The New Serfdom

by Angela Eagle

  ANGELA EAGLE AND IMRAN AHMED

  THE NEW

  SERFDOM

  THE TRIUMPH OF CONSERVATIVE

  IDEAS AND HOW TO DEFEAT THEM

  CONTENTS

  Title Page

  Foreword by Helen Clark

  Acknowledgements

  Introduction

  Part 1: Two Ideas

  Chapter One Market Fundamentalism

  Chapter Two Democratic Socialism

  Part 2: The State of Our Nation

  Chapter Three Want

  Chapter Four Idleness

  Chapter Five Ignorance

  Chapter Six Squalor

  Chapter Seven Disease

  Chapter Eight Loneliness

  Chapter Nine Mental Health and Illness

  Chapter Ten Bigotry and Intolerance

  Part 3: Democratic Socialism in the Twenty-First Century

  Chapter Eleven The History and Future of Democratic Socialism

  Chapter Twelve Austerity in the UK

  Chapter Thirteen The Second Machine Age

  Chapter Fourteen An Ethical Economy

  Chapter Fifteen An Active, Empowering State

  Chapter Sixteen Taxation in an Ethical Economy

  Chapter Seventeen The Labour Market and Fairness at Work

  Chapter Eighteen A Modern Industrial Strategy

  Chapter Nineteen Enlightenment 2.0

  Chapter Twenty A New Collective National Mission

  Endnotes

  Index

  Copyright

  FOREWORD

  This book targets the market fundamentalism which has done so much to undermine social solidarity, cohesion and equity wherever it has held sway.

  While the authors’ focus is on the United Kingdom, 12,000 miles away in New Zealand similar forces were at work for a number of years and led to similar results.

  Both our societies have seen rising inequality, and for many a loss of hope that they could have decent work, a place they could call home, safety in their community, and access to the services they need for themselves and their children.

  There has to be a better way – and there is. This book explores what that might be. A return to the core values on which democratic socialist parties were founded and finding a better balance between market and society are central to that. We have much to learn from those societies of northern Europe which found and kept that balance, and thereby maintained their economic dynamism and social solidarity.

  Now, the new global sustainable development agenda, Agenda 2030, urges all countries to leave no one behind in development. It specifically urges sustained income growth for the bottom 40 per cent of the population at a rate higher than the national average, and the adoption of fiscal, wage and social protection policies which progressively achieve greater equality.

  Reaching those targets requires building higher-value economies which generate decent work for all, and which can fund the levels of social protection that ensure that no one is left behind because of age, illness, disability, size of family or any other factor. Comprehensive social security which encompasses cash transfers, public pensions and affordable housing is required.

  In these times of growing inequality which cry out for transformational change, democratic socialist parties must be seen as the standard bearers of inclusive societies which recognise the human dignity of all. Populists of the political right have often proved adept at appealing to those who have every right to be aggrieved about their circumstances. Yet they don’t offer solutions which would change individual or national circumstances for the better – indeed, they generally make them worse.

  The biblical phrase ‘to every thing there is a season’ may be relevant here. As market fundamentalism and years of austerity transparently fail to deliver a better life to most, and as populist solutions are exposed as charades, their time of influence will end. Progressive parties of the centre-left must work for that to materialise, and, when it does, be ready to launch and implement policies which will rebuild social cohesion and economic strength. A sense of urgency and national purpose around that needs to be communicated.

  In New Zealand, the political wheel has already turned. Now, a broadly based coalition government led by Labour is in power, and is determined to fight poverty, inequality and homelessness. Nine years of underinvestment on all fronts and laissez-faire policy settings across sectors have created huge challenges for the new government. But there are solutions.

  This book is an appeal to reason – a call for ethical and proactive governance which can facilitate both economic and social revival. All societies which have been traumatised by market fundamentalism can benefit from applying its insights into how to build the more equitable and inclusive communities which enable individuals, families and nations to thrive.

  HELEN CLARK

  Prime Minister of New Zealand 1999–2008

  Administrator of the United Nations Development

  Programme 2009–2017

  ACKNOWLEDGEMENTS

  ANGELA EAGLE MP

  I was born in Bridlington, one of twins, in 1961. It was the dawn of the age of the Beatles. Britain was about to emerge from a long period of Conservative misrule and change was in the air. That Was The Week That Was was busy inventing a new form of political satire that rang the final death knell for deference to authority. My parents were both from working-class families in Sheffield, clever, but denied access to post-fifteen education. Instead they were channelled inexorably to the work assigned to ‘their sort’ – in the factory. Both were adamant that the same fate would not befall their children. Their determination formed the background to my childhood and kindled my motivation to tread where the class system had prevented them from going.

