New Labour has failed to develop a coherent project of its own, argue Eric Hobsbawm, Stuart Hall and Suzanne Moore. Geoff Mulgan disagrees The Big Picture
economists and an allegedly foolproof sys tem, gambled away well over $100 billion until it had to be saved by, in effect, a res cue operation of the US Federal govern ment. It was only months ago that Michel The Death Of Camdessus of the IMF was referring to the financial turmoil in the East as 'a blessing in disguise' because it would move the Asian tiger economies towards more American-style free market capitalism. He does so no longer. No wonder 'the IMF's Neo-Liberalism reputation' - this is The Times speaking- 'has sunk to its lowest since the body was The global crisis heralds the end set up ... in 1944' (August 19 1998). Under of free-market fundamentalism. But alas, the impact of economic crisis not only gov ernments but some of the most passionate argues Eric Hobsbawm, New Labour has champions of free market globalisation failed to break with neo-liberalism among economists, like Paul Krugman and Jagdish Bhagwati, are now envisaging het erodox economic policies like exchange control, amid weepings and gnashings of 2 funny thing happened on the with nationalism, fundamentalism and the teeth from the City of London . And it has way to the millennium: in no longer operational communism. I mean demonstrated, in the case of Indonesia, that 1998 Karl Marx came back. that for some time now he has pointed out a major breakdown of capitalism can over Ten years after it was that the uncontrolled global financial sys throw powerful political regimes. Aassumed that he had been definitively tem, which he had exploited as a highly The time has therefore come to rethink interred under the rubble of the Berlin successful speculator, was an invitation to the assumptions on which the policies of Wall. 10 years after the irreversible tri disaster, and that the idea that it is beyond too many governments, including our own umph of liberalism and the end of history control cannot be accepted. Others have New Labour government, have been based had been proclaimed, here he is back in also come to the conclusion that the insti since about 1980 and the opinions of most circulation on the 150th anniversary of the tutions which have attempted to regulate it, economists even longer. These are basical Communist Manifesto which, to everyone's and notably the IMF, have been barking up ly the assumptions of laissez-faire, namely, surprise, including the ageing family of the the wrong tree. It is now evident that the of the superiority of the free market econ old marxists, produced an enormous echo critics are right. omy to any other3. Why this should have in the press, entirely unexpected even a few The crisis which began in South-East and appealed to ideologically individualist months earlier. And all except some rare East Asia and is now, according to The governments committed to capitalism on old cold-war holdouts stressed one thing: Economist, turning into a global capitalist principle is clear. Why governments like what this man wrote 150 years ago about crisis has suddenly reminded us just how Tony Blair's could be described as Thatch- the nature and tendencies of global capital badly capitalism can go wrong. This should erism in trousers needs more explanation. I ism, rings amazingly true today! The tri- long have been evident from the former suggest there are four reasons. umphalism of 1989 has been replaced by USSR, the only country in the world in irst, that by the end of the 1970s nervous assurances that, whatever the which the theory that all an economy needs [ the classic policies of the 'Golden arguments of Das Kapital , the system was, is the introduction of the free market, has Age' mixed economy had ceased after all, basically sound. been tested - as it turns out, to destruction. to work well, and those of state- Still people rediscover the downside of Still, nobody paid much attention to the planneFd socialism were hardly working at capitalism not by reading the Manifesto but unparalleled social and human tragedy of all. What is more, the vertiginous rise of a by observing what it does in practice. That the peoples of the former USSR until the genuinely global transnational economy there was something wrong with the way Asian crisis threatened to destabilise the deprived social democracy of its major the global economy worked in the 1990s global financial system via the financial col resource, namely the ability to control what first became obvious not to economists and lapse of Russia. happened to and within the borders of its politicians but to thinking capitalists like The Asian crisis also showed two other national economies. This was clearly George Soros. I don't just mean that Soros things. It has played hell with the reputa demonstrated by the failure of the Mitter announced many months ago (Atlantic tion of bankers, economic advisers and rand government in France in 1980-82. Magazine, February 1997), to his credit as a gurus for understanding what is going on. Something had to be done. This is the justi person rather than as a businessman, that The giant, and spectacularly misnamed, fication of the project of modernising free market capitalism is the enemy of his Long-Term Capital Management Fund, Labour. This is also the reason why no guru Karl Popper's 'open society', along with the assistance of two Nobel-prize Labour Party which managed to get itself Blair: 'When I look at the Welfare State I don't see a pathway out of poverty, a route into work or
