How the left can be radical without spending money

Balls's speech made way for a new agenda that is profoundly exciting.

Balls's speech made way for a new agenda that is profoundly exciting.{C}

Ever noticed how shutting one door can open another? This week Labour's staunchest champion of growing our way out of the deficit acknowledged that he could well be making cuts in 2015. The left, personified by Owen Jones and Len McCluskey, were up in arms. They think we've lost the possibility of being radical. I say we've opened it up.

The modern left frequently makes one mistake. They assume that the most significant means government has of transforming lives is through taxing and spending, traditionally known as the "demand" side of the economy. They have left the supply side - the rules that govern the price of labour and capital - to the right.

But what if, at a time of pressure to reduce government spending, the left could develop an agenda for the supply side of the economy that delivered meaningful change?

It's not surprising we're sceptical. Because the right have dominated such policy in the past, such an agenda is associated with smashing unions to decrease the cost of labour, deregulating capital to enrich the fortunate or privatising at the expense of quality.

But supply side policy doesn't have to be regressive. It's just a tool that's been used in the wrong way. Most recently, Ed Miliband has been talking about a number of supply side policies that are courageous, imaginative and proudly consistent with the values of the left.

The most high profile example is his attack on certain energy and transport companies. We know that these markets are sown up, so increasing competition and regulation will deliver a fairer result. The living wage is another example. Government contracts that build in apprenticeships and local investment is another. The High Pay Commission's work on wage transparency and shareholder representation on boards is another. Cutting down on corporate tax havens as Miliband just outlined is another. Breaking up the banks takes this one step further.

Although it needs sexier branding, these supply side policies are all part of what Miliband calls "responsible capitalism". It's why Blue Labour is interesting.

These policies have three big advantages. First, they don't cost anything. Second, they make people's lives better. Third, they are much closer to where the public is at. I appreciate the arguments made by Owen Jones, but I don't think he has appreciated the scale of anger there is about a perceived waste of public money by Labour in the good times.

As someone who remembers what it was like to not have enough chairs in their classroom, I'm never going to apologise for investing in schools, and you'll never hear me say that government spending isn't essential and necessary. But waste on IT contracts, PFI and middle managers? I'm happy to apologise for some of that.

And as Ed Balls said this week, a true Keynesian is sometimes a hawk. If you genuinely believe we should be running a programme of increased spending now, then you have to acknowledge that we should have spent less when the economy was booming. The idea that Keynesians believe in high spending throughout the cycle misses the point completely.

So let's not get confused - Labour is still saying that we should cut less fast and less deep now, but with the OBR estimating we'll be 18 per cent poorer as a result of the recession, the state will be smaller once we're out of this mess. And that means a progressive supply side agenda.

If we do that, then Ball's speech wasn't a sign of giving up and following the Tories slowly back to the middle ground. It was a necessary part of gaining credibility with the public to make way for a new agenda that is profoundly exciting. Interestingly, it's one that Miliband is leading, not the shadow chancellor. The left shouldn't abandon ship, it should get on board.

Rowenna Davis is Labour PPC for Southampton Itchen and a councillor for Peckham

Keystone/Hulton Archive/Getty Images
Show Hide image

What Donald Trump could learn from Ronald Reagan

Reagan’s candidacy was built on more than his celebrity. Trump not only lacks experience as an elected official, he isn’t part of any organised political movement.

“No one remembers who came in second.” That wisdom, frequently dispensed by the US presidential candidate Donald Trump, came back to haunt him this week. Trump’s loss in the Iowa Republican caucuses to the Texas senator Ted Cruz, barely beating Senator Marco Rubio of Florida for second place, was the first crack in a campaign that has defied all expectations.

It has been a campaign built on Trump’s celebrity. Over the past eight months, his broad name recognition, larger-than-life personality and media savvy have produced a theatrical candidacy that has transfixed even those he repels. The question now is whether that celebrity will be enough – whether a man so obsessed with being “Number One” can bounce back from defeat.

Iowa isn’t everything, after all. It didn’t back the eventual Republican nominee in 2008 or 2012. Nor, for that matter, in 1980, when another “celebrity” candidate was in the mix. That was the year Iowa picked George H W Bush over Ronald Reagan – the former actor whom seasoned journalists dismissed as much for his right-wing views as for his “B-movie” repertoire. But Reagan regrouped, romped to victory in the New Hampshire primary and rode a wave of popular support all the way to the White House.

Trump might hope to replicate that success and has made a point of pushing the Reagan analogy more generally. Yet it is a comparison that exposes Trump’s weaknesses and his strengths.

Both men were once Democrats who came later in life to the Republican Party, projecting toughness, certainty and unabashed patriotism. Trump has even adopted Reagan’s 1980 campaign promise to “make America great again”. Like Reagan, he has shown he can appeal to evangelicals despite question marks over his religious conviction and divorces. In his ability to deflect criticism, too, Trump has shown himself as adept as Reagan – if by defiance rather than by charm – and redefined what it means to be “Teflon” in the age of Twitter.

That defiance, however, points to a huge difference in tone between Reagan’s candidacy and Trump’s. Reagan’s vision was a positive, optimistic one, even as he castigated “big government” and the perceived decline of US power. Reagan’s America was meant to be “a city upon a hill” offering a shining example of liberty to the world – in rhetoric at least. Trump’s vision is of an America closed off from the world. His rhetoric invokes fear as often as it does freedom.

On a personal level, Reagan avoided the vituperative attacks that have been the hallmark of Trump’s campaign, even as he took on the then“establishment” of the Republican Party – a moderate, urban, east coast elite. In his first run for the nomination, in 1976, Reagan even challenged an incumbent Republican president, Gerald Ford, and came close to defeating him. But he mounted the challenge on policy grounds, advocating the so-called “Eleventh Commandment”: “Thou shalt not speak ill of any fellow Republican.” Trump, as the TV debates between the Republican presidential candidates made clear, does not subscribe to the same precept.

More importantly, Reagan in 1976 and 1980 was the leader of a resurgent conservative movement, with deep wells of political experience. He had been president of the Screen Actors Guild in the late 1940s, waging a campaign to root out communist infiltrators. He had gone on to work for General Electric in the 1950s as a TV pitchman and after-dinner speaker, honing a business message that resonated beyond the “rubber chicken circuit”.

In 1964 he grabbed headlines with a televised speech on behalf of the Republican presidential candidate, Barry Goldwater – a bright spot in Goldwater’s otherwise ignominious campaign. Two years later he was elected governor of California – serving for eight years as chief executive of the nation’s most populous state. He built a conservative record on welfare reform, law and order, and business regulation that he pushed on to the federal agenda when he ran for president.

All this is to say that Reagan’s candidacy was built on more than his celebrity. By contrast, Trump not only lacks experience as an elected official, he isn’t part of any organised political movement – which enhanced his “outsider” status, perhaps, but not his ground game. So far, he has run on opportunism, tapping in to popular frustration, channelled through a media megaphone.

In Iowa, this wasn’t enough. To win the nomination he will have to do much more to build his organisation. He will be hoping that in the primaries to come, voters do remember who came in second. 

This article first appeared in the 05 February 2015 issue of the New Statesman, Putin's war