The left can win – but only with competence and vision

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This summer has not, so far, been a happy experience for those who want to promote social justice, which is a cause that does in my opinion necessarily mean overthrowing the philosophy of neoliberalism and the Washington Consensus.

The issues are obvious:

  • Confusion over Brexit
  • A new Conservative prime minister who is still committed to austerity
  • Labour tearing itself a apart
  • No obvious sign that Jeremy Corbyn has learned any lessons from his experience as leader of the Oppostion to date
  • No clear sign that the right wing of Labour has learned that neoliberalism is a dead cause despite backing a candidate who is to the left of any seeking the Labour leadership for decades
  • Poor opinion poll ratings
  • No answer being offered to any of the issues surrounding nationalism, regionalism and devolution
  • No obvious real sense of direction emerging on what the left is to do now from either camp in the Labour leadership election

There's nothing that will surprise most people in that list, I suspect. It's the last that worries me most though, by far, and here my criticisms are, I stress, of both camps in the campaign so please do not accuse me of taking sides.

What I do not, however, want to be is negative: I suspect I am not alone in thinking that the moment has arrived to start rebuilding from the rubble which has been oiled rather too high. In that case let's have the good news list as well:

  • The world is now aware that inequality is not just unfair but positively harmful
  • There is an awareness now that in equality is growing
  • That neoliberalism has driven this inequality is now recognised
  • The role of tax havens and the finance professionals who service them in this creation of inequality is now now recognised
  • Millions of people are now saying that this technical realisation has to now turn into positive political action
  • This is not just happening in one country: the sentiment is spread across countries and even continents
  •  The awareness of the need for change is real and looks likely to last and to rewrite the political narrative

But, and this is where the lists overlap, let me add the last buyllet point to that second list:

  • No obvious real sense of direction is emerging from these realisations or the frustrations and anger they are giving rise to.

The simple fact is that neoliberalism has failed, most especially because it has not delivered growth or the economic stability that is its supposed purpose, and yet so far no-one on the left (or the right,m come to that) has much idea what to do about that fact, or what to replace it with. As many have noted, the one real success of neoliberalism was the fact that it was waiting in the wings to be adopted when Keynesianism hiccuped. The failure of the left now has been that, apart from the tax justice agenda the left has had almost nothing to suggest as an alternative to neoliberalism as it has failed. And I would stress,

I think this true on whichever side of the debate one falls on the Labour leadership issue. The policy proposals from both camps are remarkably similar, and far too timid (on which I say more, below). The debate then becomes one of competence, where I think Smith wins hands down, and commitment to the necessary process of change, where because of doubts about the continuing power of the neoliberals on Labour's right wing Corbyn winds hands down. Precisely because there are few doctrinal differences between the candidates, but there are perceived to be between their support camps, the campaign has been bitter and personal. Labour has lost as a whole as a result. And there is little sign that it has any clue how to recover as yet.

Let me put some theory around this mess if I might. In my opinion the neoliberal politician is the person who I described in my book The Courageous State as a cowardly politician: whenever they see a problem they run a mile from it and say is the responsibility of the market to find a solution. The result is that we have bred a generation of largely incompetent politicians whose conduct is based on that of the lawyer, who says what we must not do, and the accountant, who says what we cannot afford to do. Everything about the role of the cowardly politician, apart from their desire to make money for themselves, is negative. Cowardly politicians have sought power to dismantle the state they are tasked with running: a more destructive purpose is hard to imagine.

The trouble is that as yet the left has not realised that its task is to present not just a different set of policies but a whole new approach to politics. I genuinely think I named this approach correctly in The Courageous State: what we need are politicians who we can believe have not just the courage of their convictions, but as vitally, courage in their ability to deliver on them. This in a nutshell is the quandary of the Labour election: Jeremy Corbyn has the courage of conviction but limited apparent ability to deliver. Owen Smith has delivered (the opposition during this parliament to welfare reforms is largely his work) but people doubt the conviction of his support team, and so Owen Smith himself.