4 MARXISM TODAY NOVEMBER/DECEMBER 1998 elected could be expected simply to reverse including labour, but there is not a single Response: 1 don't think the hold government in the world - certainly no everything Thatcher had done: some of it, of neo-liberalism has been broken. You most people will now agree, needed doing. freely elected one - whatever their com could set up tests to explore how far Second, there is what might be called the mitment to the free market, which permits New Labour sees the shift in economic consensus of the neo-classical academic unrestricted and uncontrolled immigration economists who dream of a nirvana of an - and they know why. That is why, whatev policy not just nationally but regionally optimally efficient and frietionless econo er the theory of globalisation says, there is and globally. You could test its contri my of a self-adjusting global market, that is relatively less international migration today bution to reform of financial markets to say an economy with minimal interfer than there was a century ago. Again, and rethinking ways of reframing mar ence by states or other institutions. Given though every British government since kets. At all those levels not only has the state of the world, this implied a Thatcher talks about the need for a flexible New Labour not contributed, they systematic policy of privatising and dereg labour market and wages capable of keep haven't even begun to ask the right ulating the economy. Some of them, ing our enterprises competitive on the questions. That is the extent to which starting with Friedrich von Hayek and globe, no European government actually they remain locked into the framework Milton Friedman, did so for ideological believes that cutting wages and conditions inherited from the late 1970s and reasons, but mostly they did so. I guess, out can make our labour costs competitive 1980s. But the difficult question is: is of a taste for abstract technical elegance, with, say, Indian or Chinese labour costs there a plausible alternative economic combined with a total lack of sense for the and none are even trying to make them so. framework which a crisis in neo-liberal real-life context of their propositions. Conversely, global laissez-faire doesn't just ism might shake out, or which begins Theirs is economics without political, social come into being by the process of evolu to set the framework for thinking or any other non-mathematical dimension. tion. It has to be introduced by acts of polit about new alternatives conceptually, In practice, of course, it is an economics ical power just like protectionism. institutionally and politically. The diffi which fitted the economy of transnational 'Some of he third reason for Blair's attach culty is that the state's jurisdiction is corporations and other operators in a the most ment to the free market is what limited. These regional and global flows period of boom. This consensus is now at might be called the neo-liberal go way beyond it. There is a conceptual an end. passionate ideologists' equivalent to the old and political hole in which you not only Of course it was always unrealistic in two champions of Tmarxists' belief in historical inevitability: have to rethink the nature of economic respects. One. pure laissez-faire, which free market the global economy is here. It makes any activity theoretically but also the insti rests on the doctrine of comparative advan globalisation attempt at a national economy or a nation tutions to govern it.' tage assumes the optimality of the present are now al policy impossible and therefore point distribution of 'advantages'. But, as David less. Any views to the contrary are, in the envisaging David Held, Marxism Today Seminar, Landes points out in his book The Wealth words of an earlier Paul Krugman, 'based 4-6 September 1998 And Poverty Of Nations, 'today's compar exchange on the failure to understand even the 5 ative advantage may not be tomorrow's'4. control' simplest economic facts and concepts' . Free market gurus told Germany in 1840 It ain't so. no memory of what Britain was like before that optimality meant growing wheat and Fourth, because New Labour assumed Thatcher: which grew up in a new world selling it to buy British manufactures. The that after Thatcher political majorities where politics no longer handles the man Germans of the time listened to this advice depended on getting the votes of the agement of the economy and no longer has no more than the Americans. Thatcherite middle class. Hence it had to anything to say about the transformation of Two. it doesn't work. Businessmen try to bind itself hand and foot for five years. This society - a world where politics has no avoid the economists" logic if they can. may or may not have been the reason why other subject but itself. mainly by Marx's famous process of capital we won, but in the present turbulent state 'After the