David Miliband: The decade of disorder

As he prepares to leave for his new life in America, the former foreign secretary explains why the financial crisis has not created an upsurge of support for the centre left – and why defensive opposition is not enough.

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People sometimes ask why – or lament that – the financial crisis of 2008 has not led to an upsurge of support for the centre left. One answer is that in many countries parties of the centre left were in government, and so got the blame, yet this is insufficient. In truth there was a major market failure and in particular a failure of under-regulated markets. But there was state responsibility, too. Moreover, as Stan Greenberg has written, “a crisis of government legitimacy is a crisis of liberalism”. That is why reforming the state as well as reforming the market is a necessity, not a luxury. Where centre-left parties do get elected, they quickly find that, while the nostrums of what Tony Judt called “defensive social democracy” can strike a chord when a party is in opposition, they are insufficient for government. The welfare state needs defence in the face of unfair attacks. But it also needs reform. Inequality is undoubtedly a modern menace exacerbated by austerity, but macroeconomic policy and even full employment will not tackle its roots. Those at the bottom need a voice, but the middle class is also feeling squeezed. The public sector and its services have been a civilising force in western societies, but they need to operate very differently to meet the twin challenges of changing public expectations and needs and limited public funds.

Francis Fukuyama has laid down the challenge as follows: “It has been several decades since anyone on the left has been able to articulate, first, a coherent analysis of what happens to the structure of advanced societies as they undergo economic change and, second, a realistic agenda that has any hope of protecting a middle-class society.”

We who are on the centre left should take this challenge seriously. There is not an “off-the-shelf” model of social democracy, though there are powerful examples of what can make a positive difference (as well as what doesn’t). The starting point for the modern left has to be to understand the new world.

There are many ways of describing the changing context for what the US columnist David Brooks has called the debate about how to rejuvenate mature industrialised societies. To my eye, there are four key global changes under way that explain why this feels like a decade of disorder. 
 
There is the shift in economic power from west to east (and to some extent from north to south), as outsourcing and what Al Gore calls “robo-sourcing” (that is, technological change) alter the economic prospects of millions of people. As many as 50 million people a year are joining the global middle class in Asia, while norms of employment are being overturned. This has huge domestic consequences in industrialised societies, but is also creating a new power structure in the international system.
 
There is the resource crunch, which predated the credit crunch and is exemplified by a mismatch in the supply and demand for resources that is driving up their prices. Shale gas discoveries in the US are important but they do not invalidate this issue. The oil price remains high and non-oil commodities have risen fast enough in the past decade to eradicate the price cuts of the previous hundred years. As the urban middle-class global population is continuing to grow, it is hard to see this trend going into reverse. 
 
There is the radical extension of the open society to the nooks and crannies of economic and social life, public and personal. This is fuelling democratic revolutions in the undemocratic world and frustration with democracy as conventionally practised in the established democracies. Across the public-private divide, the bar for the legitimate exercise of authority is being raised. This is a good thing.
 
And then there is the pressing nature of interdependence, local and international, that demands new forms of co-operation at precisely the time when people want more power for themselves. The Lehman moment showed that the pre-existing definition of which institutions posed systemic risk was not properly thought through. 
 
It is the interaction of these global changes that has reframed the political equation in western democracies. The welfare state is costing more, but investment in supporting wealth creation constitutes an increasingly urgent claim on public funds. Wages are being squeezed and immigration is causing resentment. There is a crisis of employment and opportunity among young people, but they don’t vote in heavy numbers, so politics is skewed towards the old. The shift to low carbon is a necessity, but there is a collectiveaction problem when global negotiations are stuck. Societies have become more diverse in cultural as well as racial terms, and this has opened up a challenging axis of division in politics, which makes the construction of coherent electoral and governing coalitions more difficult. The putative conflict between cosmopolitans and communitarians has been a real one.
 
In the 1990s it seemed that economics and politics were pushing in the same direction. Globalisation was driving down inflation by producing goods in developing countries at low prices to satisfy western demand; education and training were offering opportunities for greater social mobility; social justice seemed like the counterpart of economic efficiency. The heart of the conundrum facing centre-left parties today is that economics and politics are systematically pulling in opposite directions. The economics calls for more sharing of sovereignty, but the politics is more nationalist or localist. The economics calls for more migration, the politics for less. The economics says switch welfare spending from the old to the young, but the politics of that are horrible. And so on.
 
Meanwhile, politics itself is increasingly seen as broken – and not merely seen as broken but actually broken. This is not just about corruption scandals. It is also about political systems that, for too many people, have lost their capacity to engage and include. Party systems are controlled by small groups (President François Hollande’s exemplary election by open primary excepted). Big money creates a sense of popular disempowerment. Parliaments are gridlocked and enfeebled. For parties of the left, which take pride in the power of politics to check the abuse of power in markets, these are not peripheral concerns. They are the basis for rethinking.
 
It is not that the centre left is wrong to continue to see the importance of Keynesian insights, or wrong to see an important role for government in economy and society, or wrong to defend the poorest, who rely on the welfare state. It is that these articles of faith are insufficient for navigating the rapids of government. 
 
