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Back to the Future: Collectivism in the twenty-first century By John Mills and Austin Mitchell MP During the last thirty years the Labour Party has certainly been transformed. In many ways, it is barely recognisable as being the same organisation that it was in the early 1970s. There have been substantial changes to its structure. Its approach to political management has become more professional. It has succeeded, for the first time ever, in securing a big majority for a second term. It has, however, attained its current position at a price that many feel has been a high one. For perhaps the biggest change of all has been in what Labour is seen to stand for. For essentially what has happened is that the Labour Party has not fought very hard against recent changes in popular sentiment towards a more individualist and less collectivist approach. On the contrary, it has adopted this change as part of its policy stance. No doubt this is an important reason for its recent electoral successes. Whether this is a good long term strategy for the years ahead, however, may be another matter. For there a number of reasons for believing that the climate of opinion may be going to change again towards attitudes much closer to Labour's traditional approach. The problem for New Labour is that its underlying philosophy reflects an era which may be over as the events which enveloped the whole of the developed world in the 1970s pass into history. It was then that the Keynesian policy consensus collapsed in the face of an international "stagflation" crisis, and was replaced by the new creed of monetarism. Low inflation was given higher priority than growth and employment. Associated strategies of privatisation, public expenditure cuts, means-tested welfare systems, and tax giveaways for the better off were adopted. Beneath these policy changes was a deeper shift in the cultural atmosphere from the enterprising collectivism of the post-war period to a "culture of contentment". Those who had benefited from the period of prosperity sought to hold on to their affluence, and saw their roles and prospects as being increasing less involved with those lower down the economic scale. Individualism flourished, and collectivism declined. But today the negative effects of three decades of individualism are becoming harder and harder to ignore: • Under monetarist economic management the average annual growth rate has fallen from 3 per cent to 1.9 per cent. Had it continued at its previous rate, by the year 2001, the average British citizen would have been about 40 per cent better off than he or she is now. • Poor utilisation of the available labour force has lead to an increased "dependency ratio" (calculated as the number of non-working people each person who is in employment has to support). This puts additional strain on the tax and benefit system - extra unemployment benefit and other welfare payments, rising sickness levels, and increases in crime. The true number of people who would be willing to work if reasonable jobs were available is much higher than the published unemployment statistics would lead you to believe. • Chronic under-investment in public services has left Britain with a disgracefully poor infrastructure. There has also been a marked tendency, especially in the South East, for public sector pay to fall well behind the levels in the private sector, with a corresponding impact on service levels. • High interest rates and tight monetary policies have shifted the pattern of economic activity away from manufacturing and towards services, where productivity increases are hard to achieve. This has slowed growth, created balance of payments constraints and reduced the availability of good quality blue-collar jobs. • All these factors come together to produce a vastly more unequal distribution of wealth and income - as well as all other measures of life chances. Between 1979 and 1994/95 the income of the richest tenth of the population increased by over 60 per cent, that of the poorest tenth by only 10 per cent. The costs to society as a whole over the last thirty years of policies of this sort have then been extraordinarily heavy, even if for most opinion-formers they have been masked by a huge redistribution towards the better off. The question, even so, is whether countervailing factors may now be increasingly coming into play. It is not difficult to identify pressing issues that might commend a change of heart to a more collective approach to solving problems, not least among the better off. One is the rising frustration about the quality of many publicly funded services. Those who use them - the vast majority of the population - are beginning to realise that you get what you pay for, and that public sector administration can be at least as good, if not better than private sector management. Another series of developments relate to sustainability. As environmental awareness rises, the limitations of the notion that private interests should have a greater degree of precedence over those in the public domain are becoming obvious. Nearly all the pressures on the world's ecology are going to require much higher degrees of co- operation across frontiers and within individual countries. Thirdly, economic inequalities feed war and crime. Both the appalling events on 11th September 2001, however inexcusable they may be, and the trend for larger numbers of people to be employed as security guards as the rich retreat into self- administered ghettos, ominously illustrate the need to share the world's resources rather more fairly, both between and within nations. If these perceptions are correct, then there may be a shift underfoot away from individualism towards collectivism. Competition both within and between nations may be tempered with more co-operation. Economic management may shift towards objectives that benefit the many, not just the few. This is an exciting and enticing prospect for left-of-centre politics. Is it a vision that can be moved forward? Can the Labour Party be persuaded not to see its main role as adapting to the climate of the past three decades, but instead to begin to set out a set of priorities for the twenty-first century? "Back to the Future: Collectivism in the twenty-first century" by John Mills and Austin Mitchell MP is published by Catalyst at £5. For more information or to order a copy phone 020 7733 2111 or visit www.catalyst-trust.co.uk. NEW! Read response to this paper from Bill McCarthy, House of Lords |
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