Tuesday, 14 May 2013

Towards a new socialist Labour creed?

Socialism is a word rarely heard these days from the lexicon of Labour politics. But does it still have relevance, and should Labour rethink the contribution socialist ideas have to make to modern social and economic problems? I am not 'a socialist', but I do think that where problems are clearly social then there needs to be social solutions. The mistake of  New Labour was to buy too fully into the monetarist, 'free market' perspective of the right. It is a perspective that in the end failed. It was unsustainable. We need new perspectives. Not perspectives that fight old battles, but ones that address new problems. We must start by understanding that society is not simply an aggregate of self motivated or selfish individuals. When Mr Cameron, in opposition, started talking about 'broken communities' it looked for a short time at least that he had understood this. There is such a thing as society and it matters. Sadly, this new social Toryism lasted all but a few seconds, and was never a clearly thought out idea. But Labour needs a new 'socialism', and it needs to demonstrate why it is relevant to modern problems.

There have always been different 'shades' or ideas about 'socialism'. A socialist view that doesn't take account of the changing economic and social circumstances would be fighting old battles rather than new; dealing with old problems rather than those of contemporary society. There is, for example, no particular virtue in state ownership, and state ownership isn't in itself socialism; it is simply state ownership, and as communist dictatorships have demonstrated, it can be as oppressive and exploitative for workers as can privately owned companies. Nationalisation isn’t socialism. Public ownership, if that simply means ‘state’ ownership isn’t in itself socialism. It isn’t even a brand of socialism. It is simply a brand of ownership.

Socialism has a long history in the fight for the freedom of individuals through social justice. Early socialists realised individual freedoms had to be won through social unity and the creation of a social fabric that fosters and supports such freedoms, and gives empowerment to freedom of expression.

In economics, early forms of socialism recognised the function of markets; socialists were in those early days more concerned to establish 'share ownership' by workers and consumers, a million miles from state ownership. The cooperative movement is one such example. The emphasis of the cooperative movement is on share ownership by workers and consumers and the distribution of dividend, which is related to profit, or added value. Early socialists considered the distinction between the investment of capital and the investment of labour as being a false dichotomy; the one was on no consequence without the other. What they argued was that those who invested capital should not exploit those who invest their labour. The capitalist – worker relationship in a capitalist society is exploitative with the balance of power in favour of the capitalist.

These early forms of socialism recognised that production was a social activity and the objective of economic activity was social equity and distribution, rather than profit alone or simply the accumulation of wealth. This I think is the fundamental difference between the 'capitalist' and 'socialist' creed; the objective of profit over 'social equity'. Both, however, can be market oriented; both can see markets as a means of determining how much is produced and distributed. Socialism isn’t antagonistic to markets. It is however concerned with distribution of wealth and the exploitation that arises from it.

Free marketeers argue that 'social equity' is an ultimate consequence of profit, as striving for profit and competition in the markets produces efficiency. They argue that it creates jobs and opportunity. Politics in a democracy has always been about the balance between those two views and where and how the pivot of that balance should placed.

There are also some kinds of social needs for which markets with profit as the motive are not efficient at meeting. Much of health and social care is an example. It is difficult to run health provision as though it was a supermarket. In a supermarket it doesn’t matter if there is a shortage of bananas. In health care it matters if there is a shortage of health supplies. Setting priorities through markets in health would privilege certain kinds of health care over others. Again socialists argue about the balance between private and social health care, not whether there is such a balance.

Where the balance lies depends on the circumstances and the nature of markets and ownership. At one time, in the early days of capitalism, capital was owned by a few identifiable individuals and you could identify 'capitalists' and 'workers'; Marx recognised and argued that the interests of the two were incompatible and would inevitably clash - thus for Marxists, the nature of society was class struggle. Most socialists are not Marxists because most do believe a balance of interest can be struck between the interests of capital and Labour. Arguments in modern socialism are exactly about that balance.

Modern capitalism isn't so clear. Much of modern large businesses are owned not by individuals but by insurance funds and pension funds and a variety of different kinds of shareholders. We now talk more of institutional investors. It begs the question of who the 'capitalists' are. Modern capitalism has more of early socialism in it than ‘capitalists’ would care to acknowledge. The fact is, capitalism has changed and continues to change. Global businesses operating in global markets are economically more powerful than some countries. The economic environment is changing. The way businesses are financed is changing; the way they are run is changing. Indeed we all have a stake in the future of capitalism.

But modern capitalism still concentrates wealth into the hands of the few. It is not concerned with equitability or with fairness in distribution. It deals poorly with poverty, other than marginalising and using the poor as cheap labour.

Raw market ideas see 'society' as simply an aggregate of individual self-interest; the 'common good' if there is any simply comes from the pursuit of that self-interest. But we can see that there are problems that are 'social' in nature and require social solutions. This is clear if we consider those goods and services which we cannot produce as individuals but only through social effort or organisation. Again, we could argue about how much of that there is.

Economic and social priorities are not always in accord. Social prioritising can often mean lower profits. Free markets are not particularly good at setting social priorities. Some priorities may be abandoned altogether if there is little or no margin for profit. This is not to say that profit is not a ‘good’ motive; it simply recognises that it isn’t the only motive of human endeavour or human need.

All societies have a balance between private and societal spending. What differs is the ratio. All societies ‘interfere’ with markets. What differs is how and to what extent. This involvement in the market is often through its own endeavours; the building of hospitals, schools, libraries and other publically funded facilities or services. The state often enters the market where it is clear that private initiative and ‘free’ markets are not providing essential services or facilities, or government might contribute some kind of support or guarantee to a private initiative.

Private enterprise depends upon a social fabric. It also depends on an environmental fabric and an infrastructure, much of which will be provided by public bodies. In all history, governments that neglect this social fabric have ended with increasing street crime and other symptoms of urban decay. The 1980s is evidence enough for that truth.

This why tackling crime and disorder requires social solutions directed at rebuilding communities. It requires decent housing and health care provision; it requires educational and work opportunities. Modern socialism is more concerned with building this social fabric rather than with social ownership.  Empowerment is more significant than ownership. Issues of ownership and the way ownership is exerted should be more a consideration of how best people can take control of their lives.


  1. Socialism includes a lengthy background within the battle for that independence of people via interpersonal rights. Earlier socialists realized person freedoms needed to be received via interpersonal oneness and also the development of the interpersonal material which fosters as well as facilitates this kind of freedoms, and provide empowerment in order to independence associated with phrase.Yacht Insurance Southern California

    1. Thank you for your comment Alex. I think this is the key ingredient, often overlooked. Personal freedom requires empowerment and this is fostered by social purpose and support. Freedom predicated solely on financial empowerment restricts real freedom through inequity. As you rightly say, early socialists realised this.