Miliband has reaffirmed the original neoliberal ideal

The early neoliberals recognised the need for a strong state to challenge private monopolies.

Last year, Ed Miliband proclaimed the neoliberal era of the last thirty years to be over when he argued that “responsible capitalism” should be instituted to promote producers and prevent economic predators. This year, the Labour leader’s challenge was to communicate how this path could be developed in a language that people can understand. His chosen idea was Disraeli’s “One Nation”, but the vision for the economy set out in Manchester drew upon a surprising source: the German Soziale Marktwirstschaft (the social market economy). In fact, in pronouncing the death of Anglo-American neoliberalism, the Labour leader has rediscovered the original European neoliberal idea.

In interwar Europe, a group of intellectuals from Freiburg, Vienna, Paris, London and Manchester reformulated liberalism. They advocated a strong state to prevent concentrations of economic power, “whether through cartels, trusts or giant enterprise”, in the words of Harvard Political Scientist Carl Friedrich. As Stephanie Flanders showed last week in her programme, Masters of Money, Friedrich Hayek was the leader of these early neoliberals. But instead of the Austrian business-cycle theory with which Hayek famously opposed Keynes, the group’s main aim was a new middle way between laissez-faire and economic planning. It was a vision that its adherents, including Hayek, saw as entirely compatible with a basic social security safety net.

In 1948, this early form of European neoliberalism entered power in Germany. Ludwig Erhard, a member of Hayek’s Mont Pelerin Society (founded in 1947) became finance minister under the Chancellorship of Konrad Adenauer. German neoliberalism was characterised by a firm commitment that the economic benefits of competition as guaranteed by the state were balanced with the solution of social problems. This included a robust welfare state, worker involvement in the management of companies (“codetermination”), and a strong trade union movement, which saw its role as protecting jobs.

As the German Social Democratic Party signed up to a neoliberal approach through the Godesburg Programme of 1959, free market ideas travelled across the Atlantic. In the United States, neoliberalism turned into an uncompromising creed of market fundamentalism. This movement, led by Milton Friedman and the Chicago School on the one hand, and by James Buchanan and the Virginia School on the other, inspired, among other things, monetarism, privatisation, and the introduction of market-style incentives into public services and administration under Thatcher and Reagan. This brand of neoliberalism most famously advocated the economic and financial deregulation that led ultimately to 2008. The original European neoliberal preoccupation with competition and the targeting of monopoly (as well as its concurrent pursuit of social justice) was almost entirely absent from the priorities of its transatlantic cousin.

Thus, in expressing his confidence that people are sick of the ‘greed is good’ culture brought about by the unconditional embrace of free markets since the 1980s, the Labour leader has given voice to a visceral popular anger at the excesses of finance capital. Although he has signalled the abandonment by Labour of many of the tropes of Anglo-American neoliberalism, Miliband has championed some important pillars of German neoliberalism as he attempts to flesh out the meaning of “responsible capitalism”.

In his speech in Manchester, Miliband said he would use procurement rules to encourage a more long-term culture among business by rewarding those who offer apprenticeships and vocational training with government contracts. In the past year, he has proposed worker representation and “codetermination” for British companies to tackle excessive executive pay and bonuses. On Sunday’s Andrew Marr Show, the Labour leader supported the German trade union model of protecting jobs. Most importantly, in pushing the gimmicky-sounding “predistribution”, a term coined by Yale Political Scientist Jacob Hacker, Miliband has embraced one of the most important insights of the German neoliberals: the crucial role of the state in designing the rules of the economy to achieve particular goals. As Miliband said on Tuesday, this means, for example, changing the rules and incentives in areas such as corporate takeovers or the promotion of a living wage.

Now, for the early neoliberals the aim of the state was the achievement and maintenance of competition. For Miliband and the Labour Party there is a fundamental difference, which adds an exciting twist to their new agenda. In place of competition, “responsible capitalism” substitutes the reduction of inequality, a fairer distribution of wealth and power and increased opportunity for all as its central aims. Moreover, the lesson of the German experience is that with a political will, there is a real alternative to the Anglo-American neoliberalism of Thatcher and Reagan.

