Left Without a Future? by Anthony Painter: astute proposals, overly "pragmatic"

Anthony Painter’s 'Left Without A Future?' demonstrates an all too typical condemnation of “moral fervour”.

Left Without a Future?: Social Justice in Anxious Times
Anthony Painter
I B Tauris, 244pp, £14.99

“Labour is divided between romantics and pragmatists” asserts Anthony Painter. He argues that “there are the Romantics, who emphasise the ideal, the human, the ethical, the communitarian; while the pragmatists emphasise power, policy, practicality and process”. The important thing according to Painter is to find the correct balance between the two. “The problems arise when we have shallow pragmatism with no soul, which becomes meaningless; or when we have romanticism which delivers nothing without a pragmatic anchor”.

However, in The Left Without A Future?, a very readable and broad political manifesto, Painter himself fails to find such a balance, eschewing values, morals, and virtues, in favour of the sort of cold, calculated pragmatism that has gripped the Labour party since the ‘90s. Painter’s actual ideas are completely sound. Although he never uses the word, they essentially amount to ‘Predistribution’, the latest idea from team Ed.

Painter argues that instead of having to resort to cash transfers to compensate for the symptoms of inequality, the left today should focus on the causes, constructing new institutions that create a more equal society before redistribution is required. Institutions such as wage associations, a national infrastructure bank, university technical colleges, a high-quality child care system, decentralised forms of local government and more, are all proposed, to hand power back to the individual, to give them the capability to escape inequality before it engulfs them. Such institutions will endure and become enshrined in society, no matter what the fiscal situation.

Despite the farcical assertion that New Labour’s academies were an example of such institutions, one cannot argue that the enactment of most of Painter’s proposals would not be beneficial. His suggestions are both shrewd and intriguing, and one only wishes that he had devoted more of the book to exploring them.

However, somewhat depressingly, the co-author of In the Black Labour attempts to strip his ideas of any “moral fervour”, any virtue or principle, calling instead for a very woolly “modesty” and “humility”. Despite admitting that you should “never underestimate the moral foundations of Labour”, and despite arguing that Attlee was so brilliant because he combined his pragmatism with a “romantic” set of ideals, Painter himself fails to insert a set of principles into his proposals.

Why? Well, in a very Dan Hodges sort of way, he argues that in a pluralistic society, there are too many different opinions for us to have our own, strong, ethical, moral construct. “What if people don’t care much for ‘our’ values, or ‘our’ policies, and find talk of a good society just plain bossy?”. Such assertions only serve to hollow out politics, to remove meaning from it, to discourage engagement as the young search for other, meaningful outlets, exactly what Ed Miliband has promised not to do.

Moreover, although Painter offers breadth, truly penetrating analysis takes some time to appear. Early on for example, Painter feels the need to share with us a number of pieces of intelligence: apparently, class solidarity has declined, ‘value’ politics have become more important ... no kidding. He also insists on indulging in extremely vague and ultimately useless pop-psychology, like how everyone in society is either a “settler” a “prospector” or a “pioneer”.

Irritating too is Painter’s continual failure to hide his obsession with Barack Obama, despite its irrelevance to his main thesis. Constant comparisons are made to American institutions, American parties, American opinions, when they appear to be of little relevance. More subtle references to the US system are also seen in Painter’s constant advocacy of a compromising, consensus-seeking leadership. Instead of pursuing these vague comparisons, Painter should have spent more time laying out his useful and astute suggestions on institution building.

Strange too is Painter’s proposed adoption of ‘Englishness’. As mentioned, he vehemently rejects moral constructs and ethics, yet he seems all too happy to wish to claim the concept of English nationalism from the far right, and define a set of pluralist ‘English’ values that fit with the left’s view of the world. He seems to think that elements of the optimistic, positive, non-violent, pluralistic breed of Scottish Nationalism could be usefully supplanted into an English form of national identity. He forgets that Englishness is not only irrelevant to most, but also a potentially toxic concept.

Saying that, you may be surprised to hear that I would still recommend this book to anyone interested in social justice and the left. It does give interesting critiques of Keynesianism, neo-liberalism and the economic crash, it does offer some very useful suggestions regarding the types of institutions that the left should look to build, and it also presents an interesting new insight on immigration, suggesting that the public’s opinion is actually far more nuanced than we give them credit for.

