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New publication: ‘The Power of Ideas’ collects ‘theoretical foundations’ posts

Wednesday, December 22nd, 2010


It’s finally arrived! The most anticipated (by me at least) Policy Progress publication of 2010, The Power of Ideas: Decline and renewal in the theoretical foundations of progressive thinking, is now online.

From my foreword:

This report collects together all of my writings on the ‘Theoretical Foundations’ topic, one of the main themes for the Policy Progress website in 2010. This topic goes right to the heart of what Policy Progress has been trying to do as a policy ‘think-site’ devoted to developing and supporting progressive initiatives and ideas. Over the course of this year, I’ve tried to grapple with the history and prospects of progressive thinking and renewal. And, perhaps miraculously, I feel that the 35 or so posts that formed the basis for this report really do add up to something that hangs together.

As I said yesterday, I won’t be able to write for Policy Progress anymore next year, so I’m pleased to have managed to complete this giant compilation as a record of (much of) the year’s work.

You can download a copy here.

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New publication: ‘Reconceiving the Welfare State’

Wednesday, December 22nd, 2010

David Craig’s three-part guest-post series looking at the prospects for the welfare state was one of the most-viewed and best-regarded pieces that we published this year. Now, as promised, it’s been collected (in slightly revised form) into a single online publication.

From my foreword:

New Zealand doesn’t generate at lot of profound theoretical analysis of the political economy of institutions like the welfare state. In particular, the New Zealand political blogosphere is the last place you’d expect to see someone grappling with the dilemmas of progressive labour market regulation in the context of Foucaultian ‘governing through freedom’.

Which is why I’m so pleased to have had the opportunity to publish work by David Craig.

In the case of this essay, which appeared in an earlier form as a series of blog posts in September 2010, I can even claim that it was something I wrote that prompted him to start composing it. (Even if he swiftly went well beyond anything I’d said in both scope and depth.)

I fully expect David Craig’s conception of the ‘wellbeing society’ to be developed into a recurring idea in the journals and textbooks of the future. When it does, I’ll be able to say, you heard about it here first!

You can download a copy here.

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The Spirit Level versus the ‘investment state’

Tuesday, November 30th, 2010


Written by two epidemiology researchers, Richard Wilkinson and Kate Pickett, The Spirit Level has become the progressive publishing sensation of the last couple of years. Based on a broad range of cross-country comparisons, it takes the progressive championship of inequality to a new level.

According to Wilkinson and Pickett, greater equality doesn’t just produce better outcomes (life expectancy, educational performance, mental health etc) for the poor. They claim that (as their subtitle asserts) “equality is better for everyone”. In other words, even relatively well-off citizens are likely to achieve better outcomes in more equal societies than in less equal ones.

Why? Because, they say, more unequal societies suffer from higher levels of insecurity and status-related anxiety. This is associated with a focus on self-promotion and a weaker sense of community. These characteristics permeate the whole society, and afflict rich and poor alike. So even those who in a material sense may have ‘done better’ out of inequality may be sicker, less happy and generally less well-off as a result.

Such a theory strikes at the heart of anti-progressive political outlooks, in both their traditional-conservative and free-market manifestations. It is no wonder then, that while avowedly non-political (and occasionally cited approvingly by UK Conservative leader David Cameron), The Spirit Level has come under heavy barrage from the political ‘Right’. Policy Exchange and the Democracy Institute have each published counter-publications, by Peter Saunders and Christopher Snowden respectively, aiming to discredit it.

My main interest, however, is not the threat that The Spirit Level poses to the ‘Right’, but the challenges it presents to the theoretical foundations of much of modern progressive thinking.

Because another central plank of the Spirit Level platform is that the beneficial effects of economic growth in the advanced capitalist countries have now largely been exhausted.

The graph above illustrates that as countries develop economically, there is a reasonably close relationship with life expectancy — as the country grows and develops, its population lives longer. But the graph also suggests that, beyond a certain point, that relationship breaks down: among the rich countries life expectancy is not related to national differences in average income. The same pattern, say Wilkinson and Pickett, applies with happiness and other measures of wellbeing as well:

Sooner or later in the long history of economic growth, countries inevitably reach a level of affluence where ‘diminishing returns’ set in and additional income buys less and less additional health, happiness or wellbeing. A number of developed countries have now had almost continuous rises in average incomes for over 150 years and additional wealth is not as beneficial as it once was . . .

At the same time as the rich countries reach the end of the real benefits of economic growth, we have also had to recognise the problems of global warming and the environmental limits to growth . . .

We are the first generation to have to find new answers to the question of how we can make further improvements to the real quality of human life. What should we turn to if not to economic growth? (pp. 10-11)

Moreover, they go on to argue that the cultural logic of economic growth is intrinsically bound up with the unhealthy ’status anxiety’ that permeates unequal societies.

This, I would argue, is a major challenge to mainstream progressive thinking. Similar propositions have been put solely in ecological terms, but this takes the argument right into the heart of progressive territory: concerns about poverty and inequality.

It is hard to exaggerate how much of a departure this implies from standard Marxian, Keynesian and ‘third way’ prescriptions. (Although Marx, Keynes and Giddens themselves do each, in their own ways, conceptualise a post-materialist end-point).

This is particularly true of the ‘third way’. The success of Keynesian social democracy came from its perceived ability to keep the ‘motor’ of the economy going by acting as the ‘consumer of last resort’. As Przeworski writes, ”it was a theory that suddenly granted an universalistic status to the interest of workers” as a way of stimulating aggregate demand.

But the ‘third way’ went further, framing the idea of an ‘investment state’ whose job it was to work hand-in-glove with capital to achieve the most innovative, competitive, productive, successful national economy possible. Areas like education and science were seen more strongly than ever before as mechanisms to be used to attain national competitive advantage.

