Issue 66 of INTERNATIONAL SOCIALISM JOURNAL Published Spring 1995 Copyright © International Socialism

Backward to liberalism

A review of David Miliband, ed, Reinventing the Left (Polity Press) £45.00/£11.95


British politics is in an intriguing state of flux. The crisis the Major government has been in since the pound was driven out of the Exchange Rate Mechanism on Black Wednesday, 16 September 1992, shows no sign of abating. On the contrary, the apparently endless succession of bungles and scandals at Westminster serves to reinforce a popular mood of intense hatred of the Tories. Meanwhile issues such as the revival of fascism and the Criminal Justice Act have stimulated mass movements that are bringing a new generation into radical politics.

This situation amounts to a remarkable opportunity for the British left to begin to reverse the defeats it suffered in the 1980s. And, at the level of electoral politics, it is the parliamentary left--in the shape of the Labour Party--which is the chief beneficiary of the Tories' unpopularity. Labour, in the months following Tony Blair's elevation to the party leadership in July 1994, established an astonishing lead in the opinion polls.

But what does Blair's 'New Labour'--as his advisers have rebaptised the party--stand for? In what respects do its policies constitute an alternative to those of the Tories? What hope of a better future does it offer after the terrible suffering and waste inflicted under Margaret Thatcher and John Major?

Even by the standards set by his predecessors Neil Kinnock and John Smith, Blair has been extraordinarily cautious in his response to these questions. Detailed policy commitments from 'New Labour' are still very thin on the ground. It is, therefore, useful to have some pointers provided by the essays collected together in Reinventing the Left. True, they were based on papers delivered mainly by left wing academics at a conference held in September 1993, before Smith's death and Blair's accession. Nevertheless, they are edited by David Miliband, by all accounts one of the key figures in the new leader's kitchen cabinet, and the contributors include Blair's close ally, the shadow chancellor of the exchequer, Gordon Brown. The whole tone of the collection and the manner in which it is packaged is intended to convey the impression that its aim is to reassess the socialist tradition for a new age. Miliband explains that: 'the essays in this book all seek to give modern relevance to old values. These values have inherent in them an ambition to change in a fundamental way advanced market societies.' At the same time, however, '[n]one of the authors of the essays in this volume believe that this project can be achieved by revolutionary upheaval, but they do believe in social and economic reform'.1

The contributors thus place themselves firmly within the reformist tradition. Reformism itself has, of course, various different strains. Left reformism, which seeks a fundamental restructuring of the British state and society, is honourably represented in Britain today by figures such as Tony Benn and Dennis Skinner. But they are very much part of the 'Old Labour' which the contributors to Reinventing the Left want to break from. Miliband and his co-thinkers want to give 'modern relevance to old values'. This has, of course, become one of the main themes of Blair's 'modernisation' of the Labour Party. Thus scrapping Clause Four of the Labour Party constitution, with its commitment to common ownership of the economy, is presented as an 'updating' which will leave Labour's 'values' untouched. This kind of argument has been used before. Back in the 1970s, I remember, the Daily Telegraph used the advertising slogan 'Times Change. Values Don't.' Tony Blair's message to the Labour rank and file seems to be the same. But what exactly are the values which he--and the contributors to Reinventing the Left--are seeking to preserve and indeed reinvigorate?

The answer is implicit in former New Left Review editor Perry Anderson's comment on the sociologist Tony Giddens's opening essay. (The collection is organised around a series of major papers, each appended with a brief comment. It is generally, though not always, true that the comments are considerably better--more incisive, more realistic and at any rate shorter--than the essays to which they respond.) Anderson picks up on Giddens's claim that we are witnessing at present 'the exhaustion of received political ideologies', notably of both liberalism and socialism.2 He protests:

There is an obvious objection to this assertion. The wave of euphoria which followed the 1989 revolutions in Eastern Europe was rapidly dissipated as a series of developments demonstrated the inability of liberal capitalism to organise the world on a peaceful and stable basis--the Gulf War, the chaos in the former Soviet Union, the carnage in Bosnia, the global recession of the early 1990s, the economic collapse of most of the Stalinist succession states. Hence the widespread scepticism with which Francis Fukuyama's announcement of the end of history and the definitive triumph of economic and political liberalism was greeted, even on the right.