I was once told by a Swedish friend of mine – a successful politician in his own right – that good politics starts with empathy, then proceeds to analysis, then sets out values and establishes the vision, before getting to the nitty-gritty of policy solutions. A lot of politics focuses on the last point, but maybe that is why it fails to connect to a lot of the public. It seems to me that if this is right, three sets of issues, interlocking in nature, will be defining for the future of the centre left.
 
The first is how we respond to the people’s desire for more protection from risks beyond their control – without falling into the trap of big-state solutions that are neither affordable nor deliverable. These can be global risks of an economic, environmental or securityrelated nature. They can be personal risks, such as unemployment, dementia or crime. In each case the old mechanisms for collective insurance against risk through the state are under pressure. 
 
The second is how we meet people’s expectations for more power and control over their own lives – at a time when interdependence and inequality are making this seem like a pipe dream. The sense of disempowerment can be economic, in workplaces that lack the collective power of trade unions and where employee satisfaction and opportunity are limited. It can be social, in communities where crime or neglect sap individual and collective strength. Or it can be in public services, where budgets or decisions are out of the reach of the people who use the services.
 
In truth, the “Third Way” discussions of the 1990s were too weak in addressing issues of economic power, in the workplace and elsewhere. There seemed to be sufficient common ground to facilitate win-win solutions. But the stagnation of wages, among other matters, has shown that this perception was optimistic at best. Economic empowerment needs a harder edge. 
 
The third is how to foster a sense of belonging when people are more mobile and identities more complex. This is partly, but not only, about immigration. It is also about the loneliness of too many elderly people and the lack of security of people of all ages. 
 
Each of these areas of study captures socialdemocratic concerns with equity and mutuality. But they look at them in different ways, through the lens of the way people lead their lives, rather than the overall structure of society. What is more, they challenge the stilldominant paradigm of Anglo-Saxon politics: for or against state or market, for or against public or private sector. They speak much more clearly to the continental European notion of a social-market economy, in which public values and mores define market rules and norms, and in which the state is respectful of private enterprise and personal liberty. Where Labour had ended up in Britain by 2010 – too hands-on with the state and too hands-off with the market – shows the perils of not getting this clear. 
 
So what is the way forward? Away from the tactical battles that dominate day-to-day politics, the lessons from the successes – like that of President Obama – and the struggles, seem to me as follows.
 
The first is that, while fiscal stimulus may be a short-term remedy for low demand, fiscal prudence is a medium-term necessity. Keynesianism is after all a hard taskmaster. 
 
The second is that the politics of production requires social democrats to address the structural challenges to western economies as engines of wealth creation. Sometimes this challenge is reduced to a debate about the importance of “manufacturing”, but that is not enough, as the border between manufacturing and services becomes blurred, and as services take up a much larger share of the economy and require ever higher degrees of skill. 
 
The third is that the tendency of markets towards inequality and instability needs to be countered by action upstream in order to curb abuse of power, and to empower citizens and employees with rights, information and control. “Predistribution” does not fit on an electoral pledge card, but the idea is right and so is the challenge of developing new ways, either through individual rights or collective organisation, to tilt the balance of power towards ordinary people.
 
The fourth is that the state needs to do more with less, and that requires big reform. Reform is one of those words that can lose meaning through excessive and loose use. But for social democrats the specifics of decentralisation of power, transfer of budgets from managers to people, integration of back offices, and challenge from private- and voluntary-sector providers should all be geared towards the goal of a public sphere that can serve its founding purpose: representing the public and its interest against threats of injustice and insecurity. That the Tories will try to use their bungled NHS changes as an excuse for an assault on the very universality of the health service shows how high the stakes are. 
 
The fifth lesson is that fighting globalisation is futile and damaging, but the processes of global integration nevertheless need to be managed by regional co-operation in the absence of stronger global governance. It is striking that, despite the travails of the European Union, around the world there is a tendency towards regional association – in the Pacific Alliance in South America, for example (its GDP is 20 per cent greater than Brazil’s). This is the way for medium-sized states to have influence.
 
The sixth message is that the challenge for parties and politics is as big as the challenge to policy. Assembling a winning coalition is one thing; holding it is harder. That makes the achievement of the Obama campaign quite remarkable. He was helped by his opponent, but he made his own luck through a drive street by street and voter by voter to maintain his winning coalition. Presidential elections are different from parliamentary systems, but there is read-across nonetheless. 
 
Politics is more open than for many years – and there is a lot to fight for. I will be fighting a different set of battles, but I leave Britain confident that Labour can win.
 
David Miliband becomes president and chief executive of International Rescue Committee next month. This essay is an edited version of the foreword to Policy Network’s “Progressive Politics After the Crash: Governing from the Left”(edited by Olaf Cramme, Patrick Diamond and Michael McTernan), which will be published by I B Tauris on 4 September

 

Illustration: Francesco Bongiorni / Eastwing Illustration

David Miliband is the  President and CEO of the International Rescue Committee
He was foreign secretary from 2007 until 2010 and MP for South Shields from 2001 until this year. 

This article first appeared in the 12 August 2013 issue of the New Statesman, What if JFK had lived?

