When we go into government, we all go into government together
by John McDonnell MP (@johnmcdonnellmp) on June 23, 2018



In late 2016, in the wake of the referendum result, I wrote an article for ‘the other NS’ about the end of the prevailing economic consensus and the need for the left to seize the opportunity and define what comes after it.

Events have moved on more quickly than even I expected at the time.

The Conservatives – wedded to the continuation of austerity despite the belated recognition by some of its failings and contradictions – lost their majority in an election supposed to solidify it.

Since then, there has been no sign of agreement on the Government frontbench about why they lost ground to Labour, nor the intellectual underpinning of what needs to be done to reverse it.

Senior Tories line up after each other to argue that the problem is the need to re-state the benefits of small-state capitalism, or to accept the failings of capitalism; to double down on “fiscal responsibility” or to park tanks on Labour’s public spending lawns.

Meanwhile, Labour has begun to broaden and deepen the details of our alternative economic vision.

Alongside our 2017 manifesto we published an independent report on the implementation of a National Investment Bank, our approach to industrial strategy, an outline programme for addressing the international scandal of tax evasion and avoidance, and – terrifyingly for some – the ‘Alternative Models of Ownership’ report which details some of the failings of the current mode of production and starts thinking practically about transforming it.

We have launched a Community Wealth Building Unit to help deliver sustainable economic growth through the power of Labour in local government. We have spoken about the necessity of putting workers at the heart of environmental transition, and placing that transition at the centre of government policymaking, through fundamental changes to its institutions. And we have started asking important questions about the boundaries of the welfare state and why essential services are not available to all.

But the fact that the left has succeeded in changing the terms of intellectual debate in recent years should not blind us to the distance which we still have to travel. There should be no illusions about the work that remains to be done.

In an astute article last December, Christine Berry of SPERI pointed to the decades of work by right-wing intellectuals and influencers which preceded the Thatcher-Reagan revolution, citing Milton Friedman: “to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable”.

That network of thinktanks, lobbyists, Conservative MPs and right-wing academics not only laid the broader groundwork for the neoliberal era but produced concrete proposals and recommendations such as the notorious Ridley Plan of 1977.

Achieving a fundamental restructuring of society – not just the economy – on a scale comparable to that of Margaret Thatcher will mean the same degree of spadework by our movement, though by very different means to those of the Mont Pelerin clique and their spin-offs.

While the right relies for its ideas and ballast on a small number of wealthy individuals, we can draw on the whole labour movement: of record numbers of Labour Party members and millions of trade unionists, all with personal experiences we can learn from, whether as workers, students, civil society activists or campaigners.

Now, more than ever, we need to harness that collective knowledge to inform the implementation programmes we are working on between now and the time of the next election.

That means together developing proposals for how we deliver our programme, from the level of the individual firm upwards, involving those on the ground as well as sympathetic policy researchers and frontbench colleagues.

Of course, it won’t end then. When we go into government, we all go into government together. That means the whole of the movement: not just the proverbial open door, but active engagement on a daily basis between government and civil society and the real experts on the shop floor.

We need to establish in detail how delivering those policies when Labour takes power will involve recognising and enabling what Hilary Wainwright has called the “transformative capacity” of social knowledge: the everyday practical, tacit and theoretical knowledge of those on the front line.

Who will take planning decisions where the failed logic of the market is swept away? How are those decisions taken? What kind of decisions are best made at a national level and which are best devolved to workplaces? What levels of regional decision making are appropriate for different industries or sectors?

What new forms of ownership can we create to maximise the public benefit of new technology and new forms of wealth, like data?

In short: the labour movement as whole needs to put in place structures for a truly participatory system of economic decision making – not just for making policy but also for implementing it.

Of course, we can learn from elsewhere: the “no representation without participation” principle of Red Bologna; the collective ownership and control of data in Barcelona; the practical, detailed plans of the Lucas Aerospace workers for transforming their industry.

But the task of preparing for the transformation of society we want to see is greater than any of these.

Recent years have seen a wave of municipalisation taking place across the world, with people taking control of the economic decisions that affect everyone’s lives: over 800 “remunicipalisations” of water, transport, energy and other key services.

But by winning power at the national level, we face the challenge – with the attendant possibilities – of leading this kind of transformation at the level of national government.

Together, we can be the movement which finally turns the tide against the forward march of capital and inspires the rolling back of neoliberal capitalism across the world.

What are the main themes behind the changes we need to embed?

The whole sphere of production needs to be restructured. Following decades of offshoring and the worst forms of globalisation, the decline of union membership and collective bargaining and an increase in casualisation and rent-seeking, it is not enough to simply redistribute the proceeds of what economic growth there is. If that economic model ever worked, recent history has shown it no longer does or can.

Questions of ownership and control over production - including a revitalised trade union movement – must now be at the heart of everything we do, if we are to reverse the drift towards an economy polarised between low quality jobs and weak productivity in some areas and a few “Superstar” cities where faster growth benefits a few but comes at a higher cost of living for the many. In order to control what the economy does it will be necessary to change who owns it.

As we transform the economy of the UK, so we must not forget our place in the rest of the world. Jeremy spoke last year at the United Nations about the need for international cooperation to tackle the four threats facing humanity: the concentration of wealth and power; climate change; the unprecedented numbers of people fleeing persecution, conflict and abuse; and the use of military action rather than diplomacy to resolve disputes.

Just as neoliberalism has broken down barriers between capitalists, so our socialist response must be founded on international cooperation.

If there ever existed a purely domestic solution to social and economic exploitation in the UK, it certainly does not exist now.

Our role in global supply chains means we have both the opportunity and the responsibility to play a major role in creating an international economic system which is fairer to those currently exploited by the race to the bottom.

And Kate Osamor has set out the principles which will underlie the next Labour government’s approach to international development, including evaluating all DfID work on the extent to which it reduces inequality.

Some have recently – and rightly – drawn attention to the importance of Karl Polanyi.

Understanding the extent to which capitalism recreated human relationships in all spheres ought to inspire those of us who want a better society to consider the relationship between economics and the rest of the social sphere.

Creating the world we want to see means breaking down those barriers, and just as the market has intruded into all spheres of people’s lives, our goal should be the penetration of collective endeavour into the economic sphere. That can be from the ground up, in supporting moves towards collective and co-operative ownership of shared assets, like platform cooperatives, or community renewable schemes. Or it can be facilitated and guided by democratic and accountable government.

There is no reason why the principles of democracy should stop at the time we clock on for work.

But the rise of free market capitalism has not come at the expense of the state. It has rather been nurtured by the state, power over which has been used by successive governments to promote and enforce the logic of the market and the interests of big capital. It follows that our vision is not simply to restore a role for the state in the economy, but to both transform the nature of that role and whose interest it serves at the same time as we transform the wider economy.

The original title for the article I wrote in the New Statesman was “The forward march of capital halted?”

That wasn’t intended to be triumphalist about the potential collapse of the prevailing economic orthodoxy, and the article wasn’t.

But we have the potential to rewrite history if we understand the magnitude of the situation we find ourselves in, if we accept the responsibilities of the whole labour movement to shape it, and if we all act accordingly.


author

John McDonnell MP (@johnmcdonnellmp)

John McDonnell is the MP for Hayes and Harlington and the Shadow Chancellor

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