to need, from each according to ability.” No one gets paid for editing, no one gets charged for access. It is egalitarian and produced on the basis of horizontal reciprocities rather than hierarchical control. In the year 2000, before Wikipedia was launched, no one – including its founders—would have thought what has come to be was possible.
(3). Solidarity funds. In the province of Quebec unions have developed a specific kind of investment instrument referred to as “solidarity funds”. These funds are generated by contributions mainly from union members and are used for private equity investment in small and medium enterprises. The idea is to invest in firms which are relatively immobile geographically and rooted in the Quebec economy and which, in exchange for these long-term investments, agree to sign on to a charter of labor rights and principles of environmental sustainability. These firms remain capitalist insofar as they are profit-making firms in a capitalist market, but part of their capital comes from unions and a specific form of social power shapes the governance of the firms’ activities. They thus constitute a hybrid form combining capitalism and socialism.
(4) Worker-owned enterprises: cooperatives. From the early decades of the 19th century, worker-owned cooperatives have constituted a form of hybrid organization that combine capitalist and socialist elements. Prodhoun, in his famous conflict with Marx, argued that worker-owned cooperatives constituted both an alternative within capitalism and a strategy for challenging capitalism: because they would provide such a better way of life for workers, once they were well-established workers would leave capitalist employment for membership in productive cooperatives, eventually starving capitalism of labor power. Even if this scenario is not plausible, cooperatives are certainly one pathway of social empowerment, and we know under favorable conditions, cooperatives can be both economically efficient and organizationally stable. Mondragón in Spain is the iconic example: 270 separate worker-owned firms constitute the federation called the Mondragon Cooperative Corporation (MCC) Рbasically a Meta-cooperative of cooperatives. The MCC provides a wide range of services for its constituent units, including forms of cross-subsidization, risk reduction, work sharing and other mechanisms which help mute some of the pressures from the ordinary functioning of capitalist markets.
(5). Unconditional Basic Income. The idea of an unconditional basic income (UBI) is quite simple: Every legal resident in a country receives a monthly living stipend sufficient to live above the “poverty line.” Let’s call this the “no frills culturally respectable standard of living.” The grant is unconditional on the performance of any labor or other form of contribution, and it is universal – everyone receives the grant, rich and poor alike. Grants go to individuals, not families. Parents are the custodians of underage children’s grants (which may be at a lower rate than the grants for adults).

Basic income is generally defended on grounds of social justice, either focusing on the ways in which it deals with poverty in particular or on the way it neutralizes certain unjust forms of inequality. In the present context, a universal basic income can also be viewed as a way of infusing funds into forms of economic enterprise within which social empowerment plays a substantial role. The term “social economy” covers many such enterprises. One of the main problems that collective actors face in the social economy is generating a decent standard of living for the providers of social economy services. This is, of course, a chronic problem in the performing arts, but it also affects efforts by communities to organize effective social economy services for various kinds of care-giving activities – child care, elder care, home health care, respite care. It would be much easier for communities to mobilize various sources of funding for these activities if the basic standard of living was already taken care of through a basic income.
The problem of providing an adequate standard of living to members is also a chronic problem for worker cooperatives, especially in the early stages in which a cooperative is being established and members are learning how to function, work out organizational details, and develop productive capacity. A basic income would make it much easier for a cooperative to survive this learning phase and reproduce itself as an on-going economic organization. Because a basic income makes cooperatives more viable, this would also help solve some of the credit market constraints faced by worker-owned firms. One of the reasons banks are hesitant to loan funds to worker cooperatives is skepticism that the first will survive and be able to pay back the loans. Since workers typically do not have significant collateral, risk-aversion by lenders means that worker-coops are typically undercapitalized, which in turn makes it less likely that they will succeed. A basic income changes this equation, since now banks know that the revenue stream generated by the coops’ market activities does not have to provide basic income for the worker-owners. This reduces the risk that the cooperative will fail and thus makes credit more easily available.
Some would feel that in an effort to promote utopian visions that are ‘real’, you undermine hopes for more radical possibilities. In particular, in politics you advocate the continuing existence of the state, which appears to involve intrinsically dominating relationships. In economics, by contrast, all of your proposals involve the continuing existence of the market – an institution in which relationships are based on self-interest. Why do you advocate such apparently objectionable institutions?

I have three responses to this objection. First, if it were the case that a plausible argument could be made that the kinds of real utopian proposals I advance actually impeded the realization of a more radically democratic and egalitarian society, then this would be an important objection. But there really is no credible argument as far as I know that proposals I discuss—basic income, participatory budgets, worker cooperatives, solidarity funds, etc. – make more radical transformations less likely. So, even if one acknowledges that the state and markets are intrinsically objectionable, I don’t see how the probability of their eventual elimination is reduced by the kinds of proposals I advance. Second, under any foreseeable historical conditions the complete dissolution of state power and the complete disappearance of markets are utopian fantasies, not viable destinations. We can aspire to deepening democracy and extending its scope and thus subordinating more fully the state to social power, but this is not the same as the disappearance of the state. And we can struggle for egalitarian conditions of social justice in which the inegalitarian effects of markets are largely neutralized. But this is not the same as creating a comprehensively planned economy with no role for markets. Finally, I am not so sure that the state and the market are intrinsically objectionable; what are objectionable are their effects on power and inequality. The objections would largely disappear if state power is effectively subordinated to social power, and if the space for market relations is delimited by genuinely democratic processes and the inequality effects markets neutralized.

Take Back Parliament

Take Back Parliament is meeting in Leeds on Wednesday, June 30th, 6.30PM in the Adelphi pub on Bridge Street. Here's their message to supporters.