Nevertheless, Anderson is right in the sense that the influence of liberalism as an ideology probably is at its 20th century 'zenith'. The 1989 revolutions brought to a climax the long process through which Stalinism and social democracy--the two dominant traditions on the left since the 1920s--had been gradually discredited. The associated decline of Keynesian economics--along with cruder pressures, such as the structural adjustment programmes imposed by the International Monetary Fund and the World Bank--helped to create a vogue for free market economics throughout the Third World. The result is an intellectual climate in which no alternative to liberalism is considered to be credible.

The resulting cultural sea change is very striking particularly on the academic left, where the flight away from Marxism has assumed lemming like proportions in recent years. Often this retreat into liberalism is obscured by the adoption of some variant or other of postmodernism, where grandiloquent philosophical rhetoric helps conceal a timid acceptance of the status quo. Sometimes, however, the endorsement of liberalism is more or less explicit. Reinventing the Left is an example of this latter tendency.

Thus Miliband argues that:

There are, in fact, few signs of such a 'coherent understanding' emerging in Reinventing the Left.' David Held does offer the following 'principle of autonomy':

This new 'principle' has a familiar ring. It seems, in fact, to be nothing but a restatement, couched in the language of rights, of John Stuart Mill's famous pronouncement in On Liberty: 'The only freedom which deserves the name is that of pursuing our own good in our own way, so long as we do not attempt to deprive others of theirs or impede their efforts to obtain it.7 The standard socialist objection to this classic definition of modern liberalism has, of course, always been that most people's equal right to freedom is nullified, or at least gravely qualified, by their lack of access to the productive resources required to support themselves. They are thus not 'free and equal in the determination of the conditions of their own lives'.

Held is aware of this objection. His principle of autonomy proscribes what he (somewhat bizarrely) calls 'nautonomy', ie 'the assymetrical production and distribution of life-chances which limits and erodes the possibilities of political participation.' It follows that:

Talk of redistribution immediately raises the question of the market. One doesn't have to be a Marxist to recognise that a market economy generates systematic inequalities of resources and income, and thus what Held calls 'nautonomy'. Thus Will Hutton of the Guardian notes:

Redistribution to give people genuine control of their lives therefore inevitably involves interference in the market. But what does this imply? Miliband asserts on behalf of his contributors, 'The role of politics is not to abolish markets, but to organise and regulate them.'10 To properly understand the equivocal answers Reinventing the Left gives to this question it may be helpful briefly to consider the historical relationship between liberalism and Labourism in Britain.

There are different economic programmes consistent with the basic conception of individual freedom expounded by Mill. The laissez faire liberalism politically rehabilitated in the 1980s by Ronald Reagan and Margaret Thatcher asserts that if the market is left to its own devices, with the economic activities of the state reduced to the lowest possible level, human welfare will be maximised. Other liberals, however, including Mill, have denied this, and insisted some degree of state interference is necessary to offset the injustices and inefficiencies generated by the unrestrained market.

The emergence of Labour after the First World War as the main electoral rival to the Tories saw an influx into the party of supporters of this variant of liberalism. Many ex-Liberals came more or less reluctantly to the conclusion that Labour was the only effective vehicle for the New Liberalism of social reform devised by Gladstone in the late 19th century and implemented by the triumphant Campbell-Bannerman and Asquith administrations in the years before 1914.

