by Gordon Brown
With progress in these areas, and in the NHS and public services too, either halted or reversed in the Conservative years, there is so much more for the next generation of Labour to do. And although I am no longer a candidate for office, I write as a Labour Party voter and member whose thoughts are focused not on the day-to-day Westminster infighting but on the longer term: the world of 2025 when my sons will be eighteen and twenty-one years old.
Parties that lose tend, understandably, to return to first principles. It is right to ask what we are for, but soon we have to answer people’s questions about what programme we propose and then persuade them of its benefits if we are to be elected again. So we cannot ignore these second and third stages: devising a credible programme of government that is sufficiently thought-through to stand up to scrutiny, and then developing a credible plan for popularising it. In recent years, though, Labour has got stuck in the first phase of its renewal – and while our leaders have announced many good and successful policy initiatives, many of which have captured the public imagination, we will ultimately be judged on how beneficial and credible our overall programme is when measured against the demands of a dramatically changed and rapidly changing new era.
My years as prime minister came at a turning point between what some have called the Age of Moderation, a time when economies and politics were relatively stable, and what I call the Age of Instability, in which economies and politics both seem more volatile than ever. If any policy is to make sense for this new age, it needs to be born out of an understanding of the current and future causes of this volatility, which are: new waves of globalisation, vast and rapid technological advances, and climate change. As I hope to show in these final pages, each of these factors leads to the inescapable question of what to do about inequality and requires of us a policy programme not of restoration – reversing the damage since 2010 – but of transformation. We need to build anew.
Climate change and our response to it will dramatically impact on the coming generations’ quality of life and indeed, in some threatened island states, their very chances of survival. It is therefore impossible in the twenty-first century to talk about social justice and economic prosperity without including a third urgent imperative: environmental stewardship. Any progressive agenda must give a proper place to global carbon trading, alternative energy sources such as wind, wave and solar power, and to enforceable limits of emissions. I have described my push for a global climate change treaty that would, for the first time, oblige every state to honour its emission targets, but while the Paris agreement of 2015 has moved the world forwards, the treaty that still eludes us is more necessary than ever. Having commissioned as Chancellor the pioneering Stern Review of 2006, I believe it is now time for a sequel that maps out how investing in renewables, green technologies, carbon trading and green activism can deliver good jobs and sustainable prosperity.
While physics and chemistry were the key to technological progress in the twentieth century, in the twenty-first century genetics and biotechnology, information technology and artificial intelligence are shaping a new era of economic change that is faster and more profound than any we have previously seen. But while this technology is opening up vast new opportunities, it is also creating vast new inequalities.
Writing in the 1930s Keynes prophesied that by now technological progress would have satisfied all of our material needs, that we would all work less – as little as five or ten hours a week – and spend our many remaining hours of leisure time enjoying art, sports and culture. That transformation has not happened. As Robert and Edward Skidelsky point out in their book How Much is Enough?, Keynes got it wrong because new products – from washing machines and televisions to iPads and driverless cars – don’t just satisfy needs, they create new ones, or at least new desires. There is, as the American historian Christopher Lasch has written, a ceaseless transformation of luxuries into necessities. And while technology has put a billion people on Facebook, it has not yet been able to take a billion people out of poverty. Across our world there are still poor people in rich countries, and there are entire societies and even continents that remain disfigured by extreme poverty.
Some are pessimistic about what lies ahead and predict that the rate of technological innovation will now decline, leading to slower or even stagnant growth in advanced economies (known as ‘secular stagnation’) and what they call ‘premature deindustrialisation’ in emerging ones: the loss of jobs to automation before the traditional rewards of wide-scale industrialisation – a broad workforce and shared prosperity – are felt. In my view, the rate of technological progress will speed up in years to come but the consequences may be no better. For all the breathtaking new possibilities brought about by technology for longer, healthier, more prosperous and more meaningful lives, it seems likely to me that only a minority will benefit from them. Some predict high levels of unemployment as new technologies replace people. I predict that levels of employment may not change dramatically but the kind of work available will: higher-paying, higher-skilled jobs in manufacturing will disappear and be replaced by low-paying, less-skilled, precarious employment in personal services – such as cleaning, gardening, cooking, childcare and care for the elderly – that will aggravate the divide between rich and poor.
This divide will be further magnified by the next wave of globalisation.