The purple rallies were just the beginning.
If we are to win a referendum on voting reform and consign the current broken and discredited system to the dustbin, we need to start organising now.
Last Sunday dozens of people met to plan the next stages of our campaign in London, and in Bristol, Birmingham and Brighton. This week, over 2000 of you wrote to Nick Clegg in less than 24 hours demanding a timetable for the referendum.
But this is just the start. Take Back Parliament is now organising in your home town:
Over the summer I'll be travelling to towns, cities and universities across the country to meet supporters and build a movement for reform. But I need your help.
Click below to find out about any meetings taking place near you - and be part of our movement for change:
I hope you can join me. Together we'll change this rotten system for good.
Thank you, and best wishes,
Andy MayTake Back ParliamentNational Coordinator
P.S - If you can't see one near you and want to get one started in your area, please email me.

Tuesday, 15 June 2010

George Monbiot: we talk, they act

Bogus and Misdirected, yes. But the Party has a lot to teach the left
The radical right has an authenticity the left lacks – it is angry and ready to translate that anger into action. We talk, they act
George Monbiot, Monday 14 June 2010

In the Netherlands a movement based on paranoia and the fleecing of the poor looks set to join the government. In the United States one of the biggest exercises in false consciousness the world has ever seen – people gathering in their millions to lobby unwittingly for a smaller share of the nation's wealth – has become the playmaker in Republican primaries. The radical right is seizing its chance. But where is the radical left?

Both the Freedom party in the Netherlands and the Tea Party movement in the US base their political programmes on misinformation and denial. But as political forces they are devastatingly effective. The contrast to the leftwing meetings I've attended over the past two years couldn't be starker. They are cerebral, cogent, realistic – and little of substance has emerged from them.

The rightwing movements thrive on their contradictions, the leftwing movements drown in them. Tea Party members who proclaim their rugged individualism will follow a bucket on a broomstick if it has the right label, and engage in the herd behaviour they claim to deplore. The left, by contrast, talks of collective action but indulges instead in possessive individualism. Instead of coming together to fight common causes, leftwing meetings today consist of dozens of people promoting their own ideas, and proposing that everyone else should adopt them.

It would be wrong to characterise the Tea Party movement as being mostly working class. The polls suggest that its followers have an income and college education rate slightly above the national mean. But it is the only rising political movement in the US which enjoys major working-class support. It voices the resentments of those who sense that they have been shut out of American life. Yet it campaigns for policies that threaten to exclude them further. The Contract from America for which Tea Party members voted demands that the US adopt a single-rate tax system, repeal Obama's healthcare legislation and sustain George Bush's reductions in income tax, capital gains tax and inheritance tax. The beneficiaries of these policies are corporations and the ultra-wealthy. Those who will be hurt by them are angrily converging on state capitals to demand that they are implemented.

The Tea Party protests began after the business journalist Rick Santelli broadcast an attack from the floor of the Chicago Mercantile Exchange on the government's plan to help impoverished people whose mortgages had fallen into arrears. To cheers from the traders at the exchange, he proposed that they should hold a tea party to dump derivative securities in Lake Michigan in protest at Obama's intention – in Santelli's words – to "subsidise the losers". (I urge you to watch the broadcast: it is the most alarming example of cheap demagoguery you are likely to have seen. It continues to be promoted by Santelli's employer, CNBC.)

The protests that claim to defend the interests of the working class began, in other words, with a call for a bankers' revolt against the undeserving poor. They have been promoted by Fox News – owned by that champion of the underdog Rupert Murdoch – and lavishly funded by other billionaires. Its corporate backers wrap themselves in the complaints of the downtrodden: they are 21st-century Marie-Antoinettes, who dress up as dairymaids and propose that the poor subsist upon a diet of laissez-faire.

Before this movement had a name, its contradictions were explored in Thomas Frank's seminal book, What's the Matter with Kansas? The genius of the new conservatism, Frank argues, is its "systematic erasure of the economic". It blames the troubles of the poor not on economic forces – corporate and class power, wage cuts, tax cuts, outsourcing – but on cultural forces. The backlashers could believe that George Bush was a man of the people by ignoring his family's wealth. They can believe that the media is a liberal conspiracy only by forgetting about the corporations (CNBC, Fox, etc) and the conservative billionaires who run it.

The movement depends on people never making the connection between, for example, "mass culture, most of which conservatives hate, and laissez-faire capitalism, which they adore" or "the small towns they profess to love and the market forces that are slowly grinding those small towns back into the red-state dust".

The anger of the excluded is aimed instead at gay marriage, abortion, swearing on television and latte-drinking, French-speaking liberals. The working-class American right votes for candidates who rail against cultural degradation, but what it gets when they take power is a transfer of wealth from the poor to the rich.

In the Netherlands, Geert Wilders' Freedom party performs a similar conjuring trick, persuading working- and middle-class voters that their real enemies are Muslims, while demanding tax cuts, abolition of the minimum wage and reductions in child benefits. It is only because of the general political doziness of the British electorate that such movements – despite the UK Independence party's best efforts – have not yet taken off here. Give them time.

Though most of what they claim is false, one of the accusations levelled by both the Freedom party and the Tea Party rings true: the left is effete. This highlights another contradiction in their philosophy: liberals are weak and spineless; liberals are ruthless and all-powerful. But never mind that – the left on both sides of the Atlantic has proved to be tongue-tied, embarrassed, unable to state simple economic truths, unable to name and confront the powers that oppress the working class. It has left the field wide open to rightwing demagogues.

The great progressive cringe is only part of the problem; we have also abandoned movement-building in favour of Facebook politics. We don't want to pursue a common purpose any more, instead we want our own ideas and identity applauded. Where are the mass mobilisations in this country against the cuts, against the banks, BP, unemployment, the lack of social housing, the endless war in Afghanistan? In the US the radical right is swiftly acquiring ownership of the Republican party. In the UK the left is scarcely attempting a reclamation of the Labour party, even as opportunity knocks.

Bogus and misdirected as the Tea Party movement is, in one respect it has an authenticity that the left lacks: it is angry and it's prepared to translate that anger into action. It is marching, recruiting, unseating, replacing. We talk, they act.