As an observer I see both points of view, but let me stick to reasons, not personalities for the time being because  reasons are really important right now. This is because if the state is going to take on a positive role again - and both Labour leadership contenders say it should - then it really is time that it was appreciated that slogans and even timidity (of which both camps are guilty) are not enough, by a long way, especially if the public at large are to be convinced, as is necessary.

The reason should be obvious and is based on the big difference between the courageous and cowardly politician. Cowardly politicians do not require big skill sets: they need to be able to say 'no', issue P45s, pass the buck, and claim that doing less is best: the approach only requires an ability to say no to elements within an existing, and so pre-defined, range of options.

Courageous politicians face a much bigger challenge: they have to identify a range of options (itself a big skill), to then choose between them and then work out both the resources needed to deliver the chosen option and how to organise them. This is a massively more complex task than that faced by the cowardly politician. Real ability of a type virtually unknown in British politics for some time is required to be a courageous politician.

What I would also stress is that important as the role of being a critic has been during the neoliberal era that is not the same as being a courageous politician. Neoliberals critics - and this is, I think a fair description of the role Jeremy Corbyn and John McDonnell have played - did during the neoliberal era play an important role of pointing out its deficiencies. This is indisputable. But when it seemed that it would survive almost endlessly the critics did not have to develop ideas on what might replace it and as a consequence I am sorry to say that they did not have the courage to do so. If I am candid I think this is why tax justice became so important: as a solution focussed social movement it offered something that just about no one else did to those on the left, which was a solution focussed alternative narrative that could, at least in part, address issues like austerity.

I am pleased that it played that role. But I am equally clear that the tax justice is not enough, as I hope my own work makes clear. Rearranging the mechanisms of state to ensure sound money and finances, social justice, effective redistribution of wealth, a basis for fiscal policy and a foundation for democracy where the voice of each person counts, as I think a policy of tax justice can do, is important, but courageous politics is about more than that. Let me offer some examples, one in tax and the rest not, of what type of thinking is really required now, all of which indicate the weaknesses in the thinking on offer in the Labour leadership campaign.

Start with Labour's greatest love, which has to be the NHS. Attention here has focussed on little more than three things, which are the NHS budget and how it is to be paid for, whether the private sector is to be involved in NHS supply or not, whether the 2012 NHS reforms need to be cancelled.

The budget issue is wholly misplaced: as I have argued time and again, saying a tax must be raised to pay for a public service is wrong: as a matter of fact tax follows spend and not the other way round. Until Labour leaders realise this and say it, confidently, then they buy into the neoliberal argument of the state as a household and will never win any other argument because they are perpetually playing on the opposition's ground: they need the courage to say what is true.

The other two issues are as important though. As a matter of fact the private sector will be involved in the NHS: it will supply goods and services to it unless a candidate is really proposing the ownership and control of the entire means of production by the state in which case this argument is meaningless. In fact it's as about as meaningless as arguing that repeal of the the 2012 reforms will solve the NHS's problems because what existed before 2012 was  already wholly unsuited for purpose in a post-neoliberal world. What has to be presented instead is a threefold vision.

The first is why the NHS is vital to the well-being of the UK that it cannot be compromised by its debasement by the false standards that marketisation now imposes upon it.

The second is to argue that in that case any structure of the type imposed upon it since the early 1990s that presumes that subdividing it into quasi-autonomous and supposedly competing self-accounting units is axiomatically contrary to its functional managerial needs and will automatically lead to sub-optional outcomes.

Third then, like it or not, another fundamental top down reform of the NHS is necessary in a post-neoliberal world. But that's not on offer in the Labour leadership campaign as far as I can see, and that's not good enough. Until the UK's health care is managed around integrated patient care - which is about as far away from reality as the current system can be - Labour is playing at the edges of the problem and it is not offering real solutions.

Take another example, which is rail nationalisation, which is, again, on offer from both camps in this campaign, but once more without proper justification as far as I can see. Rail nationalisation makes sense because as a simple matter of fact rail lines are natural monopolies. This was realised as long ago as the First World War, after which the UK government decided to sweep away the plethora of competing railway companies then in existence in the UK. It went for a half hearted measure in 1923; it had to go the whole way in 1947. Rail privatisation has only supposedly worked in the last twenty years at the cost of failure of one owner of railways infrastructure and its resulting renationalisation and because of a massive increase in public sector subsidies: privatisation has been a charade that has transferred public subsidy into private hands.

