The following article was first published at www.respublica.org.uk
As 2011’s bewildering firework display of headlines, events and moments of crisis fades into the darkness, do any underlying patterns shine on to illuminate our journey through 2012?
Or in the political arena, perhaps some colours? First, it seems that Red Tory-ism is still aflame. A range of emerging policies, such as community rights and public service mutuals, reflect the influence of a philosophy which proposes small-scale and local communitarian solutions, champions civil society and traditional conservative values, and rejects both state and market monopolies.
Second, Blue Labour caught fire and burned brightly, at least for a while in 2011. It shares principles with Red Tory-ism, highlighting reciprocity, mutuality and solidarity, and is critical of New Labour’s rather less critical embrace of both market and state. Self-reliance again forms part of an approach which aims to preserve non-state institutions grounded in community (such as flag, faith and family) against the unfettered power of the market.
Finally, in the last few weeks of the year, this tricolore unfurled with the ignition of In the Black Labour. There is a crucial point here – and not only for Labour as they attempt to restore some economic credibility – that social justice “can go hand-in-hand with a clear, fiscally conservative stance.” From this perspective, spending is not the only way to pursue a progressive agenda and is sometimes even “the least good way to do so”. Instead, “structural or institutional reforms, which affect the causes of inequality and injustice, are often better – and invariably more enduring.”
It’s early days for In the Black Labour but already it’s clear that the challenge is “how”? How can greater social justice be achieved with less money? There is only one possible answer: the state must enable both the market and society to shoulder the delivery of social justice, thereby relieving an enlightened state from itself performing such an intrusive and costly role.
This immediately raises the need for us to better understand how these three (crudely drawn) spheres of labour and capital interrelate within our economy. What do we know about the interrelationship between private individuals and businesses (competing to create financial wealth) with public bodies (which command or control resources to create public goods and services) and with the groups, charities, trusts and associations (which co-operate to make the UK a more socially or environmentally rich place to live)? What are the positive and negative economic dynamics between (again, crudely) liberté, egalité and fraternité?
Can the state provide the infrastructure that helps businesses? Can businesses reinvigorate communities? Does the private sector generate tax revenues? Can social action save government money? Do markets rely on trust and social capital? And more destructively, do businesses generate negative externalities which bring costs to the Exchequer? Does the public sector crowd out social action? Can the welfare system stifle enterprise?
Of course the answer is yes to all the above. The question then for In the Black Labour, and indeed for all of us, is to identify the policies which lead to more positive supporting, catalysing and enabling dynamics and less stifling, undermining and crowding out. The UK economy can be highly inefficient when these three different sectors work selfishly and destructively in opposition. With the state asked every year to pick up a bigger tab to solve the externalities and failures of the market, the private sector feeding the public sector’s addiction to tax revenues, and the social sphere ever more reliant on hand-outs to shoulder the burden of mopping up failure elsewhere. Instead, a more harmonious and symbiotic alignment of the different spheres of capital and labour could lead us to more sustainable public finances.
So in this light, the Big Society (whatever its merits or faults) is just one part of the picture. The Government argues that if the state gets out of the way, then social action can flourish. But this is only half the side (and the gloomy side at that) of a triangle.
So while the world calls for and still awaits a new economics, it seems a new politics is already afoot with 2012 providing the canvas for an emerging political philosophy in the UK. This is a more critical approach which argues that there is, in fact, an alternative to the supposed liberal consensus that There Is No Alternative. In synthesis, a vision of a “good economy” based on a critique of the neoliberal market and the authoritarian state, together with an almost fetishisation of social action. But a vision projected not only within think-tanks and by influential policy gurus but also which appeals to the wider public in the context of broad disillusionment with Westminster’s narrow menu of choices.
First, a vision of a less crass and rampant capitalism and instead, a re-moralised economy of co-operatives, mutuals and social enterprises not refusing markets but seeking to change them: more common and local ownership, less speculation, breaking up monopolies and pricing in environmental or social costs, and banks you can trust. This is perhaps Ed Miliband’s half-formed idea of ‘good business’ creating social and economic value. (And fortuitously, as it happens, ethical business is thriving, co-operatives and social enterprises are outperforming conventional business at their own game.)
Second, a more vibrant, valued and robust civil society with ‘little platoons’ independent of the state forming around the common good, around traditional values and conserving what is cherished. This is the Conservative’s oft-ridiculed Big Society made real where people feel this is such a thing as society and that they belong to it. (And, as it happens, contrary to reports of Broken Britain, the long-term trends suggest we belong to ever more clubs and associations, and a million more people gave to charity this year.)
Finally, these more rounded spheres allow for a smaller, more enlightened and enabling state creating the rights, incentives and better regulation to catalyse and influence behaviour elsewhere, rather than mopping up and intervening itself. Perhaps a liberal state beyond peak state? (And of course, as it happens, the state is already shrinking as a proportion of GDP).
So while the economic theory is lacking and the political narrative is not quite fully expressed, there seems to be a flag unfurling to march behind, with a positive and hopeful story that suggests a better future and a more sustainable society, economy and state, working in harmony rather than in opposition. It may even be a flag for politicians to fight over for a decade or more. Already, it’s black and blue and red all over.