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The Republicans



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Rediscovering the Great British Republican Tradition


For a Civic and Constitutional Republic



Issue No 64 Friday 27 August 2010


Old Labour Thinking Still Rules


Civic Republicanism is neither of the right nor the left. Its overriding aim is to build a just society – one that favours no faction, grouping or class. This is an easily stated objective to be sure and one that might be seen as begging many questions - chief among these being how we define the justice that we seek.

But before attempting to answer this question let us consider the statement that Ed Miliband made in the Observer on Sunday, 29 August 2010. Mr Miliband’s statement is a fairly good summary of what an opinion of the left means today – if we mean by the left the left of the Labour Party. In this it also gives a pretty accurate picture of the general level of current political debate.

The salient thing to notice is that the policy objectives are set out in terms of defending and promoting the interests of the less well off members of society or “those with low and middle incomes” as he puts it. It is clear that he sees their interests as being aligned against business and in this he proposes initiatives to offset the advantages that business has over the “people”. He wants to establish “a capitalism that works for people and not the other way around”.

The problem with this sort of thinking is that it is at root a class vision whereby the interests of business and “capitalism” are seen as opposed to those of the “people”. He wishes to redress the advantages of business by for example a revision to corporation tax. He writes: “My proposal that corporate tax cuts should be conditional on the payment of a living wage of £7.60 – not just a minimum wage of £5.80 an hour – acknowledges how we need to change. We cannot go on with employers pushing so much of the costs of low pay on to the taxpayer.”

But what if businesses cannot afford to pay this? Many businesses are struggling to survive and with the banks currently reluctant to lend their difficulties are compounded. The point is businesses, particularly small and medium sized businesses, are the victims of the current economic model as much as individuals are. Businesses also suffer from the problems of cash shortages, tight financial constraints and excessive taxation. To propose as Miliband does with his corporation tax to shift business profits into employees’ pockets is to badly misunderstand the nature of our economic problems. Since the 1980’s massive numbers of businesses have been failing and the sight of once successful well known brands disappearing is all too familiar. To think that many businesses have surplus profits ready to be redistributed to their workforce is to be mired in the thinking of the old left. Some may have, but many more will not be in this position.

We have to distinguish between reputable productive businesses and banks. It is the banks that are outrageously privileged in our society and it is they that impose a “rent” on the whole economy with their control over that most vital lubricant of the economy – money. Businesses and individuals are in in the grip of the financial industry but so is the government. Because the ability to create permanent money is assigned almost exclusively to the private banks the government is forced to borrow to fund its deficit so in turn ratcheting up the burden on businesses and individuals by imposing absurd, unnecessary levels of taxation on them. Unfortunately the clapped out socio-economic model that Ed Miliband is using goes nowhere near identifying this fundamental problem.

He does seek to claw back some money from the banks. He says; “The right balance of maintaining the bonus tax, increasing the banking levy and introducing a new financial transactions tax can help rebalance our economy away from a reliance on financial services”. But this is too vague to offer any confidence of success. In any case we need a radical change in the economic model – one that will address the status of banks. Only then can we move away from the years of boom and crisis that have been a feature of western economies for more than two centuries.

So whereas Ed Miliband seeks to distance himself from the failed New Labour project the Old Labour alternative he proposes offers no hope either. Ed’s idea of justice is to rebalance the economy in favour of the lower income groups. Whereas it is true they above all need help, trying to take away company profits to do this is no solution. It will not work and it will produce no more justice than we have at present.

So to return to the original question, how do we build a just society? Well, we need to start by chucking out the old classic divisions of left and right that Miliband’s thinking is so mired in. We also need to dispense with the Neoliberalism of the modern Conservative Party (and now the ruling coalition) whereby deregulation and globalisation were supposed to be the answer to everything. We need to seat our economic policy in practical non-divisive thinking that does not see justice as a zero sum game whereby we have a limited pot of it to be redistributed for one section to another. We need to create a society where the interests of more and more people align with each other. We need economic and social changes that will promote more properity and see that everyone benefits.

Just because you may be well off or a business owner does not and must not mean that your advancement occurs at the expense of someone who is less well off and maybe less ambitious. And it must be clear and unambiguous to all that this is the case. A just society cannot tolerate deprivation as the current society does - as if we need this mass of poverty at the bottom to underpin wellbeing higher up. Equally aspiration and ambition must be encouraged to flourish. But the direction of such needs to change from the hideous, venal aspect it currently has where those in a position to pull financial strings profit out of all proportion to what they contribute. By changing the economic and constitutional model all this can be achieved. That is the Civic Republican vision for the future.