Blue Labour, Red Tories and the Second Third Way

There’s an interesting new intellectual movement in British politics, an “odd mix of the Daily Mail and the Guardian – socially conservative but economically interventionist.”  In the face of Cameron’s ‘Red Tories’ (i.e. the Big Society set) a few Miliband aides are bringing a new wave to the Party.  This is not Old Labour, New Labour, or just Labour.  This is Blue Labour.

As David Goodhart explains in his BBC Radio 4 programme, ‘Analysis’, Blue Labour are a hybrid who “though they want more social protection for poorer citizens, they’re sceptical about the top-down welfare state created in 1945.”  This, they argue, is designed to reach out to working-class voters alienated by New Labour’s stance on globalisation and the economy.   

James Purnell, former Secretary of State under the last Labour government, explains part of the rationale: “We often sounded like we said globalisation’s good for everybody, but actually it turned out to be much better for richer people and it’s not surprising that lots of Labour voters thought well I’m not sure globalisation is such a good idea.”  Maurice Glasman, now Lord and adviser to the Miliband brothers, goes further: “The Labour party became very progressive…[and] their commitment to various civil rights, anti-racism, meant that often working-class voters, as in the Gillian Duffy case, were seen as racist, resistant to change, homophobic and generally reactionary.”

Purnell and Glasman’s get to the heart of widespread working-class alienation from Labour, and all three main parties should be mindful of the perils of ‘suck it and see’ neoliberal capitalism in a globalised economy.  Sometimes skills and training aren’t enough.  Just ask the people and political leaders of Birmingham or Middlesbrough – cities with constituencies at the top of the latest unemployment charts.

Here we start to get into more dangerous territory though.  Does the Blue Labour critique lead us to clamping down on immigration and (renewed?) commitment to ‘British jobs for British workers‘ – policies, an expert on the programme tells us*, which tend to resonate with the working classes, even if they rub against ‘middle class liberalism’.  It is not clear.  However, both Glasman and Purnell push the ‘socially conservative’ role of the family, local charity and volunteering – all designed to build a society where the power of relationships is central to our engagement and interaction with public services. 

Whether you define these policies as socially conservative or put them under the heading of ‘Blue Labour’, ‘Big Society’ or ‘One Nation Tory’, it probably doesn’t matter.  But a note of caution: one of the biggest concerns with the Big Society approach is the level of risk it exposes to individuals, households and local communities.  While greater social responsibility is to be encouraged, rewarded and actively enabled, DIY Public Services aren’t always the answer.

Yes we need to think about localised solutions, actively involving users of public services in their design and delivery, mutuals, and encouraging democratic engagement.  But – Red or Blue, Labour or Tory – we’re still looking for the second Third Way, one which understands that society has compelling reasons to cling to the safeguarding of national minimum standards of quality, access and entitlement.  It is worth remembering that usually these reasons come down to our most valuable relationships – wanting our parents, husbands, wives and children to have access to the best care their taxes can buy.

*This analysis by Sara Hobalt (Oxford University) is given short shrift by Roy Hattersley: “The idea that if you have dirty fingernails, you don’t want to see homosexual law reform seems to me to be a terrible middle-class heresy. Liberalism isn’t Hampstead at its worst. The assumption that only middle-classes have these decent views – that’s Hampstead at its worst.”

Capitalism under siege?

A fresh wind seems to be blowing through political economy circles.  It has even reached the cold climes of Davos, where the world’s capitalist elite are gathered to discuss the global economy.  But this is no warm, westerly breeze.  It is a harsh and stinging gale that brings talk of a ‘new reality’ where capitalism is “under siege”.  Klaus Schwab, founder and chairman of the World Economic Forum, even says that “collective sacrifices must be made to safeguard our future”.  

Can this be true?  Has the business community started to think it might be a good idea to consider the society in which it is a part, the customer to whom it is selling and the natural resources it uses in the process?  It seems some those most closely associated with driving the capitalist global economic model of the last 30 years are finding cause to question the orthodox assumptions of the theory of the firm and the macroeconomic system (e.g. as purported by Milton Friedman).   

As the business strategy expert Michael Porter says, capitalism is an “unparalleled vehicle for meeting human needs, improving efficiency and building wealth.”  But in the most recent edition of the Harvard Business Review Porter and his colleague, Mark Kramer, argue that the Friedman’s neoclassical model has run its course.

In viewing themselves as self-contained entities, firms have lost touch with society; “Conducting business as usual is sufficient social benefit…social or community issues fall outside its proper scope.”  Global outsourcing or offshoring in search of cheap labour has only fuelled focus on short-term profit.  Corporate responsibility (CSR) programmes are an attempt to improve the reputations of firms; they don’t come anywhere close to meeting longer term social and environmental costs. 

Porter and Kramer set out a redrawing of the boundaries of capitalism so that firms create ‘shared value’ by:

1. Recognising that harm caused by business activity poses an internal cost to the firm, not just an external spillover effect; and,
2. Realising that “societal needs, not just conventional economic needs, define markets” – in reconnecting business with societal improvement, it opens up new markets and prospects for innovation.

Value is shared because this is a win for society and the environment, and firms – who “serve new needs, gain efficiency, create differentiation, and expand markets” in the process.

Only by working together will we meet the complexity of today and tomorrow’s global challenges.  Government and/or civil society cannot do it alone.  Klaus Schwab’s rallying cry to business leaders is for them to step up to this new, global reality: “Humanity is now a crossroads.  We can either continue to work as lobbyists for our self-interests and keep doing the same things that got us into the crisis in the first place. Or we can act together as true global leaders, with the long-term global public interest in mind.”

Let’s just hope that if the wind has changed, it’ll stay like this. 

*** Listen to BBC Radio 4 ‘In Business’, featuring the ideas of Porter and Kramer’s ‘New Capitalism’ here.