This review also appears on the Scottish Fabians website.
Back to The Future of Socialism, by the Labour MP and former Cabinet minister Peter Hain, is a bold effort to reimagine for today the most influential text by a British social democrat of the last century.
Published in 1956 Anthony Crosland’s The Future of Socialism followed in the socialist revisionist tradition of Eduard Bernstein, whose 1899 Evolutionary Socialism argued that social democrats should work for progressive reform within the framework of a market economy, rather than for the overthrow of capitalism as a necessary precondition for socialism.
Crosland believed that, like the fin de siècle German Social Democrats whom Bernstein addressed, the British Labour Party of the 1950s was in danger of confusing the means by which socialism might be achieved with its end, which he took to be the realisation of an egalitarian society that afforded each of its citizens the economic security and power necessary to exercise true freedom.
Crosland’s egalitarianism was uncompromising, going well beyond the meritocratic notion of equality of opportunity with which the concept is typically associated today. Looking back on The Future of Socialism some 20 years after its publication, Crosland wrote:
Socialism, in our view, was basically about equality. By equality, we meant more than a meritocratic society of equal opportunities in which the greatest rewards would go to those with the most fortunate endowments and family background; we adopted the ‘strong’ definition of equality – what [John] Rawls subsequently called the ‘democratic’ as opposed to ‘liberal’ conception. We also meant more than a simple (not that it has proved simple in practice) redistribution of income. We wanted a wider social equality embracing also the distribution of property, the educational system, social-class relationships, power and privilege in industry – indeed all that was enshrined in the age-old socialist dream of a more ‘classless society’.
But, crucially, he believed some kind of managed market system to be compatible with, and even necessary for, a prosperous egalitarian society. The market could be directed towards the common good by the hand of a powerful, social democratic state. Crosland wanted to shift Labour’s focus from what he thought to be a fixation on Clause IV of its constitution, which committed the party to the ‘public ownership of the means of production’, to Clause V, which championed ‘the Political Social and Economic emancipation of the People’.
Crosland thought that 1950s British capitalism was a more benign creature than the rapacious beast of the pre-war era: a comparatively civilised shareholder capitalism was emerging, run by a professional managerial class capable of looking beyond the simple pursuit of short term profit.
And he argued that advances in macroeconomic theory, together with the practical experience of managing a planned economy during the war years, had equipped the British state with a set of proven economic tools capable of stabilising the economy through periods of boom-and-bust, making it possible to pursue a policy of sustainable economic growth and full employment. John Maynard Keynes’ General Theory had proposed a range of fiscal and monetary instruments for managing economic cycles that had shown themselves to be effective in practice: Roosevelt’s Keynesian New Deal had lifted the US out of the Great Depression, and British governments of the 1940s and 50s had been able to design an macroeconomic framework that had sustained steady growth.
The power of capital had been further constrained by a strong labour movement and the nationalisation of several major public utilities. And the proceeds of a growing economy were paying for the construction of a cradle-to-grave welfare state providing universal health coverage, comprehensive education and extensive social insurance.
For Crosland these developments meant there was no need for wholesale reconstruction of the economic system: the social democratic mixed market economy was capable of generating the wealth and opportunity necessary for human flourishing.
Crosland’s revisionism, like Bernstein’s before him, was hugely controversial. For the labour movement’s left the idea that progressive ends could be achieved without a fundamental restructuring of the relations of production effectively evacuated socialism of its very essence. The opening lines of a satirical 1959 New Statesman sermon by Ralph Miliband, comparing Crosland’s false gospel with that of liberal Christianity, were typical:
The title of my sermon ‘Should We Drop Christ?’ will have surprised some of the more traditionally-minded among you, but facts have to be faced…
But The Future of Socialism proved extraordinarily influential on the subsequent course of British social democracy. It established itself the mainstream Labour orthodoxy of the next 20 years, and, after falling from favour during the left’s period of ascendency during the 70s and 80s, reasserted itself under New Labour, Tony Blair famously drawing on Crosland’s distinction between ends and means in support of the rewriting of Clause IV.