It strikes me that in the US the greater opportunities lie not in confronting the Tea Party movement but in turning it. As its mixed responses to Sarah Palin and Ron Paul show, it remains fluid and volatile. There's an opening here for trade unionists to move in and agree that an elite is indeed depriving working people of their rights, but it is not an intellectual elite or a cultural elite or a liberal elite: it is an economic elite. The radical right has something to teach us on this side of the Atlantic as well: the world is run by those who turn up.

Wallerstein on impossible choices in world depression

Distinguished scholar Immanuel Wallerstein produces a short commentary on various aspects of political and economic interest, twice a month. Here's the latest one.

Commentary No. 283, June 15, 2010
"Impossible Choices in a World Depression"

As the world's leaders and pundits continue to deny the reality of the world depression - they won't even use the word - the impossible choices that are faced by government after government become more and more obvious every day. Consider what has happened in just the last month.

The United States had its worst unemployment figures in quite a while. Yes, there were some new jobs, but 95% of them were of temporary census workers. Private employers added just 10% of the jobs they were expected to add. Despite this, it has now become politically impossible to get further stimulus money voted by Congress. And the Federal Reserve has ceased to buy Treasury securities and mortgage bonds. These had been the two main strategies to increase jobs. Why? The call for deficit cuts has grown too strong.

The most immediate consequence can be seen at the level of the budgets of the separate state governments. The cost of Medicaid has gone up because of the economic crisis. This cost is borne by the separate states. They have been helped in the past year by increased federal subsidies of state spending on Medicaid. Congress won't renew this. Gov. Edward Rendell of Pennsylvania says this will increase his state's budgetary shortfall by two-thirds, and force it to lay off 20,000 teachers, police officers, and other government workers. Of course, this is in addition to lost medical services for many people.

In Great Britain, the new Prime Minister, David Cameron, says that cutting down on borrowing is "the most urgent issue facing Britain today." The Financial Times sums up his proposals in its headline: "Cameron pitches an age of austerity." Its assessment of this policy: "If the government is to make such steep reductions in spending, it cannot avoid visibly damaging frontline services. The cuts will be more savage than anything contemplated by even the Thatcher government."

Germany's Chancellor Merkel has announced her version of austerity: deep public spending cuts immediately, rising in amount each year for the next four years. She has also announced new taxes on airlines, which the world's airlines immediately announced would seriously hurt their ability to reduce their negative balance-sheets and save them from bankruptcy. Germany's unemployment rates will increase, but its unemployment benefits will be reduced. Other governments in Europe plus the United States have been urging Germany to spend more and export less, in order to restore world demand. Merkel rejected these demands, saying that debt reduction was her priority.

Japan's new Prime Minister, Naoto Kan, warned the country that the debt situation is so bad that Japan could face a situation comparable to that of Greece. To remedy this, he proposed some increased taxation, more regulation of the financial arena, and new kinds of public expenditures.

In the middle of all this super-austerity in the North, a most remarkable thing has occurred, which seems to have escaped almost all notice. As everyone knows, Spain is one of the many European countries now in economic difficulty because of very large debt ratios. On May 30, Fitch Ratings joined other ratings companies in reducing Spanish bond ratings from AAA to AA+. The question is why. Just the day before, the Spanish parliament had voted the country's deepest budget cuts in 30 years.

Budget cuts are presumably what Germany and others have been calling for in Greece, Spain, Portugal, and other countries threatened by too much debt. Spain responded to this pressure. And just because it did, Fitch Ratings downgraded it. Brian Coulton, Fitch's person in charge of ratings for Spain, said in the statement downgrading Spain: "The process of adjustment to a lower level of private sector and external indebtedness will materially reduce the rate of growth of the Spanish economy over the medium-term."

So there it is - damned if you do, and damned if you don't. The financial speculators have created a disastrous fall in the world-economy. The ball was then thrown to the states to solve the problem. The states have less money and more demands on them. What can they do? They can borrow, until those who lend money won't do it, or demand too high a rate of interest. They can tax, and the businesses say that this will cut back their ability to create jobs. They can reduce expenditures. And in addition to the terrible pain this inflicts on everyone, but especially on the more vulnerable, this action also will reduce the possibility of growth, as Mr. Coulton points out for Spain.

Of course, there is one big place to reduce expenditures - the military. Military expenditures do provide jobs but far fewer than if the money were used otherwise. This does not apply only to the biggest spenders like the United States. A virtually uncommented aspect of Greece's debt problems was its heavy expenditure on the military. But are governments ready to reduce significantly military expenditures? It doesn't seem too likely.

So, what can the states do? They are trying one thing today, and another thing tomorrow. Last year, it was stimulus. This year, it's debt reduction. The year after, it will be taxation.

In any case, the overall situation will be worse and worse.

Can China save us? Stephen Roach, Morgan Stanley's very acute analyst, seems to think so, provided the government "stimulate(s) private growth." In that case, rising wages will be offset by higher productivity. Maybe. But the Chinese government has been resistant to such a policy up to now, not for economic but for political reasons. Its drive to maintain political stability has been paramount up to now. Furthermore, even Roach has one great fear - China-bashing in Washington leading to trade sanctions. Myself, I think that's a high probability, as the U.S. economic situation continues to deteriorate.

The way out of all of this is not some small adjustment here or there - whether of the monetarist or the Keynesian variety.

To emerge from the economic box in which the world finds itself requires a fundamental overhaul of the world-system. This will surely have to come, but how soon?

Monday, 14 June 2010

Danny Dorling on the social segregation in Britain revealed by the election

Our divided nation
Danny Dorling
New Statesman 14 June 2010

Analysis of voting in the 2010 election shows that Conservative Britain is becoming ever more of a fringe, restricted to very few parts of the country.

Imagine for a minute that you are holding an invisible knife. This is a bit like Adam Smith's invisible hand of the market, but a little more real, efficient and effective. You are holding the knife of geographical equality, and will use it to spread something rather than cut. You are about to take the result of the 2010 general election and change history. You are not going to alter a single adult's vote, but you are going to change where they voted. You will swap them with someone who chose to abstain and, by doing so, will smooth out the Tory vote on 6 May.
An analysis of the election results by constituency shows that the Conservatives won 10,683,528 votes that Thursday, equating to 36.9 per cent of all votes cast and 305 seats (not including the Speaker's constituency or the delayed Thirsk and Malton election). Suppose they had won exactly 36.9 per cent of the vote in each seat; the same number of votes overall, but evenly spread. This is what you need the knife of geographical equality for.

