I am grateful to Tristan Stubbs for his interesting comments. He raises a number of important issues that bear further discussion.

Clearly we do not disagree on the importance of achieving democratic institutions and liberal political structures in the developing world. Let me focus, then, on the points where we do seem to diverge. Tristan says:

"Few would argue that the NHS is suffering, but to claim that this is the result of a lack of funding is patently untrue. Over the last nine years the Labour government has almost trebled pre-1997 investment, bringing funding in line with European levels. What is more, it has overseen the biggest ever redistribution of wealth to the poorest, lifted a quarter of children out of poverty, and introduced a minimum wage. And while proposed market reforms of public services may be worrying, they are by no means axiomatic for proponents of the Third Way."

This is all true. But now much of the government’s increased investment in the NHS is now being reversed as it applies sharp cuts to hospitals and medical services in order to deal with large deficits in the health budget. Cut backs in funding and increases in user fees throughout the network of public services, particularly in transportation, municipal functions, and higher education, are causing a major deterioration in both the quality and accessibility of these services. Moreover, the large gap between the wealthiest and poorest percentiles of the population has continued to grow rapidly. The trend towards the concentration of the country’s wealth in an ever decreasing proportion of the population remains unabated under the Labour government.

Stubbs goes on to state:

"I mentioned France’s troubles earlier; German unemployment, though improving, is running at eight per cent. Even the most successful social democratic party in the world, Sweden’s SSDP, risks defeat by a centre-right coalition after being blamed for rising joblessness and burgeoning social inequality. The reason for these countries’ difficulties? Their celebration of entrenched industrial interests precludes flexibility, a valuable currency in the globalised economy."

Implicit in this remark are the classical assumptions that powerful labour unions, strong protections for workers rights, and a comprehensive social welfare state invariably produce economic stagnation and high unemployment, while tax cuts for business, liberalization of the job market, accompanied by reduction in public expenditure on social services will generate high growth and low unemployment. These assumptions have been driving the steady erosion of the welfare state and labour rights in large parts of the western world for the past thirty years.

If one compares the economic performance over the past ten years of countries that have applied radical liberalizing economic measures, like the UK and the United States, with a range of western economies that have retained social democratic policies, it becomes clear that the classical assumptions do not, in general, hold.

Consider the productivity, growth, and unemployment indicators for the following countries, with roughly comparable per capita GDP, averaged over the ten year period of 1995-2004 (the statistics are compiled from OECD profiles of each country, which are available at www.oecd.org).

          Annual Increase in        Annual Growth        Unemployment
          Labour Productivity       in Real GDP
Denmark           1.64percent           2.13percent           5.23percent
France            2.13                  2.33                 10.13
Germany           1.8                   1.46                  8.38
Norway            2.34                  3.01                  4.05
Sweden            2.38                  2.85                  7.06
UK                2.11                  2.87                  6.03
USA               2.32                  2.75                  5.06

While France and Germany do indeed exhibit sluggish growth and productivity with relatively high unemployment, Norway, Sweden, and Denmark, all of whom have more generous redistributive welfare states and labour protection than either of these countries, display relatively robust results. In fact, Norway outperforms the UK and the United States on all three indicators.

The OECD uses the Ginni Coefficient as an index to measure inequality of household disposable income on a scale of 0 to 100, with 0 representing full equality among households and 100 maximal inequality among them. The measures of inequality for the six countries listed above from the mid-1980s through to 2000 (the latest date for which the OECD lists comparative figures for this index) are as follows.

               mid-1980s             mid-1990s                2000
Denmark           22.8                  21.3                  22.5
France            27.6                  27.8                  27.3
Germany           ....                  28.3                  27.7
Norway            23.4                  25.6                  26.1
Sweden            19.9                  21.1                  24.3
UK                28.6                  31.2                  32.6
USA               33.8                  36.1                  35.7

As expected, the Scandinavian social democracies consistently show the lowest degree of inequality, Britain and the United States the highest, with France and Germany in an intermediate position. While the Scandinavian countries have been remarkably successful in sustaining reasonable growth, productivity, and low unemployment within the framework of a strong welfare state, they have also clearly suffered from the increasing pressure that globalized markets have exerted on wages and social spending over the past decades, and this is reflected in the progressive rise of their inequality indices. As Stubbs suggests, this trend has become more acute in recent years.