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Under pressure at home, Donald Trump will struggle to deliver what Saudi Arabia wants

Above all, the Gulf states want stability. Can this beleaguered US president bring order?

There is a nervous energy around Riyadh. Fresh palm trees line the roads from the airport, punctuated by a wall of American flags and corporate slogans: “Together we prevail.” All the street lights are suddenly working.

The visit of any American president is always a lavish affair in Saudi Arabia, but there is an optimism to this visit that evaded the Obama years and even the recent visits of Theresa May and Angela Merkel.

Yet, there are two distinct parts to this trip – Trump’s first overseas engagement as president – that will determine its success. The first is relatively straightforward. Trump will sign huge defence contracts worth billions of dollars and offer trading opportunities that allow him to maintain his narrative of economic renewal for American businesses.

For the Saudis, too, these deals will fit into their ambitious project – known as Vision 2030 – to expand and diversify their economy away from its current dependence on oil revenues. Both parties are comfortable with this type of corporate and transactional government, enjoying the gaudy pomp and ceremony that comes with the signing of newly minted deals.

The more complicated aspects of the trip relate to its political dimensions. As the Middle East continues to convulse under the most significant turmoil to envelope it since the collapse of the Ottoman Empire, what Gulf leaders desperately want is the re-establishment of order. At its core, that is what will define Donald Trump’s visit to Saudi Arabia – and the Saudis are optimistic.

Their buoyancy is borne of shared regional interests, not least curbing Iranian influence. Ever since the Arab uprisings in 2011, Tehran has asserted itself across the Levant by organising hundreds of proxies to fight on its behalf in Syria and Iraq. Closer to home, too, the Gulf states accuse Iran of fomenting unrest within Shia communities in Saudi Arabia’s eastern provinces, in Bahrain, and in Yemen.

All of this has left the House of Saud feeling especially vulnerable. Having enjoyed an American security umbrella since the 1970s, Obama’s pursuit of the Iran deal left them feeling particularly exposed.

In part at least, this explains some of the Kingdom’s more frantic actions at home and abroad – including the execution of prominent Shia cleric, Sheikh Nimr al-Nimr, and the war in Yemen. Both are really about posturing to Iran: projecting power and demonstrating Saudi resolve.

Trump shares these concerns over Iranian influence, is prepared to look the other way on Saudi Arabia’s war in Yemen, and is deeply opposed to Obama’s nuclear deal. Riyadh believes he will restore the status quo and is encouraged by the direction of travel.

Just last month Trump commissioned a review of the Iran deal while the US Treasury imposed sanctions on two Iranian officials. Saudi Arabia also welcomed Trump’s decision to launch cruise missiles against a Syrian military base last month after Bashar al-Assad used chemical weapons in the town of Khan Sheikhoun.

These measures have been largely tokenistic, but their broader impact has been very significant. The Saudis, and their Gulf partners more generally, feel greatly reassured. This is an American presence in the region that is aligned to their interests, that they know well and can manage.

That is why Gulf states have rushed to embrace the new president ever since he first entered the Oval Office. Saudi Arabia’s deputy crown prince, Mohammed bin Salman (colloquially known simply as “MBS”), already visited him in Washington earlier this year. The Emiratis and others followed shortly afterwards.

A spokesman for Mohammed bin Salman later described the meeting with Trump as an “historical turning point” in relations between the two countries. A White House readout of the meeting baldly stated: “The President and the deputy crown prince noted the importance of confronting Iran's destabilising regional activities.”

Now that Trump is visiting them, the Saudis are hoping to broker an even broader series of engagements between the current administration and the Islamic world. To that end, they are bringing 24 different Muslim leaders to Saudi Arabia for this visit.

This is where Trump’s visit is likely to be fraught because he plans to deliver a major speech about Islam during his visit – a move that has seemingly no positives associated with it.

There is a lot of interest (and bemusement) from ordinary Saudis about what Trump will actually say. Most are willing to look beyond his divisive campaign rhetoric – he did, after all, declare “I think Islam hates us” – and listen to him in Riyadh. But what can he say?

Either he will indulge his audience by describing Islam as a great civilisation, thereby angering much of his political base; or he will stick to the deeply hostile rhetoric of his campaign.

There is, of course, room for an informed, careful, and nuanced speech to be made on the topic, but these are not adjectives commonly associated with Donald Trump. Indeed, the pressure is on.

He will be on the road for nine days at a time when pressure is building over the sacking of the former FBI director James Comey and the ongoing investigation into former national security advisor Michael Flynn’s contacts with Russia.

It is already being reported that Trump is not entirely enthusiastic about such a long overseas programme, but he is committed now. As with almost everything concerning his presidency, this extra pressure adds a wild air of unpredictability to what could happen.

Away from the lucrative deals and glad-handing, this will be the real standard by which to measure the success of Trump’s visit. For a relationship principally defined by its pursuit of stability, whether Trump can deliver what the Gulf really wants remains to be seen.

Shiraz Maher is a contributing writer for the New Statesman and a senior research fellow at King’s College London’s International Centre for the Study of Radicalisation.

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