One of the most telling outcomes of Tony Blair’s recent
intervention into Labour’s future has been the intensity of the response from
Britain’s politocracy.
Politicians, journalists, think tanks, party loyalists and
professional commentators immediately lined up to defend, condemn, reinterpret
or weaponise his proposals. Yet for all the noise generated, something
important seemed largely absent from the debate. Very little attention was
given to the possibility that Britain’s difficulties may now run deeper than
any collection of policies can adequately address.
Labour came to power on the back of a deep and visceral
demand for change. Yet what many people wanted was not simply a change of
government. Governments come and go. Parties rise and fall. Prime Ministers
arrive with great fanfare before disappearing into the footnotes of history.
What much of the electorate sensed was that something deeper had gone wrong.
I will not rehearse the endless catalogue of failures that
brought us here. Suffice to say that the Liz Truss fiasco bundled the previous
twenty years into a single bonfire of incompetence. Within weeks, confidence in
economic management evaporated, financial markets recoiled, and institutions
once assumed to be stable suddenly looked alarmingly fragile.
Yet Truss did not create Britain’s problems. She merely exposed them. For a brief moment the country was forced to confront what many had suspected for years: that beneath the slogans, manufactured certainties, tribal point-scoring, grubby corruptions and endless political theatre, the machinery of central government itself had become dangerously hollowed out and inept.
The result is a country that increasingly feels lost to
itself, embroiled in culture wars fought from ideological trenches with
energies that might once have been directed towards solving real problems.
Economic growth remains sluggish. Productivity remains weak.
Public services strain under growing demand. Regional inequalities persist.
Housing remains unaffordable for millions. Infrastructure deteriorates. Trust
in political institutions continues to decline. Climate instability
increasingly shapes economic and social planning. Artificial intelligence
promises both extraordinary opportunities and profound disruption. Demographic
pressures continue to mount. Geopolitical tensions are rising. Energy security
has once again become a strategic concern.
Perhaps most strikingly, many of the surviving centrepieces
of Blairs modernised Thatcherism now appear increasingly threadbare. Water privatisation promised
efficiency yet delivered polluted rivers and heavily indebted monopolies. Rail
privatisation promised competition yet survives through substantial public
subsidy while passengers endure high costs and chronic disruption. Across
schools, hospitals and local government, outsourcing, consultancy and
contractual fragmentation have often produced layers of administration without
corresponding improvements in outcomes.
None of this proves that markets are inherently flawed or
that public ownership is automatically superior. Reality is rarely so simple.
It does suggest, however, that forty years of marketisation have produced
outcomes profoundly different from those originally promised. Increasingly the
question is not whether services are public or private, but whether they exist
to create public value or facilitate private extraction.
Yet despite the scale of these challenges, much of British
politics remains trapped within intellectual arguments inherited from another
age.
Perhaps this should not surprise us.
The question of change itself has occupied philosophers for
more than two and a half thousand years. Heraclitus argued that everything
flows. Parmenides argued that reality is fundamentally unchanging. Aristotle provided
the Third Way. His famous acorn-to-oak metaphor suggested that change is
neither illusion nor chaos but the unfolding of latent potential. The acorn and
the oak are not different things. They are different stages of the same thing
becoming itself.
But what Blair and his ten ‘policies’ have done is to shine
a spotlight on the lack of intellectual power or imagination required to
regenerate the aged oak in whose branches we all live.
The great political and economic struggles of the twentieth
century were not simply arguments about tax rates, spending levels or
regulation. They were arguments about how that oak should be pruned and how the
relationship between state, market and society should be organised.
The first major post-war answer emerged through the work of
John Maynard Keynes.
Keynes provided more than economic theory. He offered a
governing philosophy. Economic recovery required investment rather than
austerity. Mass unemployment threatened democratic stability itself.
Governments possessed both the right and responsibility to intervene during
periods of crisis. Markets were important, but left entirely to themselves they
could generate instability and social dislocation.
The devastation of two world wars gave these ideas enormous
force. Keynes helped shape the Bretton Woods institutions and the broader
intellectual foundations of the post-war settlement. The Marshall Plan
reflected a profoundly Keynesian insight: economic collapse breeds extremism
while prosperity encourages stability. Reconstruction rather than punishment.
Investment rather than extraction. Shared prosperity rather than economic
coercion.
The result was one of the most successful periods of
economic and social development in British history. Public investment expanded.
The welfare state grew. Public services strengthened. Economic management
became a central responsibility of government.
For almost three decades the model appeared remarkably
successful.
Yet by the late 1960s and throughout the 1970s the
settlement began to fracture. Rising international competition, slowing
productivity growth, inflation, oil shocks, fiscal pressures and industrial
conflict combined to undermine confidence in the existing order.
The newly planted oak was showing signs of stress.
Into that crisis stepped the second great intellectual force
of the post-war era.
Drawing heavily upon the work of Friedrich Hayek and Milton
Friedman, the emerging New Right challenged many of the assumptions that had
dominated post-war thinking. Markets were viewed as more effective allocators
of resources than governments. Competition became a source of discipline and
innovation. Excessive state intervention was portrayed as economically damaging
and potentially threatening to liberty itself.
Inspired by Hayek and championed in Britain by Keith Joseph
and Margaret Thatcher with Milton Friedman, this philosophy transformed the country. Privatisation,
deregulation, lower taxation, reduced trade union power and market competition
reshaped British economic life.
