Re-moralise the market, Re-localise the economy, Re-capitalise the poor
by Phillip Blond
respublica.org.uk (October 03 2009)
It is now clear that we are at one of those epoch-changing moments in
British political history. Just as the ‘Winter of Discontent’ in 1978/1979
marked a paradigm shift, an utter and complete reversal of the
pre-existing order and the arrival of something new, something
revolutionary and something transformative – so the present unprecedented
debt crisis of 2008/2009 is doing the same.
1979 brought an end to the welfare state, 2009 will see an end to the
market state and the next election will, with the election of a
conservative government, usher in the birth of the civic state.
We know what was wrong and what was right with the welfare state, it is
right to provide a floor through which people cannot fall, it is right to
have a safety net which catches and supports people who for reasons of
health, wealth or market fluctuation cannot sustain themselves in the
interim. Finally it is right to secure the general well being of all
through a universal account of the common good and the necessity of full
participation in it.
However we also know that welfare is a far more effective ceiling than it
is an adequate floor – it traps as many as it helps and condemns therefore
a whole class to permanent poverty and dependence. Furthermore welfare
dis-empowers its recipients – the philosophy of entitlement destroys
consciousness of mutuality and it fragments working class culture and
permanently disables the associative drive that alone can make communities
and foster the development of wealth and independence. Finally welfarism
was the Faustian bargain that the left struck with monopoly capitalism, it
ensures a kind of permanent ascendancy of the middle over the working
class and creates an antagonistic feudal structure – where any genuine
extension of power and ownership to the poor is resisted by the liberal
middle classes who fear mostly for their own status and their sole assumed
inherited right to social mobility. (Just look at British schooling)
Similarly we know what is right and what is wrong with the market state.
Clearly the market is a more effective and efficient mechanism for the
distribution of many resources than the state. Evidently if one can enter
the market place and if one has something to trade – the market creates
wealth, prosperity and independence. Finally there is the manifest good of
liberty and unless this has an economic reality – one would exist under
the permanent subjugation of the state, or the private cartel. Yet we also
know what is wrong with the market state – too often it replaces a public
monopoly with a private cartel. In the name of breaking up the state too
little attempt was applied to breaking up the market. Under the
dispensation of the market state, private replaced public monopoly and
market entry was effectively and progressively denied to newcomers. The
majority of Britons having being denied entry to the market lost any
access to investment capital. Thus the ability to transform one’s life or
situation steadily declined as wealth flowed upwards rather than downwards
and a new oligarchical class, asset rich and leverage keen, assumed market
freedom was synonymous with their complete ascendancy. Market
fundamentalism abandoned the fundamentals of markets. Prudent Chancellors
promised no more boom and bust, the state sanctioned monopoly capitalism
and sat happy on the tax receipts of unrestrained global gambling. As
Labour stoked the engine of inequality – it abandoned the rest of the
economy for the receipts of city speculation and the re-distributive power
of welfarism. Thus the market and the welfare state merged into one as
they both colluded in a system whose bankruptcy is now ongoing and
self-evident.
The welfare state and the market state are now two defunct and mutually
supporting failures. The real merit of the current conservative
renaissance has in some way escaped notice. Those on the now bankrupt left
argue that the new Toryism is but a cover for Thatcherism Mark II, while
those on the bankrupt right secretly agree and seem to want nothing more
than a return to monopoly capitalism and the dominance of their kind of
people.
Modern conservatism rejects both dispensations as it seeks to replace the
welfare and the market state with the civic state. The civic state aims to
blend the benefits of welfare and the market mechanism not by favouring
one or the other but by exceeding both. The Conservative’s new civic
settlement privileges the associative above the alienated, the responsible
over the self-serving and (yes I know this is shocking) the communal over
the individual. As such Cameron’s political agenda is far more radical,
far-reaching and transformative than the majority suspect. It offers a way
out of the failed class based politics of the past, it would offer through
expanded notions of ownership a way to escape the conflicts between
capital and labour. It could inveigh with equal vigour against the public
monopolies of state and the private cartels of the market – in order to
break down the barriers to market participation and individual
capitalisation. Finally it could undo the ruinous consequences of state
sanctioned multi-culturalism and the lazy moral and social relativism of
the liberal middle class. By injecting a new moral purpose and political
culture into Britain – Cameron could and should fashion a new compact of
mutual responsibility and binding social ethic. As such modern
Conservatism could be the foundation of a new commonwealth and a new and
better way to live our lives.