Three primary responses to globalization have emerged. The neo-liberal approach celebrates it as both a positive and an inevitable phenomenon which requires us to embrace an unfettered free market. The constraints of the welfare state and the redistributive tax system required to support it are regarded as counterproductive obstacles to this process which must be dismantled as quickly and thoroughly as possible. The neo-liberals make no pretence of addressing the enormous social cost and labour instability produced by globalization, either in the West or in the developing world. They see the market as delivering the optimal solutions to these problems, despite compelling evidence to the contrary.

The anti-globalization movement regards globalization as a purely destructive force that serves the interests of a small corporate elite and visits devastation on the wage earning classes of the West, as well as the poor of the developing world. The supporters of this movement seek to halt its progress and return to an essentially localist economic system in which trade and markets are severely restricted. They ignore the fact that such economies would completely stifle growth. They would not be capable of generating the wealth needed either to alleviate poverty in the third world or to sustain the high standard of living that anti-globalizers demand for themselves in the West.

The advocates of the Third Way (as it is described in Anthony Giddens (1998), The Third Way, Polity Press, London, and implemented in the policies of New Labour) treat globalized markets as unavoidable and seek to cushion their social effects. They hope to do this through ameliorative measures like extensive job re-training programs, incentives for business to invest in deprived areas, and joint public-private provision of social services intended to reduce the burden of public spending in a way that avoids the collapse of these services. Third Way theorists do not provide substantive solutions to the profoundly disruptive effects of globalization in the West, nor do they address the problem of using the new wealth that it produces for social benefit in the developing world. They are essentially reluctant neo-liberals with a sense of social guilt.

I have been attempting to formulate a fourth approach on which the potential social benefits of globalization are realized by finding methods for transposing the constraints and redistributive mechanisms of classical social democracy from a national market, where they are increasingly ineffective, onto the emerging integrated global market. Such an approach recognizes the importance of this market for generating prosperity while seeking to harness its power in order to distribute its wealth to the largest possible number of people.

Shalom Lappin is Professor of Computational Linguistics in the Department of Philosophy, King’s College, London

I did, in fact, acknowledge Lappin's political explanation for the rise of Islamism — that it derived from the same groups' failure to deliver democracy. Nonetheless, I highlighted his materialist account for Islamism since I understood it to be emblematic of his broader approach. I considered it to be conceptually linked to his argument that democracy would take root in developing countries after a change in their material wealth. Returning to the original quote, however, I recognise that Lappin's conviction is that democratisation will accompany a rise in living standards, rather than result from this rise. Hence, the process of collective bargaining "will lead to the gradual convergence in living standards in the developing world and the West. It will also contribute to the democratization of the former'. I apologise for misinterpreting Lappin's argument in this way.

Yet my main point remains the same. I suggested that the reform of democratic and legal structures must take primary importance if economic development is to be truly sustainable. Although, as Lappin notes, "labour rights are human rights", human rights should always precede labour rights. Few citizens of developing countries are employed in industry, and an even smaller number are union members. What is key, therefore, is to protect the majority — those employed in subsistence agriculture, or in the black economy — from arbitrary taxation and expropriation by venal kleptocracies. This could well be possible with the kind of free trade agreements that Lappin proposes, which will oblige signatories to work towards strengthening democratic institutions.

2. I am grateful to Shalom Lappin for clarifying the centrality of trade unions to his scheme, and I find the example he gives of the Solidarity movement in Poland convincing. I believe, as I just mentioned, in the usefulness of free trade agreements in promoting democracy. But I don't have as much faith as Lappin in organised labour. When unions such as Solidarity fight oppression, their aims dovetail with those of the wider population. The right to vote, to assemble, to collective bargaining — all of these are noble causes of the labour movement which, as Lappin notes, have benefits for all. This is one of the reasons that free trade agreements should insist that states protect the right to organise trade unions.

However, once democratic market economies have been established, the aims of organised labour and those of the wider working class tend to diverge. Too often the narrow interests of traditional elites are traded for the equally narrow interests of union members. State protection of the French industrial and agricultural sectors has contributed to chronic unemployment in immigrant areas of the banlieues and exacerbated Third-World poverty.