neo-liberal revolution the concentration. The ideal of British Airways of the world economy it might be unwise to economy is by definition outside the range or Microsoft is a monopoly or close oligop boast too much of rigid commitments till of politics. The less it meddles with it the oly position in their respective world mar 2002, regardless of changing circumstances. better... Not only the economy understood kets, and not free global competition. What the current economic orthodoxy as the way markets function, but even the Politicians cannot avoid knowing that the gives governments today, is not a guide to macro-economy which, in the West, was for economy must operate under irremovable policy but a marvellous bunch of excuses. so long the sword-arm of politics, the as well as removable political constraints. They are being fully used in Downing battle-field of social democracy, the instru For them there is no such thing as the Street. Here is what a very intelligent Ital ment for forging the destiny of a nation, for laissez-faire theorists" 'natural rate of ian journalist, recently arrived in Britain, shaking the tree of society, for favouring unemployment', that is to say a rate - never writes about the present British govern some classes and punishing others... For mind how liigli - at which wages will not ment; whether with or without tongue in the very idea that the state might set itself produce inflationary pressure. There are cheek, I leave you to judge. Britain, he the task of redistributing wealth is from only politically tolerable and intolerable thinks, unlike the European continent, is now on excluded from politics. Not only rates. Economic theory is in favour of the post-industrial. I quote: because politics no longer wants to, having free movement of all factors of production. 'This is a generation which has virtually rejected the idea that equality can be pur- teway to dignify retirement. I see a dead end for too many people.' (Dudley, 15.1.1998)
5 MARXISM TODAY NOVEMBER/DECEMBER 1998 'globalisation' are legitimate, at least in Response: 'No one seriously part, since there are some things that are makes the claims about state pow- actually beyond the power of any single erlessness that were fashionable in government, to achieve at present. But the early 1990s. The governments 'we don't want to do this' should not be had lost all room for manoeuvre in disguised as "there is nothing we can do the global markets. The era when about it'. There is and it must be done. that was a serious discussion has Faced with a Wall Street collapse econo 7 passed. There has been serious mists discover the powers of state action . analysis of what is the real scope for Let there be an end to excuses, self- states to achieve things. The man delusion or sales-talk about the impotence date of Labour in this country, and of government in economics. social democratic parties elsewhere, The global economy is indeed here to has been precisely predicated on the stay. But three things about it must be said. promise to use state power to 1 Its operation and its further progress achieve things.' are not identical with the policy of extreme laissez-faire. This docs not achieve the Geoff Mulgan, Marxism Today worldwide optimal growth of goods and Seminar, 4-6 September 1998 services and it certainly docs not within any finite period of time produce the most effi cient allocation of resources in the real Union and Japan - remains decisive. This is world, as distinct from the the neo-classical because most of what happens in every theorists' never-never land. As is proved by national economy is not directly dependent what has happened to Russia since the free on what happens in the global economy marketeers got hold of it. Indeed Russia and transnational operators do not live in has made it impossible to overlook the cyberspace, but also in the space of real problem of what the Nobel laureate Dou states which control their material infra glass North calls "transition economies'. If structure and the places where they have the real world were not what it is. 'then their often very expensive installations of institutions would not matter, and fixed capital. The attempt to give transna overnight the policy-maker could impose tional corporations the unilateral right to efficient rules upon an economy and sue governments for policies harmful to overnight alter its direction to a productive their profits (the so-called Multilateral economy. Such ... are the implicit assump Agreement on Investment or MAI) tions that underlay neo-classical reasoning demonstrates how nervous the transna sued by means of government decree, but The global and led to the policy conclusions associated tional are of state power. Only in the era with "privatisation" as the answer to the of free market triumphalism would an also because it can't. The economy of post- economy has s industrial societies is beyond our grasp, problems of transition economies.' That agreement which fundamentally trans beyond management by any centre, even not replaced applies to all economies. The real world is forms the balance between state and pri beyond the ability of classical statistics the world what it is. Even economists must take vate