And social goals were largely seen as being achieved through the tax dividend from all this growth. Rather than worrying about an economy that was driving increasingly unequal conditions in the marketplace, the state would focus on ameliorating those effects through redistribution (via tax credits like Working for Families in New Zealand, other targeted assistance, and social spending designed to combat inequalities).

The theory and prescription of Wilkinson and Pickett stands starkly opposed to the logic of this approach, which can be seen as essentially Rawlsian.

John Rawls was perhaps the most important liberal political philosopher of the late 20th century. His “difference principle” held that inequality could be justified insofar as it contributed to general prosperity in a way that made even the poorest members of society better-off than they would be in a more equal society.

To be fair to Rawls, this could be interpreted as permitting only a very small amount of inequality. But, in practice, the Rawlsian approach was primarily taken up by those who accepted that there was a capitalist equality-prosperity trade-off, but that some of the fruits of that prosperity should be invested in making the poorest better off. They were, in other words, what John Kay has called ‘redistributive market liberals’.

And to a large extent ‘redistributive market liberalism’, and a Rawlsian view of economic growth, were at the heart of the ‘third way’.

The Spirit Level, on the other hand, seeks to turn the ‘difference principle’ on its head. Rather than inequality-generating growth being good even for the poorest, it is to be seen as detrimental even for the very richest.

Rather than the state trying to run ever faster to ameliorate inequality after the fact, Wilkinson and Pickett counsel us to abandon the culture of consumerism and reorientate towards a steady-state economy in which everyone has much more equal shares.

To this it might be objected that, even if such an approach were desirable, it is not feasible. The basic logic of a modern capitalist economy, it can be argued, is not compatible with a steady-state — without growth, it would become unstable and generate increasing levels of unemployment. This is the dilemma that Tim Jackson in his book Prosperity without Growth has sought to address with a new ecological macro-economics. And it is to this work I will turn in next week’s post.

Links:

  • Wilkinson and Pickett’s Equality Trust website.
  • Perhaps the best example of the debate over The Spirit Level — a session at the Royal Society for the Arts (RSA) where Wilkinson and Pickett squared off against Saunders and Snowden [audio and presentation slides].
  • A recent policy forum at the Institute of Policy Studies in Wellington entitled Does Inequality Matter? started with a video-linked presentation from Wilkinson, and spurred me to write this post. [presentation slides plus audio/slides for Wilkinson] The presentation by Tony Blakely (University of Otago Wellington) is one of the best critiques of The Spirit Level I’ve come across (and comes from a broadly progressive perspective).
  • My earlier post discussing Przeworski’s view of Keynes.
  • Four posts I’ve written on the ‘third way’: (1) (2) (3) (4)
  • Wikipedia on John Rawls’ A Theory of Justice.
  • An earlier post I did on Tim Jackson.
  • Two posts I did on James Purnell’s arguments about the limits of the redistributive strategy are also relevant: (1) (2).

Further Reading:

  • Richard Wilkinson and Kate Pickett, The Spirit Level: Why Equality is Better for Everyone (revised edition, 2010).
  • John Rawls, A Theory of Justice (1971).

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Postscript on ‘The New Politics’

Wednesday, November 24th, 2010

One must of course be careful about reading too much into titles and labels. I shared an advance copy of yesterday’s post with Peter Harris and Chris Eichbaum and they advised me that the ‘Third Way’ subtitle to their book was included largely at the urging of their publishers, who wanted to connect the book more explicitly to the global ‘third way’ debate. The original title had been something like “The New Politics: the search for a post-Washington consensus in NZ”.

Nonetheless, they went along with the idea, reasoning that (as they say in the book) NZ had had its first and second ways with Muldoonist statism, and the neo-liberalism of Douglas, Richardson & co. So a ‘third way’ was relevant here too, even though NZ Labour needed distance from its past for rather different reasons to UK Labour.

They did insist on the subtitle being “a third way” rather than “the third way” though! (Which is consistent with the specifically NZ ‘third way’ character that I’ve tried to outline.)

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Did the ‘third way’ give New Zealand ‘a new politics’?

Tuesday, November 23rd, 2010

This is the last in a series of three posts about the ‘third way’ strand of progressive thinking in New Zealand. Part one looked at Helen Clark’s perspective, while part two looked at Steve Maharey’s identification with the ‘third way’. An earlier post introduced the ‘third way’, looking at its leading UK theorist, Anthony Giddens.

Although Steve Maharey was the Cabinet minister most identified with the ‘third way’, the most indepth account of what a New Zealand ‘third way’ approach might mean can be found in a book that was published immediately before the 1999 election that brought Helen Clark and the Fifth Labour Government to power.

Entitled The New Politics: a Third Way for New Zealand, it was written by a group of eight academics and trade unionists and produced with the assistance of a progressive thinktank, the Gamma Foundation, that was active at the time (the Public Service Association and FinSec also provided support).

Although the book doesn’t have any identified editors, both the preface and concluding chapters were co-written by Peter Harris and Chris Eichbaum. Harris had been the economist for Council of Trade Unions (and prior to that for the PSA), while Eichbaum was a Massey University academic (who also had credentials with the union movement and as a former Labour staffer). Both would go on to become highly-placed ministerial advisors during the first term of the Fifth Labour Government, Harris for the second-ranked Labour minister Michael Cullen and Eichbaum for the third-ranked Labour minister Steve Maharey. Eichbaum then did a stint in the Prime Minister’s office before returning to academia. Harris later chaired the Ministerial Savings Product Working Group, which formed the basis for the establishment of the KiwiSaver scheme.