However, the chief architect of this synthesis of liberalism and social democracy never joined the Labour Party. John Maynard Keynes developed a critique of laissez faire, showing that the unrestrained market would lead precisely to the kind of chronic mass unemployment characteristic of the inter-war years. He argued that the state could, by judicious adjustments to taxation and public spending, ensure that the economy avoided the sharp fluctuations of boom and slump, and thereby secure full employment. He thus provided social democracy with an economic programme which offered an alternative to the unbridled market but avoided any direct confrontation with the structures of capitalist economic power. Though Keynes remained a Liberal, young Labour intellectuals such as Douglas Jay and Hugh Gaitksell proselytised for his ideas in the 1930s. During the long boom of the 1950s and 1960s Keynesian economics was adapted by leading 'revisionists' such as Anthony Crosland and John Strachey, and gave right wing social democracy its intellectual underpinnings.11

The return of economic crisis in the late 1960s--particularly in its initial form of 'stagflation', which combined accelerating inflation and mass unemployment--discredited the Keynesian methods of demand management which had previously been held responsible for the post-war boom. The crisis set the stage for the revival of the free market liberalism advocated by Milton Friedman and Friedrich von Hayek. Developments over the past 25 years--in particular the pronounced tendency to the greater global integration of capital--have, by reducing the ability of states to manage their 'national' economies' further weakened the main instrument of Keynesian policies. What Nigel Harris has called 'the end of capitalism in one country' seemed also to sound the death knell of interventionist liberalism.13

Where, then, does this leave social democracy? What does 'regulating' the market mean in the post-Keynesian era? Reinventing the Left offers a hubbub of different answers, some mutually inconsistent, none of them convincing. In some cases we are presented with nothing but muddle. Giddens, for example, attacks what he calls the '"cybernetic model" of social life' traditionally accepted by the left, according to which 'a system (in the case of socialism, the economy) can best be organised by being subordinated to a directive intelligence (the state, understood in one form or another)'. This form of organisation can't work, he claims, in a system as complex as a modern economy. This argument is strongly reminiscent of Hayek's attempt to prove the impossibility of any form of socialist planning, and therefore the necessity of leaving the market to its own devices. But Giddens refuses to draw the latter conclusion, arguing instead that '[u]nchecked capitalist markets still have many of the unhappy results to which socialists have long pointed'. Well then, how are these results to be avoided? Presumably, laissez faire won't do. But with what is it to be replaced? Beyond reaffirming his rejection of 'the cybernetic model of socialism', Giddens doesn't say.14

Other contributors are more up front. French Socialist Party leader Michel Rocard, for example, opts for '[a] society of social solidarity in a market economy', with the emphasis on the latter. Thus he argues that the left has:

Many socialists would be unwilling to take lessons from a former prime minister in François Mitterrand's disastrous administration. And indeed Will Hutton takes him to task for having 'yielded too much ground. The notion that markets are the only successful form of organisation... requires more caution.' He goes on to point out that 'there are many forms of market and capitalism, with varying degrees of efficiency and social cohesion; the Left must discriminate between them'.16

The thought is that, rather than offer a global alternative to capitalism as a system, the left should espouse that variant of capitalism which offers the best chance of realising their objectives. Thus, in the Ten Commandments for Social Democrats with which the book concludes, James Cornford and Patricia Hewitt invite the reader to 'decide what kind of capitalist you are'.17

This stress on the varieties of capitalism has been made fashionable in social democratic circles by a recent book by the French businessman and journalist Michel Albert. Albert argues that the collapse of Stalinism has indeed marked the triumph of capitalism. This does not, however, as Fukuyama claims, amount to the end of history. On the contrary, a new conflict is now beginning to occupy the centre stage of world history, that between the two main models of capitalism prevalent in the developed economies.

The first, 'Anglo-American capitalism', comes closer to the requirements of laissez-faire liberalism. The market is increasingly unregulated, individuals are left to pursue their own destiny, and poverty and inequality are growing. Confronting it is the 'Rhine model' of capitalism, most fully developed in West Germany but to some extent to be found throughout the European Union. Here the market is closely regulated, networks of social co-operation bind together industry, finance and the state on the one hand, and capital and labour on the other. High levels of welfare spending ensure social cohesion and reduce inequality. Albert believes that Rhine capitalism represents a more efficient and humane version of the market and therefore will be able to see off the Anglo-American challenge.18

