One of the oldest rhetorical tricks of free-marketeers has been the appeal to unintended consequences; state interventions, they claim - often reasonably - don't work out as intended. But it's not just statist policies that are vulnerable to unintended consequences. So too is neoliberalism, as Ed Miliband's speech yesterday made clear.
That speech was an echo of Karl Polanyi. Back in 1944 he pointed out that pretty much all industrial societies had seen a retreat from laisser-faire and rise of statism since the late 19th century:
If [the] market economy was a threat to the human and natural components of the social fabric...what else would one expect than an urge on the part of a great variety of people to press for some sort of protection? (The Great Transformation, p150)
Miliband is betting on a repeat of this process. His talk of "one nation Labour" and his claim that the rising tide of economic recovery "just seems to lift the yachts" echo Polanyi's claim that market economies undermine the "social fabric". And his promises to freeze energy prices and strengthen the minimum wage are (mild) statist challenges to a private enterprise economy.
In this sense, we're seeing two unintended consequences of neoliberalism.
One, as Polanyi described, is that when market economies undermine human concepts of reciprocity - when the rich seem to get richer at the expense of the poor - they generate a backlash; Miliband's promise to freeze energy prices is hugely popular with focus groups.
The other is that this backlash is taking the form of statist policies. But this need not, in theory, be so. Historically, one alternative to statism has been the use of trades unions to protect workers; and yes, these are alternatives because as Philippe Aghion and colleagues have shown, stronger unions are associated with weaker minimum wage legislation. Sadly, the combination of weaker trades unions and the global excess supply (pdf) of labour rule out this alternative. Workers have lost power at the point of production, but they still have it in the ballot box, and Miliband hopes they'll use it.
Herein, though, lies a tragedy. In principle, unions are a better way of protecting workers than the state, partly because they represent "big society" virtues of self-help and community, and partly because collective bargaining can be sensitive to local idiosyncratic market forces in a way that legislation is not. But this healthy alternative is not available now.
In this sense, Miliband's rightist critics are missing a point - that his statism is an unintended consequence of the neoliberal policies they've supported.