Like Keynesianism before it, Thatcherism was not merely a
collection of policies.
It was a coherent worldview.
Yet it also contained a paradox. While seeking a smaller
economic state, Thatcher frequently relied upon a stronger political state to
impose reform. The result was not less power but a different deployment of centralised power.
If Keynes provided much of the intellectual architecture for
constructing the post-war settlement, Hayek and Friedman provided Thatcher with much of the
intellectual ammunition for dismantling significant parts of it.
The political economy of the late twentieth century can
therefore be understood as a long argument between those two philosophies.
By the time Tony Blair and Gordon Brown arrived in
government in 1997, neither side had fully won.
Instead, New Labour attempted something different.
The Third Way was less a new philosophy than an ambitious
synthesis of Thatcherism and Keynes. Markets would generate wealth. Government would
invest in people. Education would drive social mobility. Economic growth would
fund social progress. Globalisation would be embraced rather than resisted.
Public services would be modernised through privatisation rather than fundamentally restructured.
In many respects the strategy proved remarkably successful.
The National Minimum Wage, devolution, the Good Friday Agreement, major
investment in health and education, reductions in child poverty and sustained
economic growth remain significant achievements. Blair supplied the political
vision. Brown supplied much of the economic machinery. Together they created
one of the most electorally successful governments of the post-war era.
Yet the Third Way also rested upon assumptions that
increasingly no longer hold.
It assumed continuing globalisation. It assumed relatively
cheap energy. It assumed rising living standards. It assumed stable democratic
institutions. Above all, it assumed that economic growth would continue to
generate sufficient resources to reconcile competing interests.
Those assumptions have steadily weakened.
The financial crisis of 2008 exposed vulnerabilities and corporate corruption within global
finance. Subsequent austerity weakened public capacity. Brexit revealed profound
territorial and cultural fractures. Climate instability accelerated. Trust in
institutions continued to decline. Artificial intelligence now promises to
reshape labour markets, governance systems and economic organisation in ways
that remain poorly understood.
This is where Blair’s recent intervention becomes
particularly revealing.
His ten policies themselves are less important than the
assumptions underpinning them. Much of the thinking remains rooted in the
worldview that made New Labour successful: technological innovation, economic
growth, global competitiveness, institutional reform and market dynamism.
These are not unreasonable objectives.
Yet they assume that the challenges confronting Britain are
extensions of those faced during the late twentieth century rather than
symptoms of a fundamentally different historical moment.
Blair’s enthusiasm for artificial intelligence reflects a
continuing belief that technological innovation can unlock a new wave of
prosperity. His willingness to embrace Trump and elements of contemporary American
political discourse suggests a similar faith in the adaptive capacity of
existing institutions. Even his confidence in technological solutions to
climate and energy challenges reflects an assumption that innovation will
largely resolve the contradictions that innovation itself has helped create.
Perhaps. But perhaps not.
Artificial intelligence, economic electrification and
digital infrastructure will require enormous quantities of reliable energy and water supply and
vast material resources. Fossil induced climate instability is already imposing costs that
previous generations scarcely imagined. Social fragmentation continues to
deepen. Trust continues to erode. Regional disparities remain entrenched.
Institutions designed for twentieth-century industrial society increasingly
struggle to respond to twenty-first-century complexity.
The challenge facing Britain may therefore not be how to accelerate the existing model. It may be how to rethink it.
Keynes responded to the collapse of pre-war laissez-faire
capitalism. Hayek, Friedman and Thatcher responded to the crisis of the post-war
settlement. Blair responded to the opportunities created by globalisation. Each
offered a coherent philosophy for the age in which they lived.
The question confronting Britain today is whether all three
were responding to conditions that no longer exist.
If so, the task before us is not simply to improve existing
policies or modernise existing institutions. It is to develop a new
understanding of how society should organise itself under conditions that were not fully anticipated by previous administrations: ecological instability, technological
disruption, declining trust, demographic change, resource constraints and
widening regional inequality.
Periods of stability rarely produce radical ideas. Existing
assumptions appear sufficient. Existing institutions appear durable. It is
periods of uncertainty and systemic stress that force societies to re-examine
their deepest beliefs.
History suggests that genuinely transformative philosophies
emerge not during periods of confidence but during periods of crisis.
Britain may now be entering precisely such a moment.
The old arguments are exhausted. This helps explain the
increasingly barren quality of modern British politics. Cameron offered
managerial conservatism. Brexit exposed fractures neither major party properly
understood. May struggled to reconcile incompatible mandates. Johnson
substituted performance buffoonery for strategic substance. Truss briefly
attempted ideological purification with catastrophic consequences. Starmer's
government inherited a state weakened by years of institutional erosion but has
yet to articulate a governing philosophy capable of replacing those that have
failed.
Britain therefore finds itself in an unusual position. It is
not suffering from a shortage of policies. It is suffering from a shortage of
ideas. Yet much of Westminster continues to argue within intellectual
frameworks inherited from the late twentieth century while confronting problems
that belong to the twenty-first. The old assumptions have disappeared. We
remain, however, in the branches of the same ageing oak hacked at by successive
generations. The question is no longer whether individual branches require
pruning. The question is whether the conditions in which the tree itself must
survive have fundamentally changed.
That is the conversation Blair’s intervention has
inadvertently exposed.
And it is the conversation British politics has so far shown
remarkably little willingness to have and one that we will continue anon.