But what we are being offered by both Labour camps is a  story of renationalisation as franchises expire: the 'cost free' option. The messaging could not be worse. First it's that franchising is valid and has served a purpose because its perpetuation is to be permitted for some time. Second, it says that there is no alternative vision for how to organise railways when we very clearly need one given their significance in national economic life and the obvious failures inherent in current models whether at national, regional or local levels. And it says there's a timidity about committing resources which suggests a lack of conviction. If that's courageous at any level I need to be told how, because I do not see it right now. To be candid, this seems to only be about changing ownership but (as with the NHS) not in any way moving the debate on what ownership by the state is for. And that's not going to answer any of the questions that those opposed to neoliberalism are asking. If the debate cannot be about the role of railways in national life, sustainability, the way we work and where, and how public transport can and should be taking us to a new low carbon world then what is the point of rail nationalisation?

Finally, take wealth tax. Owen Smith has announced a small measure on this issue: John McDonnell has a commitment to more progressive taxation. But neither has gone near measures that would really address these issues such as those I suggested here and nor is it really clear how they will address all the issues concerning tax havens that permit the growth in wealth inequality, although some appropriate noises are being made. Again then I think there is a lack of courage: the need to fundamentally reform, which is what those who are angry are demanding, is not being taken on board.

Enough of examples. What needs to be done? First, Labour has to say that it is not trying to transform the existing economy: it has to say that the foundations on which that existing economy are built has failed. I am the first to say that Corbyn is closer to this than Smith.

Second, it has to show that it understands what this means: right now I am not convinced that the left has got its head round this issue but I would equally suggest that it should not be hard to do so: the metaphor of the cappuccino that I use on occasion might be of assistance here. A cappuccino is based on strong black coffee (the state) mixed with hot frothy milk (the private sector) to which a topping is added which are the fun things in life to which all should have access. The left has to believe in the state building the foundations for prosperity: that is its role alongside ensuring that all have access to some of the chocolate or nutmeg. Everything it does has to be focussed on this, and saying that the private sector is a partner, but a dependent partner in this task (which as a matter of fact is true). The real left wants a double shot in its cappuccino: it has to evidence that.

Third, the left has to realise that to achieve this it has to massively improve its management decision making ability, because courageous policies demand that for reasons already noted. This is where, based on personal knowledge, I know Smith beats Corbyn hands down.

What now then? Let me offer these final thoughts. First, if Jeremy Corbyn wins, as seems likely, then he has to acknowledge his weaknesses if he is to win any of the PLP he has alienated back. That's a major demand, not least because those weaknesses are very real and a procedure to address them has to be agreed.

Second, hard thinking has to be done and that means something much more than John McDonnell's tokenism with his economic advisory panel which met just twice, and without an agenda on either occasion. It also means something much more root and branch than the three reviews that were supposedly being undertaken, none of which have delivered as yet, because each only focussed on the machinery of government and the thinking has to be much broader than that.

Third, it requires a recognition that management competence has a real value and some in the PLP have that: if they are willing to align that with a post-neoliberal agenda then the leadership has to do all it can to keep them on board.

But most of all this requires real vision. That's not the vision of opposition that Corbyn currently embraces. Nor is it the tepid tinkering that many think those supporting Owen Smith will tolerate, at best. It is instead the vision of fundamental economic reform to bring in a new courageous era in economic management where the state is a proactive decision maker in shaping fortunes and their distribution for the sake of all in a society.

That demands competence of an order we have not been used to for a long time. I know that at a personal level Owen Smith comes closer to delivering that competence than Jeremy Corbyn does right now, but neither has all that's required. So cooperation and team building will be they way forward, by necessity.

If that though  is to be the case vision is needed. I really hope that at sometime that will be on offer. I am not convinced it has been as yet. But I live in hope because vast numbers of people need that hope to be fulfilled if their chances of enjoying life to the full are to be met. The vision then must be uncompromising. But I suspect compromise is going to be needed to deliver it. It's time to talk.