enterprise have progressed with so to measure... account of it. little opposition from governments, or of states, indeed in the virtual absence of public 'In such an economy politics has nothing political 2 The actors in the global market can no to say, nothing to do, no power to exer more function smoothly without non- discussion. But for some last-minute resis cise... All the government can do is to play power and market institutions than the national mar tance, the MAI would already have been with a modest fiscal surplus in such a way as policies. The ket. At the very least they require the signed by the governments of the OECD - and the fight against it is very far from won. not to disturb macro-economic stability, two coexist equivalent of a system of law with sanctions which is the indispensable condition of to guarantee the performance of contracts This is a dangerous issue of international prosperity. It can shift it one way or the in mutual and, more to the point, outside regulation - politics about which one might expect a other, now to favour the middle strata, now negotiation' very notably of financial markets. The British government - and the press - to to favour the poorer groups, cutting subsi transnational economy is indeed trying to show more concern than it has done. dies here, raising fiscal credits there, paving create such institutions, but in doing so it There is, however, one way in which the pensioners' heating bills or taking away a utilises - it must utilise - the only source of rise of the global economy modifies the pri pound or two from single mothers. All this effective law and outside regulation there orities of a Labour government. The fur amounts to no more than petty social engi is. namely the political power of states or ther economic growth of Britain depends neering which leaves the broad structures supranational institutions operated by only to a small extent on what governments of society unchanged... or by permission of states, singly or collec do in Britain alone. Fortunately, whatever lair already operates in the tively. In short: the global economy has may be said for the world as a whole, realm of hyper-politics, not replaced the world of states, political Britain's problem - like that of the other where politics is exclusive power and policies. The two coexist in rich and advanced economies of the world ly concerned with itself. In mutual negotiation. - is not economic growth as such. That has this world politics is a daily struggle to win 3 The power of states over what happens taken care of itself for 200 years, except for the attention of a public which has its mind on their territories may have decreased relatively brief periods during the cyclical on other matters... Hence the software of since, after two centuries of growth, it depressions which are the basic pulse-beat politics becomes decisive, its ability to reached its peak after the second world of the capitalist economy. Since 1945, inci adjust itself ... to the country's state of war. Nevertheless their powers of control dentally, western Europe has lived through mind, to intercept and encourage its over the economy on their territory remain its best ever period of growth. Hence moods... This explains the enormous suc substantial, at least in the 23 large states achieving maximum growth is not vital for cess in Britain of the 'spin-doctors'... who which contain 70 per cent of the human Britain, as it may or may not be for, say. teach the politicians how to get at the heart race and the 10 states which contain three- China or India. of the people, since they can no longer gel quarters of the global GDP. In the short Moreover Britain today, like the other at its wallet. Politics has been reduced to run the collective power of the political 6 core regions of the European Union, the language of politics.' authorities representing the three major belongs to the richest and most prosperous Of course some of the excuses offered by economic blocs - the USA, the European part of the world. Our GDP per capita may Blair: 'So I can say today for the long-term unemployed turning down all choices and staying on
6 MARXISM TODAY NOVEMBER/DECEMBER 1998 now be below 10 of the 15 states of the EU. government to remember that its major but nevertheless we unquestionably objective is not national wealth but welfare belong, and will continue for the foresee and social fairness. able future to belong, to the fortunate There is. of course, both an economic minority of countries whose inhabitants no and a social, as well as the convincing longer have to worry about getting their moral, case for diminishing our strikingly daily bread, but - insofar as they need to increased inequality. A relatively even dis eat bread at all - about whether they want tribution of incomes has been, historically, their lunchtime sandwiches on French rolls, good for economic growth. Incidentally. focaccia or pumpernickel and whether they OECD growth in the period of ultra- want cooked or smoked ham on it, and with liberalism has been slower than in the plain or sun-dried tomatoes. As Marks & Keynesian Golden Age9. And, as Richard Spencer have discovered, we live in Marie Wilkinson and others have demonstrated, Antoinette's