Hain is the latest of a long line of senior Labour figures, including Giles Radice, Roy Hattersley and Bryan Gould, who, over the years, have attempted to refresh Crosland’s essential thesis to demonstrate its continued relevance. Back to The Future of Socialism aims to reboot Crosland for 2015, setting out a comprehensive political programme for how Crosland’s humane vision of an egalitarian participatory democracy might be realised today.
Hain acknowledges the many elements of Crosland’s original argument that have dated badly over the past 50 years, most glaringly, perhaps, his confidence in the ready capacity of an enlightened state to manage an essentially benign market. Today’s capitalism is a rather more virulent specimen than that which came under Crosland’s microscope, as indicated by passages like these from The Future of Socialism:
The most characteristic features of capitalism have disappeared – the absolute rule of private property, the subjection of all life to market influences, the domination of the profit motive, the neutrality of government, typical laissez-faire division of income and the ideology of individual rights.
In retrospect the book was clearly a child of its time, its faith in the capacity of a technocratic state to design an ever better world characteristic of the high modernism of the 1950s. This was the hopeful era of the post-war planners, the 1951 Festival of Britain, mass house building programmes, the construction of the New Towns, new universities, polytechnics and arts colleges, and steadily increasing consumer spending power. A famous passage from the book is indicative of the hopeful ambience of the age:
We need not only higher exports and old-age pensions, but more open-air cafes, brighter and gayer streets at night, later closing hours for public houses, more local repertory theatres, better and more hospitable hoteliers and restaurateurs, brighter and cleaner eating houses, more riverside cafes, more pleasure gardens on the Battersea model, more murals and pictures in public places, better designs for furniture and pottery and women’s clothes, statues in the centre of new housing estates, better-designed new street lamps and telephone kiosks and so on ad infinitum.
Crosland could not have foreseen that the ordered social democratic settlement he described would break down so completely some 20 years later, to be succeeded by a neoliberal hegemony that inverted his core assumptions that the market needs to be constrained, that government is capable of steering the economy, and that inequality is a problem to be addressed through a strong welfare state and redistribution.
But despite the sustained attack to which it has been subjected for the past 30 years, Hain believes the essential social democratic argument articulated by Crosland, that an intelligent state can marshall capitalism to serve progressive ends, can and must, be rehabilitated and reconstructed.
His book is something of a tour-de-force, taking in economic policy, financial regulation, taxation and redistribution, industrial strategy, industrial relations, education and training, the British constitution, globalisation, climate change, and even Labour’s internal organisation. The result is a dense, sprawling essay that by attempting to cover so much frequently spreads itself too thin.
But – the occasional loss of focus notwithstanding – Hain’s programme for reinventing the Croslandite social democratic state for 2015 is worth the effort, referencing and assimilating as it does much of the best thinking the party has undertaken in opposition.
Hain’s central argument is that an incoming Labour government serious about getting to grips with contemporary British capitalism would need to develop and master a much more extensive and versatile set of economic tools than Crosland had thought sufficient for the challenges of the 1950s.
Certainly, he shares Crosland’s faith in Keynesian demand management and pump-priming as an effective means for pulling economies out of recession. Hain’s analysis of the Coalition government’s self-defeating imposition of austerity, which held up Britain’s economic recovery for at least three years, is unsparing. Noting the continued spare capacity in the economy even after two years of fragile growth, he advocates the immediate implementation of a two-year £60bn programme of public investment in housing stock, infrastructure and vocational training.
But though essential for injecting renewed life into a sluggish economy, Hain doesn’t think that traditional Keynesian economic stimulus programmes are enough: he argues the state needs to go much further, and be prepared to undertake intricate rewiring of the machinery of the British economy to facilitate the development of the kind of innovative, advanced industries capable of generating millions of stable well paid jobs.