What the knife does, as you scrape it across the land, is pick up Tory voters from places where they are more numerous than usual and deposit them in towns where they are lacking. At the extreme, some 14,772 would have to be moved into Dunfermline and West Fife to ensure the 36.9 per cent quota, but most of these could be found from the 13,815 surplus Tory votes in Richmond, North Yorkshire, the seat with the most "wasted" votes.

What effect would the knife have had on the result? The Liberal Democrats would have won 72 seats instead of 57. Labour's number would have stayed the same overall at 258 and the Conservatives would have won only 293 rather than 305. A Lib-Lab coalition could have commanded 330 seats instead of the measly 315 that was contemplated as a block.
But the crucial figure is not how many seats the Tories might have lost, had their support been evenly spread, but how many of their voters would have had to move seat in order for their vote to count. The answer is 1,751,646. That's 16.4 per cent of their entire vote, a percentage which can be called the "segregation index". The Tory vote has not been more unevenly spread since 1918 (at 19.3 per cent). Even as they become more numerous, Tory voters are growing more geographically isolated.

Swing where you're winning
The isolation of Conservative voters has been growing steadily since 1979, when it was half the current level. After it last reached a peak in 1918, it fell, almost continuously, through to 1959. At the same time, the country became less socially and spatially polarised. Wealth and health inequalities narrowed along with those in voting, which became much less of a geographical matter.

From 1959 through to February 1974, the level of Tory segregation remained stable, never going above 9 per cent. In the 1960s and early 1970s, there were Tories everywhere. One-Nation Conservatives had support up and down the country. Then, in October 1974, the segregation index lurched up to 10.7 per cent. New Conservative voters in the Home Counties swung the party's support heavily southwards, while in the north and west it fell. The Tories may have lost that election, but their support had changed geographically and taken the first step on the road towards ever-rising segregation across Britain.

One-Nation Tories felt the cold wind of change. Margaret Thatcher was appointed leader of the opposition the following year. In 1979, she secured her first victory and then, in every general election that followed, including 2010, Conservative support overall increased slightly more where it was strongest to begin with. The segregation index increased the most in 1997, to 13.9 per cent. These may have been "wasted" votes, but they were also one of the many ways in which the 1997 election was no break from the past.

In May 2010, it was voters in the best-off constituencies who swung most firmly towards David Cameron, even though so many in those places already voted for his party. He failed to secure an overall majority because support was lacklustre in the marginal seats. The last Tory leader who saw the segregation level of his or her vote fall while in office was Ted Heath in the early 1970s. In 2010, support swung away from the Tories where it had already been lowest in 2005.
What does this say for the future? It tells us we are living in remarkable times. The segregation of the Tory voter is greater now than it was in 1922, and it has been that high and rising since 2001. That the Conservatives won the largest minority of seats in a general election, while seeing the greatest increase in support where they needed it the least, shows how little empathy most people in Tory shires now feel for those who live in the cities, or the north, or the countries outside of England.

Kings of the hill
In Sheffield, where I now live, it felt like an apathetic election. Hundreds of volunteers were pushing leaflets through doors, but there seemed to be fewer posters than before, despite that brief spell of Cleggmania infecting his adopted city. A few days before the election, I went back to Oxford East, where I grew up, and was shocked to see so many Labour posters again. Perhaps I should not have been surprised when people in that constituency gave an overall swing to Labour.

I also went to nearby Witney, Cameron's seat, and passed posters for Ukip and the Tories (marking out the field boundaries of wealthy farmers, rather than council estates). I asked people there what they thought would happen to the economy after the election and some told me a flood of cuts was coming, but Witney was (metaphorically) "on a hill" and would be OK, especially if they voted for "Dave".

The people of Oxford East have been surrounded by Conservatives for generations. With hindsight, it is not surprising where voters swung; but these two Oxfordshire seats represent in microcosm what has occurred across the country. Those who have most have voted to try to hold on to as much as they can. Those who have less have not been fooled.

The previous 1918 peak is almost 3 per cent higher than today's figure, so there is a precedent for the country to become even more geographically divided. But 1918 was a very strange election (see box left). In many other ways, we have already become more unequal than we were then - in terms of what matters (health) and what we think matters (wealth).

The early casualties of the cuts are the poorest in Britain, who have already disproportionately lost their jobs and their chances of a better home, or even of a holiday, this year. Fear drove those who have the most to vote in greater concentrations to cling on to what they've got.
We all need a politics we can better trust. In more equitable times, we didn't need the knife of geographical equality to help us understand elections. But then, people who voted for different parties lived nearer to each other.

Danny Dorling is the author of "Injustice: Why Social Inequality Persists" (Policy Press, £19.99)

Neal Lawson urges pluralism

Out of one party, many cultures
Neal Lawson
New Statesman
Published 10 June 2010
If Labour is to survive in the age of new politics, it must transcend its instincts to descend into crude tribal tactics and learn to be more plural.

In the run-up to the 1997 election, during discussions about a possible alliance between Labour and the Liberal Democrats, Paddy Ashdown asked of Tony Blair: "Is he a pluralist?" The answer, we eventually learned, was "No", but the question as it relates to the car crash of a party Blair left behind remains pertinent. Can Labour become a pluralist party? The answer to the question will seal its fate.

The fight for Labour's future is not just between right and left, but critically between pluralists and their opposites, the tribalists. It is a struggle between different ways of conceiving power and doing politics. It is existential. What are the differences between pluralists and tribalists? Why do they matter, and can pluralists win?

