BLAIR’S BRITAIN, 1997–2007
Page 28
Labour had held large leads in the opinion polls during the Kinnock
years, only to find them dissipated when a general election approached.
This was primarily because the public feared a return to the failed policies
of the 1970s. Despite the fact that both Neil Kinnock and John Smith had
regularly insisted, with varying degrees of plausibility, that Labour had
changed, there was, so Blair believed, a residual suspicion amongst voters
that the transformation of the party was but skin-deep. A symbolic act
was therefore needed to show that Labour had broken with its past. That
symbolic act involved the removal of the commitment to nationalisation.
By the 1990s, this was little more than a recognition, however belated, of
reality – the reality that history was moving in a different direction from
that which had been anticipated by social democrats. For social democracy, which for the first half of the post-war period had seemed in tune
with the trends of social evolution, now appeared as fustian and oldfashioned, a doctrine whose greatest days lay behind it.
At the beginning of the twentieth century, by contrast, socialism and
social democracy had appeared to be the wave of the future. By the end
of the century, however, the very term ‘socialism’ had gone out of fashion;
it had been replaced by ‘social democracy’. The removal of the commitment to nationalisation could be held to mark explicit recognition,
belated no doubt, that Labour had become a social democratic party. But,
what did social democracy consist of at the end of the twentieth century –
what did it actually mean? Did it mean the same as it had meant to the
revisionists of the 1950s, Hugh Gaitskell and Anthony Crosland? Was
social democracy equivalent to the ‘Third Way’ or any of the other
slogans used to describe the policies of the Blair government? Or, had the
Blair government repudiated, as the former deputy leader of the party
Roy Hattersley believed, social democracy as well as socialism?
In his book, The Future of Socialism, published in 1956, Anthony
Crosland claimed that social democracy was not a fixed doctrine, nor a
fixed set of policies, but a set of values, the most important of which was
equality. Crosland argued that the left in Britain was congenitally prone
to confusing means, such as nationalisation, with ends. Nationalisation
might perhaps, so Crosland thought, prove of value in helping to achieve
an egalitarian society, but it was not to be regarded as an end in itself. The
aim was to achieve not a society based on public ownership but an equal
society, and the policies of the Labour Party ought to be evaluated in
terms of whether or not they helped to achieve this aim.
Crosland was, however, unclear, and the Labour Party has remained
unclear, about what equality meant and what it entailed. It was fairly clear
what Crosland did not mean by equality. He certainly did not mean
equality of outcomes, for even if this form of equality were achievable, it
would probably threaten liberty. Crosland believed, moreover, that
inequality of reward was necessary to mobilise talent. Inequalities were a
form of economic rent to be paid to people of ability. To seek to do
without such a rent of ability would involve direction of labour and that
would be unacceptable in a free society. Equality of outcomes, therefore,
would be incompatible with the values of pluralism and liberty.
Yet, if equality meant less than equality of outcomes, it meant more
than equality of opportunity. For in a society based on equal opportunity
the greatest rewards would go to those with the most fortunate genetic
endowment and family background. Yet, as Crosland said in The Future of
Socialism, ‘No one deserves either so generous a reward or so severe a
penalty for a quality implanted from the outside and for which he can
claim only a limited responsibility.’2 A society based on equal opportunity would be a society in which there was an equal opportunity to
become unequal. Moreover, those who ended with the smallest rewards
would be unable to console themselves, as they could in a class-divided
society, with the reflection that they had been unlucky in their social circumstances; for they would be held to have deserved their fate, a fate
chillingly portrayed in Michael Young’s satire, The Rise of the Meritocracy,
published just two years after The Future of Socialism.3
There is a further objection to the idea of equality of opportunity as
a basis for social democracy. For equality of opportunity rewarded
only marketable skills. That, however, as Raymond Plant has argued,
‘neglected a wide range of other human qualities which were vitally
important for sustaining a civilized democratic society’. Social democrats
‘need to positively value a wider range of skills and human virtues than
those which were realized in the economy and the labour market’.4 For
social democrats, the market was a good servant but a bad master.
12 C. A. R. Crosland, The Future of Socialism (London: Jonathan Cape, 1956), p. 236.
13 Michael Young, The Rise of the Meritocracy, 1870–2023: An Essay in Education and Equality
(London: Thames and Hudson, 1958). In The Future of Socialism, Crosland acknowledges
a debt to discussions with Michael Young, on p. 235 fn.
