A new political landscape: a different double shuffle?

AuthorCoates, David

If political movements are to have futures, those who lead them have to understand the dynamics of time, and their own place in the constellation of things. But historical vision is difficult for those immersed in the detail of the here-and-now; which is why it is vital that intellectuals on the left bring the longer story to the table. Three times in my lifetime, we have been at the point we are now, three times when the political consensus across the aisle was virtually total. In the 1960s everyone was a Keynesian. In the 1980s, Thatcherism held sway. Now even David Cameron is a Blairite. Third way orthodoxies are currently unchallenged within governing circles in the UK: but they need to be challenged, because like Keynesianism and Thatcherism before them, they will have a very short shelf-life. If social democracy is to have a future, it will need to leave those orthodoxies behind. The purpose of this piece is to contribute to an understanding of why that is so, and how it might yet be effected.

New directions?

We live in an age of political certainties, and we have for quite a while. Margaret Thatcher used to make a virtue of never 'u turning'. 'You turn if you want to', she once told an adoring Tory party conference, 'the lady's not for turning'. Nor, it would appear, is Gordon Brown. For a decade he has made a virtue of prudence, following self-adopted golden rules that have kept public spending within tight and predictable limits; and for that same decade he has argued consistently for a resetting of the European social model. Faced with the inevitability of intensified competition from Asia's two new giants--China and India--Brown has consistently argued, as did Thatcher before him, that European governments should not go back to the failed policies of the 1970s. There must be no picking of industrial winners, no subsidization and management of national industrial champions, no wrapping of any protective wall of collective labour rights around a left-wing electorate. Instead of old-style industrial policy, governments of the centre-left need to do what Thatcher did--create flexible labour markets--and do what Thatcher did not, invest on a large scale in human capital.

Only through the creation and development of a high-skilled and flexible labour force, so the orthodoxy goes, can the EU in general (and the UK in particular) hope to out-compete Asian importers who currently rely on an endless supply of cheap and unskilled labour, but who are themselves increasingly developing high-tech, high-skilled, high value-added industrial sectors. We are locked, Gordon Brown has argued, not in a race to the bottom, as the jeremiahs have it, but in a race to the top; and the question is--are we up to the challenge of that race? His argument is that we are--or can be--if we pursue 'policies that promote openness and opportunity for all ... greater flexibility in product markets, labour markets and capital markets ... Structural reform that promotes flexibility and fairness together'. Brown is insistent that, in the new globalized economy, the key policy choice facing European governments is not one between old-style protectionism and unregulated market competition. Rather, it is a choice between those two and a third, more progressive alternative--a third way built on 'modern social and labour market policies geared towards promoting opportunity and employability, through the provision of skills and steps to promote workforce flexibility'. The future lies, we are told, with economies and industries that are both knowledge-driven and endlessly receptive to new challenges and opportunities. The role of social democracy is to equip its people with that knowledge, and to facilitate that innovative flexibility. We don't need a fourth way. We have a viable progressive third way in our hands already--one that guarantees that 'flexibility and fairness' can be advanced together (Brown, 2005).

But do we, and can they? I think not.

The limits of progressive competitiveness

Why? For these two reasons at least. First, that even if this combination of re-skilling and enhanced labour market flexibility were to work, its consequences would hardly be progressive. Equipping people with skills doesn't guarantee them permanently rising wages. If history tells us anything, it is that wages rise when skills are in short supply...

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