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Labour’s left foot forward?

by Tina Burrett

New party leaders never want for advice. Since his election as leader of the British Labour Party last month, everyone has words of wisdom for Ed Miliband. This frenzied fight to mold the Miliband message is hardly surprising; a series of poor policy and presentational decisions when Labour last lost power in 1979 kept the party out of office for a generation. How Miliband defines himself in the next few weeks will determine whether his party is fated to another long spell in opposition.

The fundamentals faced by Miliband are forbidding. Labour’s share of the vote in the May general election was its second lowest since 1918. The party is also financially and intellectually broke. Miliband made a good start in renewing voters trust in Labour in his first speech as leader, denouncing the mistakes of his predecessors; the Iraq war was “wrong,” unbridled faith in the market “naive” and the creeping authoritarianism of Britain’s counterterrorism “irresponsible.”

But to win back support for Labour, Miliband must offer a vision of the future as well a critique of the past. Miliband won the Labour leadership by positioning himself to the left of the front-runner, his own older brother and Blairite heir apparent, David Miliband. His critics on the right of the party suggest that the younger Miliband’s left-of-center rhetoric was a calculated ploy to win the leadership — or at least, they hope it was.

Many of the party’s New Labour elders clearly feel sore at Miliband’s trashing of their legacy. From former Prime Minister Tony Blair down, they popped up in the media to repeat the New Labour mantra that “elections are won from the center-ground of British politics.”

Although it is true that no party can win without centrist voters, it is also true that the location of the center is far from static. Economic crises in particular create seismic shifts in the political landscape. The wave of industrial action, unemployment and inflation caused by the 1973 oil crisis moved British politics to the right and culminated in the election of Margaret Thatcher.

While the crisis in the 1970s was a crisis of excessive trade union power, the crisis of the current decade was caused by the excesses of financial markets. Therefore the solution to this latest crisis must also be different — a rediscovery of the left after the failure of ideas from the right.

Post-Thatcher, no one could hold Britain’s emasculated trade unions responsible for the financial crisis of 2008. For British voters, blame rests squarely with the bankers and the New Labour government that did nothing to curtail their hubris, but rather continued to deregulate big finance with the same monomaniacal zeal as their Tory predecessors. Industry shrank and inequality grew.

When Blair came to power in 1997, Britain’s manufacturing output was eight percent higher than in 1974. By 2009, it was 2.7 percent lower. The expansion of the banking sector in the City fueled a boom, the profits from which Blair’s government used to fund long overdue improvements in education and the health service.

But while the growth of the City was a good source of cash, it was also a curse. The disproportionate size of the financial services industry vis-a-vis other sectors of the British economy had a distorting effect on both politics and society. The pursuit of material self interest became a lauded public virtue, while criticism of conspicuous consumption was derided as “the politics of envy.” As Miliband puts it, Britain became a country where “we know the price of everything and the value of nothing.”

Blair and his successor, former Finance Minister Gordon Brown, feared that criticizing the opulence of City bonuses would bring an end to Labour’s winning strategy of occupying the center ground of British politics by alienating aspirational voters. New Labour would tolerate Britain’s growing wealth gap as long as the boom in the City provided funds to improve the absolute, if not relative conditions of those at the bottom of society.

But inequality has a corrosive effect on society. The resentment and envy it creates at the bottom breeds disdain and contempt at the top. In the 2009 book “Spirit Level,” academics Kate Pickett and Richard Wilkinson show how almost everything in society, from teenage pregnancy to life expectancy, is affected by levels of equality.

At the heart of the equality debate is the issue of fairness. Traders in the City do not grow rich because of individual talent or courage. There is nothing just or fair about the huge financial rewards they receive. In modern Britain, luck as much as skill determines the course of individual lives.

It doesn’t have to be this way. A capitalist economy can coexist with a fairer society, but only if the state is willing to tame the market. For too long British society has been the servant of the market and not its master. The 2008 financial crisis presented an opportunity to place the market back under societal control.

Thus far, social democrats have failed to capitalize on the crisis of capitalism. In the late 1990s, social democratic governments were dominant in both Europe and North America — now just a handful remain. Social democrats lost power not because they shifted from the center ground, but for failing to notice that the center itself has moved. A study by Anthony Wells of Polling Report, found that the centrist voters who abandoned Labour in 2010 want people on higher incomes to pay more tax to limit the scale of deficit-reducing spending cuts.

Far too late in the campaign did Labour reach for a Keynesian vision of capital investment that creates jobs, revitalizes industry and creates growth faster than cuts. The British public are ready for a more optimistic, just and inclusive vision of the future. Ed Miliband might just be the man to give it to them.

Tina Burrett is an assistant professor of international relations at Temple University, Japan campus.