Therefore, The New Politics can be seen as reflecting a perspective that was very compatible with that of the Fifth Labour Government itself. In addition to Harris and Eichbaum, its authors included Peter Conway, who replaced Harris as CTU economist and is now their general secretary; Paul Dalziel, Canterbury university (later Lincoln) economist and brother of Cabinet minister Lianne Dalziel (he is currently a member of the Alternative Welfare Working Group); and academics Srikanta Chatterjee (Massey), Bryan Philpott (Victoria, now deceased) and Richard Shaw (Massey).

As it happens, I have worked with both Harris and Eichbaum and know them fairly well now, but I hadn’t met them at all when I read their book in 1999. (And I wouldn’t automatically ascribe exactly the same views to them today.) Going back and re-reading The New Politics, a few themes stood out for me with the benefit of hindsight.

In his chapter, Peter Harris writes:

There is a core idea that marks out the Third Way: people need jobs. It is a core part of their social persona, it contributes to more stable family life and so on. Dependency can never be a satisfactory long-term status and creates intergenerational cycles of dependency and despondence.

. . . A new consensus has to be built around some form of social concordat. In reducing previous protections via deregulation, privatisation and a free flow of finance and trade, the government assumes an obligation to make it easier for the displaced to get other jobs . . . The other side of the deal is that those who are dislocated must be active participants in job readiness and job search programmes.

Harris also sets out ’subsidiarity’ as a defining characteristic of the ‘third way’:

The principle of subsidiarity means that a decision should not be taken at a higher level if it can be more appropriately be taken at a lower level. For example, the state should not make a decison on what a school community can more appropriately make.

. . . There are two dimensions to this. One is that the state should not intrude in some areas. it should not absorb and stifle when there is no need to do so. The other is that the state should not be expected to do everything. There are structural levels of responsibility – individual, family, community, etc. that need to be both respected and expected. Subsidiarity involves the state ‘helping out’ by contributing indirectly to the ability of the social networks to contribute to that notion of public good.

Similarly, Eichbaum in his chapter writes:

The renewal of civil society, through the refurbishments of democratic institutions and the kind of institutional ‘in-building’ suggested by the stakeholder model [advanced by Will Hutton], is central to the new economics as well as to the new politics.

. . . The neo-liberal project is one that denies the legitimacy of interests within the policymaking apparatus on the grounds that credible policy must be manifestly independent of any ‘vested’ interests . . . In seeking a renewal of civil society, the Third Way holds out the prospect of a political economy that provides the kinds of structures capable of sustaining fexibility and commitment.

And on macroeconomic policy he takes issues with Giddens, arguing that it must go beyond simply “macro stability” to address “the institutional environment with which policy is developed and implemented” and recognise the importance of the “institutions of macroeconomic management”.

If we add to these prescriptions Maharey’s focus on the ‘knowledge society’, then it is possible to see ‘third way’ ideas as permeating much of the Fifth Labour Government’s activity, even though it was not framed as such at the time.

The focus on employment as the “best social policy”, which was reinforced and validated by historically rates of employment growth, became a lead feature of social development policy, and informed the design of Working for Families, which was at least partly founded on the conception of making work pay.

It also fed into Jim Anderton’s idea of the economic development portfolio as a ‘jobs machine’. But this area also reflected an attempt to answer the question about how to operate the “institutions of macroeconomic management”.

And increasingly it also reflected an effort to conceptualise and achieve a New Zealand ‘knowledge society’. This also inflenced the new institutional framework for tertiary and science policy.

The way the government went about things also reflected the emphasis on stakeholders and the rejection of the neo-liberal delegitimation of ‘vested interested’. Consultation and partnership became watchwords for the public service, and periodic efforts were made to improve the footing of community sector. (It’s worth noting that Harris and Eichbaum’s final chapter includes an admirably clear-eyed and prescient account of the likely challenges that increased reliance on the community and voluntary sector would bring.)

On the other hand, the principle of subsidiarity made only an intermittent appearance. More often, it seems to have been eclipsed by the centralising tendencies of the state in general and Labour instincts in particular.

What is also intriguing is how many specific proposals made in The New Politics seem to only be making it onto the policy agenda now, ten years later, in the post-defeat post-’global financial crisis’ Labour Party:

  • Chatterjee, Dalziel and Eichbaum all called for reform of monetary policy;
  • Dalziel argued for workers at a particular worksite to be allowed to vote by a suitable majority for compulsory union membership at their site (a ‘closed shop’);
  • Philpott argued for tighter controls on the overseas purchase of existing assets including land;
  • Dalziel advocated for a greater involvement of the government in capital production; and
  • Harris, Eichbaum, Chatterjee and Dalziel all talked about the urgent need to “restore some order to finance markets”.

Perhaps, in fact, the real ‘third way’ is not an historical relic. The name may have been discarded, but it may be that it is only now really beginning to take root.

Another way of looking at it is to identify three different components to ‘third way’ thinking.

Firstly, there is the partial accommodation to the Right’s critique of the capacity and effectiveness of the state. This is where the UK ‘third way’ has drawn most criticism from other progressives. As we have seen, however, ‘third way’ thinking in New Zealand included some rather more extensive revisiting of neo-liberal ‘nostrums’, though much of this wasn’t taken up in government at the time. In this sense, post-Crisis progressive rethinking may involve more continuity with its ‘third way’ tradition in New Zealand than was the case elsewhere.

A second component relates a particular style of government (subsidiarity, partnership, reverence for ‘civil society’). Some aspects of this got more traction than others, and some of it has gone out of fashion, but the appropriation of this approach by the Right in the UK (David Cameron’s ‘Big Society’) suggests that it still has quite a bit of mileage left.

