Since 1945, Labour has been the principle electoral vehicle for Britain's progressive aspirations, but it has reached a watershed. Its three election victories from 1997 were historically unprecedented, and yet it is now in serious difficulties.
Its electoral successes were tempered by compromises and limitations as it adapted itself to the prevailing neo-liberal orthodoxies. It deepened and extended privatisation and marketisation in the NHS and across the public sector. It made a Faustian pact with a financial oligarchy that accrued a dangerous amount of power and become a law unto itself. The bank bail out was necessary but it socialised the risk and the debt and left profit and control in the hands of the banking oligarchy. Did the government nationalise the banks or did the bankers privatise the government? The ambiguity goes to the heart of power in Britain, and highlights the timidity of New Labour in taking on powerful interests.
Whatever its current state, Labour is central to the progressive future and it needs to begin a process of democratic renewal both within its own organisation and by involving a broad range of progressive social and political movements in rebuilding a centre left coalition.
There are tens of thousands of members of the Labour Party, Green Party, Liberal Democrats, Plaid Cymru, and the SNP, along with progressive people in no party, who are prepared to discuss this kind of coalition politics. Social Democrats, Social Liberals and Greens have some fundamental political aims in common.
"After the Crash" is intended to help begin this conversation. The leading political contributors to this ebook represent different traditions, yet they share the common aim of equality. Caroline Lucas, leader of the Green Party writes: "the sustainability agenda and the equalities agenda are one and the same". Steve Webb, Liberal Democrat Shadow Secretary for Work and Pensions believes that: "if society is unequal, the individual is not free". Jon Cruddas argues against sectarian politics: "It is wrong to think of socialism as a tradition that stands in opposition to liberalism."
Whatever the result of the next general election, we need to create a common ground for a progressive coalition of ideas and action. Without this coalition the political agenda will remain unchallenged and there will be no deep rooted hinterland of support to sustain a future progressive government. It will be quickly blown off course by events. It will buckle beneath the sustained attack of the right wing media or it will be sabotaged by a conspiracy in the money markets.
In the decade ahead we will need a progressive left government that is much more resilient than New Labour in identifying its enemies and standing up to them. Real change will require a strong democracy that has widespread active support. This can only happen if we build alliances and rediscover our capacity for collective change.
Labour has lost the ability to engage in this kind of politics. It no longer has a covenant with the people and it does not yet know how to remake it. The challenge ahead is not just the election but the task of rebuilding the left around a renewed Labour Party.
After the Crash: Re-inventing the Left in Britain is edited by Jonathan Rutherford and Richard S. Grayson and features contributions from Jon Cruddas, Caroline Lucas, Steve Webb, Neal Lawson, Stuart Hall, Doreen Massey, Richard S. Grayson, Jonathan Rutherford, Alan Finlayson, Jonathon Porritt, Leanne Wood, Richard Thomson and Stuart White.
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1. You have no idea what an oligarchy is. The UK financial services industry is certainly not oligarchic. Labour have certainly managed to reduce competition in this sector by nationalisation making an oligarchy far more likely.
2. It was Brown's Bank of England regulations that handed the power to an incompetent FSA who then failed to use its debt and risk management brief on the banks.
Where did the banking crisis happen? Poor capitalisation due to the high-risk investments made by UK banks including over-leveraging in terms of lending.
Risk and debt management.
If the banks abused this power, they would have broken the law.
I still await the criminal charges.
Labour have certainly managed to reduce competition in this sector by nationalisation making an oligarchy far more likely.
Sorry. I just thought you said financial services were nowhere near oligarchic? I suppose we should use the word oligopolistic. But to your main point about Government legislation...
This is the libertarian fallacy that monopoly power only accrues because of government legislation. Sure, that happens sometimes, but a brief look at 19th Century American history shows that the opposite is more often true. The market can easily lead to powerful monopolies and oligopolies unless stringent trust busting legislation is enacted.
The financial markets, and especially the investment banks, underwriters and auditors, constituted a modal monopoly: a converging and self reaffirming set of personnel and practices which became divorced from the underlying realities of the market.
As for your regular attempt to rewrite the credit crunch as entirely the fault of the FSA, or something that would have been solved by Peter Lilley (please don't post him again) - it shows no historical depth or honesty. I think most Labour minded people here will admit that Brown and Blair have some responsibility for allowing financial services and strange derivatives to flourish unchecked. But to fail to see that his process of deregulation, demutualisation, the eradication of international controls, and globalisation of finance is a thirty year process that goes back to the 1980s - ignoring all that makes it impossible to have any sensible conversation with you, Mike.
All you can ever say is Labour bad/Tories good. And so, without any larger picture or common ground to discuss, many conversations with you just descend into factual niggling and wriggling, or nasty name calling.
I expect evidence of this forthwith.
In terms of market share, the consideration for monopolistic practices is 25% of a domestic market. Oligarchic practices are harder to define but certainly allowing the merger of large corporate banks to stave off financial insolvency is one way to reduce choice and reduce competition.
Or wouldn't you agree?
I am not suggesting for a second that it is government regulation that creates a monopoly as government regulation is required to prevent monopolistic practices. Ably demonstrated by government regulators like Ofwat, Ofgem, etc, etc, etc.