  Due to their support and the opportunities created by Labour governments, my twin sister Maria and I both won places to study at Oxford, the first in our family ever to go to university. Both of us joined the Labour Party at sixteen and both became MPs. I won Wallasey from the Tories for Labour in 1992, spending eight years as a government minister, eleven years on Labour’s National Executive Committee, which I was proud to chair, and four years as chair of the party’s National Policy Forum. I have worked in male-dominated environments ever since I took up chess and attended my first competitive tournament aged eight, only to be told by my terrified opponent (a boy) that girls couldn’t play chess. After beating him and winning the title, I realised I was a feminist. I was a fiercely competitive chess player, winning national titles and representing England. Committed to equality, I was in the thick of battles to open up the male-dominated trade union movement and Parliament to women’s participation. I championed Labour’s move to women-only shortlists and still support positive action to include all under-represented groups. When I came out in 1998, I was the first out lesbian ever to serve as a minister in any government, contributing to a Labour administration which transformed LGBT rights in our country. In coming out, I could not have wished for more support from those around me: from the Prime Minister, Tony Blair; from John Prescott, my then boss; from my local party; and, most important of all, from my constituents in Wallasey.

  Throughout my forty-one years of active Labour membership I have always believed that the values of democratic socialism are the best foundation upon which to build the society we need, which is what this book is about. Writing comes after conversation and contemplation. I would like to thank all those whose observations have helped shape it, especially my colleagues in the PLP, the party and the trade unions. My loyal office staff, Bridget Frear, Matt Daniel and Tim Gallagher. My friends, especially Lois Quam and Anni Hogan, whose encouragement kept me going. And especially to my family: my mum and dad for giving me my values, my brother Andrew and sister Maria an
d, last but never least, my erudite and wonderful partner Maria Exall.

  In memory of my late mother Shirley, who I think about every day.

  Angela Eagle

  MP March 2018

  IMRAN AHMED

  I was born in 1978, the year before Margaret Thatcher won her first election as Conservative Party leader. My family were poor and had to make tough decisions about how to survive. I was lucky to have six siblings, so life never lacked love or fun. The welfare system kept us alive. As a sickly child, the NHS saved my life several times. I remember the clinicians and my fellow patients on the children’s wards with great clarity and affection.

  Neither of my parents had the privilege of a full education, but I received one, paid for by the state. My grandfather, a first-generation immigrant, would never fail to remind me that this was thanks to taxpayers from all over the country. It is humbling to think that my fellow citizens, many on modest incomes, collectively contributed to give me such opportunities in life.

  Some years later, I became the first in my family to go to university. Again, this was thanks to taxpayers. I received a grant and a student loan. And when I went to work I was protected against discrimination by Labour’s equality laws.

  These drivers of opportunity in my life were products of Labour governments. That is why I owe my eternal thanks to the Labour Party I went on to serve and my colleagues there, past and present, who turned our ambitious dreams into reality.

  I have served the Labour Party and its MPs through five elections and referendums, under three leaders, in constituencies around the country as well as in Parliament. As is true for all the hard-working parliamentarians and councillors that inspired and encouraged me, I believe there is no higher calling than to seek to improve our nation for the good of all. I am also convinced that the route to betterment comes from getting your hands dirty and mucking in. A lot of people think politics is about talking. It’s not. It’s about action.

  So, this book is dedicated to the people who gave me the chance to act and who supported me in those endeavours.

  To those who let me serve: Andy Slaughter, Willy Bach, Hilary Benn, Alan Johnson and Angela Eagle.

  To my family: my parents, grandparents and siblings, Riaz, Fayaz, Aisha, Salma and Farheen.

  And to the friends who encouraged me: Tom, Joanne, Felicity, Kate, John, Blakey, Mo and, most of all, Gabrielle.

  Imran Ahmed

  March 2018

  INTRODUCTION

  People are angry. Britain is divided and resentful. As our society has become more unequal and insecure, our politics has polarised between intractable and potentially irreconcilable world views. Understanding and empathy between people is losing ground to blame and resentment, especially against ‘outsiders’. Fear and insecurity have replaced solidarity and sympathy. And, feeding off this insecurity, the extreme right is on the march once more. Trump, Brexit and the growing success of populist parties across Europe are alarming symptoms of a far greater malaise that must not be ignored. The warning lights are flashing red.

  The truth is, people are right to be angry. Over decades, our society has been slowly and inexorably changed by a set of forces that have acted unseen against the public interest. Selfish values have been prioritised over the desire for mutualism and equality, and the greed and self-interest of the few have been prioritised above the prosperity and welfare of the many. The promise that the further enrichment of the already-wealthy represented an advancement of the interests of all, that wealth and prosperity would ‘trickle down’, was an empty one. But now many of the victims of this con are awake to it. If you think our societies and economies aren’t working the way they are meant to, you’re right. We must act. Cherished values of democracy and liberty are at stake if we do not change the way our country works.

  Ideas affect politics. Ideologies attract followers and get translated into reality, but not always in plain sight. In this book we consider the effect of two such ideologies. The first is called market fundamentalism, and it has been dominant for the past forty years. It is the belief that all value can be expressed by a price, and market mechanisms are the best way to distribute everything; that human agency outside of market choice is inferior to the price signals that make markets work. And so only by making markets ‘free’ can we prosper. In contrast, democratic socialism – which outside of that brief window between 1997 and 2010 has been on the back foot in the past four decades – is the belief that we human beings are motivated by collective as well as individual values, and that we prosper most by living in a fairer and more equal society that incorporates human needs not expressed by a price mechanism. This protects our true liberty and creates opportunities for all to thrive through compassion, care and co-operation.

