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Time for a rethink

Labour and the left need to rebuild with mutualist values and a radical democratic vision to defeat the Coalition, argues Mike Davis

The shadow of the 1980s hangs over the UK. By embracing unadulterated pro-capitalist remedies to the economic crisis, the prospect of renewed or ‘double-dip' recession looms large as the Budget cuts instituted by Osborne begin to roll back public services and jobs are lost. The first coalition since the Second World War also looks set to shore itself up in government by limiting the ability of parliament to vote out the government in an effort to cement the Coalition for a full five year term. Although the ‘Orange Book' Lib Dems of the Clegg stripe have much in common with Cameron's revamped Tories, more social democratic LibDems like Ashdown, Simon Hughes and Shirley Williams are sceptical. While they toe the party line for now, they will surely spell trouble in the future.

Unparalleled crisis

The situation could have been very different. After 30 years of neo-liberal free market debt-driven profiteering, the ruling class has got us into another fine mess - in Oliver Hardy's immortal words – and we are witnessing an unparalleled crisis of finance capitalism. The bursting of the debt bubble in the USA with the sub-prime housing crash, could have been the catalyst for a new social democratic, interventionist approach: a radical change to housing policy, tighter regulation, loans to targeted industries and the nationalising and restructuring of the banking industry. It was not to be. Gordon Brown and Alistair Darling not only failed spectacularly to heed the warnings, their lukewarm response – the reluctant buying out of the banks, the insipid call for restraint in bankers' bonuses, the talk but no action on tax avoidance and offshore tax havens – it was all a desperate attempt to get back to business as usual.

While (amazingly) the bankers continue to cream off millions on the grounds that we cannot do without their wizardry, the Con Dems are now – with some success – deflecting the issue and reframing the problem as irresponsible government spending on public services. Given that it was the private sector that effectively drained the coffers, this is quite a feat - it is one made possible because New Labour broadly share the same perspective, even though they might differ on tactics.

It goes without saying that public spending cuts will impact on working people far more than the fat cats who took the money in the first place. The right-wing media has been dutifully preparing the ground with talk of ‘feather bedded' public pay, ‘gold-plated pensions' and a ‘bloated public sector'. Little or nothing is now being said about the pay of top bankers and private companies who continue to raid corporate profits without regard for sustainability. An Income Data Services pay report in June indicated that FTSE-100 boardroom pay rose by 7% and bonuses by a staggering 22.5%. Steve Tatton, an IDS analyst, expects the pay gap to widen ‘because unemployment holds pay low while pay in the ‘vanity league' will continue to rise.' So much for ‘We are all in this together'!

With a government stuffed with millionaires, the harsh irony of the 1930s cartoon comes to mind. Four classes on different rungs of the ladder, the rich at the top with the poorest class just keeping its head above water on the bottom rung being told ‘just one step down for us all'. Osbourne's budget rams home the message that the most vulnerable will have to carry the burden of capitalism's profits crisis. The Institute of Fiscal Studies reports that with 25 per cent cuts, reductions in Child Tax Credit, other welfare benefits, allied with 20 per cent VAT, the poor will undoubtedly be hardest hit in the biggest austerity drive since the Second World War..

The cuts will have a widespread impact. Some things have gone already. The Child Trust Funds, the Future Jobs Fund with its guarantee of work or training for young people, 10,000 university places and arts internships, even down to free swimming for the elderly and children. The list will only lengthen. We have yet to witness the full impact of the cuts, history suggests that they will push the economy into reverse and a more protracted and severe recession. Billions will be taken out of the economy – in circumstances where credit is still not flowing.

The political consequences have yet to be seen. In the meantime the government is contemplating constitutional change to bind the coalition partners. Plans to increase the majority for parliamentary dissolution to 55% will, of course, allow Cameron to hang on to power even if the Lib Dems leave the coalition and it effectively locks them into the coalition for the duration. Further proposals to reduce the number of parliamentary seats, to pack the Lords and introduce more curbs on trade unions bode ill for the future of Britain's democratic credentials.

A high price

It is a high price to pay for the promise of electoral reform if it ever happens. Even if they achieve their goal of electoral reform the future for the Lib Dems looks bleak. They can hardly continue to advocate progressive taxation, no VAT bombshell, ending Trident nuclear missile renewal, pulling troops out of Afghanistan or a Tobin tax, as they did before the election. Their choice of coalition was a huge risk and the longer they continue their deathly dance with the Tories, the more the splits will surface. If they are ultimately squeezed out, Cameron will have succeeded in capturing the middle ground of politics.

