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Social democracy in a digital era

The digital revolution presents an opportunity for the left.

The shadow business secretary, Chuka Umunna, made headlines recently by highlighting that employees in France and Germany completed work by Thursday afternoon that would take the entire working week in Britain.  The purpose was to underline one of the UK’s chief economic weaknesses – its poor productivity performance – and to attack the current government’s approach to long-term investment and inclusive growth.

As a new Policy Network and ITIF book on Sharing in the Success of the Digital Economy shows, improving the adoption of ICT across the UK economy can drive-up productivity. The US has been more successful at adopting ICT than Europe, to the extent that if the EU-15 and US had swapped productivity growth rates from 1995 to 2013, it is estimated that GDP would be €2.2 trillion larger than the United States, instead of €1.6 trillion smaller.

The economic evidence shows that ICT-induced innovation – the development and adoption of new products, services, processes and business models – is vital to support rising living standards. But making the political case for the progressive power of innovation, and the digital economy, can be more challenging. The forces of “creative destruction” threaten incumbent firms, jobs, and the way people work and live, creating strong incentives to oppose change.

Confronting these hard realities is one of the defining challenges for progressive politics in the 21st century as we enter a “high opportunity, high risk society”. The danger is that under the short-term pressures of the election cycle, and at a time of widespread economic insecurity, progressives will shirk long-term decisions that will support and shape the environment for radical innovation and thus reinforce the low-growth, low-productivity cycle that consumes many European economies. If stuck defending the status quo, votes will continue to leak to new political competitors and populist insurgents. Electoral coalitions risk being further splintered by those who feel they benefit from technological change and those who do not. 

Voters may, of course, hanker for quick fixes if that is all that is offered to them. But, equally, as voters’ livelihoods become increasingly risky they may value new institutions that provide them with greater security and the means to succeed. The big policy responses to the industrial revolution – welfare states, public health services and education – developed into institutions with widespread public support, albeit challenged somewhat in recent times. Similarly, new institutions that reflect the new political realities – not least a more individualistic society and one less trusting in the state to spend taxpayers’ money – can flourish.

So how should progressives respond? First, all of the above opportunities and risks underline the need for progressive politics and a rethinking of the role of the state. There is a new purpose in navigating and supporting capitalist models through their next phase of creative destruction and in leveraging technology to tackle the great societal challenges of our times.

Second, progressives need to embrace the potential of innovation and technological change to reduce the number of low-wage, unsafe and unsatisfying jobs and transform public services. Promoting innovation by investing in science and R&D is the easy part politically but dealing with the impact of innovation on specific industries and local communities is more challenging, not least for the left when this impacts on the jobs and practices of public sector workers. The short-term “losers” from change are typically easier to identify and louder, but the benefits can be spread across society and over time. Politicians need to be straight with voters that these headwinds will have both positive and negative consequences, and be careful not to champion incumbents and rent-seekers in the name of social justice.

Third, a radically new concept of social investment is required which renews welfare edifices for the 21st century. Gone are the days of a job, or even a career, for life. Government, trades unions and businesses need to collaborate on new forms of protection, investment and flexibility, as well as on lifelong learning. People from all backgrounds need to be enabled to harness technology and meet the demands of rapidly changing labour markets, whether they work for themselves or for someone else.

Fourth, progressives need to work together to forge a European innovation agenda, built around an EU digital single market, and make the case for international cooperation to develop new institutions, regulatory approaches and tax systems that are fit for the digital age.

Innovation is about the constant transformation of an economy and its institutions. By its nature some industries and firms will lose out to new challengers. Rather than trying to stop this perennial gale, managing the transition into new work and creating new forms of social investment should be the key mission of progressive politicians in the 21st century. Labour should be the party concentrating on how to make these changes work for the population as a whole and thinking about how they can be directed to tackle structures of inequality.

Michael McTernan is acting director of Policy Network and Alastair Reed is a researcher at Policy Network.

Photo: Getty
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Labour's purge: how it works, and what it means

The total number of people removed will be small - but the rancour will linger. 

Labour has just kicked off its first big wave of expulsions, purging many voters from the party’s leadership rolls. Twitter is ablaze with activists who believe they have been kicked out because they are supporters of Jeremy Corbyn. There are, I'm told, more expulsions to come - what's going on?  Is Labour purging its rolls of Corbyn supporters?

The short answer is “No”.

If that opener feels familiar, it should: I wrote it last year, when the last set of purges kicked off, and may end up using it again next year. Labour has stringent rules about expressing support for other candidates and membership of other parties, which account for the bulk of the expulsions. It also has a code of conduct on abusive language which is also thinning the rolls, with supporters of both candidates being kicked off. 

Although the party is in significantly better financial shape than last year, it still is running a skeleton staff and is recovering from an expensive contest (in this case, to keep Britain in the European Union). The compliance unit itself remains small, so once again people from across the party staff have been dragooned in.

The process this year is pretty much the same: Labour party headquarters doesn’t have any bespoke software to match its voters against a long list of candidates in local elections, compiled last year and added to the list of candidates that stood against Labour in the 2016 local and devolved elections, plus a large backlog of complaints from activists.

It’s that backlog that is behind many of the highest-profile and most controversial examples. Last year, in one complaint that was not upheld, a local member was reported to the Compliance Unit for their failure to attend their local party’s annual barbecue. The mood in Labour, in the country and at Westminster, is significantly more bitter this summer than last and the complaints more personal. Ronnie Draper, the general secretary of the Bfawu, the bakers’ union, one of Corbyn’s biggest supporters in the trade union movement, has been expelled, reported for tweets which included the use of the word “traitors” to refer to Labour opponents of Corbyn.  Jon Will Chambers, former bag carrier to Stella Creasy, and a vocal Corbyn critic on Twitter, has been kicked out for using a “Theresa May” twibbon to indicate his preference for May over Andrea Leadsom, in contravention of the party’s rules.

Both activities breach the letter of the party’s rules although you can (and people will) make good arguments against empowering other people to comb through the social media profiles of their opponents for reasons to dob them in.  (In both cases, I wouldn’t be shocked if both complaints were struck down on appeal)

I would be frankly astonished if Corbyn’s margin of victory – or defeat, as unlikely as that remains in my view – isn’t significantly bigger than the number of people who are barred from voting, which will include supporters of both candidates, as well as a number of duplicates (some people who paid £25 were in fact members before the freeze date, others are affliated trade unionists, and so on). 

What is unarguably more significant, as one party staffer reflected is, “the complaints are nastier now [than last year]”. More and more of the messages to compliance are firmly in what you might call “the barbecue category” – they are obviously groundless and based on personal animosity. That doesn’t feel like the basis of a party that is ready to unite at any level. Publicly and privately, most people are still talking down the chances of a split. It may prove impossible to avoid.

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.