Let's start with the dominant strain within Labour's diminished ranks. For the tribalist, power can only be singularly held and, because the winner is deemed to take all, means are readily used to justify ends. It's not how you achieve power that matters, but only whether you have and can hold on to it. Power is captured through the party and then the state, whose functions are then used to dispense social democracy from the top down.

Social democracy is thus defined as what Labour governments do, even if they are seldom social and never democratic. Change is done to people, not with people. The political game is to draw clear dividing lines between yourself and any enemy, internally or externally, who wants to stop you gaining a monopoly of power. Dissent, opposition, rivals and debate itself must be crushed. For the tribalist, if Labour doesn't say it or do it, it isn't progressive. The party has a monopoly of wisdom.

Tribalism comes from a mix of vanguardism, as practised by Leninists and old-style Fabians, and rigid class analysis. History is on the party's side. All it has to do is seize control of the state. After four failed general election attempts at such seizure, it was easy for the New Labour vanguard to take over the party in the mid-1990s. But this time, the historic certainty was the inevitability of free-market globalisation.

Tribal Labour desires predictability, certainty and, above all, control. It is a politics of pagers, whips, targets and iron discipline. Everything is subject to control from the centre: the cabinet or its shadow, the parliamentary party, the National Executive Committee, party conference, parliamentary selections, devolved administrations and even Iraq and the economy. It is a culture that cuts across the left and right of the party. It is a technocratic, managerial, brittle, rationalist machine that, by definition, is profoundly anti-democratic. It desires a monoculture that is partisan, paternalistic and graceless. It is the politics of an uncompromising and relentless search for singular power. If you can command, you control.

Together as one
Pluralists are different. They give primacy not to ends, but to means. For the pluralist the process and the journey are everything. Change for pluralists comes through dialogue, respect, trust, tolerance and interest in others. Pluralists recognise a political terrain of multiple centres of power and celebrate difference as a dialectical force. Through debate and consensus-building we learn. We need to work with others, not destroy them. That doesn't mean fundamental differences don't exist; it does mean that little is black and white. We can co-operate and compete. Pluralists are self-critical, curious and often ambivalent about a world that is increasingly complex and paradoxical. Like the tribalists, pluralists span the left/right internal party divide, but they borrow heavily from Gramsci: politics is about securing hegemony in a war of manoeuvre involving many spaces, not a war of position in deep-cut trenches.
The abiding quest of pluralists is to create spaces in which people can determine their future collectively. These are spaces such as trade unions, mutuals and co-operatives. Pluralism is about letting new things happen on a journey of trial, experiment and failure. Democratic engagement may take longer to reach a conclusion than a central diktat, but results in more effective outcomes, precisely because these are negotiated by people who use and produce services.

While tribalists rely on control of a machine that eventually leaves them marooned and detached, pluralists know that shared answers are more enduring and that, once people have struggled to win advances through pluralistic spaces, they are more likely to fight to keep them. What matters is the ability to participate in the process, to find the resources and structures to search for genuine collective freedom to manage our world.

Obviously, I am exaggerating - no one is entirely tribal or totally pluralist. But it is clear that Labour remains a largely tribal party in an age that is increasingly pluralist. Brownites tend to be among the least pluralist, while some Blairites support proportional representation - the litmus test of pluralist credentials, because it denies power without securing strong and enduring majoritarian support - and open pre-election negotiations.

Gordon Brown had a palpable fear of public conflict. Debate was to be avoided at all costs, hence the remorseless sidelining of all pretenders to his crown. He would not fight Blair and no one would be allowed to fight him. Blair himself appeared more open, but as Ashdown found to his cost, the veneer was thin. Under Blair and Brown, party democracy was hollowed out and links to other progressive forces dried up. At the very most, they believed that five people could change the world.

All tomorrow's parties
Yet politics is changing. In 1951, the two main parties secured 98 per cent of the popular vote; this year it was 65 per cent. With the smaller parties (including the Liberal Democrats) winning more than 80 seats, hung parliaments, even under the current system, will surely become a regular feature of elections. Labour will have to be prepared to form alliances or remain in the wilderness. Today, across Britain, seven different political parties are in office. Facebook, Twitter and satirical sites such as mean that neither a party's central command nor the Sun can win it any more.

Tribalism and the elitism that goes with it have cut Labour off from its core base; witness the former prime minister's clash with Gillian Duffy in Rochdale, the defining moment of the election campaign. Labour has become the lumbering party, the arrogant party. Compare and contrast with the coalition government, which may be on the centre right but is pluralism in action: the merging and potential strengthening of political cultures and traditions. The days of catch-all left-of-centre parties such as Labour and Germany's once-mighty Social Democratic Party (which won only 23 per cent of the vote in the last election) are over. In Sweden and France the left is renewing only on the basis of broader red-green coalitions.

Back in 2001, in a book optimistically entitled The Progressive Century, the Lib Dem adviser Neil Sherlock and I described the potential of a new politics, requiring not Blair's suffocating big tent but a campsite of different parties and movements, sharing common values while retaining their own identity. Labour can - indeed, it must - take a lead role as part of a progressive alliance, but only if it can move away from a belief in its singular and exclusive role. Only then can it help to create an alliance whose sum is greater than its parts. This would not be a rainbow alliance of vested interests but a genuine coalition because of a shared set of values.
In the meantime, the poor get poorer and the planet burns; and the inability of our political system to deal with these crises creates a third - that of democracy itself. A progressive alliance can be built from the growing recognition that we cannot create a more equal, sustainable and democratic world by addressing any one of these issues in isolation.

But can the pluralist win? Can the ambivalent, curious, generous and open-minded succeed against the take-no-prisoners approach of the tribalists? On one level, the omens aren't good. In every crisis that Labour has faced, notably in 1929 and 1979, it has retreated into tribalist orthodoxy. Today the party has once again been pushed back into its heartlands. One MP sent me an email when the post-election talks with the Lib Dems broke down, in which he gleefully said that it was time, comrade, for hobnail boots, not sandals.

