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Labour leaders and intellectual self-confidence

Ed MilibandThe outstanding feature of the political scene over recent decades has been the catastrophic loss of the left’s intellectual self-confidence. It has been particularly marked in the UK and reached its most extreme form with New Labour; as I observed at the time, the short three-letter word with a capital ‘N’ was meant to convey rejection rather than a renewal – not “New Labour” but “Not Labour”. The party’s leaders had convinced themselves that they could not win by adhering to Labour’s long-standing principles and values, and that the neo-liberal revolution had changed things forever. They accordingly wasted all their opportunities in government by aping Margaret Thatcher.

Labour’s current leadership, while making a welcome break from New Labour, continues to exhibit the same uncertainty and lack of confidence. They seem paralysed by the fear that to reveal anything by way of an alternative approach to the current right-wing orthodoxy will open them up to damaging attack.

So they keep their cards (assuming they have any) close to their chest. They thereby convey the overwhelming impression that they either do not know what to say and have nothing to offer, or that they do have some ideas but have so little confidence in them that they dare not reveal them to the light of day.

The problem with running scared like this is that you can never run far enough. Once you accept that the debate must be conducted on terms defined by your opponents, a concession (or a failure to make an argument) on one point will be followed by a demand that the next point should then be conceded. A party that supposedly represents the chance of change and reform finds itself constantly on the back foot.

It is not only the leadership that is incapacitated by this timid stance; those who follow them are left discouraged and direction-less. The energy and enthusiasm that are needed to produce election victory are still-born. Labour’s predicament is summed up in Macaulay’s famous description of an army in which “those behind cried ‘Forward!’ and those before cried ‘Back!’

Nowhere is this weakness more apparent than on economic policy. Labour politicians are still relatively comfortable when taking broad positions on social or even environmental or foreign policy issues; they find it easy to represent themselves as standing up for the underdog. But they are notably reluctant to engage in serious debate about how to run the economy and fall far short of advancing a coherent and comprehensive economic strategy that would provide a credible alternative to Tory austerity.

Opting out of the economic policy debate is a luxury they cannot afford. Economic issues are the most challenging we face. If Labour leaders are unwilling to take the Tories on in this centrally important battleground, they cannot expect to be taken seriously. Criticising the outcomes of Tory economic policy while offering little by way of an alternative analysis or policy prescription inevitably lacks something by way of credibility.

The failure to take up the challenge means that Labour finds itself unable to contest the Tory insistence that deficit reduction is the first priority. No wonder that the public concludes that any legitimate conversation about the economy must begin by recognising the primacy of deficit reduction as the goal of economic policy.

No one would dispute that, all other things being equal, a smaller deficit would be desirable; but Labour should be clear that a large deficit is a symptom rather than a cause of our real economic problems. To address it to the exclusion of other concerns is self-defeating (since the deficit under Tory policies remains stubbornly high and will continue to be so) and also prolongs and entrenches our real problems by ignoring them.

Labour will not, in other words, prosper, or even begin to convince the public that it has something worthwhile to say, until the leadership is prepared to say that the current goals of policy, and the analysis on which they are based, are deeply flawed. They must have the courage to initiate a proper debate that rejects deficit reduction as the unavoidable starting-point and shows that it is in any case best dealt with as the corollary of successfully addressing much more important issues.

What are those issues? They are, first, addressing our fundamental and long-standing loss of competitiveness, so endemic that it is now regarded as part of the natural order. Secondly, rejecting the counter-productive monetarist doctrine that monetary policy is simply about controlling inflation and understanding, as more successful growth-oriented economies have done, that its essential role is to ensure that the productive sector is not handicapped by a lack of liquidity.

Thirdly, directing bank-created credit (by far the largest element in the growth of the monetary base) away from non-productive purposes like house purchase and made available instead, in accordance with an agreed industrial strategy, to rebuild our manufacturing base.

Fourthly, restoring macro-economic policy to its proper place as the responsibility of a democratically elected and therefore accountable government, rather than remaining as the exclusive preserve of unaccountable and self-interested bankers.

Finally, identifying full employment as the central goal of policy and the criterion by which its success or otherwise should be judged.  Full employment is the hallmark of a properly functioning economy; anything less brings with it the unmistakable evidence of economic failure.

A strategy based on these points would offer a clear alternative to Tory austerity, offering hope both for Labour’s electoral chances and for the country’s economic future.


  1. James Martin says:

    Once you abondon socialism (even as a never to be achieved wish, such as was held by the old right wing reformists), what are you left with? A ‘nicer’ form of capitalism? Well we have the Lib-Dims for that and nice it certainly isn’t.

    So without a philosophy you are left with emptiness. Sound bites and stunts replace conviction and policies.

    But you are also left with leaders who can’t lead. Blair was different because he did believe in something (neo-conservitism and evangelical imperialist interventions). But what does Milliband minor beleive in? Anyone know, becuase I don’t.

    The underlying problem here is actually his class background and position. After leaving uni he had a short lived ‘job’ as a ‘media researcher’, before becoming a Spad and then an MP. So effectively he has never done a proper job in his life. Never been a union rep and had to try and protect members from attacks on their pay and conditions. Never even been a local councillor and had to try and cope with cuts at the sharp end. Never done anything, and yet he became leader of the Labour Party, which shows to what a dreadful level the Party had – and has – sunk in terms of genuine talent. Never done anything, and yet he wants to lead the country. Some hope!

  2. Syzygy says:

    Thank god someone with a big name is saying it!

