This has been the best Labour government of the past half-century. Before the caveats and complaints - which are now highlighted by political commentators to show that they share at least part of the obsessive contemporary distrust of politics and politicians - this has to be recognised. True, the government has been blessed by a strong world economy and a weak domestic opposition. But Margaret Thatcher was enjoying the same advantages when forced to resign in 1990, as was Labour when it drove straight for the economic rocks in the 1960s.
New Labour has managed public finances well; focused on and kick-started the improvement of conditions of life for the poor; defined the British interest well abroad; denied the centre ground to the Conservatives; begun to reconstruct the efficiency of, and trust in, the public sphere; launched constitutional modernisation and the devolution of state power; led unionism and nationalism to wrestle together with the legacies of Irish hatred and division; and set out the practical parameters of action for reformist governments that can no longer appeal to socialism.
To say that it is the best Labour government for half a century is to leave out (just) the Attlee government. The comparison - between the sweeping creation of the main institutions of state welfare then and a cautious, incremental reformism now - naturally rebounds to the former's credit. But, in the 1940s, government was more easily carried through by central command, capitalising on the mood of a majority united by war and victory and determined to bring to an end the grossest privileges of wealth.
Government now, in a society at once politically disengaged and ferociously defensive of individual as well as small-group rights and privileges, is a permanent negotiation. Every decision is contested, both before and after it is taken. A government of the left attempts to insert policies and values into a society that considers itself largely autonomous from the state - a confusing mixture of legislative command and tentative suggestion. New Labour has shown itself the master at this. Only by the standards of the past does it look slow.
We must also recognise that Labour is a party formed to create socialism, and it now operates in a world from which socialism has fled. It can - as it did for part of the 1980s - parrot socialism. Indeed, Michael Foot's assumption of the party leadership after the 1979 general election defeat was an attempt to nail the deceased parrot to its perch, and sell it to an electorate that knew the parrot had joined the choir invisible. Neil Kinnock saw the limits to that, even as he was doing it.
Finally, new Labour needs to be placed among the ranks of the globalised governments that now span the whole gamut, from the Chinese (whose communist leaders have been holding party seminars on the Third Way) to the American. A globalised government recognises that it is playing by new rules, which are being made up in a ceaseless iteration between the leading states and the international institutions. Whatever your views about the extent of globalisation, it is hard to deny that governments of major states must ceaselessly shift between the global, national, regional, local and individual in order to stay on their feet and retain their votes. Full of promise and blessed with freedoms, this new matrix of governance is fundamentally unsettling: new Labour has not just learnt the rules, but claims to write them for "progressives" of the 21st century.
So what should this government do? First, it must restore power to the state, after the leaching away of the state's authority and legitimacy at the end of the 20th century. Trends in taxation are slightly up in most OECD countries; and opinion, from the low-spending US to the high-spending Sweden, has moved on from how to cut public expenditure to how to use the money more effectively.
A government cannot, however, simply strengthen the state. It has not the resources, competences and flexibility; at a more mundane level, it finds it hard to afford the salaries. Public service is in danger of becoming a sink of, rather than a goal for, talent. That problem remains largely unsolved anywhere, with even the diplomatic service of the United States, global hegemon that it is, suffering a severe recruitment crisis.
As this is the first Labour government to govern without socialism, it is also the first to be uninhibited in boosting the private sector. However, new Labour also committed itself to the same basic principle as that summed up best - if opaquely - by the French prime minister, Lionel Jospin: yes to a market economy, no to the market society. It has thus asked to be judged on how well it solves the most intractable problem of the modern industrial age. "There are no precedents to guide us," wrote the American commentator Walter Lippmann in 1914, "no wisdom that wasn't meant for a simpler age. We have changed our environment more than we know how to change ourselves." Nearly a century later, almost anyone would agree. All societies that have wrenched themselves out of traditional or oppressive environments suffer the same disorientation, a condition about which governments can do only so much. They must seek to establish an equilibrium between the need to carry on consuming at the rates popularly demanded and finding ways in which deeply shaken societies can produce the social glues that make them stick. Like the American progressives of the time about which Lippmann was writing, the new progressive governments cannot go back to the old cohesions, but must try to encourage what there is, and propose new kinds of fixative.
The dilemma was highlighted recently in an interview that the Italian law expert Guido Rossi gave to La Repubblica. Rossi, "a convinced anti-cleric", begged the liberal, outspoken Cardinal Carlo Maria Martini of Milan not to retire to a life of contemplation but to stay in post, so that the city will not lose one of its "most important moral reference points". All governments now rest, a little desperately, on moral reference points derived from more certain ages, patched and tricked out for one that has turned to values that no longer overarch.
Because there is nothing transcendent or given in ethics and values, Tony Blair sounds temporising, uncertain, and can be easily satirised as one who wishes to have it all ways. Yet he has established Labour as a "natural" governing party, and the centre left as the "natural" tendency of the country, and, if there are downsides, they spring from the situations in which the party finds itself.
First, since it had no socialist-corporatist "enemy within" against which to battle (Thatcher's great strength) and define itself - except some vague and shifting notion of "the forces of conservatism" - it has to make a very large investment in being acceptable to the capitalism that ensures high and rising standards and provides the surplus for public investment. Hence the two-year spending standstill; hence the late tackling of bad transport and other infrastructure, low standards in education, miserable levels of pensions. These are not "third world", as critics constantly claim - the effectiveness of Germany's health service, for example, rates considerably lower than the UK's. But it is impossible to avoid the hard facts of lower levels of public spending over long periods. As the marvellous years of the late 1990s give way to lower economic growth (at best), the need to embed a principle that the public sphere and redistributionist strategies have high priority becomes at once more urgent and more difficult.
Second, globalisation carries with it many new twists to old problems. One of these is the ability of large groups of relatively poor people to fulfil their ambitions to make a better economic life for themselves than they can hope for in their own countries - whether China, Albania or Nigeria. The US is a society founded in part on this phenomenon, and is relatively good and liberal in dealing with it. Europe is not. Britain and France had been constrained to "welcome" citizens of the empire, but no more; Germany has only just tackled a legislative-psychological block on anyone not of the German race becoming a citizen. Most other states, such as large Italy and little Ireland, had customarily exported their huddled masses, not received them - one of the biggest reasons why a part-xenophobe Italian right is likely to win elections next month. In its second term, new Labour must make immigration laws transparently just, and must also make the case for larger engagement with, and export of aid to, countries whose citizens flee them.
Third, new Labour has to move further on the question of the constitution. It must decide on membership of the euro; with that goes a wider engagement in the politics and policies of the EU. It cannot continue to justify a second chamber that is wholly appointed. It must find a resolution for the anomaly of a centrally governed England and regionally governed Northern Ireland, Scotland and Wales - one that has been stymied in part because of the indifference of most of the English to being anything other than centrally governed. Despite what the constitutionalists say, there is no longer an obvious path through constitutional change to more efficient, or even more democratic, government. As the Guardian's David Walker has written, "there are real limits to the public's appetite for ballots".
Reform, in previous progressive eras, meant more democracy, more redistribution, less discrimination. There is still some meaning to these - especially to the last, though it has taken on a global, and thus a much more problematic, dimension. But they have less meaning than they did when Labour could propose big schemes to raise people from ignorance, want and sickness. The domestic wretched of rich states such as ours are a minority; their exclusion is not amenable to mere money transfer.
New Labour has not created a promised land. That is because it cannot promise such things, and is thus charged, as are all governments, to keep the public sphere going as best it can, when most around are leaving that sphere and blaming its thinness on government. A thankless lot: but new Labour has shown that it can govern well without thanks.