For inspiration and guidance, we should return to Gramsci and his understanding of political turning points, or of interregnums, the short space between an old order dying and the emergence of something new. Tribal orders feel insurmountable, but can fall fast because they are so brittle. They can't be scratched, yet under continued pressure they can suddenly snap.

Hello to Berlin
Over the coming months and years, Labour needs a "Berlin Wall" moment that will help transform it into a pluralist party. To make such a fundamental shift happen will require sustained effort to win the larger argument about how we can best transform Britain into a more equal, sustainable and democratic nation. Ironically, it was Lenin who said that "the right words are worth a hundred regiments".

The Holy Grail of pluralism - proportional representation - is again off the agenda, but we cannot allow ourselves to be constrained by electoral systems. We must instead understand that it is culture, ideas and organisation that need to change first. All of these we can shape and build. We have to pre-empt a more pluralist politics by practising it, and show it works by submitting ourselves and our institutions to continual democratic scrutiny.

The leading social-democratic theorist Eduard Bernstein wrote that "democracy is both means and ends. It is the weapon in the struggle for socialism and it is the form in which socialism will be realised." Through pluralism, we can seek to remoralise public institutions as places in which the values of equality, solidarity and citizenship resonate.

Pluralism can't offer certainty - it is always unfinished business - but it is our business. Pluralism is the only way socialists can be. Fundamentally, it is about trusting people to make their own democratic future. Unless we get that right, everything else will go wrong.

Larry Elliott: lunatics back in charge of economy

The lunatics are back in charge of the economy and they want cuts, cuts, cuts
Franklin D Roosevelt's mistake wasn't boosting the economy with government spending, it was heeding the advice of the deficit hawks when he sought re-election and tipping the US economy back into recession

Larry Elliott, economics editor
The Guardian, Monday 14 June 2010

The Germans are doing it. The Greeks, the Spanish and the Portuguese believe they have no choice but to do it. George Osborne believes it is his patriotic duty to do it. Around the world, cutting budget deficits has become the priority for policymakers fearful that rising debt levels will leave them at the mercy of capricious financial markets.

Mervyn King has applauded the return of fiscal conservatism. So has the Organisation for Economic Co-operation and Development. Two months after they urged that budgetary support be maintained until recovery was fully entrenched, finance ministers and central bank governors from the G20 said they welcomed the plans announced by some countries to begin deficit cutting without delay.

Budget deficits are certainly high across the G20 and beyond. But they are high primarily because of the severity of the worst recession since the second world war and because of the action taken collectively by governments to prevent that recession turning into something far, far worse.

As things stand, a second Great Depression has been averted, but growth has ranged from the weak in Europe to the unspectacular in the United States. Banks are not lending. Unemployment is running at near double-digit levels in the US and the eurozone. The determination to cut budget deficits in these circumstances does not show that policymakers of probity and integrity have replaced the irresponsible spendthrifts of 2008 and 2009. It shows that the lunatics are back in charge of the asylum.

As evidence, take David Cameron's warning last week about the need for austerity. The prime minister said: "Nothing illustrates better the total irresponsibility of the last government's approach than the fact that they kept ratcheting up unaffordable government spending even when the economy was shrinking."

This brought the apt riposte from Marshall Auerback of the New Deal 2.0 thinktank. "So we're supposed to ratchet up government spending when the economy is growing? When it can present genuine inflationary dangers? If this is the type of policy incoherence we have in store, then God help the United Kingdom."

There are economically literate members of the government capable of pointing out to the PM that he is talking dangerous nonsense. Vince Cable is one. Chris Huhne is another. Sadly, though, the Liberal Democrats seem unwilling or unable to mount an argument against policies that now threaten to repeat the mistakes of Japan in the 1990s, when every tentative recovery was snuffed out by over-hasty retrenchment.

Let's start with a bit of history. The budget hawks like to cite Geoffrey Howe's draconian 1981 budget as evidence that fiscal tightening is perfectly consistent with economic growth. So it is, providing there is scope for an over-valued pound to depreciate and for excessively high interest rates to be cut. So it is, provided that tumbling oil prices raise the real incomes of consumers and cut costs for businesses. All these things happened in the early 1980s; none of them are likely to occur now. The pound has already fallen by 25%, interest rates are at 0.5% and oil prices show no sign of falling much below $70 (£48) a barrel.

The real historical comparison is not with 1981 but, as the American economist Paul Davidson notes, with the US in 1937. On arriving in the White House in 1933, Franklin D Roosevelt used government spending and tax breaks to boost the economy. The US ran deficits of between 2% and 5% during FDR's first term but, while the economy started to pull out of the deep trough reached in 1932, the national debt rose from $20bn to $33bn .

Coming up for re-election, Roosevelt heeded the advice of the "sound money" economists who delivered the same sort of warnings that we are hearing today: the US was running unaffordable budget deficits that would impose an intolerable burden on future generations. The budget for 1937 was slashed and the US economy promptly went back into recession. Falling tax revenues meant the budget deficit rose to $37bn.

When deficit spending resumed in 1938, the economy started to grow again but did not fully recover until the US entered the second world war. The deficit hawks disappeared into obscurity as the need to win the war trumped all other considerations. By 1945, the US budget deficit stood at more than $250bn or 120% of GDP.

But the beneficial spin-off from the war effort was that the domestic economy was humming. Resources that had stood idle in the 1930s were fully utilised and there was full employment. Strong growth brought both the annual deficits and the size of the national debt down in the 1950s. Far from being burdened with unpayable debt, the baby boomers born in the late 1940s and 1950s were the most blessed generation in history.

That's enough history. Just as in 1937, private demand in most advanced countries is too weak to sustain the recovery. Budget deficits are a reflection of high unemployment and low levels of private investment. They are also a reflection of the big financial surpluses that have been amassed in the private sector. Animal spirits, in Keynes's phrase, are low. Consumers are worried about losing their jobs and are having their incomes squeezed. That makes businesses anxious about investing.