The book's flaw is not the lack of a useful plan of action, but instead, the lack of a set of principles which justify that action. In order to construct a new, inspiring programme, like Atlee did in 1945, like the right believe Thatcher did in 1979, you do need a moral construct, a set of fundamental values. Despite some very interesting and potentially very useful proposals which he would do well to devote more analysis to, Painter is far too willing to see ethics as a weakness.

Painter dismisses the "populist left" as too pure and unable to face "real decisions". Photograph: Getty Images.
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Let's turn RBS into a bank for the public interest

A tarnished symbol of global finance could be remade as a network of local banks. 

The Royal Bank of Scotland has now been losing money for nine consecutive years. Today’s announcement of a further £7bn yearly loss at the publicly-owned bank is just the latest evidence that RBS is essentially unsellable. The difference this time is that the Government seems finally to have accepted that fact.

Up until now, the government had been reluctant to intervene in the running of the business, instead insisting that it will be sold back to the private sector when the time is right. But these losses come just a week after the government announced that it is abandoning plans to sell Williams & Glynn – an RBS subsidiary which has over 300 branches and £22bn of customer deposits.

After a series of expensive delays and a lack of buyer interest, the government now plans to retain Williams & Glynn within the RBS group and instead attempt to boost competition in the business lending market by granting smaller "challenger banks" access to RBS’s branch infrastructure. It also plans to provide funding to encourage small businesses to switch their accounts away from RBS.

As a major public asset, RBS should be used to help achieve wider objectives. Improving how the banking sector serves small businesses should be the top priority, and it is good to see the government start to move in this direction. But to make the most of RBS, they should be going much further.

The public stake in RBS gives us a unique opportunity to create new banking institutions that will genuinely put the interests of the UK’s small businesses first. The New Economics Foundation has proposed turning RBS into a network of local banks with a public interest mandate to serve their local area, lend to small businesses and provide universal access to banking services. If the government is serious about rebalancing the economy and meeting the needs of those who feel left behind, this is the path they should take with RBS.

Small and medium sized enterprises are the lifeblood of the UK economy, and they depend on banking services to fund investment and provide a safe place to store money. For centuries a healthy relationship between businesses and banks has been a cornerstone of UK prosperity.

However, in recent decades this relationship has broken down. Small businesses have repeatedly fallen victim to exploitative practice by the big banks, including the the mis-selling of loans and instances of deliberate asset stripping. Affected business owners have not only lost their livelihoods due to the stress of their treatment at the hands of these banks, but have also experienced family break-ups and deteriorating physical and mental health. Others have been made homeless or bankrupt.

Meanwhile, many businesses struggle to get access to the finance they need to grow and expand. Small firms have always had trouble accessing finance, but in recent decades this problem has intensified as the UK banking sector has come to be dominated by a handful of large, universal, shareholder-owned banks.

Without a focus on specific geographical areas or social objectives, these banks choose to lend to the most profitable activities, and lending to local businesses tends to be less profitable than other activities such as mortgage lending and lending to other financial institutions.

The result is that since the mid-1980s the share of lending going to non-financial businesses has been falling rapidly. Today, lending to small and medium sized businesses accounts for just 4 per cent of bank lending.

Of the relatively small amount of business lending that does occur in the UK, most is heavily concentrated in London and surrounding areas. The UK’s homogenous and highly concentrated banking sector is therefore hampering economic development, starving communities of investment and making regional imbalances worse.

The government’s plans to encourage business customers to switch away from RBS to another bank will not do much to solve this problem. With the market dominated by a small number of large shareholder-owned banks who all behave in similar ways (and who have been hit by repeated scandals), businesses do not have any real choice.

If the government were to go further and turn RBS into a network of local banks, it would be a vital first step in regenerating disenfranchised communities, rebalancing the UK’s economy and staving off any economic downturn that may be on the horizon. Evidence shows that geographically limited stakeholder banks direct a much greater proportion of their capital towards lending in the real economy. By only investing in their local area, these banks help create and retain wealth regionally rather than making existing geographic imbalances worce.

Big, deep challenges require big, deep solutions. It’s time for the government to make banking work for small businesses once again.

Laurie Macfarlane is an economist at the New Economics Foundation