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Tony Blair needs a big idea By Gareth Stedman Jones Is it possible to combine a free-enterprise economy with the serious pursuit of equality? This is the question that Labour strategists might find hard to avoid as they gather in Brighton searching for a third-term "big idea". The traditional Labour answer was always no. The real gulf, it argued, was not between rich and poor, but between "workers by hand and brain" and the owners of the means of production. There could be no meaningful progress towards equality while the commanding heights of the economy remained in private hands. New Labour did away with all that. Clause 4 was dropped, while Tony Blair declared it was never a burning ambition "to make sure that David Beckham earns less money". But it did not do away with questions about equality. And as the latest report from the Institute for Public Policy Research reveals, in the past two decades the richest 1% has seen its share of total income double from 6.5% to 13%. Finding progressive answers to the stark iniquities of a market economy is surely what a third term should be about. And some powerful solutions can be found in the Labour party's pre-history. In its earlier years, New Labour could avoid talking about strategies for reducing inequality. With the collapse of Communism, it was widely agreed that Clause 4 could no longer be defended. Socialized economies had, it seemed, only exchanged one form of inequality for another, at the cost of mounting inefficiency and stagnation. In the 1997 election it was sufficient that Labour possessed a strong leadership and had accepted Mrs Thatcher's destruction of the politics of collectivism and class. The most important thing about Blair's party was that it was not "old Labour". In 2001 as well, little was said. A prosperous economy, sound financial management and Tory disarray were enough to secure a landslide victory. This time, Labour may have to be more specific. The problem is not middle England, which has shown little sign of reverting to the Tories, but Labour's other constituencies. Spin, disquiet over Iraq, disgust with Blair's proximity to Bush, panic about asylum seekers, hostility towards Europe and anxiety about public services could lead to support drifting away. Party membership has fallen; activists are demoralized; protest votes have grown; and erstwhile supporters are opting for everything from the Scottish Socialists to Ukip. More ominously, there is a growing number of non-voters. A commitment to the principle of equality is precisely what is needed to re-enthuse Labour's more questioning supporters. New Labour can already claim some achievements. Doggedly, if covertly, it has reduced child poverty, supported controls over the global environment and increased aid. Poorer families have also benefited from the reduction of unemployment, the increase in nursery places, and the minimum wage. But Labour has never been able to take much credit for this laudable record because it refuses to make a connection between the elimination of poverty and a more equal society. Most obviously, Labour is terrified of the E-word because it fears the reaction to higher taxation for the rich. This would be understandable if it were simply a tactical concern. But it seems more basic. For the evidence suggests New Labour agrees with the new right critique that greater equality could only be at the expense of a free-enterprise economy, and that its pursuit would consequently lead back to an ever more entrenched public sector. In short, a return to Old Labour. Therefore, giving up "socialism" means abandoning the goal of greater equality as well. This is a fallacy. It is based upon a foreshortening of history, in which the intellectual origins of neo-conservative laissez- faire are dated back to Adam Smith's The Wealth of Nations, of 1776. Omitted from the story is the fact that Smith's original reputation was that of a progressive whose work provided the foundation of the radical critique of aristocratic monopoly and of the bellicose state that protected it. It also forgets that the first thinkers and activists to build on Smith's work were libertarians of the left. They included people such as the English radical Tom Paine and the French revolutionary Condorcet, both of whom believed growing inequality was not the inevitable price of a free-enterprise economy, but could be remedied by science and "the social art". They were the first to propose universal pensions and schooling, death duties and tax-based systems of social insurance as remedies for poverty and ignorance. For them, two obstacles confronted social advance: "force" (aristocratic or oligarchic rule and the laws that protected it); and "fraud" (unreasoning superstition and prejudice born of ignorance). Unshackled from this legacy of injustice and oppression, capitalism went together in their minds with scientific progress, increasing equality, free trade, feminism, anti-slavery, anti-colonialism and anti-racism. This was not the founding moment of neo-conservatism. That came a few years later at the end of the 18th century with the frightened reaction to the French revolution. In England, loyalists burned Paine's effigy. In France, Condorcet died in prison. In this climate, anti-revolutionaries such as Edmund Burke and Thomas Malthus denied the radical implications of Smith's work, ridiculed Paine and Condorcet and set in motion the long-term association between liberal economics and conservative politics. But an accurate account of this period shows that the pursuit of equality can be conceived in terms quite other than those of socialism. The language of Paine and Condorcet was that of the coming together of commercial society and the modern democratic republic elaborated in the era of American and French revolutions. Greater equality with a minimal state, universal education, moderate redistributive taxation and social security belonged together in a language of reason and citizenship. As little reliance as possible was to be placed upon the state, since it was associated with a legacy of tyranny and corruption. Instead, the inequality and uncertainty constantly generated by a modern exchange economy was to be curtailed by a democratic constitution in which a framework of law was maintained by a combination of voluntary associations and local authorities - in modern terms, mutual associations, friendly societies, cooperatives, elected local boards, ethically oriented companies and trade unions. In the 19th and 20th centuries, this new language of citizenship and democratic enlightenment was increasingly pushed aside by opposing extremes: on the one side, laissez-faire individualism and a language of markets; on the other side, socialism and the language of worker and capitalist. In the 21st century, Labour's "big idea" might be to start again from the true birthplace of social democracy, the Enlightenment of the 1790s, with its ambition to combine the benefits of individual freedom and commercial society with an ideal of inclusive citizenship and the public good. The needs of the market can be combined with policies fostering greater equality. New Labour needs to rediscover the first way. -Dawn/The Guardian News Service. Please Visit our Sponsor (Ads open in separate window)
