In the first half of the 1980s an energetic new progressive government came to power, and began governing in ways that surprised its traditional supporters. They devalued and deregulated the currency, deregulated capital markets and the financial sector, cut corporate taxation and taxation on high income-earners, corporatised and to some extent privatised state assets, and changed the focus of monetary policy from preserving employment to tackling inflation.

I’m referring of course to the Social Democratic Party of Sweden.

But another 1980s progressive government also prioritised inflation over employment or corporatised publicly-owned enterprises. Plus, they cut public spending, froze benefits, and even imposed a ‘hotel’ charge on hospital patients.

This was the French Socialist Party under the presidency of François Mitterrand.

None of this is to suggest that the ‘Rogernomics’ era of the New Zealand Labour Party was simply part of a worldwide trend. In many respects, they went further in the neoliberal direction than any other progressive party, or than most conservative parties.

Nevertheless, I was put in mind of these other examples when thinking about how to respond to James Caygill’s comment on my previous post setting out a ‘potted history’ of progressive ‘theoretical foundations’:

. . . I think you need to find a place in there (even if we agree we’ve moved on (or back)) to the rise of the monetarists as a critique/replacement for the Keynesians. We can (and do) argue about the continued relevance of the 4th labour government but the fact remains that they saw themselves as consistent with social democratic thinking at the time.

I’d agree that monetarism, or perhaps more broadly neoliberalism or ‘the Washington consensus’, has been one of the most important theoretical (and successful) movements of the last fifty years. And as such the ‘Theoretical Foundations’ topic will definitely need to critically engage with its ideas.

But should they be regarded as part of the story of how progressive theoretical thinking has developed? I’d argue not, for reasons that I’ll explain below.

Perhaps some readers would also deny that the government led by David Lange (and maybe those of Carlsson and Mitterand) were ‘progressives’ at all. Clearly, Roger Douglas who was Finance Minister 1984-88 and now an ACT party MP, can no longer be regarded as a progressive.

But I think if we start withholding the label wholesale because we don’t happen to agree with their policies, then we get into a very slippery slope indeed. Some people might consider Labour to have been a progressive party throughout its history except for the 1984-90 period of the Fourth Labour Government; others would exclude the Moore years (1990-93) as well; others would say it has still not returned to being properly progressive. Some would even say that the New Zealand Labour Party has never been truly progressive, or not since the days of Harry Holland (1919-33).

We end up having a term that’s meaningless because nobody can agree what it covers and what it doesn’t. I think we need to accept all parties that claim themselves to be social democratic or green as being part of the ‘progressive’ movement. (I’d also argue for the inclusion of the US Democratic Party.) That doesn’t mean we need to always agree with or support or like them.

This is also important because it forces us to confront (rather than edit out) periods in our history where parties that called themselves progressive have gone off on bizarre and troubling tangents. So, to that extent, I agree with James.

I also agree that, with important (and growing) pockets of dissent, the Cabinet of the Fourth Labour Government did broadly accept the theoretical framework offered to them by the Treasury documents Economic Management (1984) and Government Management (1987). And that was a neoliberal framework.

Why did they do this? The fact that their French and Swedish counterparts did something similar at around the same time offers some clues.

The economic situation at the time was dire, and had been so for some time, and in a way that people weren’t used to after the ‘golden age’ of the 1950s and 1960s. Also, and even more importantly, the progressive canon of ideas seemed to be powerless to do anything about this, and was becoming discredited in the eyes of many as a result.

It was in this context (and in reaction to the conservative interventionism of Muldoon) that Labour politicians were tempted to ‘reach across the aisle’ to try neoliberal ideas. Or, as economist Peter Harris wrote in a recent comment on this blog:

The resurgence of neo-classicism . . . was a response to the supposed demonstration of the fundamental flaws of Keynesianism evident in the stagflation of the late 1970s (which had entirely different causes, but more on that some other day)

(There were also cultural and generational factors, which have probably been best explored in the New Zealand context in Colin James’s Quiet Revolution; although see also Bruce Jesson’s Fragments of Labour.)

So the incorporation of neoliberal theories into Labour’s programme of action reflected a failure and in some ways a suspension of progressive theory, rather than a change to the progressive theory. The neoliberal programme was largely imported wholesale, without any adaptation into a progressive framework, and then expelled (at least in part) equally quickly.

For this reason, I would not see the neoliberalism of the 1980s as part of the story of progressive ideas.

Rather, I would see its impact on progressive thought as largely occurring a little later, with the active engagement between progressive theory and neoliberal theory and the attempt to develop some kind of synthesis between the two. This was in many ways what the ‘Third Way’ (as an intellectual rather than political project) was all about. As I’ve argued previously, this is where the importance of Anthony Giddens (Beyond Left and Right and The Third Way) comes in. But one could see the efforts of Gordon Brown to theorise progressive action as a response to market failure (whose critique by John Kay we’ve previously covered) in the same light.

That brings us to another noteworthy feature of the development of progressive thinking as I’ve outlined it, which is its trajectory of increasing accommodation with the capitalist system. I’ll address this in my next post, on Thursday.

Links

• The previous post on this topic, Progressive theoretical foundations — an introduction and potted history
• Policy Progress blog comments by James Caygill and Peter Harris.
• Wikipedia on the Washington Consensus
• Earlier post discussing John Kay on market failure.

Further Reading

• Colin James, The Quiet Revolution (1989)
• Bruce Jesson, Fragments of labour: The story behind the Labour government (1989)
• Donald Sassoon, One Hundred Years of Socialism. The West European Left in the Twentieth Century (1997)

P.S. The title of this post is based very loosely on the titles of a couple of article by one of the New Zealand political writers I most admire, the late Bruce Jesson. A series of articles in his self-published magazine The Republican in the 1970s called Labour ‘the party of capitalism’ and National ‘the party of the capitalists’; it’s a distinction that has always stuck with me.

Tags: Bruce Jesson, Colin James, Fourth Labour Government, François Mitterrand, Ingvar Carlsson

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