Hain, to borrow a term coined by Labour adviser Stewart Wood, proposes a kind of ‘supply side social democracy‘, the patient restructuring of the economy around a cluster of high value industries supported by a responsible banking sector willing to provide long term finance, and the supply of a skilled workforce through flexible educational institutions.
Here Hain drews on the work of the economist Mariana Mazzucato, arguing for an ‘enterpreneurial state‘, a government prepared to help existing industries grow and to seed new ones, through investment in the research and development from which new enterprises emerge:
A good social infrastructure means more than just a dependable power grid and water supply, extensive road and rail networks, reliable telecommunication systems, an efficient banking system, and health and education services that meet high standards. It encompasses the rules and regulations, institutions and policies that primarily determine how willing people are to make the long-term investments in new technology, capital and skills that drive long-run growth.
He shares the current Labour leadership’s admiration for the sophisticated economic networks that support the ongoing strength of the German ‘Mittelstand’, the dense web of small to medium sized enterprises that underpin Germany’s advanced manufacturing sector. For Hain this willingness of government to offer extensive and intelligent support to industry is fundamental to any contemporary reimagining of the role of the Croslandite social democratic state. Fiscal and monetary policy is not enough to set British capitalism on a sustainable trajectory: a smart, pro-active government needs to be embedded within the deep structures of the economy.
And whereas for Crosland economic sustainability meant the management of economic cycles, for Hain, as for any contemporary political economist, the term carries urgent ecological overtones. The smooth expansion of Britain’s promising renewables sector is fundamental to Hain’s industrial strategy: economic growth is a necessary condition for generating the wealth necessary to realise any Croslandite social democratic ideal, but in 2015 it must be green growth, rooted in the successful development of Britain’s natural resources of marine, wind and tidal energies.
Back to the Future of Socialism is a thoughtful, exhaustive, and – given its length – somewhat exhausting, contribution to the perennial debate over the meaning of social democracy, and the ultimate purpose of the Labour Party. That discussion is particularly urgent today, with a critical general election looming, and the growing strength of left alternatives to Labour such as the Green Party, and, here in Scotland, an ostensibly social democratic SNP together with new movements such as the Common Weal.
Crosland’s egalitarian ideal remains an attractive one, and Hain’s achievement in reimagining how it might be pursued today is impressive, a formidable sifting of much of the best social democratic thinking undertaken both within and without the Labour Party in recent years. His book is as comprehensive and contemporary a restatement of the classic principles of British social democracy as is currently available.
And yet, for that very reason, one wonders how persuasive the many political progressives today who have lost faith in traditional social democracy will find it. For all his stress on the importance of fostering renewable industries, Hain’s uncompromising prioritisation of the necessity of economic growth will immediately alienate those – one time natural Labour supporters – who believe that a traditional focus on growth is part of the problem, not the solution.
For many progressives, represented by parties such as the Greens, think tanks like the New Economics Foundation, and a host of popular commentators including Naomi Klein and George Monbiot, the traditional social democratic model of growth plus public services is no longer sustainable, underestimating the enormity of the challenge presented by climate change.
The current difficulties the Green Party is having in presenting a credible message indicates that much work has yet to be done to develop a tough-minded, coherent alternative to social democracy, but the outline of a new vision is there: a decentralised economic framework run according to cooperative principles that emphasises sustainability over growth. This model goes so far as to reject the desirability of the age-old goal of full employment in favour of some kind of citizen’s income, in the belief that climate change, together with the continued automation of labour, renders the idea of jobs for all both irresponsible and unachievable. Whatever its merits social democrats like Hain need to engage with this alternative economic model, which holds increasing appeal for many on the left.
So the question asked of today’s social democrats, like Hain, is fundamentally the same as that asked of Crosland. Back then, it was posed by Marxists like Ralph Miliband; today it is asked by the ecologically concerned: can capitalism ever be civilised, brought within the compass of a well meaning state and made to serve the common good, or, for the sake of social harmony and ecological sustainability must we ultimately look to an alternative system altogether?