Twenty-five years after the Berlin Wall came down, James Bloodworth on why New Labour was the natural next chapter for the left
Next month marks 25 years since the fall of the Berlin Wall and the liberation of eastern Europe from Soviet communism. The wall was erected in 1961, ostensibly to protect the population of East Germany from ‘fascist elements’, but in reality it was yet another repressive tool used to stop citizens of the GDR from fleeing the workers’ paradise.
The wall lasted for 28 years. It only ceased to matter when, on the back of a confused press conference in which a relaxation of certain travel restrictions was announced by senior East German communists, tens of thousands of people began massing at the East German side of the border demanding to be let across to the west. The GDR border guards, who had not heard about the press conference, were under orders to shoot anyone who attempted to cross. Fortunately, the guards ignored those orders and instead opened the borders. As a liberalising member of the East German Politburo, Guenter Schabowski, subsequently put it, ‘With hindsight it’s the border guards we must thank, not any of us in the Politburo.’
The disappearance of communism, signified most spectacularly by the improvised toppling of the wall, had reverberations right across the democratic world, and not only because it brought an end to 40 years of ‘cold’ war. It threw a few Marxist economists out of work, but, more significantly, it consigned to the history books the economic theory in which a large portion of the socialist left had put its faith. Centrally planned economies had not only failed to surpass capitalism but had not come near to keeping pace with them. As the great historian of Stalinism Robert Conquest put it: ‘Soviet economists, as soon as they got the chance, pointed out that the problem of setting prices was insoluble. Twenty-four to twenty-five million industrial prices alone per annum, each backed by pages of documentation, had to be handled by the State Commission on Prices. In the end, no one knew what the true production figures were, nor what the costs were, nor the quality of the products. Russian economists believe that, even in the 1980s, up to 30 per cent of material passing through Soviet production actually lost value in the process.’
Even old Stalinists like Cuba’s Fidel Castro were, in the early 1990s, turning to the market to save their ailing regimes. In Britain Tony Blair was berated by the left for removing Clause IV from the Labour party constitution, yet large-scale nationalisation would not have been on the cards whoever came to power in the last decade of the 20th century.
Many socialists had, of course, been unequivocal in their denunciation of the system which had produced the gulag. Indeed some of the most effective anti-communists had come from the left rather than the right (think George Orwell, Victor Serge and Arthur Koestler). Yet a significant number were also given to believe that economic planning could be made to work if only better – more democratic – people were put in charge. If the government represented the workers then state control would in practice be control of the economy by the people. After 1989 this belief was no longer credible, and western leftists were offered a clear sight of what had been obvious to the technocrats of the eastern bloc for decades: economic planning was unable to function at the level of complexity required of a modern economy. It could build tanks, ships and rockets but it could not ensure that shops were stocked with even basic amenities like soap and toothbrushes.
The middle of the 20th century had seen the state in the ascendant, but by the end of the century its flaws were becoming increasingly obvious. By the 1980s the curtain had already started to come down on the social democratic postwar consensus in Britain. In the 1970s the outgoing Labour prime minister James Callaghan had famously concluded that there was a ‘sea change’ afoot in British politics. But it was the 1976 Labour party conference where he elaborated in more detail on the flaws of the settlement adhered to by governments of left and right after 1945: ‘We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists, and in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step.’
For the left, then, the end of the 20th century was a dispiriting time. State ownership had shown itself to be incompatible with freedom and prosperity, with nationalised industries often turning into inefficient behemoths reliant upon huge government subsidies. Meanwhile, however desirable it might once have been to squeeze the rich, globalisation meant that taxing them past a certain point had become counterproductive, with little to prevent those on high incomes from packing their bags and taking their talents elsewhere. Being ‘intensely relaxed’ about the filthy rich was in practice cover for government being unable to do very much about them.
All of this paved the way for ‘third way’ social democracy and for the ascendance of politicians like Bill Clinton, Blair and Gerhard Schroeder. For some, of course, the word ‘Blairite’ remains a term of abuse, especially when set against the perceived ideological purity of ‘Old Labour’. Aside from the obvious (and legitimate) quarrels which may be had with the political decisions of the above-mentioned politicians, third way politics is still damned by many primarily for being a negation of the historic role of the left in bringing about a socialist transformation.