And while we can promote human rights through free trade agreements, the same can't be said of social democracy. To insist that governments adopt a social democratic model is at best optimistic and at worst a call for the kind of doctrinal orthodoxy of which Lappin accuses me. We can endorse measures such as the European Working Time Directive to EU member states, but to do so on a wider scale, while desirable, may well prove impracticable. Indeed, even within the EU there is much discomfort over labour regulation. In countries such as Poland, memories of communism have influenced voters to elect parties with populist neoliberal platforms.

The social democratic response should therefore be to demonstrate the inadequacies of neoliberalism, and to argue for the desirability of full employment ahead of a minimal state (this shouldn't be too difficult — Poland's neoliberal model has created unemployment levels as high as twenty per cent). It was in pursuit of this goal that social democrats learned to accommodate themselves to liberalised markets — this was no "resigned embrace".

3. In his rejoinder, Lappin asks how the Third Way differs from traditional neoliberalism. Its emphasis on full employment is the first answer. The second lies in its advocacy of a welfare safety net for those cast aside by the globalised economy.

According to Lappin, the NHS is suffering from massive underinvestment, a result of the iniquitous neoliberal ideas that have informed British governments since the 1980s. Few would argue that the NHS is suffering, but to claim that this is the result of a lack of funding is patently untrue. Over the last nine years the Labour government has almost trebled pre-1997 investment, bringing funding in line with European levels. What is more, it has overseen the biggest ever redistribution of wealth to the poorest, lifted a quarter of children out of poverty, and introduced a minimum wage. And while proposed market reforms of public services may be worrying, they are by no means axiomatic for proponents of the Third Way.

Lappin's deconstruction of the Third Way highlights the acute social gap between the richest and poorest citizens of the United States. Yet a comparison between the British and American social models is somewhat specious. Though they share an attachment to liberalisation, in relative terms their welfare states are incomparable. A better contrast might be made with European economies. I mentioned France's troubles earlier; German unemployment, though improving, is running at eight per cent. Even the most successful social democratic party in the world, Sweden's SSDP, risks defeat by a centre-right coalition after being blamed for rising joblessness and burgeoning social inequality. The reason for these countries' difficulties? Their celebration of entrenched industrial interests precludes flexibility, a valuable currency in the globalised economy.

4. Both Shalom Lappin and I wish to adapt social democracy to the interconnected world, but have differing views as to how to achieve this. If we are to realise a progressive agenda for future global development, we must protect a culture of debate on the Left. This is why, in my response to Lappin's article, I called for a discussion of the Third Way rather than an ex ante dismissal.

I assume that when Lappin refers to the "tone" of my response he means to imply that it was overly polemical. The piece was adapted from a review of the Euston Manifesto launch that I produced for the Henry Jackson Society website. The text of Lappin's speech at that event was the same as "Towards a Renewal of Social Democracy". Although the political aims of the Manifesto — a commitment to liberal democracy, pluralism and tolerance — were restated by every speaker, the only mention we had of an economic programme was Lappin's. I found it odd that a spokesman for a project with the potential for support not only from the left, but from the broader political spectrum, should dismiss some of Euston's most instinctive colleagues (me included) as neoliberals. To be branded as such is as exasperating — and as imprecise — as it is for Eustonians to be labelled neoconservatives.

I therefore welcome the Social Democratic Futures project. After all, to paraphrase Shalom Lappin, free debate should come naturally to those who consider themselves "democrats and political liberals".

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

Setting aside the tone of Tristan Stubbs’ remarks let me respond to what I take to be his main points.

1. Stubbs seriously misinterprets my account of the rise of radical Islamism. The fact that I identify this movement as, in part, conditioned by the failure of secular nationalism to deliver democracy or prosperity in post colonial third world countries certainly does not entail that I regard poverty as the major cause of Islamism, nor is my proposed description of this phenomenon “materialist” in any obvious sense. It is unclear to me on what basis Stubbs arrives at these thoroughly unmotivated inferences. I was simply suggesting that radical Islamism has been filling the political void left by the collapse of secular revolutionary nationalist ideologies thoughout the third world. This claim seems to be uncontroversial in that it amounts to little more than a straightforward description of the facts.