14 Raymond Plant, ‘Crosland, Equality and New Labour’, in Dick Leonard, Crosland and New
Labour (Basingstoke: Macmillan, 1999), pp. 25–6. This paragraph is based on Plant’s essay.
But if equality meant neither equality of outcome nor equality of
opportunity, what did it mean? What form of equality should social
democrats aim for? In The Future of Socialism, Crosland seemed
unsure. His beliefs, it has been said, were rather similar to those of the
American philosopher John Rawls, who had put forward the notion of
‘democratic equality’.5 According to this notion, inequalities could be
justified only on two conditions. The first was that the positions which
attracted high rewards must be genuinely open to all through
processes of fair competition. The second was that they should benefit
the worst-off in society, improving their position in relative as well as
absolute terms. It was this idea of benefiting the worst-off in relative as
well as absolute terms that distinguished the social democrat from the
liberal or the conservative. For most politicians, whatever their position on the political spectrum, could agree that one important test of
policy should be its effects on the absolute standard of living of the
poorest. Most governments, whether of the left or the right argue,
with more or less conviction, that their policies will help the poor. The
test proposed by Crosland was more stringent than that – it was that
the poorest must be made relatively better off vis-à-vis the rich; and
that, Crosland believed, could only be achieved through redistributive
taxation.
Democratic equality, then, was the end. Redistributive taxation would
be one important means in helping to achieve it. About means, however
,
Crosland was entirely empirical; for the means towards the end of social
democracy would no doubt legitimately vary in different countries and
different periods.
Thus, for Crosland, and for social democrats more generally, social
democracy was a doctrine subject to permanent revision. Social democratic policies needed to be looked at anew by each generation so that they
could be accommodated to changes of circumstance. This was an important development in the thinking of the British left. For, in the past,
socialism had seemed a closed doctrine impervious to evidence and
overly reliant upon supposed laws of historical development. What these
laws were depended, admittedly, upon where one placed oneself on the
political spectrum of the left. For Communists, and for a few on Labour’s
left, the laws of history had been laid down by Karl Marx; for Ramsay
MacDonald, they had been laid down in a rather cloudy way by the evolutionists, whose doctrines socialists should seek to apply to society; for
Sidney Webb, most of the Fabians, and most of the leaders of Labour’s
15 Ibid., p. 28.
heroic age in the 1940s, the laws had been laid down by economists and
sociologists who had noticed the inherent tendency of modern societies
towards collectivism. It was this conception which, though rarely articulated, subconsciously influenced many social democrats until the end of
the twentieth century.
If the trends of history were known, it appeared to follow that the test
of a good policy was that it was in accordance with these trends; policies
should, as it were, assist the flow of history, rather than seeking to arrest
its development. This seemed to obviate the need to work out empirically
based policies from a rigorous and realistic interpretation of what was
actually happening in society. Popper, however, had taught social democrats that all truths about society were conjectural. Crosland had absorbed
this lesson, although many of his colleagues did not. But the conclusion
which Crosland drew was that no Labour Party policies should be set in
tablets of stone. All were to remain open to questioning, provided only
that the central aim of equality was retained. That alone was not open to
question – or, rather, anyone who questioned it had ceased to be a social
democrat.
II
By 1998, however, when Tony Blair became Labour leader after four successive election defeats, it seemed that Crosland’s revisionism itself
needed revising. The problem that Blair faced was that, as Eric
Hobsbawm had feared when Margaret Thatcher had come to power in
1979, the forward march of Labour seemed to have been halted.6 For
most of the twentieth century, as we have seen, Labour had been sustained by the belief that its advance was in some sense guaranteed by
history, by what Sidney Webb had called ‘the inevitability of gradualness’.
Society, so it was believed, was moving inexorably in a collectivist direction. No doubt Conservative governments would continue to be elected
from time to time. Their role, however, would be confined to that of
administering a dispensation shaped by Labour. Their role would be that
of administering a collectivised state, as the Churchill and Macmillan
governments in the 1950s had done. If Conservatives tried to go further,
if they tried to roll back the state, to follow the siren calls of neo-liberals
such as Hayek, they would be repudiated by the electorate. For the gains
16 Eric Hobsbawm, in Martin Jacques and Francis Mulhern (eds.), The Forward March of
Labour Halted? (London: Verso 1981).
secured by the Attlee government could be maintained only through state
action, and the voters would surely punish any government that sought to
undermine them. It was for this reason that Crosland believed that these
gains – full employment, the welfare state, sharply progressive taxation
and recognition of the claims of organised labour – were permanent and
immune to challenge from the right.
