Philip Whiteley's Blog

February 8, 2012

A crisis for the left, too

Filed under: Uncategorized — felipewh @ 9:26 am

As Fred Goodwin becomes dis-knighted (or whatever the antonym of being knighted may be) and his successor Stephen Hestor is forced by the mob to return his bonus and try to survive on little more than £1 million a year, public opinion is turning on banking bosses, the former Masters of the Universe.

One surprise is how long it has taken. It is more than three years since the week commencing Monday 15th September 2008, when the leading investment bank Lehman Brothers collapsed, followed by the humiliation of forced nationalisations of many other financial institutions in the West. According to the doctrines of neo-liberalism, deregulated markets were supposed to be both efficient and self-regulating. So the events of 2008 should not have happened.

It was as seismic a collapse of political and economic belief as the fall of Communism a generation earlier. The advocates of neo-liberalism, the parties of the right and centre-right, ought to be in retreat. Yet they are not. In Spain and the UK, they have been recently elected to power, and elsewhere left-wing parties are not making the inroads they would expect.

In Britain, the situation is complicated by the fact that the main centre-left party, Labour, was in power for 13 years, including the period of the banking collapses. But it goes deeper than that. Its current leader Ed Miliband has broken with the tradition of the ‘New Labour’ elite that was in power, and made a succession of policy announcements that appear to be in keeping with the times: for restraint of bonuses, especially in subsidised  banks; for worker representative on the remuneration committee, for new controls on excessive charges by utility companies.

Yet he is struggling to set the national narrative, and is even behind in some opinion polls. The deeper explanation may be that the left never really came to terms with its own crisis, that of 1989, and never engaged in ideological renewal. Moreover, they actually shared a core neo-liberal belief with their right-wing opponents on the economics of employee relations: that the lower the labour cost, the higher the profits.

Just over a decade ago there were glimmers of hope that trade unions might eke out a more progressive approach. In the late 1990s a few trade unionists pioneered the partnership movement. Many were veterans of the futile industrial confrontations of the 1970s. I attended many conferences where wiser trade union leaders told delegates that they had learned the lesson: that the worker cannot prosper if the company does not.

Yet instead of nurturing this enlightened philosophy, the trade union movement killed it off. The former head of the engineering union AEEU Sir Ken Jackson was ousted in 2002, and a return to confrontation became the norm.

When Ed Miliband proposes a worker on the remuneration committee, business leaders might now fear not an informed representative keen to ensure fairness and sound governance, but a class warrior bent on gratuitous damage to the organization. He and his articulate business spokesman Chuka Umunna will protest that they are not anti-business, and probably they are not, as individuals. The problem is that they stood silently by while anti-business zealots re-conquered the trade union movement.

The left is serenely unaware of its complicity in the more cynical beliefs of neo-liberalism. Its spokespeople simultaneously argue that executives must act ethically, and that it is against their interests to do so. You can hear the same view in the same speech sometimes. A few years ago, I heard the then head of the trade union movement in the UK, John Monks, argue for a business case for better treatment for workers. Yet just a few minutes later he said that labour regulation must be tough and international, to prevent ‘social dumping’ – getting a higher profit from worse treatment of workers!

This sloppy thinking is accompanied by neglect of the more collaborative elements of left-wing practice and thought: co-operatives, mutual societies, concern for local communities. Any approach that does not consist of state spending or state regulation is dismissed as a sell-out. In the wake of the economic crisis, I would encourage a return to ethical capitalism. I would also like to see a return to ethical socialism.


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