Social democracy Needs to Get Real - Or Else Surrender Reality to the Right

I recall Nick Cohen saying, around the time that the Lib-Con Coalition was formed, that there was a sharp division in this country between left and right. He defined people on the left as those who blamed the bankers for the financial crash and people on the right as those who blamed the previous Labour government.
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I recall Nick Cohen saying, around the time that the Lib-Con Coalition was formed, that there was a sharp division in this country between left and right. He defined people on the left as those who blamed the bankers for the financial crash and people on the right as those who blamed the previous Labour government. Problem there is, it was actually the fault of both - or more precisely, disengaging one from the other is logistically impossible. The whole idea behind New Labour's economic policy in a nutshell was that the bankers' profits would fund public spending. So the left castigating the bankers has a particular irony as they were the ones funding the whole public spending spree we had in the late 90's, early 00's to start with. And the ones who would have to lend us the money if we wanted to spend with wild abandon again, something they aren't likely to do, which is where I'd like to begin. Because I myself am I committed social democrat and I want to approach austerity from the left as opposed to the right, where the issue has lived almost exclusively since the financial crash and particularly since the last general election.

Since 2010 the Labour Party have, without directly saying so, led people to believe that if they got back into power they would issue forth a new era where social spending could be done on a level commensurate with pre-2007 standards and that this would be funded with no financial pain to anyone, save perhaps a few bankers in the City who would simply have to lump it, and certainly not the "squeezed middle" of yore. The problem with this line of thinking is that it does not reflect basic economic reality. The financial crash of 2007, boiled down to its basics, happened because at the turn of the century there was a large lump of money from emerging economies that needed to go somewhere. In a round about sort of a way, a chunk of it ended up funding the social spending of western European countries. This was particularly true of Great Britain, which was and remains much more economically reliant on the markets than most other European countries. That money is now gone, forever, and what will replace it remains uncertain. This point is much more important for the left, with its emphasis on government spending, than the right for whom austerity is in many ways welcome.

I can see why Labour went in the direction they have; it has clearly translated into a poll gain. However, I think they should have thought about this counter intuitively and played the long game. They could have tried to convince left wing people in this country that social spending is going to be harder in the coming decade than it was in the preceding one and that although this makes the task of preserving our public services harder, it is a challenge worth pursuing. Which brings me neatly to my final point. I believe the binary argument about "austerity vs growth" has taken hold with the left for a very un-leftie reason: people like having stuff and don't want it to be taken away. We've had a decade of free money and we don't want it to be over. I get that, it's perfectly understandable. However, we all need to understand what is at stake here.

I don't want to live in a Britain that resembles the worst parts of America, one stripped of useable public transport, hospitals free at the point of use no longer and state schools that are even less fit for purpose than at present. Problem is, if Labour get in come 2015 and everyone, swing voters in particular, can see that free money really has turned out to be a fantasy, this emboldens the right for whom the convergence of low tax revenues and the desire to shrink the state are the makings of the perfect storm.

My point is social democracy needs to be affordable. Yes, it was great when the world economy was on a high that looked never to end and there was a way to fund state spending that mostly got around thorny issues like how much tax would have to fund it all. But end it did. And if we want to live in a Britain that we on the left are desperate to keep hold of, we'd better start facing reality.