When I was growing up, most of the clothes, fridges, washing machines, cookers, radios, TVs and furniture that were sold in our local high street were manufactured by British companies in Britain. Fifty years on, trace the production of any number of high-street goods, from a T-shirt to an iPhone, and they will be found to originate in Asia. What is more, you will find that the worker sewing the designer T-shirt that sells here for anything between £10 and £50 earns less than 1p per T-shirt. The worker making £500 mobile phones, meanwhile, earns not much more than £1 an hour. Fifty years ago, even twenty-five years ago, Asian workers laboured on old-fashioned machines – usually ramshackle cast-offs from western firms – without access to the most up-to-date technology. Today, Asian workers are not only vastly cheaper to employ than western workers but they use manufacturing technology every bit as modern as our own. The effect of this – a global supply chain starting with poverty pay in Asia – is a constant downward pressure on western pay, and thus the benefits of globalisation flow disproportionately to company boardrooms and shareholders.
Some claim we have reached ‘peak globalisation’ and that there will now be movement in the opposite direction through ‘re-shoring’ and the emergence of local and regional supply chains. Yet the latest research suggests that over the next decade business transacted through global supply chains will not slow but double to $190 trillion a year by 2030.
Equally concerning is the fact that global supply chains allow companies to sidestep tougher environmental laws in one country by moving their production to another. At the same time, simply by threatening to move elsewhere, taking their jobs and tax contributions with them, companies are able to pressurise governments into providing them with low tax rates. And by sheltering their profits in tax havens, they deprive nation states of revenues desperately needed for education, health, poverty reduction and economic infrastructure.
In this way, globalisation challenges social democracy at its very foundation. Deprived of their tax base, national welfare states and the publicly provided services of the past are now said to be unaffordable. Without coordinated intergovernmental action to reform the supply chain – and to set labour, environmental and taxation rules and standards – the price of our open global economy will inevitably be economic and social insecurity for millions. Combined with the further destabilising effect of technological advances on employment, the polarisation of the workforce between elites and the rest of us, the anxiety caused by migration around not just what we have but who we are, and more and more people will suffer from insecurity.
It will take many forms: an even more strongly felt sense o
f powerlessness; easily manipulated anxieties about crime, terrorism and migration; hard-to-answer worries about the cost of growing old; anger at jobs churned, traditional skills lost, precarious employment; young people angry that their prospects today are far inferior to those of their parents’ generation, what some call the ‘youthquake’. This widespread disenchantment means that running an open economy on an engine of inequality and insecurity is increasingly incompatible with stability, and it is the reason that political parties around the world, under pressure from these global realities and unable to conjure up the old nation-state solutions, are now fighting for their very survival.
After the 2010 election delivered a hung parliament, commentators were predicting the end of the two-party system in Britain. The 2017 election might have suggested a reinstatement of two-party dominance, at least outside Scotland, but whatever the current composition of the House of Commons I do not think this reflects any deeply embedded sentiment on the part of the public. For when I look more closely at the distribution of votes and the evidence of polls, I do not detect a new stability. Instead I see a new volatility that reflects a country more divided than ever – economically, socially, geographically and ideologically – between Remainers and Leavers, globalists and anti-immigrant nationalists, the socially conservative and the socially liberal.
The evidence is stark and compelling. According to a Natcen poll in 2017, nearly 60 per cent of British people considered themselves ‘politically homeless’, a sentiment strongest among the young, those who rent rather than own their homes, those on low incomes, and working women. The more fearful you are about the future, the more willing you are, it seems, to move from party to party searching for answers. This political homelessness – a weakening of long-term loyalties to a single party side by side with heightened partisanship over individual causes such as Europe, the NHS or immigration – may explain why the 2017 election campaign saw the biggest ever shift of support between the start of the campaign and the end: from a twenty-point lead to just 2 per cent support for the Tories, confounding the standard view that campaigns do not matter and that people do not shift their views much in the heat of a contest.
A major shift may be under way. Fifty years ago, in 1966, only 13 per cent of voters changed their minds between one election and the next. In 2015, 38 per cent of voters changed their minds. And more seemed to have done so in 2017: 35 per cent of Conservative voters and 40 per cent of Labour voters did not vote in 2015 for the parties they chose only two years later. For a hundred years social class has been the best predictor of political affiliation. But perhaps neither that, nor where you live, what age you are or what education you have can adequately account for the vast switches in preferences we are witnessing now. By election day in 2017 the state of the NHS and stagnating living standards – and Europe – had come to the fore as concerns influencing the Labour vote. Yet millions were not voting primarily for a government but were, to borrow an American phrase, ‘sending a message’, opting for the party that at that moment offered the most striking rebuke to the status quo. Finding someone to articulate your anger at what is happening in your life, punishing elites who are in power for not ‘delivering’, or just registering your protest may now explain why millions have been moving from one party to another in a sometimes futile cycle of searching for fundamental change that never happens. This anti-politics, anti-establishment mood is borne out by evidence from one post-election study of 2017: nearly three in every five voters think politicians will always let them down. Indeed, the majority think both business and politicians could never speak for them.
