A genuinely radical Labour Party would adore the state far less

Judging by the broad, if sometimes shaky, support Ed Miliband enjoys from the Labour left, there is a general acceptance now that the Party has moved some clicks along the political spectrum towards socialism. In fact, Labour is seized by what might be called vulgar Fabianism rather than any meaningful notion of socialism. In this ideological world, the Party’s agenda is driven by left wing intellectuals whose major goal is to defend and expand the role of the state in the creation of a more equal economy. It’s an approach that even has its own movie now courtesy of Ken Loach.

Ironically, given the hostility of the left to Tony Blair, this has resulted in a strong continuity with New Labour’s economic policy.  Just as New Labour was built around the apparent benefits in the good times of higher public spending and central bank activism, so today’s Party tells us that an intensification of this approach is precisely the correct response to the bad times. We should not underestimate how much the spirit of vulgar Fabianism informs both Blairism and today’s revived Keynesianism.

What is lost in this state-centric, rule of the intellectuals is the historical faith that the left once placed in the power of working people to solve their own problems through their own initiative free of the attentions of both bosses and bureaucrats. It is the spirit that informed the non-conformist tradition, the co-operative movement and even the trade unions before they became a mere wing of the corporatist state.  What Ken Loach doesn’t want you to know is that the Spirit of ‘44 is far more radical than the Spirit of ’45.

It also means that the left now suffers from a double blind spot on the less benign aspects of the state for working people.  It ignores the dependency that a policy led by higher public spending creates.  This isn’t the supposed cultural dependency that the right are so obsessed by but a macro-economic dependency where the jobs and incomes of millions of working people literally rely on the sustainability of a certain level of tax revenues and the mood of the bond markets. The deep risks associated with such an approach are now here for all to see.

Equally there is an unwillingness to acknowledge that there are deep risks for working people in the belief that economic redemption flows directly from Threadneedle or 11 Downing Street. The left may have convinced themselves that our problems all began with lightly regulated bankers but no account of the Crash is complete without an understanding of how the loose money policies of the US Federal Reserve and other central banks created the permissive environment for the absurd practices we saw in the 2000s. And yet, what the impact might be some years hence of today’s unprecedentedly loose money policy for the jobs and incomes of working people is taboo.

The alternative to vulgar fabianism cannot, however, be a nostalgic return to the days of co-ops and chapels.  They were the product of an industrial working class that no longer exists.

But we can self-consciously revive that spirit of autonomous initiative and innovation that could underpin  a much more radical and imaginative left.  Fortuitously, it is just such a spirit that imbues a new generation’s drive to set up their own social, economic and political initiatives. This is a generation of entrepreneurs and activists inspired by the new freedoms provided by the internet but also shocked by the ineptitude of those who led us to the 2008 Crash and the social injustice that followed.

Labour needs to capture and ride this venturesome spirit and understand how it can be used for social and economic good. Doing this requires the very opposite ethos to that which informs vulgar Fabianism. It is not state support that is needed to make a popular entrepreneurialism benefit working people but a determination to fight the monopolistic practices that the state has long adored and which skew the market in favour of the big, wealthy and corporate and against the small, diverse and innovative.

Adam Lent was Head of Economics at the TUC and co-author of In the Black Labour