2. Stubbs asks how free trade unions can be established in third world countries that are ruled by repressive regimes which do not respect the rights of organized labour. This is a reasonable question. I suggested a partial answer in proposing that global free trade agreements be used as instruments for promoting democratic institutions, as well as social investment in the developing world. The obvious precedent here is the demand for democratization and respect for human rights that defines a necessary condition for entry into the European Union. It is also worth recalling that when union activists struggling against an undemocratic government enjoy widespread popular endorsement within their own country and receive strong support from abroad, they can, in some cases, effectively challenge their government. This is how Solidarity established itself both as a free labour union and the main engine of democratization within Communist Poland in the 1980s.

3. Stubbs claims that I have mistakenly identified Third Way politics with the neo-liberalism of the Thatcher era. Instead, he suggests, it aims to achieve prosperity by promoting entrepreneurial energy and freeing business from regulation in order to generate investment. This view is, from what I can see, indistinguishable from a vintage neo-liberal approach. It is unclear how it differs from the model proposed by conservative devotees of liberalized markets, low corporate taxation, and reduced business regulation. On this approach, a rise in living standards will invariably accompany the economic growth that is generated by reducing the burden of taxation and regulation on business activity. The problem with this theory is that it stands in marked contrast with the observed facts. The social gap between the richest and poorest segments of the population in Britain has grown considerably under recent Labour as well as the preceding Conservative governments. The wages of large sections of the labour force have grown very slowly or remained static in real terms. The quality of social services like the NHS and higher education, as well as the public transportation system are suffering from massive underinvestment. This pattern Is even more acute in the United States. In the Third World, rapid development through economic liberalization and investment has indeed led to the emergence of an expanding middle class and a reduction of poverty in countries like China and, to a lesser extent, India. However, large sections of the populations in these countries have been left out of the new economy and are sinking even deeper into poverty and dispossession. It should be clear that I am not calling for the destruction of the market, but for its deployment in a manner that maximizes social benefit across the population at large, as well as economic development.

4. Finally, Stubbs suggests my criticisms of Third Way politics and my proposals for a robust renewal of social democracy in internationalist terms will alienate people who might otherwise sign up to the Euston Manifesto’s project. This is, at best, a puzzling assertion. I am presenting a personal view in the context of an open discussion on how best to renew social democractic policies in a global economy. Other contributors to the forum have taken alternative positions, some of them closely aligned to New Labour. Stubbs’ comments here appear to exclude free discussion and to seek political orthodoxy in terms of Third Way policies. If this is the case, then these comments are entirely incompatible with the diversity of opinion and free debate that we wish to encourage on these issues. If such debate prevents some people from joining the Euston Manifesto Group, then one wonders in what sense they could possibly be democrats and political liberals.

Shalom Lappin is Professor of Computational Linguistics in the Department of Philosophy, King’s College, London

"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

1. David Grant suggests that I take free trade and the globalized markets that it is generating to be inevitable processes. This is not the case. They are the result of economic policy decisions and international agreements. Like him, I see free trade as an engine of development that has the potential to produce the wealth necessary to improve living standards and eradicate poverty in the third world. However, precisely because global markets, like all markets, are social artefacts rather than forces of nature, their design reflects the interests of the forces that control them. If they are shaped entirely by private capital and the political agencies which represent it, then the wealth that they produce will be concentrated in the hands of a small business elite. In order to achieve an equitable distribution of this wealth that serves the interests of labour and consumers, as well as producers and investors global markets must be constrained and socialized by political interests that also represent the former. Private business alone cannot promote social or environmental rationality. Moving from the robber baron capitalism of the nineteenth and early twentieth century to the welfare state of the post war years involved such a social rationalization of the market within western countries. This achievement is now seriously threatened by the emergence of global markets that bypass the constraints and redistributative mechanisms of the traditional welfare state. Refashioning them for the global market place is the primary challenge of a renewed social democracy.

2. Grant asks about how I envisage the role of the state in a globalized social democracy. On the model that I am sketching nation states do not disappear, but they enter into federative structures that define open, socialized markets. The EU provides a precedent for this approach. However, to work on a genuinely global scale such a federation will have to include underdeveloped countries and provide for significant investment in them. The emergence of an integrated socialized market of international dimensions will require an extended and complex historical process, as did the transformation of the European Common Market into the European Union.