Thirdly, the idea of an ‘investment state’ informed thinking about a ‘knowledge society’, the primacy of employment and the ‘institutions of macroeconomic management’. Some of the language and the framing of ’strategies’ has faded a little, and economic conditions no longer as propitious for a focus on employment growth as a driver. Nevertheless, this was a central and generally still well-regarded aspect of the Fifth Labour Government’s tenure.

In my next series of posts, however, I want to explore some emerging trends in progressive thinking that may amount to a significant move away from the ‘investment state’ approach.

Further Reading:

Srikanta Chatterjee, Peter Conway, Paul Dalziel, Chris Eichbaum, Peter Harris, Bryan Philpott and Richard Shaw, The New Politics: a Third Way for New Zealand (1999) — available online from Wheelers Books.

Brian Easton, The Model Economist: Bryan Philpott (1921-2000) (2000)

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Steve Maharey and New Zealand’s third way

Tuesday, November 16th, 2010

This post is the second of three posts on New Zealand’s relationship to the ‘third way’ strand of progressive thought, as theorised by sociologist Anthony Giddens and made famous by Tony Blair. In part one, we looked at Helen Clark’s statements about the third way.

Disclosure: the author worked for six years as a ministerial advisor to Steve Maharey.

By the end of its tenure, there were two differing perceptions about the Fifth Labour Government. The general public saw it as a one-person show dominated by Helen Clark. People who considered themselves more informed saw it as a two-person outfit, co-steered by Michael Cullen (with the real insiders adding in Helen’s chief of staff Heather Simpson for good measure).

All perspectives are partial and subjective, including my own, but I tended to see the Fifth Labour Government as more pluralist than that. There were a handful of senior ministers who seemed to have a fair bit of autonomy over their own portfolios and some ability to influence the wider agenda (the influence of the Alliance in the first term is not to be disregarded either). The most visible of these to me were Trevor Mallard (who Helen early on had mooted as her possible successor) and Steve Maharey.

Steve Maharey is of particular interest in this context, as he is the New Zealand politician most associated with the ‘third way’. As Colin James said in 2001,

Steve Maharey earnestly read the new social democratic texts, the “third way” tracts, but few of his colleagues have.

To my mind, the most direct and personal statement that Maharey made while in government about the ‘third way’ approach was a lecture he gave to a group of Massey University students in June 2003, entitled “The Third Way and how I got on to it”.

In this lecture, he traces his intellectual pathway back to the 1980s, where he distinguishes his perspective from that of other, more traditionalist critics of Rogernomics:

I found myself in a curious position. The left opposed Rogernomics and as someone who regarded himself as part of the left I felt sympathetic. Yet it seemed to me that the defensive posture adopted by the left would lead nowhere. While I accepted that the traditional left values of solidarity, collectivity and social justice remained valid, new ways of delivering them were needed.

I took up a rather isolated position in the debate that raged during the 1980s criticizing both the right and the left. I wanted to see social democrats acknowledge the need for change and offer a new political agenda based on social democratic values. The British politician and academic David Marquand called this – old values, new politics.

This stance, he says, led him to the New Times thesis (associated with Martin Jacques and Stuart Hall). He also cites as influences Giddens, Geoff Mulgan (who co-founded the Demos thinktank with Jacques), Charlie (Living on Thin Air) Leadbeater, Swedish sociologist Goran Therborn, ‘communitarian’ writers Amitai Etzioni and Robert Putnam, Clinton’s dissident Secretary of Labor Robert Reich, and Australian Labor politician Mark Latham.

Maharey seeks to correct what he sees as two misconceptions about the ‘third way’. Similarly to Giddens and many others seen as associated with the ‘third way’, he states:

It is often said that the Third Way is just a compromise between the concerns of the market and social justice. I do not agree. Or at least I would argue that the Third Way does not need to be reduced to a political agenda that appears to be just a clever mixture of ideas from across the political spectrum. What has antagonized its critics is that so often it has in practice turned out this way.

Also, the ‘third way’ was not monolithic; there was not one single version. Rather, what united its proponents was:

an understanding that new times demand new answers from social democratic politicians. They could see that right wing neo-liberal politics had dominated the 80s and 90s by appearing to respond to social change and they wanted to “modernize” their own parties.

He lists a range of challenges that make up these ‘new times’ (renewing democracy, international engagement, inequality, etc.) but the prevailing theme is around the implications of technological change. While ‘third way’ social democracy’s ‘egalitarian project’ is unchanged, he says,

the means by which we intend to further the project have altered. The focus now is on the creation of a knowledge society and investment in policies that make this goal a reality.

Citing Latham, he describes the ‘third way’ as:

an attempt to answer the core challenge of Information Age politics: is it still possible to practice the shared bonds and responsibilities of a good society? Is collectivism still viable? The Third Way thinks that it is.

And he quotes Leadbeater to emphasise that this has significant, and progressive, consequences:

The goal of becoming a knowledge-driven society, however, is radical and emancipatory. It has far-reaching implications for how companies are owned, organized and managed; for the ways in which rewards are distributed to match talent, creativity and contribution; for how learning and research are organized; and for the constitution of the welfare state and the political system.

In terms of Maharey’s own portfolios, this had ramifications for tertiary education, where he sought to institute a more strategic approach. And, with regard to social welfare, or ’social development’ (as he reframed the porfolio), he says:

if everyone is to be included in the kind of knowledge based future at the heart of Third Way thinking the focus of traditional models of welfare on the transfer of income is not enough . . . Achieving social justice requires the extension of economic opportunity as much as the redistribution of wealth.

The new social democracy places the welfare state, or the new welfare state, at the confluence of economic and social justice.

How far beyond Maharey’s own areas did this thinking go, though? He is frank that, notwithstanding Helen Clark’s willingness to identify herself with it, “During its period of renewal, New Zealand Labour did not consciously decide to become a Third Way party.”

