This is an ambitious attempt by a former Labour cabinet minister to rethink Labour’s doctrine and policy agenda for the post-crisis age. Peter Hain is audacious in aligning his own revisionism with that of the great post war theoretician, Anthony Crosland, who famously wrote The Future of Socialism nearly 60 years ago – arguably the greatest work of social democratic philosophy produced in the 20^th century. Hain, author of more than 20 books including a poignant memoir of his childhood experience growing up in apartheid-era South Africa, deserves credit for undertaking a project of this scope. He challenges us to think hard about the nature of our commitment to social democratic ideas.

Hain’s central argument is for a radical alternative to ‘austerity’. Austerity refers to the cuts inflicted by the Conservative-led coalition government since 2010 alongside the apparent acquiescence of the Labour leadership to the ‘neoliberal’ agenda of retrenchment in the public realm. Hain’s clarion call is for the Labour party and the wider labour movement to rediscover the courage of its Keynesian convictions.

There are potential weaknesses with the Keynesian approach which Hain, at points, acknowledges. One concerns the plausibility of effective demand management in an internationalised economy. The United Kingdom depends on overseas lenders to fund its huge trade deficit which means retaining the confidence of the financial markets. We may not like this fact but unless we resolve the structural weaknesses in British economic performance there is little that can be done. The Hollande government in France has been blown off course by its failure to strengthen aggregate demand. Hain is correct to underline the central importance of Britain’s active engagement at the European level. Domestic economic policies have inherently limited purchase.

The second issue concerns the radicalism of Keynesian prescriptions. It is right that Britain should strive to achieve a higher rate of growth, raising personal living standards and making progress towards greater equality, but this cannot be achieved only by increasing the cumulative level of public spending in the economy. Britain’s economic problems are overwhelmingly structural, reflected in one of the highest current account deficits in the industrialised world, combined with an unusual degree of exposure to global shocks. Our economy is not productive enough and is overdependent on the City of London. Our skills base is weak at the lower end. Wage inequalities are accelerating, we are in danger of losing out in the development of new technologies, and we produce too few high-quality exports to pay our way in the world. That is the root cause of Britain’s malaise: the coalition government has lamentably failed to address these challenges, but they cannot plausibly be blamed merely on the cuts inflicted since 2010.

Hain’s world view is that the 2008 crash signalled a decisive shift to the left in the politics of the advanced industrialised democracies: politicians of appropriate ideological conviction and radical spirit will be rewarded with parliamentary majorities enabling them to carry out major reforms of our economy, our model of capitalism, and our political institutions. His political confidence and élan are admirable; whether they are really in tune with the spirit of the age remains to be seen.

———————————

Patrick Diamond is vice-chair of Policy Network and lecturer in public policy at Queen Mary University of London

———————————

Back to the Future of Socialism

Peter Hain

Policy Press | 304pp | £19.99