world where most people can the greater the social as well as economic eat cake instead of bread, since only about equality, the better a region's health, mor 10 per cent of our income is spent on food tality, crime rates and "civic community', instead of 80-90 per cent (as in Marie hence - for those who need such arguments Antoinette's day), or even 30 or so per cent - the lower the financial cost to society. as before the 1960s. The worst that is ow much we can afford to dis likelv to happen economically to the British tribute or redistribute cannot peoples is insignificant by the standards be measured in absolute fig of what can happen, and is happening, to ures, or in terms of existing three-quarters of the human race. This is public expenditure, but only as a percent also due partly to the fact that we belong to age of the total national wealth, whatever the region of strong and effective welfare that is used for. Almost all the political states, ie of states fundamentally concerned argument in this field is about what gov with matters of welfare and social re ernment wants to pay, not whether it will distribution. (This is probably the most take a larger/smaller share of the national lasting heritage of the organised labour product. Thus by GDP criteria Britain's movements of which Europe was the expenditure on the National Health Ser original home.) vice has risen over the past 30 years, as in Let's not use the rhetoric of extremes. all states, but it has remained lower than in The worst economic scenario is not 'cata all other developed states and has risen strophe', and the best is not paradise. It is less. As our GDP rises faster than popula to go on doing as well as we have been tion, more becomes available to spend per doing in absolute terms for the past 40 capita. This may be so even if a regime years. It is in the social, cultural and - pos wants to lower the percentage of the prod sibly - political field that there is scope for uct that government takes as revenue, as radical deterioration. But this is not my the Tories did. subject here. The real problem before us in the pio ur basic problem therefore is neer countries of industrialisation is how to 'As Marks & system by the state. I also agree with him twofold. It is how to control distribute the enormous and growing that welfare reform requires a lot more and regulate the operations of a wealth of their GNPs among a population Spencer have money, but. as 1 have suggested above, capitalist market economy which can no longer rely on the major discovered, the argument that Britain can't afford it. Owhich, by its nature, tends towards what the mechanism for giving people a share of the we live in is moonshine. American journalist William Pfaff calls GDP. namely the labour market, and Marie As for the labour market, it has changed nihilo-capitalism'. This can't be done by under circumstances when the main mech in three ways. First, it is now possible to Britain single-handed, but for the first time anism for supplementing its deficiencies, Antoinette's produce the GDP with far smaller labour in many years there is a possibility of co namely income transfer through a welfare world where inputs than ever before, and in very differ ordinated action by several governments. system, is not working satisfactorily. I most people ent ways. This doesn't of course affect the The world crisis has once again put this repeat that this is not because we can't can eat cake total GDP of the country, but it makes question on the global agenda. It also hap afford it. instead of non-market ways of distributing it more pens to coincide with one of the rare I shall say nothing about the welfare sys important. It does not necessarily mean moments in twentieth century history - the tem, except that I agree with Frank Field bread' permanent mass unemployment, or a per first since 1947 - when most countries of on three crucial points: one that it must be manent rise in the non-earning population, what has become the European Union are universal, two that we must break with a although it is difficult to generalise, because under governments of the centre-left, elect system that generates welfare dependency of the changing age- and gender-balance of ed by voters sceptical of free market fun among people of working age, and three labour forces in various parts of the world. damentalism. Whether this is a cause for that it can no longer be - perhaps that it This affects the whole globe. However, the optimism remains to be seen. should not ever have been - purely a sys pioneer countries of industrialism have a The other problem is how to distribute tem of state transfers. special problem, because the basic manu the enormous wealth generated and accu On the other hand both the exclusively facturing and service industries which used mulated by our society properly to its state-oriented policy of the Beveridgc sys to provide most family incomes through a inhabitants. This the market visibly does tem of social security and the substantial main earner's wage or salary, have emi not do either. But doing something about rise in the black or grey economy, which grated or been transformed, leaving behind the growing inequality and social