Nevertheless, if we take this ‘knowledge society’ project as central to a ‘third way’ approach (perhaps even moreso here than elsewhere) then we can see it as a recurring thread through the Fifth Labour Government: from the Knowledge Wave conference, through the Growth and Innovation Framework, and on to the Economic Transformation Agenda.

For Maharey, there was a particular imperative for New Zealand in seizing the knowledge society agenda. On other occasions (in May 2003 for instance), he said that a “‘developmental’ approach, seeing New Zealand as essentially a ‘developing nation’ whose circumstances can and must be transformed, is a distinguishing characteristic of this Government”.

That particular metaphor wasn’t one that other Cabinet colleagues used. But, even so, something of the approach that it implied can be seen as a distinctive (though perhaps somewhat tentative) New Zealand dimension to the ‘third way’ project of achieving a knowledge society.

In part three: we look at the 1999 New Zealand ‘third way’ manifesto, The New Politics.

Links:

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Weekend reading (special edition): Ed speaks

Friday, October 1st, 2010




Ed Miliband – A New Generation

The younger Miliband brother is now leader of the UK Labour Party and this conference address is his first extended speech in that role.

Some commenters here at Policy Progress haven’t been impressed, but I’ve been reading the text of the speech (my preferred approach to taking in these sorts of things) and, while I can’t comment on his skills as an oratorical “performer”, I thought the content was pretty good. He set some distance between himself and New Labour:

New Labour embraced markets in our economy and was right to do so.

But lets be honest we became naïve about them.

. . . We must shed old thinking and stand up for those who believe there is more to life than the bottom line.

And:

The hard truth for all of us in this hall is that a party that started out taking on old thinking became the prisoner of its own certainties.

The world was changing all around us – from global finance to immigration to terrorism – New Labour, a political force founded on its ability to adapt and change lost its ability to do so.

The reason was that we too often bought old, established ways of thinking and over time we just looked more and more like a new establishment.

Let me say to the country:

You saw the worst financial crisis in a generation, and I understand your anger that Labour hadn’t changed the old ways in the City which said deregulation was the answer.

You wanted your concerns about the impact of immigration on communities to be heard, and I understand your frustration that we didn’t seem to be on your side.

And when you wanted to make it possible for your kids to get on in life, I understand why you felt that we were stuck in old thinking about higher and higher levels of personal debt, including from tuition fees.

That comment about tuition fees is rather intriguing. Like others, I’m a little uncomfortable with this and other comments about immigration in the speech but there’s a difference between validating grassroots concerns and being anti-immigrant, and I think he stops short of crossing that line. The speech also has a strong generational theme:

This generation wants to change our economy so that it works better for working people and doesn’t just serve the needs of the few at the top.

This generation wants to change our society so that it values community and family, not just work, because we understand there is more to life than the bottom line.

This generation wants to change the way government works because it understands the power of the state to change lives but also how frustrating it can be if not reformed.

This generation wants to change our foreign policy so that it’s always based on values, not just alliances.

And this generation knows very profoundly that to change Britain we need a new politics.

Above all, I lead a new generation not bound by the fear or the ghosts of the past.

Miliband also returns to his theme about a renewed focus on inequality:

And we need responsibility at the top of society too. The gap between rich and poor does matter. It doesn’t just harm the poor it harms us all.

What does it say about the values of our society, what have we become, that a banker can earn in a day what the care worker can earn in a year?

I say: responsibility in this country shouldn’t just be about what you can get away with.

And that applies to every chief executive of every major company in this country.

As the Guardian said just ahead of the speech, “Ed Miliband is not expected to make any major policy announcements in his speech; he favours a long-term approach using semi-independent policy commissions.” But there’s some interesting hints there of directions to come.

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Looking back on the Third Way

Tuesday, September 28th, 2010

This post is about Tony Giddens, not Tony Blair.

In other words, it’s about the intellectual foundations of the ‘Third Way’, rather than an assessment of how political parties that described themselves as ‘Third Way’ did in government.

And Anthony Giddens is probably the writer most strongly associated with the ‘Third Way’ as an theoretical project. His 1998 book The Third Way: The Renewal of Social Democracy provided an intellectual justification for, and both reflected and influenced the practice of, New Labour in the UK and its overseas counterparts. (I’ll discuss the impact of ‘Third Way’ thinking on the Clark government in New Zealand in an upcoming column.)

Giddens is an academic sociologist who, by the time he came to write The Third Way, had already been working and publishing for over 25 years, starting with Capitalism and Modern Social Theory. An Analysis of the writings of Marx, Durkheim and Max Weber in 1971. Much of his work was heavily theoretical rather than closely related to contemporary political debates. An Australian collection, Social Theory: A Guide to Central Thinkers, published in 1991, described his career up to that point:

Over the past two decades he has published more than twenty books and established himself as a central thinker. Giddens’ writings combined a detailed exegesis of the classics with a sensitivity to the issues at the forefront of contemporary social theory. He brings these concerns together under the rubric of an overarching project. This project involves identifying and criticising the shortcomings of traditional thought and developing a way of theorising issues that are obscured or ignored within that framework.

. . . This involves a reconceptualisation of the concepts of action, structure and system in order to integrate them into a new theoretical approach. Giddens calls this new approach the ‘theory of structuration’.

Giddens has been heavily involved with the UK-based Policy Network over the last decade, and this year he has published two essays for them reflecting on New Labour and his book The Third Way. These essays provide a useful insight into which features of his mid-90s project he feels are likely to endure.

‘The Third Way’ as a phrase is not one of them. In his essay “The Third Way revisited” Giddens expresses some regret that he didn’t stick with his orginal (if less flashy) choice, The Renewal of Social Democracy, rather than relegating it to a subtitle: “If I had published the book under the original title, it would have been clear that it was rooted firmly in social democratic traditions.”