Charles Dumas of Lombard Street Research has put some hard numbers on this trend. In the US, the private sector was in deficit by 4% of GDP in 2006 but is now running a surplus of 8% of GDP. In Britain, the corresponding move was from a 1% deficit to a 10% surplus. He estimates that the global private sector surplus is now $3.3 trillion.

These are counter-balanced by public sector deficits that also total $3.3tn. The public sector, in other words, has been compensating for a lack of private demand. This spending was not "irresponsible", although a collective attempt to rein in deficits when the private sector recovery is so anaemic certainly would be.

Dumas notes: "If some countries deflate their economies in an attempt to cut their government deficits, other countries will have a larger deficit – and even the deflating countries will be partially frustrated in their endeavours. Why? Because they will induce a renewed recession that will hammer tax revenue and enforce greater relief spending." The result, he warns, "will almost certainly be renewed European recession, quite possibly a prolonged depression".

So why are they doing it? Is it, for all Nick Clegg's guff about "progressive cuts", that the real agenda is to complete the demolition job on welfare states that was started in the 1980s? Or is simply that the deficit hawks are simply crackers?

Either way, we now have the bizarre spectacle of China, Japan, the eurozone and Britain all set on reducing budget deficits while simultaneously pursuing export-led growth. This is a logical absurdity because somebody, somewhere has to be importing all the exports. If the rest of the world assumes that the US is once again going to become the world's spender of last resort it is seriously mistaken.

Paul Krugman calls this "utter folly posing as wisdom". Sovereign debt problems are confined to those eurozone countries that have no way to deal with their productivity problems other than to deflate savagely. Bond markets are not freaking out about budget deficits in Britain, the US or Germany, but let's see how they react to a return to the mass unemployment, protectionism and political extremism of 1930s.

Wednesday, 9 June 2010

Stuart White maps the new politics

Where does the Coalition stand on the new ideological map?
Stuart White, 9 June 2010

About the author
Stuart White is a political theorist with an interest in ideas and their application. His research analyses political ideals such as social justice, equality and liberty and considers the kind of policies and institutions that advance these ideals. He lectures at Oxford University and blogs at Next Left.

Last year I tried in an article at Next Left, later revised for the New Statesman, to map the main new ideological currents in British politics, in particular those influencing debate amongst self-defined ‘progressives’. How far does the map I offered back then – tentatively and provisionally – help us understand the new political terrain we are now on? How, for example, does the Coalition stand in terms of these currents? Labour? Other, non-party groupings?

In the original article, I identified four currents of thought:

(1) Left communitarianism: ‘We need a social vision that acknowledges and celebrates our interdependence. This will emphasise solidarity and mutuality against the atomistic individualism of the right. We need to tackle economic equality and restate the case for ambitious collective action, while also recalling that social democracy begins, not with the state, but in the everyday cooperation of civil society. The market must be kept firmly in its place, which is not in the public sector.’

(2) Left republicanism: ‘The task of progressive politics is radically to disperse power and opportunity and to build a participatory and deliberative form of democratic politics. This requires restructuring the state so that individuals participate more directly in decision-making. It requires the cultivation of a grass-roots social-movement politics. It also requires a new politics of ownership, one that seeks both to widen individual asset ownership and to democratise the control of capital.’

(3) Centre republicanism: ‘The task of progressive politics is radically to disperse power and opportunity. This requires restructuring the state in a much more decentralised direction; individual empowerment in public services; a wider distribution of assets; and a stronger policy of protecting - indeed, expanding - civil liberties and lifestyle freedom. The left should get over its fixation on high taxation of labour income and put more emphasis on taxing unearned wealth and environmental bads.’

(4) Right communitarianism: ‘The urgent task is to fill the moral vacuum created by a combination of neo-liberalism in the economy and lifestyle liberalism in society. This requires that we rebuild a strongly moralistic civil society to meet social needs that neither the free market nor the conventional welfare state can meet. To this end, we must build a new political and economic localism. We must ‘recapitalise the poor’ in order to empower them to crawl out from under the welfare state, and the welfare state itself must be cut back.’

The Coalition

The Coalition government can be seen, I think, as drawing on – without in any way being reducible to - right communitarian and centre republican currents.

Right communitarianism is represented by people such as Iain Duncan Smith and by those, such as Philippa Stroud, whom some are now calling the ‘theo-cons’ at the Department of Work and Pensions. Outside of the government machine, Red Tory Phillip Blond stands ready at Respublica to offer advice.

Centre republicanism, as I termed it, has strong affinities with ‘Orange Book’ liberalism, and it is striking that one of the think-tankers I linked to this current, Richard Reeves, has now become Nick Clegg’s advisor on political strategy. Indeed, the Demos pamphlet, The Liberal Republic, co-authored by Richard Reeves and Phil Collins, has been cited as something civil servants have been required to read to get a handle on the Coalition’s overarching philosophy.

The marrying of right communitarianism and centre republicanism is obviously not without potential for conflict. There are some possible points of agreement. Both can agree on the desirability of concerted action to achieve a wider distribution of assets, for instance. But the Reevesian ‘liberal republic’ celebrates a lifestyle liberalism with which right communitarianism is deeply uncomfortable. Phillip Blond spent a good part of the past year, and his book Red Tory, fulminating against the evils of hedonistic, nihilistic, liberalism – not just a particular form of liberalism, but liberalism as such. In a remarkable episode of high-speed ideological reappraisal, Blond then discovered in a Newsnight interview on the first full day of the new government that Red Toryism is, after all, compatible with ‘liberalism’, finding common ground around the theme of the ‘Big Society’. We shall see.

And while both currents might be there in the Coalition mix, we should emphatically not see the Coalition as simply a marriage of the two currents. For there are other, potentially more powerful elements in the mix. Given their commitments to spreading asset ownership, I cannot see how right communitarianism or centre republicanism could support abolition of the Child Trust Fund (see Nick Pearce in OK). But the Coalition did abolish it, almost immediately, reflecting a particular brand of pragmatism that is tacitly grounded in Thatcherite assumptions about the state and the economy. If one wants to understand the ideology of the Coalition look at George Osborne. Right communitarian? Centre republican? Pragmatic Thatcherite? The question answers itself – a point to which I shall return below.