But if politics is real, if it intervenes and makes a difference then
progressive conservatism must tell us how it gets there from here. How
does Cameron’s conservatism realise the civic state that is so needed and
so desired.
In the face of the current collapse of credit engendered and state
sanctioned monopoly capitalism, the most urgent need is for Conservatives
to craft an entirely new political economy and a refigured paradigm for
markets and trade. This new progressive conservative economics would
pursue three interrelated goals: the re-moralisation of the market,
re-localisation of the economy, and re-capitalisation of the poor.
Only markets located in and shaped by a moral architecture are
sustainable, as Adam Smith understood. Without law, morality, custom and
conscience we would have anarchy in place of exchange, and extortion in
place of contract. Economic output needs to pass a series of social tests,
and the Conservatives need to tie economic policy to the social outcomes
they favour. For Conservatives it must be the extension of wealth, assets
and the benefits of ecological and social well being to all. Freedom from
the monopoly dominance of state bureaucracy and market power would allow
independence for the formation of community and autonomy and a rebalancing
of the demands of work, family and childcare.
Second, more attention needs to be paid to the health of local economies.
Labour’s ‘market state’, subservient to big business, has generated a
nation of ‘clone towns’ and ‘ghost towns’ where retail outlets are either
identical or absent. Blair and Brown’s worship of monopoly markets
produced the paradox of competition without competitors, an almost
exclusive favouring of the big box retail model, and the permanent
dominance of supermarkets. Small business are squeezed out by the
monopolistic power of trans-national enterprises, and the barriers to
market entry that their economies of scale represent. Small wonder that
the UK has one of the lowest percentages of small and medium businesses in
the OECD.
But small and medium businesses are how millions ordinary people own and
secure the wealth for themselves and their families. The present market
dispossesses them and re-categorizes them as permanent members of the
low-waged shop serving, rather than shop owning, class. By toughening
planning laws and reforming local tax bases, Conservatives can restore
local economies and local capital, so that the benefits of trade flow
downwards to all participants rather than upwards to the tax-avoiding
off-shore aristocracy of Brown’s Britain.
The third goal of modern, progressive conservatism is the
re-capitalisation of the poor. Under the reign of the monopoly market, the
poor have been wholly dispossessed. In 1976 the bottom fifty per cent of
the population owned twelve per cent of the nation’s liquid wealth; by
2003 they had just one per cent. In the same period, the share enjoyed by
the top ten per cent rose from 57% to 71%. Even when property is included,
the bottom half of the population still only owns just seven per cent of
the country’s wealth. Savings rates have declined to levels last seen in
the 1940s, wages at the bottom have risen slowest, and the poverty gap -
both relative and absolute – has widened while the elite lectured us on
the universal benefits of global capitalism. A new conservative agenda of
ownership extension and security is therefore urgently required. If the
most vulnerable victims of Labour’s debt-financed depression are to be
saved from re-proletarianisation and permanent subjection to an inadequate
welfare state, a new popular philosophy of asset extension and stakeholder
equity capitalism is required.
To conclude, the new conservatism is accused of being shallow or extreme -
of being vapid or a sinister covert Thatcherism of the most insidious
intent. It can’t be both – since in fact it is neither. On the contrary it
is something new and unrecognised – it represents a deep and profound
critique of the pre-existing extremes and a restoration of something close
to the real heart of Britain : an organic conservatism that cares for all.
http://www.respublica.org.uk/articles/civic-state