Giddens insists that for him ‘the Third Way’ was never about “a ‘middle way’ between left and right, socialism and capitalism, or anything else, but a left-of-centre political philosophy, concerned with exactly what was stated in my original title, the renewal of social democracy. It was NOT a succumbing to neo-liberalism or market fundamentalism.”

I’d just about be ready to buy this, and accept that that fateful title was just an unfortunate phrase that was doing the rounds at the time (thanks to the Swedish Social democrats and Bill Clinton). Except that Giddens’ previous book, where he began his exploration of some of the themes of The Third Way was entitled Beyond Left and Right — the Future of Radical Politics (1994).

Moreover, we then come to this:

On the contrary, I argued that social democrats had to move beyond two failed, or compromised, philosophies of the past, one being neo-liberalism, the other being “old-style social democracy,” characterised by a top-down state ownership of the “commanding heights of the economy” and Keynesian national demand management.

And we are back to ‘equidistance’. Despite his earlier denials, Giddens instinctively depicts his ‘Third Way’ as being as far away from traditional social democracy as it was from neo-liberalism.

Similarly, in “The rise and fall of New Labour”, Giddens again tries to have it both ways. Early on, he states: “A different relationship of government to business had to be established, recognising the key role of enterprise in wealth creation and the limits of state power. No country, however large and powerful, could control that marketplace: hence the ‘prawn cocktail offensive’ that Labour launched to woo the support of the City.” But towards the end, he admonishes: “It was a fundamental error, however, to allow the prawn cocktail offensive to evolve into a fawning dependence and turn the UK into something like a gigantic tax haven.”

Giddens’ positions about both the Third Way’s relationship to traditional social democracy and its relationship to wealth are not inherently contradictory, but in both cases they require a delicate balancing act. And I’m not sure that he provides sufficient guidance about how to achieve that balance.

Giddens and his ‘Third Way’ project have attracted many critics over the years, including some extended and detailed rebuttals. But, from my perspective, the most effective challenge came when he debated Will Hutton, another reformist social democrat who had an early influence on Blair, in their co-edited volume On the Edge (2000). At one point Hutton says to Giddens:

Well, which is to be — regulation because capitalism can be destructive now that communism has left a gap or starry-eyed faith in capitalism’s boundless creativity? Don’t traduce Schumpeter. Your argument and his are essentially the same: capitalism may be ruthlessly destructive but it is also creative. At one moment you want to celebrate capitalism, at another you’re wary of it, but without — unlike Schumpeter — offering an integrated view of how both propositions could be true.

Giddens was right that social democracy needed renewal. The ascendancy of neo-liberalism, and the faltering of progressive thinking in the face of it, suggested that new ideas were required, which took into account new social and economic contexts.

And the changes that he identified in 1998 (and restates in “The Third Way revisited”) still seem convincing as new elements a modern progressivism needs to take on board, perhaps even moreso today. These were: the intensifying of globalisation; expanding individualism; the growth of reflexivity; and the increasing intrusion of ecological risk into the political field.

But in the end the failure of the Third Way was its inability to repeat the task that Weber and Keynes, between them, had achieved a generation before. This was to set out a compelling account of, not only the need for but also the effectiveness of, state action.

That theoretical failing was to be reflected in the limitations of early-21st century progressive governments in practice. And it is this that a new wave of progressive leaders and progressive thinkers need to remedy.

Links

Further Reading

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Reconceiving the welfare state (part three)

Thursday, September 23rd, 2010

This is the conclusion of David Craig’s conceptual analysis — parts one and two were published over the last two weeks.

Towards a wellbeing society? Market- oriented social wellbeing beyond ‘social inclusion’ and workfare

I argued in earlier posts that the relations between state, society and markets have continued to shift, with market power now strongly institutionalized and in many ways built into people’s subjective and normative expectations of work and welfare.

Overall, I think it crucial that we start re-thinking based on this shift, and that we actively re-consider how the best can be made of it.

Social democratic responses to this shift have tended to rely heavily on state intervention to deliver quick and controllable change. This intervention has been effective in a number of areas, but it has also been in some ways top down and technocratic, reliant on an elite control of the executive function inherited from previous neoliberal ambits (which captured state power to push through marketising reforms). Enacted by a professional political machine using polling and other restricted modalities of participation, this engagement has not really taken advantage of any real shifts in the social order emerging from neoliberalism which might have underpinned a more thorough shift of ground for the welfare state. These shifts include the emergence of a re-commodified labour market reaching further down than ever into families’ lives, time, assets and incomes.

On the other hand, many conceptions of the social which have been activated in policy contexts have been relatively lame and reactionary: Third way governments have played to the communitarian, to moral reaction, to punition and a shrill work ethic, while failing to see anything in the social that might provide a stronger basis for representational political action. The state doing some things for poor people is important, but it can also be self defeating for social democrats seeking to engage and mobilize low paid workers and households whose real living conditions are dictated by market outcomes.

Overall then, here is a call for a conception of the social much more closely linked to markets and market outcomes, but also as viscerally involved and engaged on a day-to-day basis with carving out a stronger niche within those arrangements. The state surely has a role legislating this, as do political managers in making smart policy around it. I suggested that gendered labour (and wider structural and institutional dimensions of the labour market and its governing), the early childhood and family environment, education (especially early education) and the housing market could all be fruitfully examined as sites where this kind of renewed engagement with the social and markets might have traction.

In all these fields we need above all to construct strong historical narratives which avoid dull thirdway notions such as social inclusion, partnership or (simple work or community) participation, and cut to the wider political economic chase in terms of the major forces shaping social and market relations.

