Twenty five years ago I wrote a pamphlet for the Fabian Society called ‘French Lessons for Labour.’ It was a vain attempt to persuade the unreformed ‘old’ Labour Party that there might be some ideas from the socialist administration of Francois Mitterrand that might be worth adapting.
Labour was then locked in its eurosceptic mode, and looking for inspiration from other modern nations was regarded as otiose when all you needed to do was read RH Tawney and worship Attlee’s statism.
So a welcome for Maurice Glasman who is Labour’s one-man windmill of ideas when he argued as he did in the Financial Times (4 August) in an article co-written with Duncan Weldon that Germany’s social market model might have lessons for Labour.
The dream of importing the German economic model has been around for decades. The chief apostle of the virtues of Germany’s social market model has been Will Hutton, who in books and writing over 20 years has been urging Britain to learn a bit more from the continent.
But here are 10 pre-conditions for this economic and social model that exist in Germany and which do not exist in Britain:
1. A small number of industrial unions, so there is only one union for all industrial or public sector employees. Every public sector employee is in one union. The unions in the private capitalist sector of the German economy like IG Metall have exclusive representation rights for all workers in the metal industry (cars, aerospace, electrical etc)
2. Union rules requiring 75 per cent of all workers voting for a strike.
3. Managers who deal not with shop stewards but with works councils elected by non-union and union employees alike.
4. Union willingness to accept a five-year pay freeze to recapitalise industry. The loss of purchasing power of workers to strengthen German capitalism was dramatic.
5. A social democratic chancellor willing to impose this pay freeze even if it means losing power.
6. Unitary employer, professional, and chamber of commerce organisation. No CBIs, EEFs, BCCs, FSBs and the myriad of outfits with the title of ‘Engineer’ in their name.
7. Devolved regional government able to promote industry independent of central government.
8. Proportional representation to produce coalition and consensual government at national, regional and municipal level.
9. Massive demand from BRIC nations for Mercedes and BMWs. German unemployment was four million in 1998 when Gerhard Schröder won power. It was four million when he lost power in 2005. Germany has benefited from BRIC growth but if this falters Germany has no plan B and insufficient domestic demand.
10. Trade unions that give no money to the social democratic party and do not sit on its ruling council.
Progress readers will note that none of these conditions apply – yet – in Britain. British unions have always opposed works council systems, guard their membership autonomy, and do not require high bars for strikes. Most Labour MPs opposed AV, let alone PR. No Labour PM would risk his personal position to take decisions that would cost him power. Growth and job creation in Britain 1998 – 2008 were better than in Germany over the same period.
Perhaps the only area where Labour is hinting at a German model is the reorganisation of union-party relationships. Even Lord Prescott has come out to say that it would be no bad thing if unions were gently distanced from the concept that they have the right to finance and help run the Labour party – something utterly unknown rejected in the rest of the social democratic left in Europe.
Lord Glasman is right to argue that Labour can and should learn from Germany. Just as that other exuberant ideas-generating professor-turned-Labour peer, Meghnad Desai, is right to urge Labour to look to India and China for ideas. Glasman and Desai light up Labour politics as delightfully original professors whose obiter dicta sometimes make political professionals shudder but who nonetheless seek to fill the ideas vacuum that Julian Glover writing in today’s Guardian acknowledges to be the main cause of current British government and party political malaise.
But to wish Britain were more like Germany without acknowledging that there are massive differences between politics, history, society, law, unions and economic culture makes a good FT column but is not serious political economics.
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Denis MacShane is MP for Rotherham and a former Europe minister. He worked as an international trade union official in different European countries before becoming being elected to the Commons.
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We could also have a (superior) healthcare system like France and Germany, however we are wed to a producer system that is focused on the ownership of inputs than medical outcomes.
We can (and should) always learn from good practice in the French and German healthcare systems, but Gary Pepworth is wrong to suggest that the NHS is not focused on good medical outcomes. Professor Colin Pritchard’s study in the journal of the Royal Society of Medicine shows the NHS saving more lives for each pound spent as a proportion of national wealth than any other country apart from Ireland over 25 years. Pritchard’s figures show the NHS reducing the number of adult deaths per million of population by 3951 a year compared with 2779 in France and 2395 in Germany.
Thank you for a helpful critique Denis.
To be fair though the article (of 800 words) was half a critique of what has gone wrong in the British economy over the past 30 or so years and half on the lessons to be learned from Germany in terms of useful structures, financial reform, corporate governanc – covering several of your ’10 differences’.
As we wrote:
“we should re-examine the lessons to be learnt from the German
social market economy”.
We certainly weren’t suggesting the answer was a wholesale import of the entire German economic structure – which would clearly be impossible.
Thanks,
Duncan
What is Gary Pepworth talking about when he refers to the superior French and German health services? A new study, published in the Journal of the Royal Society of Medicine, finds that the NHS is one of the most cost-effective health systems in the world, which saves more lives for every each found spent as a proportion of national wealth than any ofher country but Ireland in the last 25 years. It reduced the number of adult deaths per million of the population by 3,951 a year. Gary Pepworth may like to note that the nearest comparable European countries were France (2,779) and Germany (2,395).
Researchers say that their findings contradict the Coalition’s belief that the NHS needs competition and choice to make it more efficient.
There are many matters where the NHS can improve but Gary Pepworth illustrates one of the characteristics of the last Labour government – running down its own achievements.
In his article, Denis MacShane mentions Julian Glover “writing in today’s Guardian”, the words in quotes being in red. I clicked on them and up came Mr Glover’s article, which I found pessimistic. However, at the top, on the right was mention of an article “Global Finance has dysfunction at its heart”, by Ha-Joon Chang (which is to appear in the Guardian on 9th August), which I then read. That article is entirely sensible and the thinking behind it is to be applauded. It can be a starting point for putting national and international financial systems on a proper footing and I would like to commend it to Progress and the readers of this comment. I would also like to congratulate the Guardian for having it available and publishing it.
“that the unions have the right to finance and help run the Labour Party” is it seems a notion that is pernicious. (and is BOTH unknown AND rejected in other social-democratic movements – how so….?) So MacShane implies directly that the unions have NO right to finance or to help run the Labour Party – and that CLP members have no right to support that tradition. The German clean slate sprang from 12 years of Nazi dictatorship and the loss of a World War (see R.Schlesinger Social Democracy in Central Europe, RKP) ….
Does he propose that we rely on what few of Mandelson’s “filthy rich” people care to dominate party policy-making with no democratic mandate whatsoever? I suspect he hopes that the equally unelected mandarins of the civil service will force citizens to support political parties they detest, and will also supervise the fitness of people and parties alike to conduct ‘democratic’ politics – a phrase about as meaningful in such a scenario of ‘state funding’ as the German Democratic Republic. The mandarin IPSA is already hounding MP’s staff and so impeding democratic representative politics. A sharper look at MacShane’s weasel phrases is needed; otherwise he and his allies are leading us down a German path rejected by the German people 20 years ago.
My Union has decided to donate to MP’s and of course it’s better then pumping money into a black hole which is Labour, but labour decided it would take unions like the GMB to court to get the political levy which labour stated belonged to the Labour party, he was a loser with that one, because a Union can affiliate with any party, it can also dictate where the levy is spent be it within the Labour party or directly to the party members like MP’s.
Sadly Mr Straw lost that one and I think to much more will see labour demand state funding and some how that would not go down to well with cut backs. SO either become a party people want to donate to or die.