The international context is grim too: the fear of being held to ransom by global capital has prompted the leading economies of Europe to backtrack on any Keynesian style interventions and to make big cuts in public spending. It could signal a deeper global recession and huge job losses. Worklessness could foster extremism and a huge increase in criminal activities such as drug dealing. We could see the growth of racism and xenophobia, scapegoating migrant workers and a retreat into nationalism.

But there must be an alternative. That Labour avoided complete electoral wipe-out is testimony to the fact that millions of people still continue to look to Labour to articulate their interests and indicates that Tory support is anything but solid. The Labour left has made some headway in advocating more radical solutions, and the debate within the Party has noticeably shifted as a result. The Green Party's triumph in Brighton also showed that there is a possibility of popular support for a more radical alternative if Labour is able to offer that.

What are the prospects for rebuilding both within and outside the Labour Party? The leadership contest underway in the Labour Party should provide an opportunity to learn from past mistakes, draw a line under New Labour and develop a more inspiring vision. Will any of the five candidates be capable of that? David Miliband seems stuck with a New Labour script which is surely now redundant. Ed Balls and Ed Miliband are edging towards a critique of new-liberalism. Ed Miliband has made a stronger case for industrial interventionism. Diane Abbott is the most radical reminding us of her opposition to Blair's wars and attacks on civil liberties. But the alternative from TV couch mate of Michael Portillo and Andrew Neil lacks political traction or credibility.

Democratic revolution

Last year, Chartist outlined a 12-point plan for a ‘people's parliament' to link to the renewal of democracy agenda. Part of this plan involved abolition of the Lords, transparency in payment of MPs, proportional representation (a crunch issue for the coalition) , more regular parliaments and improved gender and racial balance. Constitutional reform has to be a main plank of any future programme. Integral to this democratic revolution must be the restoration of civil liberties including inside the Labour Party. New Labour's ‘democratic centralism' must be ditched in favour of restoring the authority of conference and powers of constituency parties to develop policy.

Secondly, there are new ideas on economics, the importance of local communities and working towards sustainability rather than unlimited growth as the ultimate goal, together with greater equality to bring about greater social solidarity. New Labour presided over a big growth in social inequality. Local councils with local powers (not phoney ConDem localism of Council Tax capping), trade unions, community and campaigning groups all have the opportunity to play a pivotal role in assembling popular alliances to build strong communities, not only to oppose the cuts in public services and protect the most disadvantaged, but also to develop new models of engagement and self-management. This will provide space to develop a new political programme, and Labour needs to be engaged with this. The bogus ‘Big Society' agenda must be exposed and genuine participation encouraged. A new mutualism has the potential to exploit the opportunities that the break up of the state will provide, rather than leaving it to the rapacious private sector. Support for cooperatives should be placed centre stage in any alternative left strategy. Of course Labour has a far longer and richer tradition of embracing this approach, not least through its alliance with the Co-operative Party.

Thirdly, a new international perspective needs to be developed which recognises the more complex realities of a global world order, twenty years after the fall of the Berlin Wall. Basic structures of international law such as human rights conventions need defending and extending, following on from Guantanamo and the UK's apparent complicity in rendition and torture. International aid must be defended alongside solidarity with oppressed minorities, particularly the Palestinians. A new, fair model of migration needs to be developed which recognises the new realities of the global market and international travel, along with new perspectives on community solidarity.

Finally a vision of 21st Century society needs to be articulated in response to relentless commercialisation, globalisation and the growth of the illicit economy. It needs to get to grips with the realities of criminal networks, the pernicious drugs, prostitution and human trafficking trade that will otherwise benefit from the withdrawal of the welfare state. Culturally, we need to celebrate the grass-roots, diversity, skills and talents of local communities whilst being international in our perspective. The vision needs to challenge the dominance of the global conglomerates in media, sport and entertainment, to question the cult of celebrity and individualism and the pollution of personal relations by advertising.

These are some of the ingredients of a new version of socialism which the Labour, trade union and cooperative movements need to debate and foster. Failure to construct an alternative based on mutualism and cooperation will open the door to a narrow nationalism and even the fascist right, only temporarily bloodied in Britain. Chartist will continue to work with allies and partners to campaign for such an approach as the most effective way to protect our communities through the coming years and rebuild a Labour Party and movement worthy of our best traditions.