The Left & the state

If you ignore the mindless tittle-tattle, David Miliband’s New Statesman article raises a genuine issue: what should be the left’s attitude to the state? He writes:

The weaknesses of the "big society" should not blind us to the policy and political dead end of the "Big State". The public won't vote for the prescription that central government is the cure for all ills for the good reason that it isn't.

Although this is seen as “Blairite” it is also consistent with a more radical leftist tradition of scepticism about big government is a longstanding tradition on the left such as guild socialism, anarchism, market socialism or Marxism; the SWPer who asked his public choice lecturer “when did you become a Marxist?” was making a serious point.

And such scepticism is valid. In some respects (not all - I just highlight the flaws), the state does not promote leftist ideals:

- It is not very redistributive. The difference between the Gini coefficient for post-tax income (that is, income including benefits after direct and indirect tax) and original income is only seven percentage points: 38% vs. 45%. The tax rate for the middle quintile, at 27%, is not far short of the 32.6% on the top quintile. To a large extent, therefore, the state redistributes income within the working class. And this has an unpleasant effect. It leads to a “divide and rule” the working class, with some public workers and benefit “scroungers“ being stigmatized. 

- It is insufficient to protect the interests of the vulnerable. The state can be - and often is - captured by people hostile to the worst-off with the result that benefits are cut.

- The state serves the interests of the rich whilst attacking the poor.  A man who, in his mental distress, tries to kill himself is imprisoned for damaging property. A man who, with a more respectable mental disorder, wrecks the economy merely loses a knighthood; those who say Fred Goodwin broke no law miss the point - that there are no laws against capitalist vandalism.

- The state serves as a lightning conductor, which deflects criticism away from capitalism - for example, when the crisis is blamed upon Labour’s deficit or weak banking regulation rather than the flaws of capitalism itself. 

- The state is run according to the same dysfunctional ideology than runs business - hierarchical managerialism. However, in the private sector its flaws are mitigated by the forces of competition whereas they are much less so in government. The upshot is that the state offers indifferent value for money.

It is in light of these flaws that we should read Sunny’s claim that spending cuts won’t make the government unpopular. Very many working people are not opposed to cuts because they do not regard the big state as their friend. And this is for a good reason.

Granted, David’s analysis and solutions here would be rather different from mine. But he is posing a good question. The tragedy is that, in our anti-political political culture, this question will be ignored.

Comments

[BT]

Real decisions in government are made one at a time. Should we have High Speed Rail 2 - yes or no? Should we reform the NHS? Should we create more Academy schools?

Ideological debates about big versus small government just confuse the issues. The argument for smaller government is always pulled out when it suits the powerful, like when taxes on the rich are being discussed, but not when the military budget or anti-terror laws are being discussed.

Big versus small is a distraction. Individual issues are what really matters.

[BT]

The current austerity measures result not just from bad economic thinking (fear of the invisible bond vigilantes), but also from the conservative party small-government ideology (which seeks to implement austerity by cutting spending on services and welfare, not by raising taxes).

Deficits should be determined by better macroeconomic analysis (like the TC rule:
http://monetaryrealism.com/?p=51). Spending should be determined by what the parliament is willing to vote for. Taxes just make up the difference, and should be levied in a fair and progressive manner.

[aragon]

A corporatist state, run by a self selecting elite, promoting a neoliberal, liassez faire agenda, whom David Miliband is part.

When the price of entry is free, everyone has the price of entry, with the state funding through progressive taxation. When the price of entry is high only the rich get their needs met.

There is often a limit to what the state will pay but profits are unlimited, so the state can be more efficient, as it does not have the unlimited dead weight private profits.

The purpose of attacking excess banking profits and salaries, is to change the behavior of the banks, not to demonize individuals.

To borrow part of a phrase: The banks are creating credit without limit on quantity or quality, and they are doing so for personal, private profit.

Vickers is part but not sufficient reform of the banking industry, personal rewards and financial engineering also need to be curbed, and limited.

Or just take the money creation away from the private sector, to the public sector, when any abuse would be in the public interest, rather than private personal profit.

[aragon]

To address some of Sunny's points:

1. Labour spent to much money: Throw Gordon Brown overboard.

2. Gov't narrative is clear.
Labour's narrative should be clear: Job's and Growth.

3. The left is mainly talking to itself.
So change the agenda: see 2.

4. There is a big partisan split.
Not if you change the agenda.

5. Most people affected are Labour voters.
The riots, media, no group is a island.

6. We haven't pushed the right message
See 2. So no to suggestions.

7. We don't have the mass media on our side.
See 2.

I think this is called framing the argument :)

Simples!