Daniel Stedman Jones is a barrister practising in London. His book on the history of neoliberalism, Masters of the Universe, is published this month by Princeton University Press.

Ed Miliband sings at the conclusion of the annual Labour Party conference in Manchester. Photograph: Getty Images.

Daniel Stedman Jones is a barrister practising in London, and the author of Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics.

Getty
Show Hide image

Let's face it: supporting Spurs is basically a form of charity

Now, for my biggest donation yet . . .

I gazed in awe at the new stadium, the future home of Spurs, wondering where my treasures will go. It is going to be one of the architectural wonders of the modern world (football stadia division), yet at the same time it seems ancient, archaic, a Roman ruin, very much like an amphitheatre I once saw in Croatia. It’s at the stage in a new construction when you can see all the bones and none of the flesh, with huge tiers soaring up into the sky. You can’t tell if it’s going or coming, a past perfect ruin or a perfect future model.

It has been so annoying at White Hart Lane this past year or so, having to walk round walkways and under awnings and dodge fences and hoardings, losing all sense of direction. Millions of pounds were being poured into what appeared to be a hole in the ground. The new stadium will replace part of one end of the present one, which was built in 1898. It has been hard not to be unaware of what’s going on, continually asking ourselves, as we take our seats: did the earth move for you?

Now, at long last, you can see what will be there, when it emerges from the scaffolding in another year. Awesome, of course. And, har, har, it will hold more people than Arsenal’s new home by 1,000 (61,000, as opposed to the puny Emirates, with only 60,000). At each home game, I am thinking about the future, wondering how my treasures will fare: will they be happy there?

No, I don’t mean Harry Kane, Danny Rose and Kyle Walker – local as well as national treasures. Not many Prem teams these days can boast quite as many English persons in their ranks. I mean my treasures, stuff wot I have been collecting these past 50 years.

About ten years ago, I went to a shareholders’ meeting at White Hart Lane when the embryonic plans for the new stadium were being announced. I stood up when questions were called for and asked the chairman, Daniel Levy, about having a museum in the new stadium. I told him that Man United had made £1m the previous year from their museum. Surely Spurs should make room for one in the brave new mega-stadium – to show off our long and proud history, delight the fans and all those interested in football history and make a few bob.

He mumbled something – fluent enough, as he did go to Cambridge – but gave nothing away, like the PM caught at Prime Minister’s Questions with an unexpected question.

But now it is going to happen. The people who are designing the museum are coming from Manchester to look at my treasures. They asked for a list but I said, “No chance.” I must have 2,000 items of Spurs memorabilia. I could be dead by the time I finish listing them. They’ll have to see them, in the flesh, and then they’ll be free to take away whatever they might consider worth having in the new museum.

I’m awfully kind that way, partly because I have always looked on supporting Spurs as a form of charity. You don’t expect any reward. Nor could you expect a great deal of pleasure, these past few decades, and certainly not the other day at Liverpool when they were shite. But you do want to help them, poor things.

I have been downsizing since my wife died, and since we sold our Loweswater house, and I’m now clearing out some of my treasures. I’ve donated a very rare Wordsworth book to Dove Cottage, five letters from Beatrix Potter to the Armitt Library in Ambleside, and handwritten Beatles lyrics to the British Library. If Beckham and I don’t get a knighthood in the next honours list, I will be spitting.

My Spurs stuff includes programmes going back to 1910, plus recent stuff like the Opus book, that monster publication, about the size of a black cab. Limited editions cost £8,000 a copy in 2007. I got mine free, as I did the introduction and loaned them photographs. I will be glad to get rid of it. It’s blocking the light in my room.

Perhaps, depending on what they want, and they might take nothing, I will ask for a small pourboire in return. Two free tickets in the new stadium. For life. Or longer . . . 

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 16 February 2017 issue of the New Statesman, The New Times