Yet despite the mistakes of the New Labour years – to take one example, the gap between rich and poor really does matter – the historical moment at which the left found itself during the 1980s left few other avenues open. New Labour’s departure from previous ideological obsessions was not simply a pragmatic tool deployed to win elections, but rather was a reflection of the failure of state-centred alternatives. In this respect, we really are ‘all Blairites now’: no mainstream Labour figure believes in nationalising huge swaths of the economy; everyone understands the frivolity of 90 per cent tax rates; progressives see a role for the state in regulating the market but not abolishing it.
1989 was a year of profound liberation, even if it did appear at the time to signify a resurgent and triumphalist right. Not only did it mark the end of the beginning of the fall of communism, setting millions of people free from despotism, but it freed the left from its bondage – however loose – to the state.
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James Bloodworth is a contributing editor to Progress
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Great article James, you have summed up the dilemma of the far left, I make a distinction, which is why it is in the parlous state it is today. Marxism failed miserably and yet is still adhered to by otherwise reasonably intelligent people, Seamus Milne is a prime example.
I agree with Bloodworth that the rise of New Labour was to some extent contingent on the collapse of the centralised states of the Warsaw Pact.
But there has been another process at work too. That process is the erosion of utopianism.
This belief that divine or human intervention will result – through prayer or through one big heave – in the Kingdom of God on Earth, or paradise on earth, or a workers’ paradise goes back thousands of years.
It was the father of social democracy – Eduard Bernstein – who, most notably, attempted to remove this utopianism from the progressive political agenda. Instead he wanted to focus – he wanted us to focus – on the here and now. He wanted to focus pragmatically on organising people to address their day to day problems in such a way as better to ensure increased social justice in the present.
In “The Preconditions of Socialism” he cites evidence that, in their later years, Marx and Engels had started to think the same way. They had, he claimed, left behind the utopianism of the Communist Manifesto.
Bernstein’s centrism (as we might describe it today) was vilified by his “revolutionary” critics for whom a workers’ utopia was a cobble stone’s throw away. This then set the scene for the 20th century contest that culminated in the UK with the abolition of the old Clause IV.
However, the end of Clause IV was not the end of utopianism. This springs up continuously out of the ground of Judeo-Christian beliefs and feeds leftist currents in politics.
It is ironic that the figurehead of New Labour, Tony Blair, having abandoned utopianism in politics, should, on resigning, declare his allegiance to that most utopian of sects, the Catholics.
The Third Way itself still has some way to go to break with utopianism. The words themselves show this. There is no “way”, no yellow brick road. There is only the here and now that leads from the past to a set of concrete issues and concrete problems that, through concrete analysis, can initiate our concrete actions that should seek to ensure increased social justice in the present.
Yes, that’s a whole load of concrete. But that is surely better than a whole load of hot air.
“Nationalised industries often turning into inefficient behemoths”? Does that apply to the NHS? Or could it be more appropriately applied to multinational corporations? Nationalisation of our basic infrastructure should be “outsourced” to some profit-seeking corporate and it’ll be better then, will it? Competition generates efficiency, does it? I really haven’t seen the evidence over the last 35 years that shows how we’ve ALL benefited from such ideological claptrap. Stalin and the Bolsheviks killed communism once they got a taste of power. Russia became an oligarchy which is just another facet of capitalism. All that appears to be happening now is that corporates can make as many demands as they wish on democratically elected governments through secret trade deals enforced by secret international courts, take as much of our cash as they like with impunity, and if we challenge their “right” to do so, we’re accused of being “anti-business”! Crush workers’ rights, depress wages, maintain a high level of unemployment, rid ourselves of any kind of welfare support, disempower unions, commodify every aspect of our lives and hey! we’ve reached business heaven! I must be a “leftwing lunatic” to want to challenge such a wonderful worldview.