  So how did market fundamentalism become the dominant idea in the political arena? It all started with a man named Friedrich Hayek, a prophet extolling the divine properties of free markets. Hayek was an Austrian economist and political theorist who, amidst the smoke and chaos of the Second World War, wrote a book that provocatively sought to discredit socialism as akin to Nazism. He ludicrously claimed that any collective instinct, however small, would extinguish his very narrow definition of ‘freedom’ and therefore constituted the ‘road to serfdom’. Hayek was ridiculed for these extreme views, especially by the then Labour leader, Clement Attlee. In Britain, during the Second World War, the benefits of democracy, state planning, national solidarity and international co-operation were there for all to see. It is ironic that amidst one of the greatest triumphs of central planning, the seeds of its subsequent destruction had been planted by Friedrich Hayek.

  Forty years ago, Margaret Thatcher came to power in Great Britain and set about ripping up the economic and political consensus that had prevailed since the Second World War. That post-war consensus was a mixed economy, combining a vibrant, regulated and managed private sector and a large and redistributionist public sector that sought to ensure people had a set of protections if they experienced tough times in their lives – for their health, housing and social security. Mrs Thatcher looked at the world through Hayek-tinted spectacles. She expected people to look after themselves and she wanted the government out of the market. The Conservative government she ushered in ruled Britain from 1979 until the Labour Party, led by Tony Blair, decisively defeated it eighteen long years later in 1997. Mrs Thatcher was a devoted disciple of Hayek, like her close friend, American President Ronald Reagan. Mrs Thatcher and President Reagan relentlessly promoted Hayek’s ideas and legislated to change our societies to work in accordance with his reactionary and extreme beliefs – that people should look after themselves and the government should not interfere with ‘free’ markets. Their successors – people like Donald Trump and David Cameron – have gone further still.

  At the heart of Hayek’s philosophy were three big lies: that the free market is the only way to make any decision while preserving freedom; that only when human beings act out of selfishness and greed will the best solution be found; and that inequality drives personal achievement and is therefore a good thing. Despite their dubious morality and their downright untruthfulness, belief in these three falsehoods still forms the background to much decision-making today.

  The first lie is that the ‘free market’ is the best proxy for all decisions and so human agency is not valid outside of the price signal and the market mechanisms which price animates. In short, the belief is that the market is correct, infallible and superior to any other choice mechanism.

  This forty-year-long uncritical veneration of markets, of the private enterprise that competes via markets, and the actors within those markets, has led to the infiltration of marketisation into all sorts of spheres of public life and even into our language. Universities ‘produce’ graduates rather than educate and enrich the intellectual and emotional capacities of their students. Civil servants, working in government departments re-defined as ‘service providers’, are urged to focus on efficiency, rath
er than other desirable social outcomes such as improving equity or empowering citizens. As individuals, we are encouraged to package ourselves as products – our CVs become part of our personal brand; our relationships with other people recast as strategic means of self-progression. We are in a ‘global race’ with other countries, as George Osborne put it, in which each person is forever locked in competition with their neighbour. We are meant to celebrate the ‘self-made’ person; forgetting that there are myriad individuals and institutions that, without exception, have contributed to that ‘individual’ success. Are we meant to ignore the innumerable people that contribute to each of our lives? It is a depressingly narrow and desiccated view of humanity and one that has contributed to the steady erosion of social solidarity. It has obliterated our community life and left many alone and friendless. Which was, of course, the point. Because without solidarity and the democratic socialism that springs from it, the strongest take the most and the weakest are left behind, blaming themselves for their inadequacies as social mobility stalls. How very convenient for those who are already privileged. The failure of the system is cruelly recast as an individual’s own personal failing. The victims are blamed for their plight while the system itself goes unscrutinised. This also leads to the erosion of trust in institutions and expertise because they cease to deliver for the majority.

  Even a moment’s deliberation proves that the price mechanism should not be regarded as sacrosanct. It gives a person without the means to ‘buy’ no say or influence on the outcome. Thus, it disenfranchises the already vulnerable and supports the already privileged. It denies the possibility of any other valid decision-making mechanism, such as voting, having an influence greater than that delivered by the ‘free market’, rendering democracy a sideshow. It begins with an astonishing but convenient presumption that the market is always, and everywhere, ‘perfect’. The thing is, markets aren’t perfect. Just look at the evidence. From the Dutch tulip mania in the seventeenth century, to the madness of the dot-com boom at the turn of the twenty-first, to the most recent enormous global failure with sub-prime loans in the unregulated American housing market and the collateralised debt obligations sold worldwide, it is not possible to argue that markets are even rational. Markets are amoral, often illogical, prone to herd behaviour and, as we can now see, left free and unsupervised, have driven rapaciousness and inequality in the industrialised world to extreme levels.