David Grant responds to Shalom Lappin

This is, I think, the third piece written on the renewal of social democracy that Shalom Lappin has written. I have to say I’m no further forward in understanding what this advocacy of free-trade, trade unions and ‘preserving the integrity of the public sphere’ would amount to in practice and I’m not sure that this vision is a plausible take on either economic history or on any possible economic future. I may, of course, misunderstood — in which case could Mr Lappin or someone else elaborate or address the following queries?

Free trade

I favour free trade myself, although I think for different reasons than Shalom Lappin. Despite the economic catastrophes of Russia and practically the entire continent of Africa since the collapse of the Soviet Union - the expansion of free-trade has, as it did during the long post-war boom, produced a greater increase in human welfare as compared to the experience of protection in the interwar period. However, I’m not sure that’s Shalom Lappin’s view. In one of his earlier pieces published on normblog he said the post ‘89 ‘globalisation’ was ‘analogous to the Industrial Revolution’. I don’t really understand this but it seems to carry the idea that it is similarly irresistible — hence the reference to ‘Luddite’ opposition to it. I’m assuming the term is being used in the usual ahistorical way as meaning an irrational opposition to technological innovation. But free-trade is not a function of technological change and is not irresistible.

The nation-state

Reports of its death have been greatly exaggerated and by extension its capacity to regulate and restrain capital in various ways. The British government currently spends around 42% of the National Income, which is lower than most other European countries, particularly the pre-enlargement EU 15. If we are to believe that the largest player in the national economy is irrelevant in the face of “footloose” capital, I can’t see how these “international trade unions” are going to fare much better. The argument seems to be that market forces are irresistible when it comes to trade but resistible in the labour market? I don’t understand this. I’m also unclear what the role of the state should actually be. Does Mr Lappin think the state’s intervention should be larger, and if so, how much larger? Or should the role fall to trans-national governmental institutions like the EU? Or is some other form of international government envisaged here?

Labour and capital

Related to the previous point is the question of what the state’s role in relation to capital is. Privatisation is bad, we are told — but no justification for this is given. Yet if we advocated expanding state ownership to, say, Cuban proportions, I sense this would be dismissed by Shalom Lappin as “Luddite” and “protectionist”, which it is of course. So what does ‘preserving the integrity of the public sphere’ in the face of the ‘neo-liberal juggernaut’ actually mean? Looking at where we are now and simply saying no more privatization please? Or should some industries be re-nationalised — and if so, which ones and what proportion of the economy should be owned by the state before we can be classed ‘social democratic’? We are not told.

This ‘renewal of social democracy’ seems to amount to resisting privatization and advocating New Unionism, only on a global scale. I don’t think there’s anything new about this at all and anyway it’s completely unclear to me how all this would work.

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