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11 June 2009

Nothing to turn back to

Irresponsible capitalism has left us in economic and political turmoil. The solution is a new democr

By Neal Lawson

You wait ages for a crisis to arise, and then a stack of them come along at once. But the multiple crises that Britain is now experiencing have a common thread running through them: the relationship between markets and capitalism, on one side, and society and democracy, on the other. The interaction between these forces presents the left with its greatest threat – and its biggest opportunity – since 1945. It started with a financial services crisis because politicians put the banks outside democratic control. Then we were tipped into an economic crisis because of the credit crunch that ensued. As the Treasury bailed out the banks, the recession took hold and tax revenues plummeted, turning the crisis into a public-spending disaster.

Then the Daily Telegraph drew attention away from the bankers by lighting a fire under parliament. The expenses scandal is just another sign of our 30-year lurch towards consumerism. Too many MPs, it seems, are more interested in changing their homes than changing the world. The biggest crisis of all – the destruction of our climate – also has its roots in a capitalist system unfettered by social responsibility. We are on course to destroy our planet because, like our MPs, we can’t stop buying stuff we believe we don’t just want, but need. It’s the only version of the good life we know.

These multiple crises were a long time coming and will take a long time to be resolved. The European election results are a reminder that in the middle of a storm people can swing to the right, just as they did after 1929. But, over time, and given the right arguments, these crises could equally spark the start of a golden progressive era. The wonder of the moment is that, suddenly, politics is alive. Workers threatened by redundancy, homeowners staring eviction in the face, voters everywhere outraged at the expenses scandal: suddenly, everyone has a voice and view. We need each other, we need society – and therefore we need democracy.

Three months ago, John Harris and I wrote an essay in these pages entitled “No turning back”. We argued that, instead of slipping back to the pre-crash politics of debt and turbo consumption, the left must create new terrain on which to fight for a more equal, democratic and sustainable future. But since then, the possibility of turning back has gone – there is simply nothing to turn back to. The question we are all facing now is not whether to build the good society, but how.

The longest-ever Labour administration can now be deemed a failure. New Labour humanised Thatcherism and the market with policies such as the minimum wage; but it also embedded the market culture in schools, hospitals and every other part of our daily life. The current government has presided over growing inequality and the rise of the British National Party, the erosion of civil liberties and an unwillingness to take climate change seriously.

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The overriding failure of New Labour, however – one at the root of all of these political disasters – has been the systematic weakening of institutions that make democratic change possible. Along with parliament and the party itself, the unions and the public realm have been hollowed out, not by accident but by design.

The moment it accepted the “inevitability” of market fundamentalism, New Labour signed the death warrant for social democracy. The relationship between markets and democracy is zero-sum – more of one means less of the other. Markets create efficiencies by closing down the space between producers and consumers, stripping out any organisations that stand between the two, such as trade unions, which demand negotiation and consensus-building. Much better to eradicate them through privatising services such as Royal Mail, turning the people who use them – all of us – from citizens into consumers. Economic efficiency and social justice, so the story went, go hand in hand. But while flexible labour markets were efficient, they destroyed jobs, cut real wages and imposed longer hours.

Efficiency through social democracy, on the other hand, is premised on the belief that the participation of people who run and use political institutions, public services and workplaces makes the most of everyone’s input, because everyone’s voice is heard. New Labour fears debate outside the party because it is deemed inefficient and internally because the membership would never back market-oriented goals. Broadly speaking, therefore, it is an anti-democratic project. Intellectually, organisationally and financially, it is bankrupt. But Cameronism is not the answer, either: he is a right-wing politician, and this should be a centre-left moment. He will not renounce Thatcherism. His leadership would be a pale imitation of Tony Blair’s, another sofa government. In seizing the moment, the democratic left must start with its moral compass: the values of equality, solidarity and sustainability. The principle of democratisation must be applied in five main areas.

First, the Labour Party needs to recognise that democracy is more than a means to an end – it must be both. The intrinsic worth of democracy is how it empowers us, not just that it delivers control. To have any hope of reforming parliament, the leadership must show trust in both the public and the party’s own members.

Second, the democratic system needs thorough reform. Proportional representation is the key, allowing politics to become a debate between competing visions of the good society. Without PR, reforms will just be a technocratic fix. The political system requires ideological blood coursing through its veins if it is to come to life.

Third, we have to democratise public services and local government as well as parliament. Fourth, there must be recognition that civil society matters: unions, NGOs, voluntary organi­sations – the places in which people can learn to be citizens – must all play a part. Fifth, we must democratise our places of employment. A voice in the workplace is not just a right, but also the means of unlocking our productive potential.

A new democracy and a new socialism are two sides of the same coin. The good society is the one we create for ourselves – we can’t turn back to the bureaucratic state just because the markets have crumbled. It is time for the democratic state. Do people need protection from global capitalism? Should we be a more equal society? Can people achieve more together than alone? The answer to all of these questions is: “Yes!” The potential for the left and the opportunity to realise it has never been greater. But we must seize the mantle of democracy firmly and permanently. There is no turning back. The past 12 years have left us nothing to turn back to.

Neal Lawson is chair of Compass and author of “All Consuming”, to be published by Penguin on 25 June (£10.99) The New Statesman is sponsoring the Compass conference “No Turning Back” at the Institute of Education, London WC1, on Saturday 13 June. Book at:

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