Although he is wrong about kicking people out of their council houses, and although he is wrong to treat Militant as ever having been particularly important (how, exactly, was he politically active in those days, and where did his erstwhile comrades end up after 1997?), Nick Cohen is otherwise on excellent form here:
It's difficult to know what has happened. Harder to find out what is happening. Impossible to know what will happen. Yet economists, generals, politicians and planners insist that they have the power to see the future. I have no right to criticise. Pundits suffer most acutely from the clairvoyants' delusion and offer more fake predictions than astrologers at a lunar eclipse. So I say in the expectation of being proved wrong that I can feel the faint flicker of a pulse on the prone body of the British left, a glimpse of the first signs that it is readying itself to govern a new and poorer country.
Conservatives believe that the crash has trapped social democrats. What can the left do when the money has gone? It will deplore the hounding of the poor and disabled, and the cuts to public services, to be sure, but then what? If Labour politicians say they will raise taxes, the right will tear into them. If they pretend the public finances are on the mend, the right will damn them as "deficit deniers". In theory, Labour is stuck.
In practice, Labour councils are already dealing with austerity. The coalition has borne down hardest on the poorest regions of England and Wales. Its political motives are obvious. The attack on the inner cities may destroy David Cameron and Nick Clegg's claims to be compassionate politicians, but they protect their own supporters while ensuring that those who vote Labour suffer the consequences.
Councils could retreat into ultra-leftism. They might refuse to set legal budgets, as the Revolutionary Socialist League did when it disguised itself as the Militant Tendency and took control of the Liverpool Labour party in the 1980s. But every story of councils defying the law from Liverpool back to Clay Cross in the 1970s to Poplar in the 1920s ends the same. The courts force councillors to comply and gleeful Conservatives shout that Labour cannot be trusted to govern.
Alternatively, Labour politicians could retreat into despair. They might rage against "Tory cuts" and do nothing more. Instead of heading up either dead end, however, Labour councils are finding ways to develop new policies for hard times. A short and by no means exhaustive list includes freeing up council housing by taking parents whose children have grown up out of family homes; cutting the pay of executives and introducing a living wage for low-paid staff; and demanding that private firms that receive public money not only pay the living wage, but also recruit locally, hire apprentices and stop their managers' salaries exploding.
Beyond the need not to stand back, two forces propel the new municipal socialism. The first is Richard Wilkinson and Kate Pickett's The Spirit Level: Why Equality is Better for Everyone, the most influential leftwing book in years. It showed how more equal societies are happier societies and not just for those at the bottom of the heap. (The rich are less likely to become paranoid wrecks, since you ask.) A belief in the advantages of equality may seem fundamental to leftwing thought. But after the battering they received from Thatcher and Blair, Wilkinson and Pickett gave Labour supporters the confidence to restate truths they once took to be self-evident. In Islington, north London, it inspired the impressive Labour council leaders Catherine West and Andy Hull – who will be national politicians soon, if I am allowed one prediction – to create the first of many Labour "fairness commissions" and charge it with finding ways to spread what public money the council had evenly.
As important as the arguments for egalitarianism is the daily reality of a financial crisis that has destroyed the credibility of the elite as surely as Munich or Suez. New Labour and the Conservatives worshipped the cult of the supreme manager. If executives took fantastic "rewards", that was no more than they deserved. If you did not stuff their mouths with gold, they would emigrate and we would miss their job-creating dynamism terribly. No one believes that any more. Not even managers. With the exception of Steve Jobs, not one executive can give a satisfactory answer to the question: "Why should we give you public money when you are pocketing 20 times more than your lowest paid worker?" And Steve Jobs is dead.
While Tories see their job as organising the privatisation of services, Labour councils are trying to organise the defence of their towns and cities and marching into new political ground as they do it. If you pass through any shabby area of Britain, for example, you ought to be stunned by the proliferation of pawn and payday loan shops and that is before you get to Wonga and the other online operators charging interest rates of around 4,200% APR. The coalition is happy for them to flourish. The borrowers, 40% of whom are trying to raise money to buy food and other basics, are from a Britain they do not understand. Labour councillors have no power to throw the moneylenders out of the high street. But that does not prevent them picketing shops and telling the needy that the credit unions they never see on television or the high street will lend them money on fair terms. Labour at its best is no longer the managerial dispenser of public funds, but a force that is trying to reshape the world around it.
Only a decade ago, Labour was deregulating casinos and betting shops so that the gambling conglomerates could fix the odds and mug the credulous. If there was a market for gambling, then the government should not stand in its way. Now it is trying to protect the weak and punish the rapacious. I don't want to pretend that new forms of activism can work miracles. The voice of Nick Forbes, the Labour leader of Newcastle council, came close to trembling when he told me how, for all the schemes he was trying, the cuts still dominated his every waking moment. (He had just had to cancel all spending on the arts.) But politics changes when once respectable ideas become discredited and hard-won experience generates a new consensus.
The Labour party that is emerging from the crisis will be tougher, more interventionist and less in awe of the moneyed classes. When – and if – it comes to power, it may provide what the coalition has failed to deliver: a break with a bankrupt past.