Doomed?

“We’re doomed” was Private Frazer’s inevitable response to any crisis in “Dad’s Army”. It echoes the Aberdonian farmer in “England, their England”, who thought it was just conceivably possible that a man of exceptionally powerful brain might be able to imagine a state of things just a fraction worse than they then were.

One might stray into such despondency when considering the external context in which New Zealand finds itself, then considering what we are doing as a nation to respond.

The last fifty years have seen a constant erosion of the gains made by working people during the post-1930s Keynesian Accommodation. Since the early 1970s, wealth differences have been exacerbated by the decoupling of the financial sector from the productive sector, which in turn fostered a series of devastating financial crises. The taxpayer repeatedly bailed out the finance sector, which continues on its merry way.

Meanwhile, the productive sector, restructuring, off-shoring and on-shoring as the whim took, taking advantage of China’s and elsewhere’s cheap labour, supported by taxpayer funding of research, training and exports, demanding (and getting) reduced worker protections and voice, promising pie in the sky if just another jot of flexibility can be squeezed from the workforce, swithers between chest-beating pride and desperate calls for support.

Working people – excoriated and blamed for their laziness and inflexibility, on reduced rations as the wage share falls and as welfare cuts amass, denied voice by legislation designed to vitiate trade union power, distanced evermore from the levers and instruments of political power, shorn of an effective voice in a “Just Transition” – are told to know their place. Varoufakis’ invocation of a new feudalism has a powerful ring.

One does not have to entertain the Apocalypse to see that the world has permanently changed. This is the essential point in Piketty’s work; it is glaringly obvious to any student of political economy. There will be no return to the old Keynesian model. Its institutions – domestic and international – are in disarray. Apart from a beleaguered Northern Europe, the 1930s accommodation between State, Labour and Capital at its heart is moribund.

If we are to create an alternative, fairer, sustainable alternative to a chaotic world ordered by buccaneering supra-national magnates, progressive voices must, first, recognise that the future cannot be “business as usual”. A new political and economic alternative to chaos must be defined. Second, its scope must be, initially, national, that is, a space in which democratic voice may exist and be protected. Third, priority must be given to two things. There must be a new “economic” accommodation that reduces wealth differentials and offers a decent life to all. There must also be a deepening of democratic voice – in work and in the community. Without such economic and political change, the future for working people is bleak.

What does this mean for Labour? First, Labour doesn’t have choice if it is true to its historical role. It must develop and proselytise around a new vision. Its starting point will be wealth – its distribution, taxation and production. A sustainable society – one in which people have sufficient stake that they willingly abide by its norms and practices – will have a flatter wealth structure as a result of taxation and successful economic activity. These two go together. Overarching their relationship, and providing a third term in the equation, is environmental sustainability.

Second, democratic voice is weakening. Multiple factors contribute to this challenge. Neo-liberalism’s market focus never placed great store in democracy. The vote was always a political concession, wrought out of struggle, and used to deflect concern away from the main prize, economic democracy. Anti-democratic populism is on the rise, ably supported by a new relativism in truth, fostered by technology and the Right. Universal suffrage at the national level needs to be supported by increased local democracy and, above all, voice in the workplace beyond collective bargaining. A recasting of wealth may involve initiatives such co-ops and other forms of social enterprise.

Third, Capital must be drawn into the mix. This is by far the most challenging aspect of a new accommodation. The division between finance and productive capital in the early 1970s hampers progress in this direction. Productive capital is usually more willing – self-interest will out – to see the logic of an accommodation. Finance capital, wearing its austere Patrician garb, sees little interest in change that might challenge its pre-eminence. This is why political measures to curb the power of financial capital are necessary, and so feared by that sector. The “Bank of Dave” offers pithy insights. And watch carefully bankers supporting a CGT!

Some in Labour will disagree with much of this. They tell me so. Often. Frankly, I’m not even sure that it’s achievable, and it may be that the man from Trier will be proved right. Critics in Labour usually take a Fabian line – move carefully, tweak the system when we can, understand a changed world, getting into power is everything, don’t rock the boat. Unfortunately, the boat is rocking madly already, after fifty years of tempests. Those tempests will intensify if the Left fails to offer a comprehensive alternative. And isn’t it the Left’s job to change history?