New Labour Totally Subordinated Labour to Capital

Why was New Labour “intensely relaxed” about “people getting filthy rich”? The answer lies in a comprehensive analysis and critique of Labourism itself, which the new book Futures of Socialism fails to deliver.

Labour leader Tony Blair takes a question at a news conference during New Labour's "Business Tour" of Great Britain, 1995. (John Stillwell / PA Images via Getty Images)

To speak of the “modernizers” in the context of British Labour Party in the years culminating in the landslide election victory of 1997 has become synonymous with Tony Blair, Gordon Brown, and their immediate circle. They believed that Labour needed to ruthlessly centralize power inside the party to minimize the power of members, ditch Clause IV (its historic constitutional commitment to socialism and public ownership), and, if not positively embrace, then at least accept the inevitability of capitalist globalization under the aegis of neoliberalism.

Under the rebranded New Labour, the party would need to cast aside its historical claim to be the vehicle of the organized working class in order to become a broad, cross-class progressive force. While the “link,” which saw a number of unions financially affiliate to the party, would just about remain intact (though not without critics on either side), a New Labour government would claim to treat the unions with fairness but offer them no special favors. The election of Bill Clinton as US president in 1992 gave further impetus to this effort to realign Labour as something akin to the Democrats.

In a calculated move, New Labour’s “modernizers” would picture their opponents — not only on the Left but also among more traditionally minded social democrats — as one homogenous lump, dubbed Old Labour, or political dinosaurs. Only the Blairites, from this viewpoint, were interested in making Labour look fresh and relevant and speaking to the challenges of a rapidly changing world, rather than clinging to sepia-tinged images of the 1945 Labour government and wishing the clock could be turned back to those glory days. As Colm Murphy’s study demonstrates, this view was an unfair caricature of the Left as a whole. Nevertheless, the uncritical argument from some sections of the Left that Labour should just “stick to its guns” and would return to power with “one more heave” remained sufficiently common for the attacks to stick, and this position seemed manifestly untenable in the wake of Neil Kinnock’s defeat in 1992.

But as this study usefully reminds us, the Blairite project was only one possible iteration of what it might mean to modernize the Left. In returning to the pre-97 debates on left political strategy, Murphy unearths evidence of a whole series of figures, by no means simply identified with the Blairites (at least initially), who were also making appeals to modernization or attempting to contest what a modernized Labour Party might look like, including Ken Livingstone (the leader of the left-led Greater London Council), Clare Short, Michael Meacher, David Blunkett, and Bryan Gould, who challenged unsuccessfully for the Labour leadership against John Smith. A diverse series of modernizations were under discussion, of which the Blairite model was but one.

One key shift that would eventually command broad — though not universal — support was the transition from skepticism of European political institutions as undemocratic bosses’ clubs to the desire to see “Britain at the heart of Europe.” Significant in the trajectory of Labour’s thinking on these questions was the experience of François Mitterrand’s government in France in the early ’80s, which was elected on a relatively bold left reformist program that it began to implement but which soon ran aground amid market pressures. Jacques Delors, Mitterand’s finance minister, oversaw a major retreat, and he subsequently became president of the European Community and pioneered the development of Europe’s single market.

Domestically, what accelerated the shift to align Labour with a pro-European politics was the catastrophic defeat of the miners’ strike in 1984–85. Margaret Thatcher had waged war on the miners, the standard-bearers of the militant working class, and won. This huge defeat for militant trade unionism meant that the promises now being made by Delors — that European institutions could override Thatcherism at home and make gains through social regulation and some kind of social partnership agenda between unions and business — was warmly received as one possible source of progress, given the general despair about the prospects of both industrial conflict and radical left success at the ballot box.

Moderate union bureaucrats and Fabian-minded policy experts were particularly enthused by the Blairites’ new agenda, which relegated the importance of rank-and-file class militancy and democratic challenge alike and elevated their own sense of self-importance. Nevertheless, mistaking the institutional character and class basis of the European institutions, some leftists — like Guardian journalist John Palmer, Tony Benn’s former adviser Frances Morrell, and the activist Peter Tatchell — saw European integration as a stage for mobilizing greater international solidarity between the peoples of Europe.

In the end, the coalescence of the soft left and moderate reformists meant that, by 1989 and for a long while thereafter, Labour’s Europhile position “went more or less unchallenged by the majority of the Parliamentary Labour Party.” (Although Murphy reminds us that Bryan Gould for some time struck a bravely discordant note in challenging the European Exchange Rate Mechanism. He had foreseen the huge weight that European economic policy was affording the Bundesbank and the risk that diverging national economies would see the least powerful forced to endure inappropriate interest rates and fiscal restraints in order to protect the richer nations.)

Another notable Euroskeptic was the young Jeremy Corbyn, later to be swept into the leadership as a radical left challenger to the whole New Labour project. Sadly, the rift over the question of Europe would ultimately consume Corbyn’s leadership, since the association of internationalism, European integration, and the importance of the social protections it apparently, but misleadingly, seemed to offer continued to carry the day among his liberal supporters. Fatally, this included young people not old enough remember the arguments of those like the Left’s standard-bearer, Tony Benn, about the fatal lack of democratic accountability at the heart of these top-down institutions, painfully demonstrated by the savage austerity later imposed on Greece by the troika.