maldistri the Thalcherite policy of fostering self- them no jobs at equivalent levels. Since bution is in the power of nation-states employment encouraged, has made this Mrs Thatcher's massacre of British manu because, give or take a lew percentage harder to achieve. It would have been a lot facturing industry in the 1980s this is a par points which are under the control of the easier to solve the problem of adequate ticularly acute problem in this country, and EL', the nation-state remains the only pensions for poorer working people with a I am sorry to see that New Labour seems to device available for distributing GNPs by lifetime of miscellaneous and changing jobs have little more sense than the Tories of other than profit criteria. It still remains the if trade unions and mutual aid societies the importance of manufacturing - not so essential tool. So it is time for the Labour had not been pushed entirely out of the much as an economic contributor to the t-doing nothing Will not be an Option.' (Nexus Conference, 1.3.1997)
7 MARXISM TODAY NOVEMBER/DECEMBER 1998 GDP than as a stabiliser of society. It is individuals - not corporations - have more anything less will bring the economy to a basically the predicament so perceptively money to spend on politics than national grinding halt. Neither the British motor presented in the film The Full Monty. parties, or even poorer states.) The major trade nor British supermarkets will go out In any case, people in the rich countries tendency in the developed countries is to of business if their mark-ups are reduced to such as ours have got used to a standard of produce a division between the highly qual the lower level of American and continen living which cannot be drastically reduced. ified or specialised and the low-skilled. The tal supermarkets or motor dealers. How to maintain it in the face of the pres consumer economy is equally polarising: Second, as the most recent elections won sure of capitalism to the contrary, is the stratospherically priced Vogue fashion con by the left have shown - notably in Sweden major problem of government, and now fronts Oxfam shop second-hand clothes. and Germany - voters are readier for posi that the neo-liberal balloon is visibly deflat The middle ground is being squeezed - tive government action than economic ing, it should be clear that it can't be done whether in the form of middle incomes or advisers. This may be so even in Britain. by hoping that the market will find equiva modestly profitable, but otherwise entire Whether or not government should rena- lent jobs, or by offering to retrain shipyard ly viable, firms. tionalise the railways, if they did, it is a safe riveters as computer programmers. Why The third change in the labour market is bet that at present it would lose no votes. should not government once again regard it that it is shrinking, thanks to the expansion Third, and most important. However of the informal or grey or black economy, powerful the argument 'this will not get us Response: 'We need a major crisis to which is fairly universal - but, obviously, 'If the market elected' was before May 1997, it must not break out of neo-liberalism. And that will much more rapid in states with neo-liberal is to work be confused with the proposition: 'Our top only happen if the present disturbances policies, such as Mrs Thatcher's which dis adequately, priority is to get re-elected'. Carrying out its couraged regular employment. It would programme is a justification of reforming prove to be as bad as people are afraid its systematic they might be. If there is a shallow reces take too long to go into the implications of governments; getting re-elected isn't - still sion there will be a shallow dip in the this development. I've already mentioned it tendency to less 'becoming the permanent party of in connection with the pensions problem. self-confidence of the neo-liberal ortho generate government'. (Actually, as we all know, a For one thing, it tends to shift the target of permanent political monopoly has not doxy. Having said that, if there isn't a acute taxation from income (which is hard to proved to be such a smart idea, either in severe crisis this time there might be touch in this area) to expenditure. inequality undemocratic countries or in democratic one in the future. By abolishing all credit needs to be ones.) Like President Clinton, New Labour controls and all exchange controls we oth the social and the econom ic consequences of these will be judged, both by history and by the have recreated the conditions of the regulated' | changes are dangerous. They people, by other criteria than its success in nineteenth century trade cycle.' engender (I quote) 'massive winning re-election. In any case, if there is any way of losing the next election, it Gerry Holtham. Marxism Today distortions in the operations of various is by not recognising that the age of neo- Seminar, 4-6 September 1998 markets, from investment to housing and labour'10. In fact, if the market is to work liberalism is over • adequately, its systematic tendency to gen as legitimate to provide employment? And erate acute inequality and maldistribution 1 Das Kapital Revisited' {Financial Times Septem not least for the very