These narratives need, in other words, to comprehend some of the following: and also to show people clearly what they have to do with their own past, present and future. They need, in other words, to:

1. Recognise and draw attention to the big picture political economic drivers behind changes including asset, income, intergenerational, health and neighbourhood inequality (ghettoisation), alongside the widening obligation for individual agency and responsibility.

Core to this will be historically understanding the effects of market mechanisms in basic areas (labour, capital, land), how these have been set up and regulated, and what social effects they have had. The housing market, for example, driven by a range of factors including favourable tax policies for landlords and a wider concentration of income in the top deciles, has over time delivered a polarised situation in which home ownership levels are falling while overall housing costs are rising faster than real wages. Asset concentration follows income inequality, and many families are the poorer for this, as the following (before and after housing costs) graphs from Bryan Perry’s 2010 survey of Household incomes illustrate.

Proportion of all individuals in low-income households by age, 60% REL threshold (Before Housing Costs)

Proportion of all individuals in low-income households by age, 60% REL threshold (AHC)

2. Help rebuild and refocus understanding of the roles of state and society, by:

  • raising wider debate around the actual costs of rising inequalities, making voters more aware of who these costs impact on, and how the social order and outcomes has been structurally changed by these shifts;
  • Building understanding about the real potential social bases of embedding and shaping of market forces, and the ways market arrangements can be more smartly managed to produce better social outcomes;
  • Linking, in robust policy terms, the social and political economic drivers to individual and family lived experiences, especially in terms of inequality, control, stress, resilience;
  • Building recognition of the real costs of labour market commodification, day to day;
  • Building recognition of the limits of the state’s role on the social development side (without weakening that role into mere monitor or bankroller).

From such a debate might emerge, if we are lucky, a plausible conception of wellbeing in relation to markets, social processes, and the scope of state intervention.

This conception would of some necessity go beyond the notion of a welfare state, without losing sight of that entity’s core social security capabilities.

In this context, I don’t think it’s naïve to talk over time about founding some new, durable understandings around something like a wellbeing society (rather than just a welfare state). Perhaps, and this is worth debating, it is not naïve either to talk about the real scope of market-oriented wellbeing. If we can even begin to do this in ways that go beyond the narrow social inclusion-ism of thirdway workfare, we will already be making progress.

We need venues for this discussion to happen, here, in NZ and more widely: Policy Progress seems to me to be a great starting point.

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David Craig is senior lecturer in Sociology at the University of Auckland, where he teaches around the history and political economy/ sociology of liberalism; colonialism and development; and urban sociology. His previous posts for Policy Progress were State subsidisation of low wages, Reconceiving the welfare state (part one) and Reconceiving the welfare state (part two).

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Reconceiving the welfare state (part two)

Thursday, September 16th, 2010

A continuation of David Craig’s conceptual analysis, which commenced in last week’s guest-post.

Some new and shifting elements in social development and the state/ society relations

In the previous post I suggested that the role of the state in relation to two core areas of the welfare state — decommodification of labour and provision of a social wage — had come under a kind of popular revision in recent years, wherein at least some kind of engagement with the labour market per se was seen as a kind of social good, a normative standard against which many NZers would like to see as many of us as possible measured (and rewarded). In consequence, state action in this and other areas needed to learn to work better with and around the market mechanism: not in a merely reactive way, but in a way that leveraged real market relations, market efficiency and market power in labour market relations. It needed too to reconsider what social relations might mean in relation to markets and the state, and whether in some different conceptions of society and the social (and even in notions like the UK Conservatives’ “Big Society”) are some other levers for producing better outcomes. This, NOT just by not by throwing in ‘local community’ as a substitute for a bigger picture of society as comprised of different groups, classes, families, individuals, all making their way together and separately.

Overall here I want to pursue this reconsideration of state-market- society relations a little more widely. James Purnell recently argued that a feature of progressive policy in this area in recent years has been a polarisation, wherein on the one hand the market (perhaps in the guise of ‘globalisation’, the ‘knowledge economy’ or marketised monetary policy and exchange rates) was seen as a kind of formidable unchallengeable arbiter, but where at the same time the state was seen as the preferred intervention mechanism, where intervention was seen as badly needed. Thirdwayism, I would suggest, will be remembered for being beholden to/ in awe of the market, and yet for falling back on the heavy hand of the state when it needed action. Some of this was captured early on in Tony Blair’s famous 1999 Chicago statement. There he argued,

“We are all coping with the same issues: achieving prosperity in a world of rapid economic and technological change; social stability in the face of changing family and community mores; a role for Government in an era where we have learnt Big Government doesn’t work, but no Government works even less.”

In response, he outlined “the new political agenda we stand for:

  1. Financial prudence as the foundation of economic success. In Britain, we have eliminated the massive Budget deficit we inherited; put in new fiscal rules; granted Bank of England independence – and we’re proud of it.
  2. On top of that foundation, there is a new economic role for Government. We don’t believe in laissez-faire. But the role is not picking winners, heavy handed intervention, old-style corporatism, but: education, skills, technology, small business entrepreneurship.

As the policy rolled out, the state’s roll was at first reinforced through heavy handed management and targeting, and then after 2003 thrown wide open by a swathe of hardly-thought-through communitarian and quasi-market solutions, which Brown felt he had to rein in. Now, under the Conservatives, the institutional pluralisation will continue, perhaps as an experiment, perhaps as something which is increasingly driven down privatisation pathways by a government urgent for ‘results’, and believing its own idealisations.

So, what now? Can we do better than that, and work some of these relations in more reasoned ways?

State, market, society: what scope for new policy relations?

Overall, the solutions seem to me to need robust understandings of the market, the social, the state, and the individual. We must throw in the community and local government there too, on the proviso that we try to remain really clear about what capabilities they can and can’t have!

