Gordon's path to redemption

To seize the moment, Gordon Brown has to change course; not a U-turn or swerve to the left, but a pr

Perhaps God is not a Conservative, after all. Providence has provided a second chance for Gordon Brown to do what he should have done a year ago - describe the sort of society that he wants to see, set out ways of bringing it about, and implement policies that edge the country closer to its achievement. At the same time, he can restore his reputation for managerial competence by decisive action to moderate the effects of the not-yet-solved financial crisis.

The country wants and needs a Prime Minister who is visibly in charge of events. But a demonstration of competence is only part of the prescription for recovery. Without vision, says the Book of Proverbs, the people perish. That is certainly true of Gordon Brown. Fortunately, we have arrived at a time when the people believe there must be a better way of running the economy than the reckless pursuit of short-term gain in a free market which only liberates the rich. Thanks to the incompetence and greed of the men who ran the sub-prime mortgage market, in Britain as well as the US, the autumn of 2008 is, or ought to be, the social democrats' moment.

Ruthless individualism and contempt for social obligations got us into the mess. To get us out and prevent a repetition in five years' time, the state must act to ensure, in Gordon Brown's words last Tuesday, "not the pursuit of any sectional interest but the advancement of the public interest". When Northern Rock was a building society, its concerns were the interests of its community of savers and borrowers. "Mutual" characterised its activities. Then came Margaret Thatcher's "big bang" of deregulation. Northern Rock became a bank, its interests and obligations transferred to shareholders. What mattered was profits, dividends and bonuses. Only market fundamentalists - several of whom have appeared on radio and television to declare a fatwa against government intervention - would claim that competition was better for Northern Rock than the co-operative ethos that preceded it.

And when the unregulated market breaks down, even the free-enterprise jihadists come whining to the government for help. September 2008 ought to be the month in which deregulation was recognised as the god which failed, and when government intervention in the economy was again accepted as an essential feature of a civilised nation.

Last Monday, Alistair Darling committed the government to acting against the market's worst abuses. There must be no half-measures and the government must emphasise the moral dimension, as well as the practical necessity, of restraining the worst results of the profit motive. The textbooks tell us free markets will always return to equilibrium. But the price of restored stability is the misery of families who are impoverished along the way. Labour's task is to provide efficiency with social justice. That requires equity. The voting public is outraged by a system which rewards failure with million-pound annual bonuses and is typified by televised boasts that it is possible to make a fortune out of bankruptcies and the unemployment which follows. Condemning the excesses is not enough. Taking strong action to prevent them is a sure vote winner. More importantly, it is right and necessary.

To seize the moment, Gordon Brown has to change course; not a U-turn or swerve to the left, but a prudent adjustment of direction. Sometime during the past decade his attitude towards the global market changed from acceptance of its inevitable consequences to positive approval of the values on which it was based. Commodity price inflation, combined with the international credit crisis, is not just an excuse for changing policy. Nor is it simply a justification. It makes a new beginning absolutely essential.

His speech last Tuesday suggests that Brown is on the point of becoming a born-again social democrat. Confirmation of that during the next couple of months is his path to salvation. No peace-time premier in history has been offered a better chance of redemption. The Gordon Brown I wanted to become Prime Minister would not hesitate to announce that in a new situation new rules which meet the needs of society as a whole are necessary. That man - a genuine social democrat - is about somewhere. The sooner he is back in Downing Street the better.

This article first appeared in the 29 September 2008 issue of the New Statesman, The crash of 2008