    The UK can never run out of money.. it is a sovereign country with its own currency. The UK does not need to borrow and the deficit/debt are merely indicators of the state of the economy.

    Ed Balls should move right away from, the free-marketeer, Larry Summers. Balls knows perfectly well that the next Labour gov’t is not constrained by a lack of finance. With 2.5m unemployed, and another 5m underemployed, there is no likelihood of inflation from a New Green Deal.

    If the LP is not going to be brave now, when would it be. Its a tragedy that Bryan Gould’s economic analysis was rejected in favour of Kinnock/Brown/Blair.

  3. Rod says:

    James Martin, re Miliband: “Never done anything, and yet he wants to lead the country.”

    One problem with Miliband is that he wants to use the secret and apparently sexed-up Falkirk dossier to change the Labour Party. If he’s prepared to keep evidence secret and seemingly manipulate events in the way one might expect of the central committee a Trotskyist sect then I’m not at all sure he’s the right person to run the country.

    If this is the measure of Miliband just imagine if he wins in 2015. After two years in office, Miliband addresses the nation: “I have been provided with incontestable evidence showing that we are 45 minutes from attack. Unfortunately, for reasons of military response, I am unable to share this evidence with you. Therefore, in order to protect this great Nation and our interests, I am authorising, in cooperation with our allies, a pre-emptive, preventative strike.”

    And then, two years later, after much slaughter for no purpose: “I only know what I believe.”

    Enough is enough. And Miliband doesn’t have enough integrity.

  4. Patrick Coates says:

    Ed writes to me all the time, I dont have to read it in a Tory newspaper or hear it on 24 hour sorry 24 minutes TV news.
    I dont always agree with what he writes, but I can write back if I want to.
    I keep all the correspondance for others to read if they wish, so that we can make a sensible reply at the appropriate time.
    How do I do this, 1) I am a member of the party and 2) I am the CLP Secretary.

  5. Rob the cripple says:

    When would be the best time to tell us after the election.

  6. I think it’s wrong to blame Ed Milliband for the current malaise of the Labour Party. The Labour Party was ideologically gutted and hollowed out during the Blair years – when the Party got rid of its old socialist doctrine, and dropped Clause Four – and replaced it by the frothy, contrived Third Way Project (which was always more about spin than substance) – and which has evaporated into thin air, with the departure of Blair. People no longer know what the Labour Party stands for and believes in. It isn’t a change of leadership that is required. It is an intellectual makeover that the party needs, so that people might know what they’re voting for, for a change.

  7. Sandra Crawford says:

    The Labour government should do something similar to that achieved by Clement Attlee. He nationalised the bank of England and gained all of the seniorage on cash. Cash became a source of debt free money for the government as the face value of the money was paid into the treasury after being sold to the banks.
    This could be done again with electronic money. Banks should be forced to buy 50% reserves before being allowed to create their own money. Some believe that this should be 100%, but this could be politically difficult.
    I definitely agree that banks should be stoped from blowing up economic bubbles in the property market which is impoverishing the population with crippling debt, which is becoming a feudal tax for the finance industry. They must be broken up and regulated. They must lend for productive purposes.
    These measures alongside legislation to prevent tax avoidance and evasion, are the true beginnings of recovery.

  8. David Pavett says:

    I strongly agree with Bryan Gould except that I think the problem goes further than he suggests. It is not that the Labour leaders have ideas about making fundamental changes to the way our economy works but lack the intellectual confidence to make the case for them. They just don’t have he ideas in the first place. They really do believe that “responsible capitalism” is the answer to our problems and their thinking does not move outside that framework.

    Andy Burnham’s recent Guardian interview was a welcome break in the Shadow Cabinet’s tired fumblings. But one swallow … Just listen to Stephen Twigg. He still believes that making all schools independent, competing in the “market place” for new customers through parental choice is the way to “drive standards up”. It’s the old neo-liberal model with its ever increasing privatisation (largely covert for the moment). Oh, and he is against free schools but for “parent-led academies”. Can you spot the difference. I have written to ask him but he seems not in a hurry to reply.

    A perfect illustration of Bryan Gould’s points about the complete inadequacy of Labour’s economic stance is provided by an article in the Guardian by Chuka Umunna. It is pure flim-flam which tries to give the impression of offering something different to the Tories but actually does no such thing. Interestingly though Umunna says that Labour has a goal of full employment. Can we expect to see this in the 2010 manifesto? 100 to 1 anybody?

  9. Neil Stretton says:

    Once again, an accurate and pertinent description of the failure of the Party to develop a unique economic policy. Bryan is right, the economy (“stupid” !) is THE battleground for the coming election and Labour should be offering a cogent alternative approach to the Coalition. It has COMPLETELY failed to do that (so far) and (as Burnham et al rightly point out) we have little time to do that. Balls has ‘ballsed’ it up ! I can’t see him going – but his replacement (well, if it was by someone who knew what they were doing !) could be one way of getting an alternative to austerity in place, before it’s too late.

    Bryan’s final point, about the need to identify FULL EMPLOYMENT as the central goal of Labour Party policy, is fundamental. He helped launch the Full Employment Forum 25 years ago – perhaps the most far-sighted (but overlooked) policy initiative in recent times. Unfortunately long since gone, perhaps now is the time for someone to resurrect this and re-establish a campaign for Labour to adopt such a policy. There are a few siren voices in the Party calling for a Job Guarantee commitment – that is only one plank in a broad full employment policy – but it is a start. It should be welcomed.

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