Political strategy not just moral argument: the conditions for advancing a more 'responsible capitalism'.

AuthorCooke, Graeme
PositionEssay

In the aftermath of the financial crisis, it has almost become a cliche for people on the Left to argue that we need a 'new economy'. The ease with which this claim is made obscures the enormous task of actually achieving it. The fundamental character of British capitalism has shifted in a decisive manner only twice in the last hundred years. In both eras underlying sociological trends created pressures for reform that were harnessed in support of purposeful political action. In the 1940s, a generation of moderate welfare capitalism was spurred on by the legacy of Depression, the fallout of War, and the growing power of organised labour (both in the workplace and at the ballot box). In the 1980s, the foundations for the neo-liberal shift grew from declining domestic competitiveness, an increasingly open international economy, alongside major demographic and occupational trends which undercut both support and legitimacy from the Keynesian settlement.

In each of these periods the underlying economic, social and cultural forces which propelled change forward were real, but their political expression and consequences were not predetermined. Both the Attlee and Thatcher governments transformed the British economy through the mobilisation of substantial state power, allied to rising sources of political energy in society, underpinned by ideological agendas and governing projects which chimed with the spirit of their times. History has shown that such decisive shifts in our political economy are both difficult and disruptive. There are always strong forces acting against change and, if these obstacles can be overcome, significant dislocation is almost inevitably wrought in its wake, as an old order gives way to something new.

In his speech to this year's Labour Party conference, Ed Miliband pinned his leadership of the Party to the goal of advancing such a paradigm shift. He argued that there are serious and long standing weaknesses in Britain's current economic model and called for a more 'responsible capitalism' in its place. This followed an article by Stewart Wood, a senior adviser to the Labour leader, on the failures of neo-liberalism and the need for a different economic philosophy and approach (Wood, 2011). These moves mark a break from Labour's recent past and constitute a clear statement of political intent. Subsequent interventions suggest that Miliband intends this agenda to define his leadership (Miliband, 2011, 2012). The scale of ambition is nothing short of achieving in the years ahead for the Left what Mrs Thatcher delivered for the Right in the 1980s.

This argument has divided opinion. Many have welcomed it as a timely reassertion of social democracy's historic role in correcting the inherent deficiencies of capitalism. Others have been more critical, pointing to the absence of a substantive policy agenda to deliver a more 'responsible capitalism' and questioning whether it is an electorally plausible pitch. In between, some of those sympathetic to the agenda wonder whether it could be expressed in more 'everyday' terms, which the focus on living standards for the majority of working people begins to achieve. However, to develop a new line of thinking, this essay sidesteps the debate about whether Ed Miliband is right to argue for a more 'responsible capitalism' - or whether he has framed the argument in the best way. Instead, it takes the case made by the Labour leader as given so as to focus on what has received far less attention: the necessary conditions for actually advancing the political change for which he has argued.

Indeed, the contention developed here is that Ed Miliband's desire for 'responsible capitalism' is not yet attached to a political strategy with the potential to win, govern and change the country. Without this, short term steps to fill a policy gap or strengthen a polling position are highly unlikely to hit the target. The economic convulsions of recent years have undoubtedly created new spaces for reform, as the existing settlement fails to deliver for large sections of society. However if the structure and nature of British capitalism is going to be reshaped in the years ahead it will take more than a moral argument, more than 'vision' and 'values', and certainly more than the occupation of St Paul's Cathedral to make it happen.

The volatility of the last few years leaves all political parties and ideological traditions struggling to come to terms with the new context. The future direction of British politics is up for grabs in a way that has not been the case for a generation. The political forces which will shape this emerging era - and then prosper in it - will be those which are successful in defining a new common sense and offering plausible way forwards. If the Left is to lead in this period of flux - rather than simply opposing and reacting - it must remember that politics is as much a struggle for power as a battle of ideas. And that means dealing in the currency of political strategy, where it is agency, alliances, institutions and interests that count.

To illuminate this insight, IPPR has spent the last year investigating the 'political sociology' of modern Britain, by which we mean the sources of energy in society which shape the context in which politics is contested. In particular, we have been exploring the major shifts in the economy, society and culture since the emergence of New Labour in the mid-1990s (Cooke, 2011). This lens suggests that the most effective political projects are guided...

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