Labour and the leadership question

What about Labour? The leadership race offers an excellent opportunity for Labour to reflect on its public philosophy. To date, however, none of the candidates has articulated a very clear vision of what a future public philosophy might look like.

By contrast, Jon Cruddas, who is not standing as a candidate for the leader’s job, has written suggestively on this. In my original article, I associated Cruddas with left communitarianism. In his recent article in the New Statesman, co-authored with Jonathan Rutherford, Cruddas can be seen as integrating left communitarian and left republican concerns. There is a new emphasis on liberty and democratic renewal in this article which resonates with left republican concerns. At the same time, Cruddas continues to draw attention to the importance of reciprocity and locality to social democratic politics, reflecting a communitarian – or what he would prefer to call ‘ethical socialist’ - outlook. David Lammy, writing for Fabian Review, is also developing an interesting synthesis of communitarian and republican ideas.

In addition the emphasis that both David and Ed Miliband, leadership candidates, have placed on rebuilding Labour as a community-based, campaigning party, learning from the example of organizations such as London Citizens, represents a promising – and very practical - coming together of communitarian and republican themes.

However, integrating republicanism into Labour’s public philosophy poses considerable challenges which should not be underestimated. For example, just how far is Labour willing to go as a party of democratic renewal?

The nub of the question is this: Does Labour think of political success in terms of the return of another majority Labour government? Or does Labour think in terms of being part of a wider left or centre-left politics and in terms of a future progressive coalition government? Much of the discussion of the party’s future still seems to assume that the goal is the return of a majority Labour government, a way of thinking that is really quite at odds with the reforms, e.g., proportional representation, which are necessary for genuine and fundamental democratic renewal.

The new democratic activism

This brings us to what might be called the new democratic activism: the activism of groups such as Take Back Parliament and Power 2010, coming out of the tradition of Charter 88.

Far more than any political party, it is this new activist movement which represents ‘republicanism’ in contemporary politics. It has connected most closely with the Liberal Democrats of the three main parties. But the new democratic activism emerged independently of the Lib Dems, and it will remain independent – particularly now that the Lib Dems are locked into a government that will, inevitably, disappoint a lot of the hopes of new democratic activists.

Is the new democratic activism left or centre republicanism? (Or some other kind of republicanism?)

One cannot say. For it is a feature of the new democratic activism – and this is an observation, not a criticism - that it treats questions of political and constitutional reform as a self-contained ‘module’, detached from, say, questions of political economy. Take Back Parliament is a campaign for ‘Fair Votes’. It draws on an activist base which wants a state grounded in real popular sovereignty, in which state power is more widely dispersed, transparent and accountable, and respectful of civil liberties. But these commitments are compatible with a wide range of philosophical views on citizenship and the economy. They can fit with a left republican agenda which also wants to make the power of capital accountable. Or they can fit with a right-libertarian politics which simplistically sees ‘the state’ as the problem and seeks to ‘shrink’ the state in the name of liberty. Or they can fit with any number of other positions.

Looking ahead

Looking ahead – and thereby sticking my neck out - I do not expect right communitarianism or centre republicanism to be that important in determining the final character of the Coalition.

The Coalition does not represent the ‘end of Thatcherism’. To be sure, Cameron is a Tory politician in what David Marquand calls the ‘Whig imperialist’ tradition and, as such, he is not a dogmatic or doctrinaire politician in the way that the Thatcherites of the 1980s were. In that sense Thatcherism is indeed dead. But the thing about Whig imperialists is that, precisely because they are so undoctrinaire, so untheoretical and ‘pragmatic’, they adapt to their ideological surroundings, to the prevailing ‘common sense’. And the ‘common sense’ surrounding Cameron and his allies, as of so much of the political elite more widely, is in its essence a Thatcherite one: the state is the problem, markets work, taxes should be lowered, unions should be weak, etc. These assumptions, grasped as a sensibility rather than as a theoretical dogma, will be the major force shaping the government’s character. Thatcherism had to be doctrinaire in the 1980s because it was then an insurgent public philosophy battling to displace the conventional wisdom. Now it is the conventional wisdom. So its continued success is quite compatible with the ascendancy of undoctrinaire, pragmatic politicians.

In short, I expect this to be a government of Thatcherite consolidation: a government that consolidates Britain’s adherence to neo-liberal economics and which tries to use the fiscal crisis as an opportunity to push an anti-state agenda further. This is entirely consistent with modest tempering of free-market excesses in specific areas, e.g., banking – just as New Labour tempered excesses in other areas, e.g., in the distribution of income via generous tax credits, while also preserving key elements of the post-Thatcher settlement. The Liberal Democrats are not in a strong position to resist any of this, not least because their own ‘Orange Book’ liberals share much of the Thatcherite analysis.

Right communitarianism is potentially important in rhetorical terms as providing the government with a distinctively non-Thatcherite, ‘compassionate’ way of talking about problems of poverty - even as the practice of welfare reform is to intensify coercive pressures on the most vulnerable in the labour market. And centre republican discourse can of course be used to argue for new experiments in the public services, such as Michael Gove’s agenda for schools. Admittedly, this requires that one accentuate the more individualistic aspects of republican thought almost to the exclusion of the democratic aspects – but Reeves’s conception of republicanism has always had something of this bias.

On the other hand, a creative coming together of left communitarian and left republican currents might yet offer a way of truly bringing the age of Thatcher to an end.

But while this fusion can probably be made philosophically, it is harder to make it happen politically. It will require a willingness on Labour’s part – of which there is as yet little sign - to accept a new, pluralistic electoral politics, a politics of red/green or red/orange or red/green/orange coalitions. And it will require a supporting context of campaigning activism that engages with social, economic and environmental issues with the same idealism, imagination and generosity of spirit with which the new democratic activists campaign for the reconstitution of the state. Of course, some of that activism is there already. But we need so much more of it.