By substituting their former pursuit of socialism with the idea that Britain could become a mainstream European-style social democracy, a general rightward journey was undertaken by many of the soft left in the name of pragmatism and realpolitik in the wake of the miners’ defeat. Initially, there was a superficial degree of unity on the Left — for example, around the need to advance industrial democracy. This demand had traditionally been resisted by the Labour Party hierarchy and elements of the trade union leadership on the quasi-syndicalist grounds that it was a distraction from free collective bargaining and could see workers incorporated into accepting management roles. Previously, however, the work of the Institute for Workers’ Control mobilized around a more radical conception of workers taking over their own industries and planning production around their common interests, influencing Benn’s support for workers on the Upper Clyde shipyards, for example.

Perhaps to head off the growing momentum behind demands for worker control, the Labour government commissioned the independent Bullock Report, which produced a relatively tepid series of recommendations, including giving workers representations on company boards. Essentially, this was the version of industrial democracy that was to be taken up under the leadership of Neil Kinnock, and which presumed a social partnership model of relations between big businesses and trade unions, which would be reflected in a German-style corporatist institutional apparatus. Industrial democracy became acceptable to the Labour leadership in the 1980s, but only in a highly attenuated form that would not empower collective groups of workers at the rank-and-file level. In any case, the militant shop stewards movement of the 1970s had largely gone into decline by this stage; arguably, the time for a radical extension of workers’ control had been missed.

But even from within the broadly corporatist vision of a social democratic model of capitalism, there was scope to at least begin to address the critical question of ownership. A late flowering of such thinking was The State We’re In, a widely read work by the social democratic journalist Will Hutton that anatomized both the sclerotic state of the British constitution and framework for governance and also the historic influence of the City of London prioritizing short-term financial gains over long-term investment in the real economy. Murphy tracks how Hutton’s vision of a stakeholder economy was fleetingly taken up in a speech by Tony Blair, only to be allowed to wither on the vine, as the realization dawned that this would require tackling questions of corporate ownership and governance that would threaten to disrupt the cozy relationship between New Labour and the business elite. Murphy implies that a more radical path to social democratic renewal was open to New Labour, but a failure of nerve meant this promising avenue was never explored.

The constitutional reform agenda would also require confronting long-standing vested interests, and few could deny the antiquated character of Britain’s highly centralized and unaccountable institutions. Blair would inherit commitments on devolution to Scotland and Wales from his predecessor John Smith. He carried through on this agenda in government, although arguably without real conviction, and his proposal to deliver meaningful decentralization to the northern regions would fall flat. Benn’s republican focus on confronting the monarchy and its significant residual constitutional powers (including to declare war) was not on the radar of the “modernizers,” although the reform of the House of Lords — sought by anti-Tory forces in Britain for a century or more — continued to be promised, only to be ditched in government.

One key constitutional reform sought by modernizers of all sorts was the overhaul of Britain’s first-past-the-post electoral system in favor of a system of proportional representation. This was sought not only on the grounds of fairness or in the belief that it would prevent Tories from monopolizing the functions of government on the basis of only around a third of the vote share, but also often in the belief that it would generate a pluralistic political culture more open to creative alliances and, implicitly, challenge the ideological grip of Labourism.

This was seen as necessary in response to the demographic trends highlighted by Eric Hobsbawm’s famous article “The Forward March of Labour Halted?” which suggested that fewer people were identifying with the institutions of the Labour movement or with the (predominantly male) industrial working-class identity on which it was traditionally centered. Labour’s electoral base was shrinking, Hobsbawm argued, and only by reaching out to build broader alliances would it be possible to challenge the growing popularity of Thatcherism. Alongside and arguably driving these trends was the changing composition of British capitalism away from industrial manufacturing and toward a post-Fordist future in which services were critical and women would be a huge part of the workforce. Feminist challenges to the Labour movement’s traditional priorities and methods would also be increasingly cast in terms of “modernization” and alignment with economic trends.

The argument for pluralism was by no means inherently reactionary. The left-led Greater London Council, for example, was able to build a pioneering alliance of forces, including women’s groups; black and Asian community groups; anti-racist, gay, and lesbian rights activists; and many more, around broad campaigns such as the cost of transport in the capital city. But critically at stake was whether such moves were augmenting and updating working-class politics to reflect its changing composition or whether the new politics of identity was somehow displacing and relegating the significance of class itself as an organizing principle.

For example, the revisionist wing of the British Communist Party around the journal Marxism Today developed an analysis culminating in the document “New Times,” which constructed an exaggerated form of class essentialism, which it then rejected in favor of celebrating diverse identities and celebrating micro-choices in an age of individual consumerism. Murphy’s account would have benefitted from more attention to the excoriating critiques of the New Times crowd by thinkers who were by no means apologists for Old Labour — such as John Savile of Socialist Register or A. Sivanandan of the Race Today collective or, on the retreat from class more broadly, Ellen Meiksins Wood.

