If it’s broke, fix it? The case for a new consensus

6 Nov 2014

* IMPACT Article of the Month *


The radical left has always claimed to have history on its side. Che Guevara was quite keen on the idea, asserting that “Whatever the tribulations of history during short periods, the future belongs to the people; the future will bring about social justice.” So too was the great thinker Karl Marx, who claimed that Iron Laws of history made progressive advances in the organisation of human society inevitable.


However, in recent years - or to be specific, since the election of Margaret Thatcher and Ronald Reagan - history seems to have gone the other way. Financial markets have been deregulated, progressive or redistributive taxation systems have largely been abandoned, and successive governments have striven to reduce the size of the state.


This is not to say that there has not been any public spending. Public spending has thrived, but quite often in a distinctly corporatist direction. Between 2011 and 2012 the UK government spent around £17 billion on housing benefit; a handout that essentially goes straight into the clutches of landlords that charge rents that their tenants can’t afford. Another £12 billion between 2011 and 2012 was spent on tax credits; a benefit that tops up wages that are too low for people to live on.


These spending programs, however, are not radical left wing solutions. The radical left’s solution to expensive houses is for the state to build cheap ones. Its solution to poverty wages is for unions to negotiate pay increases. So whether we like the radical left or not, the apparently left wing spending plans that have been implemented across the UK for the last 30 years are far from socialism in action.


The big question we’re all asking of the radical left however, is do they have a solution? Notorious for veracious criticism the radical left is widely condemned for falling short when it comes to practical policies. After all, you can’t solve a financial crisis caused by unsustainable public spending through more spending can you?


Essentially, the radical left’s point is that the financial crisis wasn’t caused by public spending. They argue that various innovations created by the financial sector through the post-Thatcher boom are responsible for the crash. Banks, for example, by lending more in credit than they had in hard cash, granting credit indiscriminately and blowing their profits in a culture of unsustainable bonus’ created an economy based on unsustainable debt and the fallacy of self regulation. So the left’s point is that, even if the economy looks good at the moment, while the financial system remains unreformed any savings in spending and economic gains are going to be outstripped by fallout from the next crisis.


In terms of solutions, meanwhile, the left have many that swivel and dart around in the air like juggling balls. Traditionalists like Alex Callinicos maintain that lasting prosperity can only be established through “democratic planning”. The view that we should aspire to be what the Soviet Union was between the years of 1917 and 1924 is not without reason compared by most to flogging a dead horse.


But it also is not without its supporters, particularly in militant parts of the Labour Party, TUSC and Left Unity.


More contemporary approaches are emerging however. In its latest pamphlet Reclaiming Modernity for the Left, Compass, a left wing think tank of the Labour Party, has outlined a plan for greater bottom up control of public services. This, admittedly, has little to do with growing the economy besides the implication that co-operatives should be encouraged, although it does open up the possibility of a new left wing program detached from the dream of resurrecting long dead “utopias,” like the post war consensus.


Similar ideas are emerging from the RSA that points to how many people are simply opting out from corporate jobs and seeking more creative forms of self employment, using new technologies and the internet, with self employment growing by 30% in the last decade. The most important advantage of the ideas of this new radical left, however, is that most of their policies are already being implemented, and working, in practise. Employee part-owned companies, for example, have increased in America by almost 50% in the last decade and now make around 30% of the agricultural products produced there. Also in parts of America we’ve seen the rise of locally organised, publicly owned gas, electricity and internet companies which compete with private firms to bring down prices for ordinary people.


These are small examples, but also clear indications that bottom-up leftism can and is working in practice. So in summary, the revolution may be a far chime away but the radical left has policies, the example of a thriving localist movement in America and perhaps even the next consensus at its fingertips.


By Nicholas Byard

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