One Nation Labour and the search for an economic narrative

I have spent some time carefully reading Jon Cruddas and Jonathan Rutherford’s pamphlet One Nation: Labour’s Political Renewal.  It aims to give an overarching rationale for the outcome of Labour’s policy review.  It is ambitious and in many respects offers a powerful diagnosis of a society that has become disillusioned, impoverished, unequal, unambitious.  There are many fine things in it.  It’s also fair to say that much of the material is familiar; it talks of a more communitarian approach to politics and policy-making.  Its tone – with copious references to previous writers on right and left – aims to be serious and philosophical.  But, however close some passages come to providing a serious and rational agenda for Labour in Government, it falls badly short in important respects – and, ironically enough, on issues where one feels that Ed Miliband has made some of his most grounded and radical pronouncements.

Its most serious shortcoming – as so often with Cruddas’ work – is on economics.  It seems to me that throughout, Cruddas and Rutherford mistake economic for social phenomena, and simply don’t understand the realities of the modern economy.  At the heart of the argument is a claim that the move from manufacturing to service industries has produced a different type of capitalism, a changed relationship between customer, company and employee that is more open, more flexible, more innovative.  I fail to see a shred of evidence for this.  It seems to me that Cruddas and Rutherford have taken at their own word the enthusiasts for a certain vision of modern capitalism, without understanding that the service sector is the place of the call-centre, the zero-hours contract cleaner, the vast supermarket, the just-in-time distribution centre.  These are places whose resemblance to the Victorian factory, in which the “hands” became de-humanised, obsessively-scrutinised and micro-managed factors of production – increasingly unmoderated by unionisation – is one of the more striking aspects of modern economic life.  Cruddas and Rutherford seem to base their argument on the experience of a small number of highly-privileged individuals in the creative or digital sectors; the daily lives of millions of workers are just ignored – an ironic failing from authors whose explicit aim is to make policy more grounded and relevant.

Elsewhere, the authors appear to argue that “predistribution” – in which markets are made to work more beneficially and equitably – stands as an alternative to the intervention of the state.  But again, the argument is flawed.  There is certainly a strong case for arguing that measures like a substantial hike in minimum wage, which does not involve increasing state spending, would bring substantial economic benefits.  But the point is that this can only be done through state intervention – through powerful regulation and improved enforcement, both of which form part of Labour’s programme.   The authors also need to consider the role that the state played in producing the one period since the industrial revolution – the benign years of 1950-73 – when living standards and security rose across the board, and working people were able to claim a growing portion of the fruits of economic activity.  Cruddas and Rutherford rightly reference the rentier economy as a crucial modern ill; but they offer nothing by way of alternative.

Moreover, the more inclusive, more open democratic structures they argue for don’t come cheap.  Cruddas and Rutherford argue quite explicitly that their aim is “big reform without big spending” – but they say nothing about how reform will be delivered, or how much it will cost, or whether it will deliver consistency of approach and level of service.  One does not need to be an advocate of the box-ticking mentality that accompanied many of the reforms of the New Labour years to appreciate the risks and costs inherent in a devolved model of governance – and in particular the risk that, with reduction in funding and the need to acquire funding from methods other than progressive direct taxation, the burden may fall disproportionately on those least able to bear it.  It’s easy to criticise the centralism inherent in the Beveridge ideal; but it has the merits of consistency and cost-efficiency.  Honesty requires us to recognise that there are costs and risks, as well as benefits, in moving away from that model; costs that may well be worth paying, but decentralisation does not necessarily bring savings.

Throughout, the pamphlet aspires to erudition by referencing a range of political and social authors (Keynes is a notable absentee) but all too often lapses into unsupported generalisation.  Cruddas and Rutherford write that orthodox Marxism has been discredited by history, but the post-crash economy – with its deepening cost-of-living crisis, its inability to generate investment or a decent income for an increasing proportion of the workforce – looks more like the the crisis of capitalism that Marx described than anything we have seen since the 1870s.  Again and again they cite work as the thing that defines people in modern society, without an understanding that there is – as I have argued before – a profound crisis of work in late capitalism; that it fails to provide an adequate income for growing numbers of workers.  The authors talk about family as the bedrock of society, without expressing an understanding that family is for millions a source of misery and that economic issues – most notably the soaring cost of housing – affect and redefine family structures.  The pamphlet refers several times to the effects of immigration on low-paid employment, but the evidence shows clearly that this is a myth.

And here perhaps is the fundamental problem with Cruddas’ and Rutherford’s argument. Time and again they chide their perceived opponents on the left for indulging in nostalgia; but there is something deeply nostalgic about their own argument, in its apparent refusal to move away from traditional models of work and family and homeland.  It’s an understandable reaction in a time of upheaval – and one that UKIP are more than happy to exploit – but it won’t do.  Cruddas and Rutherford are absolutely right when they argue that fundamental change is needed – not least to the way we relate to one another in civic society; they certainly don’t shy away from arguing that democracy is in crisis, and they are right to argue this.  But the change they offer seems curiously insubstantial.

It’s the more frustrating because Ed Milband and the Labour leadership give every appearance of engaging with the big economic issues that Cruddas and Rutherford appear to overlook; the questions of falling pay, rising prices, underemployment, increasing the minimum wage, and above all for whose benefit the economy is organised.  It’s difficult to see who the arguments in this pamphlet are aimed at, in an election year; they almost appear like a post-hoc rationalisation for a withdrawal from the economic debate; as if the economics of late capitalism were a given and politicians cannot change the rationality of economic activity.  Their argument is hobbled by economic defeatism.

The problem, ultimately, is not that Cruddas and Rutherford ask the wrong questions – but that they appear reluctant to get seriously to grips with the big economic issues that their questions beg.  And Labour must address those issues – because they’re the reality of the daily lives of the millions of people we look to represent, and who did not turn out to vote for us in 2010.  We still need an overarching economic narrative.


2 thoughts on “One Nation Labour and the search for an economic narrative

  1. “..and above all for whose benefit the economy is organised. ”
    Probably the single most pressing question in politics today. One the Tories don’t want to answer and one the Labour Party seem incapable of answering. A brutal party, where increased suffering of the less well off is taken as justification for turning the screw even more, versus a party of confusion and bankrupt ideas, and a lost identity as in ‘what’s the Labour Party for?’
    The same question was confronted in the early 1950’s in Germany, the Freiburg School, and led to the ‘third way. The Social Market Model married market forces to Christian ethics, to ensure that market forces worked for benefit of all. It has been a success for over 60 years.
    Germany probably managed to answer the question because failure to do so would have had shattering consequences; after WW2 it was 50/50 whether West Germany would have gone communist (rudimentary straw polls at the time suggested a real danger), or even slipped back into fascism. I know my country and leopards really don’t change their spots.
    So one could say what best concentrates the mind to rise to the question is the consequences of not doing so.

    “We still need an overarching economic narrative.”
    With just over 7 months to go, polls effectively neck and neck and Tories some 25 points ahead in opinion polls on economic management, which polls also point out is the most important issue to most people, suggests game over to me.

    If the Tories win in 2015, which I fear they might, by 2020 it will too late, and other forces may begin to shape events (racist, xenophobic UKIP or worse).
    So in its failure to rise to the important questions the Labour Party is putting our democracy in great danger.

    Also please reflect that in an age of great and increasing inequality Labour are selecting people like Euan Blair, the son of a former Labour prime minister, who has a fortune based on inherited (largely rentier) wealth. A sick parody if ever there was one.

    Tory Britain looks pretty safe from where I am sitting.

  2. Pingback: Scottish referendum: morning after thoughts | Notes from a Broken Society

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