Murphy’s retrospective reconstruction of multiple modernizations vying for supremacy has the advantage of identifying roads not taken and potentially productive avenues of thought that the Blairite iteration would fail to develop. However, in disrupting the linear narrative of modernization as a single inevitable course of development, he arguably neglects to consider whether the tenor of debates around modernization played a tragic enabling role in inducing onetime Bennites and “hard-left” radicals to swallow New Labour revisionism. Why did so many of the left figures who embraced the need to modernize ultimately find themselves serving — with varying degrees of (dis)comfort — as Blairite ministers? Should we really be surprised that key Marxism Today contributors, including Charlie Leadbeater and Geoff Mulgan, would shift with such ease from this brand of left revisionism to openly embracing New Labour’s enthusiasm for capitalist globalization as policy advisers?

Murphy is open about his allegiance to the journal Renewal, a publication which, while retaining a critical distance from the eventual trajectory of Blair, was influential on the leaderships of Brown and Ed Miliband, sharing many of New Labour’s original ambitions, and that he saw in this moment unrealized possibilities for the renewal of the social democratic project. This perspective informs Murphy’s core contention that some of the alternative paths that modernization could have taken were neglected along the way, meaning that opportunities were squandered or at least not fully developed. It also leads Murphy to contest the judgement that New Labour was “neoliberal,” which gained greater traction with the rise of Corbyn. Clearly, he is correct to observe that the levels of government spending and elements of stealthy redistribution undertaken by Blair and Brown in office fall outside an ideologically purist model of neoliberalism along the lines envisaged by, say, Ludwig von Mises and Friedrich Hayek. But this excludes the possibility that other — hybrid or mutant — variants of their project could selectively incorporate elements of the same agenda.

New Labour, it should be remembered, did almost nothing to challenge eighteen years of restrictive Tory anti-trade-union legislation; argued that key public utilities such a rail, energy. and water should remain in private ownership; continued to leverage private capital in the financing and running of other public services, including the cherished National Health Service; developed a highly punitive welfare system; failed to replace the council housing stock sold under Thatcher; and further deregulated the financial sector ahead of the 2008 financial crisis.

Peter Mandelson notoriously admitted the government was “intensely relaxed” about “people getting filthy rich.” The acceptance of some mildly ameliorative post hoc measures to soften the edges of growing inequality does not compensate for a view that celebrates the “dynamics of the market” and “rigours of competition” as inviolable, as did Blair’s replacement version of Clause IV. Indeed, Labour’s less abrasive approach to growing social disparities acted as a cloak behind which capital was granted access to entirely new revenue streams (such as the interest repayments on Private Finance Initiative loans) that a narrow focus on “small government” would preclude. Whether we call this market liberalism on steroids or an alternative iteration of neoliberalism is a somewhat scholastic question.

The reader could be forgiven for asking why the Blairite iteration of modernization won out over its early rivals. Strangely enough, this is not a question that Murphy really addresses, perhaps because it has been addressed at length elsewhere in the existing literature.1 In a nutshell, it won out through its ruthlessly authoritarian centralization of power inside the party, sedulously courting powerful sections of the media and benefiting from an institutional infrastructure of well-funded think tanks and private sector consultants. Crucially, however, there was little in the way of organized resistance, because the defeats of the 1980s had largely demoralized and emptied out the trade unions, while local Constituency Labour parties frequently became empty shells as members were treated as nothing but cheerleaders and foot soldiers.

There is little doubt that the subordinate position of labor in relation to capital was maintained and furthered by Blair and Brown using the idiom and hollowed-out institutions of social democracy. So, overall, while this is an admirably well-written and researched account of the period, to my mind the present post-Corbynite moment requires a more comprehensive institutional critique of Labourism. This is the implicit compact between the trade unions and the leadership of the Labour Party, which sees trade unionism as primarily confined to a narrowly industrial organizing agenda, while “political” progress is judged essentially in terms of Labour’s success in elections and the number of representatives then expected to advocate on behalf of workers.

This implies accepting in full the existing constitutional framework of parliamentarism to which Labour has always conformed itself, with the assumption that Labour governs in a nebulously defined “national interest” rather than to fight for working-class interests. The political passivity encouraged by electoralism then leaves little scope to mobilize working-class communities.

The bitter experience of previous Labour governments has been that, once elected, the parliamentary party is largely unaccountable to its members or trade union backers, while existing policy commitments and priorities are ditched in practice. Murphy’s account would have benefited from greater consideration of the New Left critique offered by Miliband (and those who have updated his analysis, such as Leo Panitch, David Coates, and Colin Leys) and, in a different way, Raymond Williams, whose distinctive contributions are not touched on here.

Delivering on meaningful constitutional reform and industrial democracy and confronting the power of the financial markets are tasks that require a far more throughgoing critique than most politicians or commentators around Labour, then or now (with the all-too-brief exception during Corbyn’s tenure), are prepared to envisage.

About the Author

Michael Calderbank works for Solidarity Consulting in the UK Parliament on behalf of trade unions. He is a Contributing Editor to Socialist Register.