large number of peo needs to be regulated and controlled - and ber 31 1998); Paul Blustein, 'Financial Crises May ple the public sector employs, and could by who else except public authority? Stall Capitalism's Global March' (International Herald Tribune September 7 1998); 'Hold The employ, once the irrational prejudice This brings me to the big question. Ide Obituary; Capitalism Is Alive And Well' (Interna against public enterprise inherited from the ologically the Blair government is today tional Herald Tribune September IS 1998) 1980s is abandoned. (Ironically, the biggest distinctly to the right of the other centre- 2 'Why hasn't China been nearly as badly hit as its commercially active public enterprise today left governments in the West - certainly of neighbours? Because it has been able to cut, not raise, interest rates in this crisis, despite maintain - one of the 30 largest businesses in the Clinton, Jospin, Prodi, probably of the new ing a fixed exchange rate; and the reason it is able world - is actually from the citadel of pri German government. How far is it pre to do that is that it has an inconvertible currency vate enterprise: the US postal service.) pared to recognise that the economic aka exchange controls.' Paul Krugman, 'A Des he second change in the labour theory, or the excuses, it inherited from its perate Remedy' (Fortune September 7 1998, p32) 3 'The Washington consensus held that good eco market is the segmentation of predecessor, are going down the tubes? nomic performance required liberalised trade, uniform markets. Labour mar How far will it abandon a policy which was, macro-economic stability, and getting prices right. kets for different occupations. essentially, based on the neo-liberal econo Once the government dealt with these issues - Tlevels of skill or income become virtually mists' consensus? Will New Labour in ret essentially, once the government "got out of the way" - private markets would allocate resources incommensurable. In every field and at all rospect be judged to have failed for the efficiently and generate robust growth.' Joseph E levels, the extremes grow: the winners- same reasons that Very Old Labour failed Stiglitz, More Instruments And Broader Goals: take-all and the also-rans. This is true with in 1929-31, namely a refusal to break with Moving Toward The Post-Washington Consensus in what remains of the old working class, current economic orthodoxy? At that time (WIDER, Helsinki January 1998) the rethinking came from the Liberals 4 David Landes, The Wealth And Poverty Of but even more so if we take the occupied Nations: Why Some Are So Rich And Some So population as a whole. (Keynes was, you remember, a member of Poor (New York-London 1998) p485 What is happening today - and in the the Liberal Party). Will it again come from 5 Paul Krugmann. Pop Internationalism (MIT absence of unions and government action, that quarter? How far will it recognise that Press. Cambridge 1996) p70 there is not only a social, but an economic 6 Antonio Polito. Cool Britannia: (Gli Inglesi (E Gli without any countervailing forces - is what ltaliani) Visti Da l.ondra (Donzelli. Rome 1998) we see in the world cities like London and case, for returning to social-democratic pp 17-23 New York which are the hubs of the glob policies? These are questions only Down 7 "New Thinking Can Prevent A Great Depression' al economy: a polarisation between a ing Street can answer. And 'standing still (International Herald Tribune September 1 98, p8) concentration of high-income-generating and emoting fuzzily' about Third Ways" is 8 Douglass C North. The Contribution Of The New not enough. Institutional Economics To An Understanding Of jobs in high-profit-making firms (finance, The Transition Problem (WIDER.Helsinki March media) and a low-wage, casual, service pop Three things may be said in conclusion. 1997)pi A ulation - between the city dealers and the The first was well known to Keynes who 9 OECD Output (annual average percentage change): office cleaners and security staff, catering knew about the world of business. Let 19A0-74 4.9 workers etc. Let us leave aside the socially there be an end to the assumption that gov 1970-90 3.2 obscene extremes of seven-figure salaries ernment must give businessmen everything 1980-90 3.0 which corporation executives vote each they say is indispensable to keep them 1990-97 2.15 other, insisting that they express their mar (Robert Brenner, 'The Economics Of Global happy. True, an economy is in trouble if the Turbulence' New Left Review 229/1998, p2A2) ket scarcity, and the stratospheric rewards flow of profit runs dry, which fuels the pri 10 Saskia Sassen, Globalisation And Its Discontents for the top showbiz handful - rock stars, vate sector engine, that produces most of its (New York. New Press 1998) pl38 football stars, premier league clubs etc goods and services. But we are not obliged 11 Tony Judt, 'The Third Way To What? We Need compared to the rest. (Actually it has Some Direction' (International Herald Tribune 29 to believe them if. having got used to extor September 1998. pi I) produced a crazy situation where wealthy tionate salaries and profits, they claim that & E T Hobsbawm
8 MARXISM TODAY NOVEMBER/DECEMBER 1998