The advent of Margaret Thatcher to power in 1979 had changed all
that. For she conceived of her task not merely as one of containing the
advances made by Labour, but of reversing them. Dismissed at first by
many on the left as an aberration, it soon became apparent that she was
engaged in instituting, in the words of John Gray, ‘a modernizing project
with profound and irreversible consequences for political life in Britain’.7
Labour, therefore, was forced to adapt its doctrines to conditions
that it had never before envisaged. It now seemed that social democracy,
far from being guaranteed by history, was being repudiated by it. The
question is whether the Blair project has been a further stage in social
democratic revisionism, or whether it has finally jettisoned the social
democratic ideal of equality.
The Future of Socialism had been based on a group of interrelated presuppositions which had been taken for granted by most of those on the
left. The first was that the state could, through intelligent macro-economic
policy, secure both full employment and price stability using Keynesian
methods. ‘Acting mainly through the budget’, Crosland had argued,
‘although with the aid of other instruments, government can exert any
influence it likes on income distribution, and can also determine, within
broad limits, the division of total output between consumption, investment, exports and social expenditure.’8 The state should, in Crosland’s
view, use its ability to control the economy to redistribute income.
This belief, though taken for granted at the time across much of the
political spectrum had, nevertheless, hardly been subject to empirical
testing. Indeed, even at the height of the Keynesian era, in 1968, R. C. O.
Matthews, Drummond Professor of Political Economy at Oxford, had
convincingly argued in an article in the Economic Journal that post-war
full employment in Britain owed hardly anything to Keynesian techniques of pump-priming.9 The belief that social democratic aims could
be achieved by fiscal means was, therefore, quite untested.
17 John Gray, After Social Democracy: Politics, Capitalism and the Common Life (London:
Demos, 1996), p. 10.
8 Crosland, The Future of Socialism, p. 27.
19 R. C. O. Matthews, `Why Has Britain Had Full Employment Since the War?’, Economic
Journal, 78, 1968: 556–69.
By the time of the IMF crisis in 1976, Labour’s leaders hardly dared test
it. They were already convinced that it would not work. At the 1976
Labour Party conference, Prime Minister James Callaghan spoke of:
The cosy world we were told would go on for ever, where full employment
would be guaranteed by a stroke of the Chancellor’s pen – We used to think
that you could just spend your way out of a recession – I tell you in all
candour that that option no longer exists, and that in so far as it ever did
exist, it only worked – by injecting a bigger dose of inflation into the
economy, followed by a higher level of unemplo
yment – That is the history
of the last twenty years.10
Thus the first of Crosland’s presuppositions – that the economy could be
brought under control by the state – had been subverted.
Crosland’s second presupposition was that the British state was beneficent, efficient and generally fit for purpose. For the social democratic
programme, and in particular the redistribution of income and wealth,
could be achieved only by using the state as its instrument. The power of
the state would no doubt expand, but this, so Crosland believed, need not
cause any worries to believers in a free society. Indeed, the expansion of
the state might actually strengthen rather than weaken democracy. For, as
Tom Clark has pointed out, ‘increasing the share of national income consumed by state services redistributed power. The private sector was controlled through market purchases, where each pound had equal weight,
leaving influence dependent on spending power. In contrast, the state was
theoretically controlled by elections, where each vote was equal.’11 The
extension of state power required to secure social democracy would thus
not pose a serious threat to liberty; on the contrary, it would help to
increase the liberty of those with little market power.
By the 1970s, however, some on the right of the Labour Party were
coming to the view that the limits of taxable capacity were being reached
and that if public expenditure were to rise further, the values of a pluralist society would come under threat. Moreover, it seemed that some of
Labour’s supporters – better-off members of the working class, whose
votes might be crucial in marginal constituencies – were also coming to
be hostile to high taxation, preferring, in place of what Harold Wilson
10 Cited in Kenneth O. Morgan, Callaghan: A Life (Oxford: Oxford University Press, 1997),
p. 535.
11 Tom Clark, The Limits of Social Democracy? Tax and Spend under Labour, 1974–1979,
Working Paper No. 64/01 (London: LSE, Department of Economic History, 2001), p. 2,
emphasis in original.
artfully referred to as the ‘social wage’, to retain more of their real wage in
their pockets. At the time of the 1976 IMF crisis, therefore, the argument