How to build the good society

A "good society" can only be achieved if there is an acceptance of the need to tame capitalism.

These are painful times. The huge financial crisis of 2008 shook the world economy but it is ordinary people who are paying the price. Across Europe working people's living standards are stagnant. Unemployment is rising. In Greece, Ireland and Portugal huge cuts in public-sector pay and services are imposed by the European Central Bank and International Monetary Fund. Yet, the architects of the crisis -- the banks, hedge funds, credit rating agencies -- emerge scot-free, able to carry on their activities and pick up their bonuses regardless.

Politically, it has been the right which has benefited from the insecurity which the crisis has generated. Following recent victories in the UK, Sweden, Hungary and Portugal, today the left remains in office in just five EU countries. Even more alarmingly, it is not just orthodox Christian-democratic parties which are gaining ground but new racist, nationalistic and xenophobic parties, as in Finland, Sweden, Holland and Hungary. These parties are now making inroads into government or shifting the mainstream right on to their ground.

This is a dangerous moment for the left and all concerned with the principles of justice, democracy and racial equality. That is why we think the long article just published by Compass entitled "Building The Good Society: A New Form of Progressive Politics" is important. It analyses how we reached where we are and how to break out of the impasse. The argument is based on several overarching themes.

First, it is guided by a belief in the goal of a "good society", where each individual can aspire to fulfil their potential and where manual labour is valued as much as mental labour. Our thinking is informed by the marriage of the ideals of liberty, equality and solidarity but fused with a 21st-century concern for the environment and the legacy we leave to future generations. Furthermore, it is a philosophy which sees politics as the way to fight for and guarantee the security and therefore the freedom of each and every citizen.

This thinking is in sharp contrast to the philosophy of the current government. Here we see "Thatcherism with a public school face", a government which believes that competition is the only value. This is a government which is using the financial crisis as the lever for a concerted drive to establish not just a market economy but a market society. It wants to sell off forests and woodlands. It makes entrance to universities dependent not on academic ability but on the ability to pay. It strives to open up the NHS and indeed all public services to any private provider. In a phrase, this is a government that wants to create a world fit for Southern Cross to thrive in.

Secondly, we argue that a "good society" can only be achieved if there is an acceptance of the need to tame capitalism and strictly regulate it. The financial crisis has exposed the fatal flaws of 'New' Labour's love affair with globalisation and the City of London. Blairites have been most reluctant to acknowledge that they got the economics of modern capitalism wrong. Patrick Diamond (Guardian 6 June 2011) has been the first to acknowledge this and to argue, as we do, that social democracy has to give voice to people's anger with City recklessness and show that there are alternatives.

Thirdly, citizenship is not just about voting once every few years but a sustained engagement in all walks of life. This paper argues strongly for the importance of citizen participation but emphasises that a strong civil society emerges and goes hand in hand with a strong state.

Fourthly, the whole spirit of this paper is avowedly pluralist. Some diehard Labour MPs may cling to their tribalist traditions but "Ourselves alone", the old politics of monolithic parties, has had its day. A good society will be constructed from many alliances and interests as well as the continuing importance of class. For Labour that means working with a wide range of popular movements, pressures groups and trade unions, as well as with other parties on the progressive wing of politics.,

Flowing from these key themes we present individual policy suggestions in a number of areas. They are symbolic of the transformational policies we need to build a good society.

The world need not be like this. There is an alternative to the 1930s-style deflation on offer from George Osborne and the European Central Bank and to the nasty, narrow-minded nationalism of the racist and xenophobic right. A progressive alliance can galvanise public anger and tap into human optimism about the potential for a better future. This paper sets out a route map for that progressive alliance to engender a 'good society'.

New Statesman is sponsoring this Saturday's annual Compass conference Building the Good Society - details at http://compassonline.org.uk/conference/

Robin Wilson is a former magazine editor and think tank director and currently independent researcher based in Belfast.

Jon Bloomfield is currently an honorary research fellow at Birmingham University specializing in European issues.

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What is the EU customs union and will Brexit make us leave?

International trade secretary Liam Fox's job makes more sense if we leave the customs union. 

Brexiteers and Remoaners alike have spent the winter months talking of leaving the "customs union", and how this should be weighed up against the benefits of controlling immigration. But what does it actually mean, and how is it different from the EU single market?

Imagine a medieval town, with a busy marketplace where traders are buying and selling wares. Now imagine that the town is also protected by a city wall, with guards ready to slap charges on any outside traders who want to come in. That's how the customs union works.  

In essence, a customs union is an agreement between countries not to impose tariffs on imports from within the club, and at the same time impose common tariffs on goods coming in from outsiders. In other words, the countries decide to trade collectively with each other, and bargain collectively with everyone else. 

The EU isn't the only customs union, or even the first in Europe. In the 19th century, German-speaking states organised the Zollverein, or German Customs Union, which in turn paved the way for the unification of Germany. Other customs unions today include the Eurasian Economic Union of central Asian states and Russia. The EU also has a customs union with Turkey.

What is special about the EU customs union is the level of co-operation, with member states sharing commercial policies, and the size. So how would leaving it affect the UK post-Brexit?

The EU customs union in practice

The EU, acting on behalf of the UK and other member states, has negotiated trade deals with countries around the world which take years to complete. The EU is still mired in talks to try to pull off the controversial Transatlantic Trade and Investment Partnership (TTIP) with the US, and a similar EU-Japan trade deal. These two deals alone would cover a third of all EU trade.

The point of these deals is to make it easier for the EU's exporters to sell abroad, keep imports relatively cheap and at the same time protect the member states' own businesses and consumers as much as possible. 

The rules of the customs union require member states to let the EU negotiate on their behalf, rather than trying to cut their own deals. In theory, if the UK walks away from the customs union, we walk away from all these trade deals, but we also get a chance to strike our own. 

What are the UK's options?

The UK could perhaps come to an agreement with the EU where it continues to remain inside the customs union. But some analysts believe that door has already shut. 

One of Theresa May’s first acts as Prime Minister was to appoint Liam Fox, the Brexiteer, as the secretary of state for international trade. Why would she appoint him, so the logic goes, if there were no international trade deals to talk about? And Fox can only do this if the UK is outside the customs union. 

(Conversely, former Lib Dem leader Nick Clegg argues May will realise the customs union is too valuable and Fox will be gone within two years).

Fox has himself said the UK should leave the customs union but later seemed to backtrack, saying it is "important to have continuity in trade".

If the UK does leave the customs union, it will have the freedom to negotiate, but will it fare better or worse than the EU bloc?

On the one hand, the UK, as a single voice, can make speedy decisions, whereas the EU has a lengthy consultative process (the Belgian region of Wallonia recently blocked the entire EU-Canada trade deal). Incoming US President Donald Trump has already said he will try to come to a deal quickly

On the other, the UK economy is far smaller, and trade negotiators may discover they have far less leverage acting alone. 

Unintended consequences

There is also the question of the UK’s membership of the World Trade Organisation, which is currently governed by its membership of the customs union. According to the Institute for Government: “Many countries will want to be clear about the UK’s membership of the WTO before they open negotiations.”

And then there is the question of policing trade outside of the customs union. For example, if it was significantly cheaper to import goods from China into Ireland, a customs union member, than Northern Ireland, a smuggling network might emerge.

 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.