[aragon]

Throw Gordon Brown Overboard ?

Gordon Brown did spend too much money ...

£1.2 Trillion saving the banks.

They should have been bankrupted and then nationalised.

Bank as in Bankrupt !

[Luis Enrique]

" the point - that there are no laws against capitalist vandalism."

I think somebody as suspicious of the state as you are ought to be rather relieved it hasn't tried to legislate against stupidity (or bad business decisions)

[Keith]

I think this argument is confused as it does not address the question of ends. We do not live in a socialist society with a uniform set of moral goals with universal acceptance. In a Liberal democracy the ends that the state pursues are not uniform but depend on competition between ideas and belief systems. The state always fails by some set of criteria as policy is a compromise between different goals. Reducing inequality between people or families is only one of many reasons for public spending and taxation. If you accept a utilitarian theory of the goals of the state then that might lead to a state that is both large and very powerful and authoritarian. For Adolf Hitler a good state is one strong enough to allow the military subjugation of Poland. The left like the right is actually conflicted about the state as you and Milliband point out there is a libertarian side to Democratic socialism that has aimed to reduce state power, such as censorship of books or the criminalistion of Homosexuality. This however is an observation that applies to the right as there is also a liberal or libertarian element in a lot of conservatives thinking. Being conflicted about the role and power of the state is characteristic of all political traditions. It is not really a problem for one political tradition or political party. And it probably has no simple solution.

[Dipper]

I'm surprised at the lack of analysis of many policies in general "leftish" circles. As a start, surely any policy proposal should be analysed in terms of two issues: what priorities are expressed? And how does it change the distribution of power?

The push to borrow more money and spend it on welfare prioritises welfare claimants over workers. Also, by seeing money as something the state can and should invent to fulfil its priorities rather than something it takes from workers, it takes power away from workers.

It is not clear why using the state to these ends is in any way left wing.

[Chris Purnell]

I entirely agree with 'aragon'. If the bankrupt banks had been formally bankrupted then Goodwin et al would have collected the State guaranteed redundancy pay-off. The concept of a fiscal 'haircut' could have ebeen applied to the new organisations.

[guthrie]

Who says the state offers indifferent value for money? Is that before or after managerialism became the norm? I ask because I was under the impression that the NHS offered very good value for money in the time before newl abour opened the money teap (which was necesary) and increased marketisation and managerialisation (Which was not necessary).

There is also the point that big state action is necessary at times in order to oppose big corporation action, e.g. in keeping drug prices down for the NHS, and filling in for market failure e.g. lack of research into new antibiotics.

I seem to recall as well that the Tories have been centralising things into big government for longer than labour have, so people distrust big government because they've seen the politicians promise so much and fail to deliver it.

Basically, the only people who see the big state as the solution for everything are the politicians themselves, centre left and far right. Schools not privatised yet? Centralist control of farmed out schooling in government hands. I'm sure there are many examples from new labours time, such as targets and so on.

[Account Deleted]

The Left's attitude to the state should be instrumental, unless one wants to take a position that demands the abolition of the state altogether.

So the question for the Left should be: what do we want the state to do, rather than what do we want it to be?

The tendency to discuss the state in ideological terms, as if it were a autonomous entity rather than a manifestation of power, is part and parcel of the Right's defence, since Hayek, of private property. In this they stole much of anarchism's clothes for an ironic purpose.

This gives rise to apparent contradictions, such as increased centralisation under conservative governments, but the reality is clear enough: capitalism privatises wealth, but is happy to exploit state monopolies to do this.

[Bruce majors]

I find almost all political commentary now amusingly twittish, or infuriatingly mendacious when it comes from presidents and prime ministers. None of the current wrangling over the size of the state and the bailing out of banks and corporations ever takes into account the fact that we have a state monopoly monetary system that enables buying and selling of government debt, and hence the whole system of government expansion, debt slavery for future generations, the use of tax serfs and their future income streams as collateral, and the redistribution of wealth from tax serfs to crony corporatists that support the reelection of politicians. I also see no incorporation of the insights of public choice theory and its analysis of how states have their own profit motives.