Albert's analysis informs many of the contributions to Reinventing the Left. Rocard, for example, argues that 'we have a civilisation contest' and argues that the EU should actively seek to export its combination of 'human rights and social protection'19 (rights and protection denied to many blacks and Arabs in France during his premiership). Some contributors go beyond this very dubious sloganeering, advocating what Miliband calls 'an egalitarian productivism'.20 This idea is most carefully developed by Joel Rogers and Wolfgang Streeck. They argue that 'the Left must again save capitalism from itself'. In the 1930s Keynes' principle of effective demand offered a way of getting capitalism out of the Great Depression: higher public spending would stimulate demand and therefore generate an increase in output and employment. This restored growth and profits and made possible higher living standards and the development of the welfare state: both labour and capital benefited from the Keynesian remedy.21

The contemporary equivalent of Keynesian effective demand, Rogers and Streeck argue, is what they call 'effective supply'. The economic transformations of the past quarter century have left capitalism much more flexible, but also much more disorganised than it was in the recent past. It needs a higher level of social co-operation and co-ordination, one that the market cannot provide. In particular, high productivity, high wage capitalism requires a whole range of 'public goods' such as training which no individual firm has an interest in producing because this would raise costs and reduce profits. Such public goods would however benefit capitalists and workers alike if the state were to supply them. Indeed, on this strategy, 'equality and democratic participation' become 'a source of productive progress'.22 Rather than confront the traditional reformist dilemma that greater social justice will undermine the operation of the market economy, the left can have its cake and eat it.

Gordon Brown offers a cruder version of the same argument in his contribution.23 As Robert Kuttner makes clear in a highly effective critique, it assumes a rose hued view of capitalism's future course. Thus:

Moreover, Kuttner points out, whether higher productivity benefits workers depends upon the overall state of the economy: 'To assure that productivity gains in one factory add up to gains in living standards for workers rather than technological unemployment requires a macroeconomic context of high growth and full employment.' Rogers' and Streek's supply side reformism must therefore confront the problem of insufficient demand--and more generally capitalism's tendency to boom and slump--which Keynes's economics, for all its faults, sought to address.25

Finally, 'egalitarian productivism' ignores the question of power, and the class conflicts from which it is inseparable. Whatever benefits capital might gain from higher state spending on such things as the provision of training, Kuttner suggests:

The naive optimism uncovered by Kuttner is symptomatic. Thus no contributor notices that the early 1990s have seen 'Rhine capitalism' thrown into crisis in its west German heartland by the combined impact of unification and recession. The uneasy recovery of the mid-1990s is unlikely to involve much abatement of the competitive pressures on the European economies to continue the process of restructuring, and therefore to undermine the systems of social protection supposedly distinctive to the 'Rhine model'.27 The contributors to Reinventing the Left are in danger of exaggerating the differences between variants of capitalism that may be coming to resemble each other much more closely.

Our new social democrats are therefore unable to come up with a clear and plausible account of their alternative to capitalism as it exists today. What, then, does this suggest about the politics of 'New Labour'? All the signs are that the leadership's commitment to a 'dynamic market economy'--a phrase repeated by Blair and Brown like a mantra--overrides all others. The search for something fairer and more rational than the market--expressed, for example, in Clause Four, and pursued even by Keynes and those influenced by him--is being definitively abandoned by the new Labour leadership.

All that is left to distinguish Labour from the Tories is its 'values'. Chief among these is that of 'community', another 'New Labour' buzzword. Brown, for example, argues that 'modern socialism' is distinguished by the belief that 'the wellbeing of the individual is best understood within the context of the broader community'.28 The vagueness and ambiguity characteristic of much 'New Labour' thinking are especially dangerous here. For there is nothing necessarily progressive about appeals to 'community'. It depends on the nature of the community concerned, and, in particular, where the boundaries are set which determine who is included and who excluded from that community. For example, the slogan, 'Island homes for Island people', raised during the council by-election on the Isle of Dogs in September 1993 was, in effect, a racist one, since it tacitly defined the Island 'community' in a way that excluded blacks.

