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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.

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Appreciate the full horror of Nigel Farage's pro-Trump speech

The former Ukip leader has appeared at a Donald Trump rally. It went exactly as you would expect.

It is with a heavy heart that I must announce Nigel Farage is at it again.

The on-again, off-again Ukip leader and current Member of the European Parliament has appeared at a Donald Trump rally to lend his support to the presidential candidate.

It was, predictably, distressing.

Farage started by telling his American audience why they, like he, should be positive.

"I come to you from the United Kingdom"

Okay, good start. Undeniably true.

"– with a message of hope –

Again, probably quite true.

Image: Clearly hopeful (Wikipedia Screenshot)

– and optimism.”

Ah.

Image: Nigel Farage in front of a poster showing immigrants who are definitely not European (Getty)

He continues: “If the little people, if the real people–”

Wait, what?

Why is Trump nodding sagely at this?

The little people?

Image: It's a plane with the name Trump on it (Wikimedia Commons)

THE LITTLE PEOPLE?

Image: It's the word Trump on the side of a skyscraper I can't cope with this (Pixel)

THE ONLY LITTLE PERSON CLOSE TO TRUMP IS RIDING A MASSIVE STUFFED LION

Image: I don't even know what to tell you. It's Trump and his wife and a child riding a stuffed lion. 

IN A PENTHOUSE

A PENTHOUSE WHICH LOOKS LIKE LIBERACE WAS LET LOOSE WITH THE GILT ON DAY FIVE OF A PARTICULARLY BAD BENDER

Image: So much gold. Just gold, everywhere.

HIS WIFE HAS SO MANY BAGS SHE HAS TO EMPLOY A BAG MAN TO CARRY THEM

Image: I did not even know there were so many styles of Louis Vuitton, and my dentists has a lot of old copies of Vogue.

Anyway. Back to Farage, who is telling the little people that they can win "against the forces of global corporatism".

 

Image: Aaaaarggghhhh (Wikipedia Screenshot)

Ugh. Okay. What next? Oh god, he's telling them they can have a Brexit moment.

“... you can beat Washington...”

“... if enough decent people...”

“...are prepared to stand up against the establishment”

Image: A screenshot from Donald Trump's Wikipedia page.

I think I need a lie down.

Watch the full clip here:

Stephanie Boland is digital assistant at the New Statesman. She tweets at @stephanieboland