Ed Balls, speaking at Labour’s Annual Conference, admitted Labour made mistakes in its economic policies while in government. I agree. However, what Balls didn’t really acknowledge was the origin of these mistakes. Let’s take the one Balls and others have cited – ‘light touch’ banking regulation. This is clearly a textbook example of the flawed faith Labour displayed in the infallibility of capitalism in general and the markets and the financial sector more specifically. Tony Blair was so desperate to prove that socialism was no more than a ‘nice idea’ that Labour leaders doffed their cap into deference that he simply ceased to see the most eternally relevant aspect of socialism, its critique of a deeply flawed and imperfect capitalism. Maybe its solutions didn’t work out but it has consistently exposed how the relentless drive to profit is the obvious Achilles Heel. If Balls took this as his starting point he might start to understand the other mistakes we made. Private Finance Initiative, for example, has long been opposed by the left on almost moral grounds but it makes little sense on fiscal grounds either. It costs more than it does for the state to do it and what is worse the cost just keeps on coming because of the nature of the schemes. Year on year the taxpayer spends inordinate amounts of money lining the pockets of private companies for no good reason other than Labour’s capitulation to the ‘private good, public bad’ agenda pushed by vested interests in the best place to profit from these initiatives. Companies, faced with the economic crash, are furthermore turning the screw putting these facilities at risk.
Whisper it discreetly but to understand its mistakes Labour needs to go back to socialism, because it is socialism that has consistently throughout the years provided the most trenchant critique of capitalism. This is somewhat ironic given it was fear of socialism – of ‘demon red eyes’ that drove Tony Blair and the Labour Party down this road in the first place. However, you only need to switch on the news to see what a dead-end this road has become and how failing to recognise the limitations of the markets has led to a global economic catastrophe on a truly epoch-defining scale.
In not taking this line, Labour is also missing a trick. People don’t love the market anymore and its flawed nature is all too evident to everybody with eyes to see. It also goes a long way to countering the Conservative ‘Blame Labour’ skit that is very reminiscent of the ‘Blame Canada’ song from South Park and also about as logical as the contents of that song. We shouldn’t be afraid of admitting to mistakes – it is a sign of strength to admit them openly, not a sign of weakness as the press and media try to make it in the eyes of the electorate. It would form part of a powerful narrative which would provide an inspiring vision for the future. If Labour can do that and understand the origins of these mistakes then its return to Number 10 may well be assured.