'Communitarianism', developed by philosophers critical of liberal individualism such as Alasdair MacIntyre and Michael Walzer, is thus no real alternative.29 In Labour's case invocation of the value of 'community' does not provide any justification for making any inroads into the market, since 'values' are, to all intents and purposes, segregated from actual policies. It has instead helped to legitimise Blair's attempts to steal the Tories' clothes on such issues as law and order and the family. This is a mug's game, since Labour's roots in the organised working class movement are likely to prevent it from ever going as far as the Tories can in stirring up reactionary sentiments around issues such as crime and race in order to win votes.

Nevertheless the extent to which nice 'New Labour' and nasty old Tories converge, even at the level of rhetoric, is very striking. Consider for example, Gordon Brown's advocacy of 'an enabling state offering new pathways out of poverty for people trapped in welfare, showing that the true role of government is to foster personal responsibility and not to substitute for it. The welfare state should not just be a safety net but a springboard'.30 Cornford and Hewitt repeat the same metaphor in their Ten Commandments, instructing social democrats to 'build trampolines, not safety nets'.31

At much the same time as I read these words in the autumn of 1994, Tory social security secretary Peter Lilley could be heard using precisely the same formulation to justify his latest attack on the welfare state. Of course, there is nothing politicians converge on more quickly than cliches. But much more significant than the use of the same words is the ideas they share: 'New Labour' has come increasingly to accept the New Right critique of the welfare state, namely that it deprives people of the incentive to work and imprisons them in a 'culture of dependency'.

Cornford's and Hewitt's Second Commandment is to 'think big'.32 Yet nothing is more remarkable about Reinventing the Left than the narrowness of its horizons and the poverty of imagination most of the contributions display. A further retreat from the objective of a radical transformation of society is dressed up as 'new thinking'.

And this points to a paradox. If one reflects on the condition of humankind as the second millennium AD draws to a close, then it is hard not to conclude that some kind of global revolution is necessary. This conclusion doesn't have to be deduced from Marxist first principles, but can be arrived at by considering the various afflictions from which humanity suffers--widespread mass unemployment, endemic poverty in much of the Third World, the continuing proliferation of devastatingly effective military technologies, the progressive destruction of the environment. Addressing these problems requires a drastic reordering of the priorities on which the world is currently organised, and that in turn depends on radically changing the structure of power and privilege on a world scale--global revolution, in other words.33

Yet, although revolution is more urgently needed now even than in the past, it is an objective that much of the left intelligentsia no longer regard as either feasible or desirable. This is not the place to examine the reasons for this collective loss of nerve: suffice it to say the collapse of Stalinism helped solidify among many left wing intellectuals the belief that there is no alternative to the rampant market.34 If nothing else, Reinventing the Left serves to highlight how practically confining the implications of holding this belief are. Within the constraints it imposes there seems to be nothing to do but pursue the same policies as the right, only with a (somewhat) different rhetoric.

I have called this review 'Backward to Liberalism', parodying the title of a famous book by the poet Stephen Spender, Foreward from Liberalism, which described his (as it turned out) brief flirtation with Communism in the mid-1930s. But putting it like this is, in some ways, unfair to liberalism. For Marxism and liberalism are not completely at odds.35 Liberalism, after all, is the product of the age of the great bourgeois revolutions--England 1640, America 1776, France 1789. Liberalism, indeed, can carry a revolutionary charge, and not simply because it emerged from the struggle to break down the barriers imposed on individual freedom by absolutism. The ideals it evokes--life, liberty, and the pursuit of happiness, liberté, égalité, fraternité--are only capable of fully being realised in a society where capitalist exploitation and the oppressions with which it is bound up have been abolished.36 The promise of liberalism can only be fulfilled by being radicalised. Seeking to confine socialism within the limits of liberalism, as most contributors to Reinventing the Left do, amounts to a betrayal of both traditions.

