Tristan Stubbs responds to Shalom Lappin

Shalom Lappin’s ex ante dismissal of the Third Way risks alienating many potential Eustonians, argues Tristan Stubbs

"An internationalized social democracy" that "counterbalances the power of international corporations". An end to the concentration of wealth "in the hands of a small corporate elite". "A creative redefinition of a progressive social egalitarian agenda". Shalom Lappin’s goals for the "Renewal of Social Democracy" are highly admirable but, due to three key misjudgements, his plan is unconvincing. First of all, he misunderstands the political solutions to economic inequality. Secondly, he dismisses the Blairite Third Way as "neoliberal". Lastly, and as a result of this error, he risks alienating many potential Eustonians.

Lappin argues that the "failure of the secular nationalist groups that secured independence from colonial rule to deliver either prosperity or democracy" sparked the Islamist movement into life. Lappin’s materialist explanation—that Islamists are motivated by poverty—is at first sight compelling; however the biographies of known Islamists discredit it (not least that of Osama bin Laden, whose family’s links with the Bush family were famously, if crudely, documented by Michael Moore). Globalisation might have caused "wrenching social and economic dislocations" in developing countries, but many of the 9/11 terrorists, educated in Europe and America, felt very at home in the globalising world.

Lappin’s programme intends to exploit global capital for the good of the world’s poor; only incidentally is it a weapon against Islamofascism. Yet his take on this phenomenon is emblematic of the rest of his analysis. The transformative power of economic change is paramount: other factors are secondary. Tellingly, Lappin’s second explanation for Islamism—that it resulted from a lack of democratisation in erstwhile colonies—represents one of the few mentions of democracy in his article.

In advocating global trade unions, Lappin describes another materialist teleology, though this time with a positive outcome. He claims that collective bargaining in emergent industries will raise developing countries’ living standards, facilitate their convergence with Western standards, and contribute to the democratisation of those countries. Crucially, however, he neglects to outline how unions in non-democratic polities will ever gain the requisite political power to achieve this. Leftists in the West should offer their strongest support to their most besieged comrades, but can we justifiably found a whole economic programme on such uncertain ground? The tabescence of the labour movement in Iraq under Saddam’s reign of terror, and the recent suppression of the Tehran bus workers’ strike, are discouraging portents.

Lappin is correct to state in the Euston Manifesto’s "Platform Fifteen" that "democratic trade unions are the bedrock organizations for the defence of workers’ interests". He is also correct in his assessment that "[l]abour rights are human rights". Yet if labour organisations are the bedrock for the defence of workers’ interests, human rights are the mantle. Freedom from summary execution and torture precedes the right to organise unions. Freedom from religious or political persecution precedes the right to collective bargaining. The legal protection we take for granted as members of pluralist, democratic polities comes next, for practical as well as moral reasons.

Peruvian economist Hernando de Soto has shown how laws can be made to work for the people of developing countries at the expense of established plutocrats. Unchained from the corruption and arbitrary taxation that characterise so many of the world’s bureaucracies, poor men and women readily grasp the opportunity to make a living for themselves.

Thus, before economic change can happen, citizens of developing countries must first be given a stake in the legal and political structures that so often condemn them to a life of poverty. In a sense, advocates of the Third Way have similar aims. While acknowledging the past harm done by corporations, their philosophy concedes that such firms have a greater capacity for wealth and job creation than the state. New Labour favours business-friendly fiscal measures not as a result of its "resigned embrace" of neoliberal corporate interests, but out of a considered conviction that liberalisation will encourage inward investment for the good of all social classes.

It is therefore unsurprising that Tony Blair and Gordon Brown were the link between last year’s Make Poverty History campaign and the G8 summit. Theirs is an expansive vision that gives as much weight to the eradication of poverty abroad as it does inequality at home. Like Lappin, they believe that globalisation need not be the scourge of the developing world: if managed correctly, it can become its lifeblood. Yet where they differ from Lappin is in their approach to capital. Underlying Lappin’s rhetoric is a sense that businesses should be constrained not guided; that the market should be harnessed, not ridden.

In Lappin’s conception, global capital represents a necessary evil. He responds to its challenges in two ways. The first is revealed in his reply to David Grant, where he highlights the self-serving political decisions behind neoliberalism, and calls for a concerted political reaction from the labour movement to assuage neoliberalism’s pernicious effects. But is it right to pin all our hopes on organised labour? Can we legitimately foster social change through industrial trade unions when the vast majority of the world’s poor work for themselves, in subsistence agriculture or the black economy?

The history of those social models that have habitually promoted their industrial sector makes for gloomy reading. Most notably, events of the past year laid bare the hypocrisies of the French system. State protection has elevated the employees of traditional French industries to a labour aristocracy, condemning the very poorest citizens to unemployment and social alienation, and creating the same "sharp rise in social inequality and a significant reduction in economic mobility for the poor" that Lappin lays at the door of neoliberalism. Far better, then, to promote the structural and intellectual buttresses of a modern market economy—for instance entrepreneurship, education, and new technologies [PDF]. Such an approach understands that flexibility, based on a broad enough skill set to cope with a shift away from traditional industries, is the key to survival in the globalised economy.

Lappin’s second response is to advocate "fair labour laws, equitable taxation on profits and stringent environmental constraints" on global businesses. This is all pretty uncontroversial; at issue, however, are the precise meanings of the terms "fair", "equitable" and "stringent". As with domestic policy, the Third Way prioritises inward investment in developing countries. It favours full employment as the best safety net for those cast aside by the globalising labour market, trusting that a flourishing economy will soon re-employ the jobless. It knows that the most effective way to achieve this is to maintain the faith of global capital. It therefore recognises, like Celso Rocha, that overly stringent constraints cause businesses to stray towards low-wage economies, depressing wage rates in the developing world even further.

In "Platform Fifteen", Shalom Lappin warns us that "retreating to the tired slogans of past ideological struggles will in no way advance this cause". He would do well to follow his own advice—after all, what worse obloquy is there for those who spent years opposing Thatcher than to be labelled neoliberal? Conscious of their left-wing heritage, Third Way advocates like to claim the social democratic creed for themselves. John Prescott called last year for the liberalisation of the EU’s social model because, "for socialists, the [European vision] must include full employment".

They make natural Eustonians, too. Within and without Parliament there are Labour members who broadly agree with the Manifesto’s principles, who self-define as progressives, but who, after Lappin’s philippic, will think twice about signing up. If the Eustonians are to avoid the sectarian squabbles that have condemned the left in the past, they would be wise to debate the Third Way, not dismiss it ex ante. It’s a good time to start. Gordon Brown looks likely be the next Prime Minister: we’ll have to put up with a few more years of "neoliberalism" yet.

Tristan Stubbs is the Henry Jackson Society‘s Environment / Economy Section Director

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