As for the deconstruction of the City of London's regulatory framework, Gordon Brown is 100% guilty as charged. The SiB framework certainly worked in terms of creating the regulatory firewall to prevent a minor crisis (e.g. BCCI) from creating wider problems. Banks have been hit with bad debts before and liquidity crisis (the 1990 recession) and yet they remained solvent.
Brown is completely at fault here.
Other regulators the world over did not allow their banks to trade in these toxic products, their banking system has emerged largely unscathed.
Lastly, your contribution....
If someone is going to base their entire contribution on something they read by Philip Blond, they usually have the magnaminity to acknowledge that rather than pass it off as their own intellect.
You also failed to acknowledge that Blond is totally scathing of the removal of lines of demarcation that prevented businesses from operating in too many market segments and therefore allowing such modal monopolies to exist. As such Blond advocates the kinds of policies that are a total anthema to the corporatist new Labour and most importantly of all, a total anathema to a man that has spend 13 years creating a giant one-size-fits-all state.
13 years propagating the idea of the biggest monopoly of all - state provision.
We have had an oligopoly in banking since the early 1970s, when the "Big Four" came into being - Barclays, Midland, NatWest and Lloyds.
A whole host of minor banks were absorbed by the "Big Four" - Martins into Barclays, Williams & Glyn into NatWest (which was itself a merger of National and Westminster) are names that come easily to mind.
NatWest ran into a lot of problems in the early 1970s (property and finance, what else?) and had to issue a then-unprecedented public statement denying that the bank's liquidity was under pressure (its share price had fallen below par value).
The Scottish banks at this time were relatively minor players.
Lloyds went on to absorb TSB, Midland had to be bought out by HSBC.
Good comment!
Events happen. They just happen to blow the doors off the bank under Labour governments because they aren't in basic financial control.
Well, let's look at it this way: acceptance into the Eurozone is qualified by (a) deficit of 3% of GDP and (b) debt of 60% of GDP. Until the crash, UK Government was within those limits which are accepted as fiscal discipline.
You’ve highlighted the dates when the natural economic cycle took at downturn. Of course for years Labour believed they had ended boom and bust - until the reality of the natural economic cycle bit the unprepared Gordon Brown on the bum.
Anyway - I’m not talking about normal cycles. I’m talking about Labour’s financial incompetence causing us to go begging to the IMF or where our current government, prints money to support excessive government debt.
There is a reason that New Labour had to be invented. That was because the old Labour brand was tarnished with financial incompetence.
Now the “New Labour” brand is also tarnished with a reputation for financial incompetence. What next? Utterly-Butterly-Labour, or I-Can’t-Believe-They-Are-Financially-Incompetent-Labour?
I think I detect some rather special pleading in your argument. Retrospectively, it looks like Lab didn't actually need the IMF support in 76. The whole western world suffered from oil prices explosion in the late 70s - I will post up the figure again. 2008 was not an international event then? On QE, you must take that issue up with Chris Cook. Peston suggested this morning on the radio that the nationalization of NR might ultimately bring a small profit to the taxpayer. It's interesting that every crisis under the Tories is a natural economic cycle. Ejection from the mechanism in 92 was thus a widespread phenomenon? Yes, New Labour has made mistakes, but not in isolation.
It smacks too much of 'Ministry of Truth' activities...
BTW, I fail to understand 24 years ago.
You wrote, Retrospectively, it looks like Lab didn't actually need the IMF support in 76.
And I said
Ludwig, please don't be so crass as to re-write history from 24 years ago in an effort to bolster this governments phony economic record...
Substitute 24 for 34, and read again....
This whole thread was begun by Billy Blofeld's contention that Lab has historically been fiscally maladroit.:
If you go downthread, you will see his comment:
''The cycle in the UK of continually breaking and fixing the economy is ridiculous.' (Billy Blofeld)'
So I did not write it 'a chapter ahead of you' - it was downthread. I will answer your contention about 1976 when I have recovered the information, which might be a while.
'
'Another IT acronym PBKC... (Problem between keyboard and chair) I meant 34 years ago...
You wrote, Retrospectively, it looks like Lab didn't actually need the IMF support in 76.
And I said
Ludwig, please don't be so crass as to re-write history from 24 years ago in an effort to bolster this governments phony economic record...
Substitute 24 for 34, and read again.... '
As the IT people say, RTFM:
'The cycle in the UK of continually breaking and fixing the economy is ridiculous.' (Billy Blofeld)
Then might I suggest that I am happy to RTFM, but not happy with you writing it a chapter ahead of me!
Yes, I am a pedant: in these contexts, principal not principle and its not it's, people.
It would be nice for once if Labour tried to understand why it's policies always end up breaking the economy and leaving the country in financial tatters.
The cycle in the UK of continually breaking and fixing the economy is ridiculous.
Nobody can ever deliver permanent improvement to "progressive values" if the country is forever being bankrupted.
Progressive is not an epitaph I will be using when I open my champers after Labour is buried on election night.
Oh dear, another kindergarten comment gets posted by mistake.