Bryan Gould writes:
The outstanding feature of the political scene over recent decades has been the catastrophic loss of the left’s intellectual self-confidence.
It has been particularly marked in the UK and reached its most extreme form with New Labour; as I observed at the time, the short three-letter word with a capital ‘N’ was meant to convey rejection rather than a renewal – not “New Labour” but “Not Labour”.
The party’s leaders had convinced themselves that they could not win by adhering to Labour’s long-standing principles and values, and that the neo-liberal revolution had changed things forever. They accordingly wasted all their opportunities in government by aping Margaret Thatcher.
Labour’s current leadership, while making a welcome break from New Labour, continues to exhibit the same uncertainty and lack of confidence. They seem paralysed by the fear that to reveal anything by way of an alternative approach to the current right-wing orthodoxy will open them up to damaging attack.
So they keep their cards (assuming they have any) close to their chest. They thereby convey the overwhelming impression that they either do not know what to say and have nothing to offer, or that they do have some ideas but have so little confidence in them that they dare not reveal them to the light of day.
The problem with running scared like this is that you can never run far enough. Once you accept that the debate must be conducted on terms defined by your opponents, a concession (or a failure to make an argument) on one point will be followed by a demand that the next point should then be conceded. A party that supposedly represents the chance of change and reform finds itself constantly on the back foot.
It is not only the leadership that is incapacitated by this timid stance; those who follow them are left discouraged and direction-less.
The energy and enthusiasm that are needed to produce election victory are still-born. Labour’s predicament is summed up in Macaulay’s famous description of an army in which “those behind cried ‘Forward!’ and those before cried ‘Back!’”
Nowhere is this weakness more apparent than on economic policy. Labour politicians are still relatively comfortable when taking broad positions on social or even environmental or foreign policy issues; they find it easy to represent themselves as standing up for the underdog.
But they are notably reluctant to engage in serious debate about how to run the economy and fall far short of advancing a coherent and comprehensive economic strategy that would provide a credible alternative to Tory austerity.
Opting out of the economic policy debate is a luxury they cannot afford. Economic issues are the most challenging we face.
If Labour leaders are unwilling to take the Tories on in this centrally important battleground, they cannot expect to be taken seriously.
Criticising the outcomes of Tory economic policy while offering little by way of an alternative analysis or policy prescription inevitably lacks something by way of credibility.
The failure to take up the challenge means that Labour finds itself unable to contest the Tory insistence that deficit reduction is the first priority. No wonder that the public concludes that any legitimate conversation about the economy must begin by recognising the primacy of deficit reduction as the goal of economic policy.
No one would dispute that, all other things being equal, a smaller deficit would be desirable; but Labour should be clear that a large deficit is a symptom rather than a cause of our real economic problems.
To address it to the exclusion of other concerns is self-defeating (since the deficit under Tory policies remains stubbornly high and will continue to be so) and also prolongs and entrenches our real problems by ignoring them.
Labour will not, in other words, prosper, or even begin to convince the public that it has something worthwhile to say, until the leadership is prepared to say that the current goals of policy, and the analysis on which they are based, are deeply flawed.
They must have the courage to initiate a proper debate that rejects deficit reduction as the unavoidable starting-point and shows that it is in any case best dealt with as the corollary of successfully addressing much more important issues.
What are those issues? They are, first, addressing our fundamental and long-standing loss of competitiveness, so endemic that it is now regarded as part of the natural order.
Secondly, rejecting the counter-productive monetarist doctrine that monetary policy is simply about controlling inflation and understanding, as more successful growth-oriented economies have done, that its essential role is to ensure that the productive sector is not handicapped by a lack of liquidity.
Thirdly, directing bank-created credit (by far the largest element in the growth of the monetary base) away from non-productive purposes like house purchase and made available instead, in accordance with an agreed industrial strategy, to rebuild our manufacturing base.
Fourthly, restoring macro-economic policy to its proper place as the responsibility of a democratically elected and therefore accountable government, rather than remaining as the exclusive preserve of unaccountable and self-interested bankers.
Finally, identifying full employment as the central goal of policy and the criterion by which its success or otherwise should be judged. Full employment is the hallmark of a properly functioning economy; anything less brings with it the unmistakable evidence of economic failure.
A strategy based on these points would offer a clear alternative to Tory austerity, offering hope both for Labour’s electoral chances and for the country’s economic future.