Don't Let The Right Get It Right

Julian Corman writes:

In a year when the unexpected seems to have become commonplace, the decision of some of Britain's most eminent conservative commentators to wrap themselves in the red flag might not be the top headline. But recent interventions by Charles Moore, former editor of the Daily Telegraph, and Peter Oborne, a writer for the Telegraph and the Daily Mail, undoubtedly constitute two of the most interesting signs of turbulent times. In a recent article that immediately went viral – "I'm starting to think that the left might actually be right" – Moore suggested that the "free market" which has dominated the economy for the past three decades in fact accords freedom only to a super-rich mobile elite, able to shift its resources at will to maximise its interests. Meanwhile, the constraints and disciplines of the market condemn the rest of us to a hard slog in increasingly insecure circumstances.

As the financial indices in the City, Wall Street and beyond continue to lurch downwards, and the eurozone staggers into an uncertain future, Oborne continued the moral excoriation of contemporary capitalism with a post-riots attack on the "feral rich" in our society. His particular targets were the bankers bloated on bonuses, the lucrative offshore tax arrangements of businessmen such as Philip Green and the MPs who condemned rioters from the comfortable vantage point of their second homes, furnished at taxpayers' expense. Even Douglas Carswell, one of the more right-wing MPs among the new Conservative intake, has joined the fray, arguing that "the free market all too often turns out not to be a free market at all, but a corporatist racket for the few". That judgment was approvingly quoted by Dominic Sandbrook, the Daily Mail's favourite historian, who castigated the capitalist system's inability to deliver on its most fundamental promise: equality of opportunity.

To paraphrase Aretha Franklin, when it comes to the critique of capitalism, the Tories are doing it for themselves. Appalled by the greed of the financial markets that leveraged the world economy to the edge of catastrophe; astonished by the ease with which bankers milked western taxpayers before going back to their bad old ways; uneasy at flagrant displays of unmerited wealth, intellectuals of the right are delivering withering judgments that the Labour party has not dared make for a quarter of a century. As one influential figure on the left of the party told me ruefully: "Over the past two months of tumultuous events, when has anyone in the parliamentary Labour party or the shadow cabinet got close to making arguments as far-reaching and profound as Moore or Oborne? There's not even the expectation of it anymore."

European conservatives have caught the mood too. Last week, exasperated by the short-term speculators who have merrily made hay out of the woes of the eurozone, the German chancellor, Angela Merkel, and the French president, Nicolas Sarkozy, floated the idea of introducing a financial transactions tax. The "Tobin tax" – named after James Tobin, the late American economist who dreamt up the idea in 1972 – could raise hundreds of billions of pounds in revenue, a potential boon for the ailing economies of the eurozone. In America, the billionaire businessman, Warren Buffett, has demanded that he should be required to pay more taxes. "My friends and I have been mollycoddled long enough by a billionaire-friendly Congress," Buffet wrote in the New York Times last week. "It's time for our government to get serious about shared sacrifice." Increasingly, it would appear that some of the chief beneficiaries and supporters of free market capitalism now believe it needs saving from itself.

For a long period, the western European left did that job with remarkable success. From 1945 to 1973, social democratic parties, mostly in opposition but sometimes in government, kept capitalism honest. Welfare states were built, unions were listened to and full employment was maintained. Within countries such as Britain, the sense of social solidarity that came from the collective experience of the Second World War set the parameters of postwar politics. The authoritarian fate of the communist eastern bloc countries also served its purpose. Conservative and Labour governments alike, wary of offering succour to homegrown revolutionary movements, pursued consensus politics. This was the heyday of One Nation Toryism, which presided for most of those years in the UK over a country which had never been more productive or equal. The left's new vocation as capitalism's conscience came to an end in the mid-1970s. In the west, a sharp rise in oil prices hammered growth. The new freedom of finance capital to move where it chose hampered the ability of parliaments to call the economic shots. And between 1989 and 1991, the mighty communist empire collapsed, a victim of its own absurdities, inefficiencies and rank injustices. Twenty years ago this weekend, a failed coup against the Soviet reformer Mikhail Gorbachev signalled the end of the communist experiment. One young US State Department Official, Francis Fukuyama, became famous for declaring an absolute, final victory for the free market: "The end of history."

Following the meltdown of the baroque system of corrupt financial products that bankrolled the long boom, communism is still dead, but the debate about the virtues and vices of capitalism is back on. So will the Labour party heed the calls from the right and rediscover its historic role as capitalism's conscience? In opposition, can it free itself from a visceral fear of the City's disapprobation and a long aversion to talk of taxation? The party is somewhat torn. Last week, the Confederation of British Industry, Eurosceptic MP John Redwood and assorted City types derided the Merkel/Sarkozy call for action on short-term speculation; the shadow chancellor, Ed Balls, was silent. The shadow of the New Labour years still stalks Ed Miliband. Earlier this summer, Tony Blair warned Miliband that Labour could only win an election from the centre ground, which has come to stand for light-touch regulation of the City and a hands-off approach by government to the workings of the global market. "Education, education, education", Blair's famous early slogan, was a way of saying that Labour's role was to equip people to succeed in that market. Many of the PLP and shadow cabinet still agree with that approach, understandably given Blair's record of three straight election victories.

Informally, however, and beyond the confines of the House of Commons, something new may be emerging. Earlier this month, Miliband's chief of staff, Stewart Wood, received permission from his leader to sign a petition launched by the leftwing thinktank, Compass. Signed by Philip Pullman, Greg Dyke and others, it called for a public jury to hold to account a "feral elite" comprising bankers, the media and MPs: the same miscreants identified by Moore and Oborne. Powerbrokers of New Labour such as Peter Mandelson would not have countenanced the use of such confrontational language towards the powerful. Meanwhile, the Labour leader, having found his rhetorical range during the brave and successful onslaught against Rupert Murdoch's media empire, is developing a language of responsibility that, given its head, will take on the gross disparities in wealth and opportunity that have developed in Britain.

From 1989 to 2008, the handsomely remunerated representatives of financial capital ruled the world and dared politicians to challenge their power. No party did. Chastened by the debacle of communist rule, the democratic left lacked all conviction, while the bankers and speculators were full of passionate intensity. As the veteran leftwing historian, Eric Hobsbawm, wryly observed of John Paul II's regular fulminations against untamed global markets: "It is not encouraging when the only person of global importance to condemn capitalism is the Pope." On Thursday, during his visit to Spain, Pope Benedict was echoing the same theme, stating : "Man must be at the economy's centre, which is not profit, but solidarity."

Now that the Vatican has a British ally in Charles Moore, the biographer of Margaret Thatcher, the time is ripe for Labour to resume the corrective role that it performed with such distinction in the postwar period. Different solutions and approaches will be required for a different world, although some of the features of "the golden age" – capital controls and an enhanced role for reformed trade unions – may be worth revisiting. But the starting point is to recover some of the old moral dynamism that gave the party its reason for being in the first place. The summer of 2011 may well be remembered as the moment at which it became clear that global free markets are as incapable of perfect self-regulation as the News of the World. For Ed Miliband and for Labour's old crusade to make capitalism virtuous, it is a case of: "If not now, when?"