3. Grant requests that I clarify the grounds and extent of my opposition to the obsessive campaign of privatization that is the focus of much neo-liberal economic policy. Clearly I am not proposing nationalization of industry and finance on the Soviet model. My concern is with the destruction of the robust public domain of services, infrastructure, and utilities that have formed the backbone of the modern welfare state. These have been steadily eroded by the juggernaut of neo-liberalism that has dominated many western economies for the past twenty-five years. These policies have produced disasters like the privatization of British rail and the water companies, the steady decline in British higher education through underfunding, the undermining of the NHS by internal markets and cuts in primary care staff, and the widespread dissipation of municipal services. Neo-liberalism has promoted a massive shift in public policy away from social investment in order to achieve low taxes on business and capital. This has generated a sharp rise in social inequality and a significant reduction in economic mobility for the poor and the middle classes. Wealth is increasingly monopolized by a shrinking economic elite that represents a diminishing proportion of the population. The emergence of global markets has greatly facilitated these patterns. Mobile investment capital and production can maximize profit by moving to low wage countries that impose minimal burdens of corporate taxation and regulation. Neo-liberal trade negotiators seek to use the World Trade Organization as an instrument for undermining public services and social investment in the markets that free trade agreements open up to external competition. They construe these services as a form of government protection that prejudices the interests of private companies looking to enter the fields of heath, education, transportation, and energy. A social democratic approach to free trade will formulate trade agreements and regulatory mechanisms to protect public services, equitable taxation, fair labour practises, and environmental concerns as part of a socialized open market.

4. Celso Rocha points out problems with global unions. In fact, I indicated that such unions would emerge only after vigorous local unions were first established in the low wage economies of the new emerging industries. These will engage in protracted industrial struggles which, if successful, will contribute to a rise in the standard of living in those countries that will contribute to the convergence of economic conditions in the developing countries and in western economies. This process will require a considerable amount of time. On the approach that I am proposing it will also be facilitated by the social investment and regulatory constraints of the international free trade agencies designed to promote a socialized global market.

It should be clear that I am sketching a general approach for redefining the social democratic project, rather than a set of detailed policies. This sketch is intended to provide the basis for ongoing discussion through which the viability of this approach can be tested and clarified. I am grateful to Grant and Rocha for raising important issues as part of this discussion.

Shalom Lappin is Professor of Computational Linguistics in the Department of Philosophy, King’s College, London

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.

Second, workers in different countries have different interests in many important regards. In poor countries, the main attraction for foreign companies is the large reserve of cheap labour. Workers in poor countries would lose not some, but all their jobs, if they were to receive wages that even resembled those of workers in countries that offer much better conditions for investment. Therefore, Global Trade Unions would only be possible if workers in rich countries had such a highly developed level of class solidarity that they accepted to have their wages cut, or lose a significant proportion of their jobs, to workers in poor countries. It is obvious that, for any leftist at this day and age, no claim by workers in rich countries could prevail over the need of Chinese, Indian or Ethiopian workers to earn their survival.

There could be some ways to overcome, or minimize, these problems. For instance, basic income schemes could be implemented in rich countries to compensate for the wage reduction implied by fair trade. Or similar schemes could be implemented in poor countries, partially or completely funded by rich countries, to increase the reservation wage there. We cannot be sure whether any of these schemes would be economically, or politically, feasible.

If GTUs are to become a reality, major steps will be necessary, radical reforms will be needed. It is questionable whether labour anywhere has the political capital to make such an investment.

[Celso F. Rocha de Barros, celso.barros, works at the Central Bank of Brazil and is studying for a DPhil in Sociology at Oxford University.]

In large parts of the developing world the failure of the secular nationalist groups that secured independence from colonial rule to deliver either prosperity or democracy has produced a deeply reactionary response in the form of revolutionary Islamist movements seeking to establish a universal caliphate. In the West a significant part of the radical left has embraced these movements as agents of anti-imperialism. They have substituted the advocates of jihad for the working class as the vanguard of the revolution. In so doing they have exchanged a programme of class struggle for the politics of cultural identity and created a new socialism of fools. Not a small part of the liberal-left has indulged in a more nuanced version of this bizarre alliance.

The deep sense of instability unleashed by threatening economic changes has been skilfully exploited by the right in the service of xenophobia and racism. Immigrants are presented as a threat to social cohesion and security. Both the radical left and the xenophobic right converge on a fear of globalizing economic patterns and a retreat into protectionist solutions. This is, in effect, a Luddite response that seeks to deal with change by suppressing it. Dalliance with the romance of jihadist fantasies on the left and the rise of racist tribalism on the right are threatening the foundations of liberal democracy in Europe.