This will not prevent most of those seeking change in Britain today from looking towards the Labour Party in any electoral contest. Anyone who wants to get rid of the Tories has no choice but to vote for 'New Labour' at the ballot box. But if they wish also to scrap the society which both produced Thatcherism and was strengthened by it, they must look elsewhere.


  1. D Miliband (ed), 'Introduction', to Reinventing the Left (Cambridge, 1994), hereinafter RL, p15.
  2. A Giddens, 'Brave New World', in RL, p27.
  3. P Anderson, 'Power, Politics and the Enlightenment', in RL, p41.
  4. D Miliband, 'Introduction', in RL, p6.
  5. Some interesting points are made on the issues of race, ethnicity, and religion by T Modood, 'Ethnic Difference and Racial Equality', and B Parekh, 'Minority Rights, Majority Values', but their arguments are developed to a large degree independently of the book's main themes.
  6. D Held, 'Inequalities of Power, Problems of Democracy', in RL, p48.
  7. J S Mill, On Liberty (Harmondsworth, 1974), p72.
  8. D Held, 'Inequalities', pp49, 57. Held's argument may hold up better in the forthcoming book from which his paper is drawn.
  9. W Hutton, 'The Social Market in a Global Context', in RL, p162.
  10. D Miliband, 'Introduction', in RL, p6.
  11. P Clarke, Liberals and Social Democrats (Cambridge, 1978), P Williams, Hugh Gaitskell (London, 1979), and R Skidelsky, John Maynard Keynes, II (London, 1992).
  12. See C Harman, Explaining the Crisis (London, 1984), ch 3.
  13. N Harris, Of Bread and Guns (Harmondsworth, 1983), pp229ff. For a full analysis of the implications of what has come to be called 'globalisation' see C Harman, 'The State and Capitalism Today', International Socialism 51 (1991).
  14. A Giddens, 'Brave New world', pp25, 28. See F A von Hayek (ed), Collectivist Economic Planning (London, 1935).
  15. M Rocard, 'Social Solidarity in a Mixed Economy', in RL, p153.
  16. W Hutton, 'Social Market', p159.
  17. J Comford and P Hewitt. 'Dos and Don'ts for Social Democrats', in RL, p252.
  18. M Albert, Capitalism against Capitalism (London, 1993).
  19. M Rocard, 'Social Solidarity', in RL, p157.
  20. D Miliband, 'Introduction', in RL, p20.
  21. J Rogers and W Streeck, 'Productive Solidarities', in RL, p133.
  22. Ibid, pp135, 138.
  23. G Brown, 'The Politics of Potential', in RL.
  24. R Kutmer, 'Don't Forget the Demand Side', in RL, p149.
  25. Ibid, p149.
  26. Ibid, pp149-150. Anderson also highlights the realities of social conflict ignored by other contributors: 'Power', pp4l-43.
  27. See A Callinicos, 'Crisis and Class Struggle in Europe Today', International Socialism 63 (1994).
  28. Brown, 'Politics', p118.
  29. A MacIntyre, After Virtue (London, 1981), and M Walzer, Sphere of Justice (Oxford, 1983).
  30. Brown, 'Politics', p114.
  31. Comford and Hewitt, 'Do's and Don'ts', in RL, p253.
  32. Ibid, p251.
  33. It is, therefore, not surprising that it should be one of the papers on the environment that complains that 'social democracy, originally a creed to conquer capitalism, now uncritically accepts its assumptions', S Tindale, 'Sustaining Social Democracy', in RL, p205.
  34. Eric Hobsbawm's deeply disappointing Age of Extremes (London, 1994) is a striking example of this kind of pessimistic world view.
  35. For a good discussion of the assumptions shared by Marxism and liberalism, see W Kymlicka, Liberalism, Community, and Culture (Oxford, 1989), ch 6.
  36. See especially E Balibar, "'Droits de l'homme" et "droits du citoyen"', Actuel Marx, 8 (1990). Jacques Bidet uses Balibar's argument to give a radical interpretation of the theory of justice developed by the leading American left liberal philosopher John Rawls: Théorie de la Modernité (Paris, 1990), ppll9ff.

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