For some years I have been involved in helping the volunteers and care workers who run The Cottage, Kirkcaldy’s innovative family centre. In 2011 it was providing Christmas toys for a hundred poor children. In 2016 there were now 800 children in need not just of Christmas presents but the basics, food and clothing. Through involvement there I meet mothers and fathers who tell me of the pressures they are under and the downward slope they feel their family finances are on, with housing, child care and social care unaffordable, schools and the NHS underfinanced, and savings in such short supply that in or out of jobs they are vulnerable to the most minor economic downturn.
Such insecurity is no longer limited to poor families on low pay but now also extends to millions in temporary or ‘gig’ jobs bypassed by growth, and millions more of our middle class whose wages have stagnated and who also feel that the recession has never ended. Since the 1980s Britain’s middle-income earners – families with incomes 25 per cent below or above the median – have shrunk from 40 per cent to 33 per cent of the working population. Even Britain’s middle class have seen a winner-take-all culture erode their pension rights, their workplace protections and their (and their children’s) opportunities to do better.
Britain’s workforce will never again, of course, take the cohesive form of the poorly housed, urban factory workers of the nineteenth century, nor the organised manufacturing class of the twentieth. But insecurities felt right up the income scale are now such that men and women in work – and those looking for work – are starting to appreciate that their everyday economic difficulties are not theirs alone; that the economic anxieties they live with spring from common roots; and that others like them are starting to share a similar perspective on what needs to change. Their own experience tells them that all of us go through periods in our lives – as children, as young parents, in our old age and if we are sick, lose our job or become disabled – when we are vulnerable, and that it makes sense for people across Britain to come together to pool resources and share these risks. Even before the elites have cottoned on, the public sense the urgent need to make the economy work for them. This is the message I take from the outcomes of the Scottish and European referendums and from the general elections of 2010, 2015 and 2017.
Some argue differently, that the real divide is between liberalism and illiberalism and that it is now impossible for Labour to win both the liberal, educated middle class and the more traditional, more socially conservative working class. More polemically they talk of a divide between ‘open’ and ‘closed’ minds, and by implication between an openness of outlook that supposedly follows from a good education and the greater insularity of view that supposedly comes from a lack of it. I find that patronising. It suggests that voters are suffering from some kind of false consciousness, that somehow they do not know where their real interests lie. On the contrary, as they lose out in wave after crushing wave of change, they sense all too well that our political system is failing to respond – and they are right.
The pressures that have brought this rising insecurity are so profound that, now and in the future, we cannot afford to return to past conflicts, whether between New Labour and Old Labour or between any other polarised positions. To fulfil our enduring mission, we must transcend these differences. In Abraham Lincoln’s phrase, we must disenthrall ourselves and think anew to act anew. Just as climate change, technology and globalisation are changing our world, so Labour’s response has to change too. Once again, we have to enact our lasting values in a new setting with new approaches. So, what might those approaches look like?
At one extreme, there is the neo-liberal or laissez-faire approach to managing our future. The economy, it is argued, works best with the least government; as long as our policies never stray from this tenet, everything else will follow. But such a free-for-all can offer no way of tackling rising insecurities and the widening divide between the very wealthy and the vast majority. Indeed, it is important to note that after reviewing the polices they pursued in the recession, international institutions such as the International Monetary Fund have had to accept that free trade and open capital markets make for losers as well as winners; that greater social equality is not the enemy but the ally of economic growth; that fiscal activism is a necessary element of anti-recession economics and should include more redistribution; in short, that their previous way of thinking, the Wash
ington Consensus, is wrong and that we need to change the way we manage the global economy and move away from a neoliberal approach and closer to what I and others were advocating. A new consensus is forming that endorses this view.
At the opposite extreme are those who are militantly anti-globalisation, who think of globalisation as synonymous with a new stage of free-for-all capitalism. Yet adherents to this view have no answer to the question of how we manage global flows of capital and the global supply chains other than denouncing their very existence. While there may be a moral high ground to be claimed in opposing globalisation, there is no road to the future through the command-and-control economics of the twentieth-century nation state.
At the same time, we cannot afford to ignore real and understandable fears about the erosion of national identity and traditional culture, which the neoliberal view tends to ignore, and genuine concerns about security and order that have given birth to the ‘take back control’ movements. We can debate whether it is economic insecurity or a concern about identity that does most to fuel these fears, but either way we must address the concerns of voters who may be demanding greater equality on economic issues but who are traditionalist on social issues, demanding greater order and social cohesion.