In the context of integrated global markets and capital mobility the traditional instruments that social-democratic governments have employed in the past to constrain the power of capital within the welfare state are no longer effective. National labour unions, corporate regulation, a redistributive tax system and extensive universal public services are increasingly difficult to sustain in an environment in which advanced digital technologies and free trade agreements permit companies to move production and investment to low wage economies in order to maximize profit. Labour enjoys no such mobility. Social-democratic governments are discarding their traditional role as agents of progressive reform. Instead they make do with pale efforts at ameliorating the devastation caused by the onslaught of the neo-liberal juggernaut in the public domain and in the work place. Third Way politics is, in general, little more than an attempt to soft-pedal the resigned embrace of neo-liberal economic policies by defeated social democrats as the latest word in progressive thinking.

In order to renew the social-democratic project it is necessary to reformulate it in international terms. Rather than opposing globalizing patterns, social democrats should seek to harness them for social benefit. An internationalized social democracy will seek to prevent the concentration of the new wealth generated by expanded trade in the hands of a small corporate elite. It will formulate global mechanisms for redistributing this wealth to workers and consumers in a way that counterbalances the power of international corporations.

One way to achieve this objective is to promote the creation of strong unions in the new industries emerging in developing countries. Organizing labour for effective collective bargaining in these industries will raise the standard of living in the countries in which they are taking root. This process will lead to the gradual convergence in living standards in the developing world and the West. It will also contribute to the democratization of the former.

Properly negotiated free trade agreements can provide a second important instrument for advancing a new international social-democratic programme. Such agreements will not simply open up markets to international competition. They will require the companies that enter these markets to contribute to the public services and social infrastructure of the countries from which they profit. They will impose fair labour laws, equitable taxation on profits and stringent environmental constraints as conditions for participating in the international market place that they define. Free trade agreements can also be used to cultivate democratic institutions and respect for human rights, as we have seen in the case of EU expansion in Eastern Europe and the Balkans. In order for free trade agreements to be instruments of progressive social change and regulation they must be negotiated by governments committed to a new international social-democratic agenda rather than by the representatives of corporate and financial interests.

Shalom Lappin is Professor of Computational Linguistics in the Department of Philosophy, King’s College, London

Once again events in the Middle East present a test and a challenge to those involved in progressive politics. The predictable response from most of the Left in many ways replicates the motivation that lead to the publication of the Manifesto.

Here we are not attempting to promulgate, nor establish, a position, policy or “line”. Our two states stance on the Israel/Palestine conflict is outlined in the manifesto. Here we seek to explore, examine and develop the many shades of EMG opinion, surrounding this related crisis.

Below we present the views of two signatories who have prominently commented on recent events in the blogosphere:

• The Left should be supporting Israel in this war by Eric Lee
• Israel’s Strategic Quandaries in Lebanon by Shalom Lappin.

The Euston Manifesto Group will stage a one-day conference at SOAS (The School of Oriental and African Studies), University of London, on 30 May 2007. The event will be hosted with the help of the SOAS Centre for Jewish Studies and take place in the Khalili Lecture Theatre, Thornhaugh Street, Russell Square, London WC1H OXG.

If you would like a ticket, please send an email to: conference

Tickets are 5.50 GBP (plus donation at your discretion). You can pay by PayPal or by cheque made payable to ‘the Euston Manifesto Group’.

The meeting starts at 2.00 pm and continues into the evening (till 9.30 pm). The final speaker will be Michael Walzer. Each session will begin with the presentation of a short paper, which will be followed by open (chaired) discussion. Here is the full programme:

14.00 - 15.00: Norman Geras, University of Manchester, ‘Deficits of International Law’

15.00 - 15.30: Break

15.30 - 16.30: Shalom Lappin, King’s College London, ‘Multiculturalism and Democracy’

16.30 - 17.00: Break

17.00 - 18.00: Fred Halliday, London School of Economics, ‘Solidarities Simple and Complex’

18.00 - 19.00: Break for dinner

19.00 - 20.00: Eve Garrard, Keele University, ‘The Academic Boycott: Justifications, Objections, Explanations’

20.00 - 20.15: Break

20.15 - 21.30: Michael Walzer, Institute for Advanced Study, Princeton, ‘Terrorism and Just War’