To offer one starting point: a great deal of work in social aspects of health, child development, and its social and affective psychology in recent years has pointed to the intermediation of not just material wellbeing factors (these are crucial, and arguably depend on state mediation), but also to the intermediation of a range of social mechanisms operating more proximately to the person involved. Here, personal development and responsibility run head-on into big social factors like inequality.

The early family environment is one such area: another is early childhood education. In both cases, the wider social settings — inequality, work, housing — set big causal parameters, and require a solid understanding of what the state can and can’t do to make these aspects tractable. But there is also something much more subtle and close to home at work here. Here, care, stimulation and safety are seen as key, as useful and important whatever the socio-economic background — indeed, as the socio economic background worsens, these are seen as core bases of resilience, self control, and what gets called emotional (self-) regulation. Here the important discourses refer to early identification and intervention, as well as to the support of resilient, strength based parenting. Much of this MUST happen at at least arm’s length from the state per se.

Here is a (ok, pretty obvious) context of the social and security in which the state needs to be where big picture settings driving asset and income markets and security are established; but where closer in (and outside of abuse crisis) the social and individuals need distance and respect, while markets need some accessing (to say the least) but also some taming, in terms of their impact on family time, stress, etc. Hence again a background role for the state: enabling parents to care (though tax/ paid parental leave, etc), early childhood education, early intervention when things get out of hand… all until some kind of reengagement with the labour market  can be considered.

What happens inevitably in this kind of setting is a level of hybridization between state, community, market and family. Experience to here indicates that it’s really easy to set things up so these relations skew off in one direction or another. But too, that doing nothing is a recipe for missed opportunities.

Something that’s already happened is that these programming activities, which can be run by reliable professionals and scaled up from little or nothing, become a market activity and domain in their own right, and as such become a major real expression of the social contract in these settings. For all their social impact, they are liable, in other words, to capture by core market actors working in the name of community. Early intervention around children is one area the nanny state seems a bit more welcome: such interventions are popular for their talk about intervention, their aunty-style didacticism (in relation to ‘recalcitrant’ parents), their monitoring, their promotion of personal resilience and responsibility whatever the economic base, they can also represent and reinforce the wider hegemony of middle class perspectives and interests over the material wellbeing of the poor, and can come as a burden rather than as relief.

Clearly then there are risks and wins to be had here. I think we have to be prepared to explore, and I suggest that early childhood intervention and education is the place to consciously do it: with as much conscious, knowing participation of everyone (but especially families themselves) as possible.

A second area relates more directly to the labour market and its governing arrangements. Here is an area where a real social wage and real decommodification can be re-constructed, but only if it happens within a form of reconstituted market arrangements. I see real progress coming in gendered middle class dimensions of the labour market, in terms of family friendly workplace arrangements which can enable flexible juggling of work and family economies of time and place: lots of room here for active innovation, involving families themselves in shaping real decisions in workplaces and policy. A new policy compact in this area could come from an extended, active participatory policy process here, involving workers, employers, parents, children . . .

Beyond this, the basic issue of overall wage levels is much more thorny, especially at the bottom. There are legislative and institutional ways to strengthen the market power of workers (minimum wages, employment commissions): but pushing for a new social/ living wage compact will require a great deal more imagination: despite from the fact that, as the Australian experience indicates, everyone can emerge from such as winners. As I argued last time, people have come to trust, to some extent or another, the market to set some (but not other) parameters here. How to better leverage, then, issues like family and local living wages back into the agenda? Productivity is already a core element in workplace agreement discussions; but there is surely scope for these discussions to become more like substantive negotiations. A new and flexible tripartism in these areas would be quite an achievement: it might take some prompting from political/ state actors, but they would also need to know when to get out of the way.

A third area is the housing market. Simply here, income inequalities and tax arrangements have skewed market outcomes heavily in favour of the rich, undermining basic class social securities, and giving rise to all sorts of flow-on negatives: ghettoisation, undermining of local schools, and more, sending housing affordability tumbling while failing to reduce rents, at least in Auckland. There needs, simply, to be a new housing market compact hit upon. A part of this compact will no doubt be community sector housing providers : community housing trusts, complementing the state’s social housing roles, and, in some areas, replacing it. What the community sector genuinely does off here is a level of local engagement, much needed entrepreneurialism, and a responsive working relationship with tenets which can go a long way further than Housing NZ has been able to, for a range of reasons.

One step further will surely involve a revisiting of another state subsidy in the housing market, the accommodation supplement currently paid for low income families in housing they can’t quite afford. For a good while now, many on the left have regarded this simply as a subsidy to landlords, which worked in a classic subsidisation way to ensure higher rents all around: and thus add another driver to the housing market. Here is an area where a closer engagement with market actors and economics  needs to be a part of the solution: and by this I don’t mean the facile and largely failed supply-side economics of the kind that got us into the negative gearing/ asset ownership concentration mess we are in.  So far, we’ve seen a poor referencing of markets here, linked to a dull conception of possible state machinery.  The role of families as social actors in all this has been similarly restricted: if they can’t cut it in the ownership market, here’s  a non-capitalisable, bandaid  handout to help you be a tenant: which you hand on to your landlord, who will invest it in a way that will make sure you stay a tenant, too.

Room for improvement? Yes, but there’s no simple state or market fix here, to be sure!

Part three of “Reconceiving the welfare state” will be published next week. In the meantime, leave your thoughts and comments below.

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David Craig is senior lecturer in Sociology at the University of Auckland, where he teaches around the history and political economy/ sociology of liberalism; colonialism and development; and urban sociology. His previous posts for Policy Progress were State subsidisation of low wages and Reconceiving the welfare state (part one).

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