Some way into Michael Meacher’s manifesto for a ‘renaissance of Britain’ he quotes Winston Churchill on finance. In a historical irony given his record as chancellor, Churchill would rather that finance was the servant of industry than its master. At the end of The State We Need, a similar sentiment lingers – about the state. The problem with Meacher’s worldview is that we could well end up with the state as a bad master rather than good servant.
It is inevitable that this lopsided account would end up in such a place. Meacher is at his best when critiquing what has become an unbalanced, volatile, and unequal economy and society with corroded institutions. The critique is well researched and sound in many respects. The problem comes when Meacher fails to afford his chosen means of redemption – the state – a similar critical gaze. He seeks to replace neoliberalism with ‘national interest capitalism’. What this essentially involves is the creation of a developmental state overlaid with environmental objectives and the restoration of a public ethos.
The analysis is incomplete. For in the economic universe expressed here there are two sectors – industry and finance. Then there is the state. Of the UK’s service sector, which drives employment and growth, we hear little. Industrial policy is one component of future growth and there is more that the state can do strategically there. However, it is unlikely to return to much higher levels of output or employment given the nature of modern manufacturing at the high end – more specialised, technology-driven, linked to global supply chains.
Even if the UK could re-grow its heavy manufacturing base in an economy-changing fashion, what does this mean for Meacher’s environmental objectives? Where would he stand on fracking as part of the national interest economy? These awkward trade-offs are not really explored. Another is why the socially fragmented country that Meacher describes would suddenly go for economic nationalism. And what would this mean for our membership of the European Union, immigration, or inward investment?
The centrepiece of the book’s argument is a proposal to renationalise (or ‘democratise’) the creation and distribution of money. Credit would be allocated in line with governmental objectives. Essentially, this is using a pile-driver to crack a nut. The operation of financial markets is of enormous concern and Meacher identifies many of the reason why. However, the flow of money and credit is critical to growth and innovation. To have this mandated by the state instead of facilitated and regulated by it is a thoroughly bad idea – there are better ways of supporting good firms. Markets need to be embedded in good collective institutions, not replaced by the state.
Meacher’s book is a good expression of where socialist thought currently sits. It is best in critique – the chapter on inequality, for example, is good in many respects. However, if the centre-left is seduced by critique into accepting these solutions then it will be a political and economic disaster. We need the state as servant, but the master state is not what we need.
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Anthony Painter is a contributing editor to Progress and author of Left Without a Future? Social Justice in Anxious Times
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The State We Need: Keys to the Renaissance of Britain
Michael Meacher
BiteBack Publishing | 304pp | £18.99