Eric Hobsbawm and the future of socialism

Eric Hobsbawm’s piece in the Guardian on 10 April transcends its tendentious headline about the failure of socialism.  But it throws down a number of challenges to those of us who regard ourselves as being on the Green Left in understanding the current crisis and where it leads us.

Hobsbawm starts by characterising the current situation – planned state socialism failed, the free market has now failed, so the future lies with the mixed economy.  Even social democrats have been sucked into the free market illusion; but now that illusion has been laid bare, and things can change.

Looking to the future, he writes:

You may say that’s all over now. We’re free to return to the mixed economy. The old toolbox of Labour is available again – everything up to nationalisation – so let’s just go and use the tools once again, which Labour should never have put away. But that suggests we know what to do with them. We don’t. For one thing, we don’t know how to overcome the present crisis. None of the world’s governments, central banks or international financial institutions know: they are all like a blind man trying to get out of a maze by tapping the walls with different kinds of sticks in the hope of finding the way out. For another, we underestimate how addicted governments and decision-makers still are to the free-market snorts that have made them feel so good for decades. Have we really got away from the assumption that private profit-making enterprise is always a better, because more efficient, way of doing things? That business organisation and accountancy should be the model even for public service, education and research? That the growing chasm between the super-rich and the rest doesn’t matter that much, so long as everybody else (except the minority of the poor) is getting a bit better off? That what a country needs is under all circumstances maximum economic growth and commercial competitiveness? I don’t think so.

But a progressive policy needs more than just a bigger break with the economic and moral assumptions of the past 30 years. It needs a return to the conviction that economic growth and the affluence it brings is a means and not an end. The end is what it does to the lives, life-chances and hopes of people. Look at London. Of course it matters to all of us that London’s economy flourishes. But the test of the enormous wealth generated in patches of the capital is not that it contributed 20%-30% to Britain’s GDP but how it affects the lives of the millions who live and work there. What kind of lives are available to them? Can they afford to live there? If they can’t, it is not compensation that London is also a paradise for the ultra-rich. Can they get decently paid jobs or jobs at all? If they can’t, don’t brag about all those Michelin-starred restaurants and their self-dramatising chefs. Or schooling for children? Inadequate schools are not offset by the fact that London universities could field a football team of Nobel prize winners.

The test of a progressive policy is not private but public, not just rising income and consumption for individuals, but widening the opportunities and what Amartya Sen calls the “capabilities” of all through collective action. But that means, it must mean, public non-profit initiative, even if only in redistributing private accumulation. Public decisions aimed at collective social improvement from which all human lives should gain. That is the basis of progressive policy – not maximising economic growth and personal incomes. Nowhere will this be more important than in tackling the greatest problem facing us this century, the environmental crisis. Whatever ideological logo we choose for it, it will mean a major shift away from the free market and towards public action, a bigger shift than the British government has yet envisaged. And, given the acuteness of the economic crisis, probably a fairly rapid shift. Time is not on our side.

Which is fine as far as it goes.  But there are some huge issues here.

The first and most significant is that of how hard the guardians of the market – the rich and privileged who have been the main beneficiaries of the market society – will be prepared to fight to maintain their position.  

Perhaps the most impressive aspect of the G20 summit in London earlier this month was the way in which almost every nostrum of Anglo-Saxon capitalism has been abandoned.  Unfettered financial markets are no longer the path to wealth – not even for those who already hold it.  Banks and hedge funds must be regulated.  There’s a sense of leaders who have looked over the edge of the abyss, but whose response is to break out the rhetorical toilet rolls and sticky-backed plastic to cobble together something that looks like business as usual, and convince the public that the underlying system remains sound.  They can’t bring themselves to say “we were wrong”, even if they know it.  And of course to do so would undermine the basis of their wealth and power.  And here in the UK there is every sign that the victors at the next election will be a party whose explicit policy is to return to the deflation of the 1930’s – who appear to want to pretend that Keynes never existed.  

Against this background, it seems perverse to imply that the fiscal stimulus packages have changed very much.  They’re about shoring up the status quo, and helping to ensure that power and wealth stay pretty much where they are now.  There’s nothing radical here at all.

The second question is about democracy.  Hobsbawm perceives that things have changed – how widely is that view shared?  Governments and financiers are trying to ensure that the damage is limited; that we are facing a variant of “business as usual” (and, within the parameters of capitalism, perhaps we are).  Hobsbawm provides no more than the starting point.  The question the article begs is, “so what do we do next?”  

It seems to me that Hobsbawm asks most of the right questions.  It’s the answers that really matter, though.

Lessons from Ireland

The Republic of Ireland has recently introduced an emergency budget to address the effects of the economic downturn.  It’s the latest in a set of measures in an economy which, to an even greater extent than Britain, has been dependent on speculation and booming property prices.  The contraction of the Irish economy has been savage – official estimates suggest it will be 8% in 2009.  The rhetoric is about stabilising the public finances in order to bring a huge deficit under control, to restore confidence in the Irish economy.

The Irish policy response is interesting because it reflects quite closely the sort of policy framework that David Cameron and George Osborne have been setting out for the UK, in opposition to Gordon Brown’s stimulus package.  So it’s a useful exercise to unpack it to assess what Conservative policy could mean for the UK.

There’s an interesting analysis at Though Cowards Flinch which demonstrates how, despite the rhetoric that those who earn the most should pay the most, some of the changes in the tax regime actually bear down hardest on those least able to pay, by reducing income tax thresholds.

But this follows on from the announcement earlier this year of the Pensions Levy, which is in effect a swingeing pay cut for public sector workers.  The justification is simple; public sector workers enjoy substantially better pension provision than those in the public sector, and should therefore pay more for it.  Understandably it has provoked fury and mass resistance in Ireland, and the recent budget package modified it so that that it did not apply to lower-paid workers.

It’s a measure that fits closely with the rhetoric coming from the British Tory Party and its supporters in the Press.  In particular, the Daily Mail has been banging the drum about featherbedded public servants and their gold-plated pension provision, and individual Tory spokesmen have been making guarded comments on the subject (ever mindful of the fact that there are 600,000 voters in the public sector who have to be convinced somehow that voting Conservative is in their interests).  Others, like London’s Mayor Boris Johnson, have been much more outspoken.

The truth, of course, is totally different.  Mailwatch dissects the poisonous rhetoric about public sector pay here better than I could and some of the specific lies about public sector pensions are nailed by the Secretary General of the PCS, Mark Serwotka, in a radio interview in December last year.  Mailwatch points to the fact that public sector workers – who are overwhelmingly among the lower-paid in our society – have enjoyed years of below-inflation pay increases, while the private sector has forged ahead.  It however forbears to comment on the spectacle of Cameron and Osborne – both of whom sit on piles of vast inherited wealth -denouncing as bloated the average public sector pension of £7000 p.a. – barely enought to equip a member of the Bullingdon Club with tails and waistcoat.

The official Conservative line is that nothing has been ruled in or out.  But if the Tories win the next election, watch for the assault on the public sector.