It is the tragedy of the conservative tradition since Edmund Burke that it has been unable to comprehend that the market centralises and concentrates power every bit as much as the state.
Capital, through its pursuit of maximum return on investment, exerts tremendous pressure to turn human beings and their natural environment into commodities that are available at a price in fluctuating markets. Unless there are countervailing institutions with genuine power that can resist this, there will be the kind of systematic demoralisation and deceit that led to the financial crash of 2008 and the consequent debt and deficit.
Germany went a different way after the war, building its approach around Catholic social thought and a form of social democracy. It embraced subsidiarity and federalism in its politics, a radical form of decentralisation that enabled responsibility and power to be exerted at a local level. It endowed and established regional and sectoral banks that were constrained not to lend outside their region. Equally importantly, there was a balance of interests in corporate governance between workers and owners so that there could be genuine accountability and a common good within the firm. Most important of all, there was a vocational economy where an apprenticeship was required to enter the labour market. The emphasis was on labour value and good work.
In 1945, the tragedy for socialism was that Britain didn’t go that way, but became statist, administrative and managerial. We adopted nationalisation and not co-determination, centralisation and not federalism, collectivism not solidarity. It did not end well.
Labour needs to repent of its exclusive reliance on an administrative state and the redistribution of money, often through back-end transfers to the private sector. Relationships, responsibility and reciprocity should be the guiding principles of welfare reform, where contribution plays a central role in the renewal of solidarity. Vocation, virtue and value should underpin the remoralisation of the economy.
There is no more reasonable tradition from which to begin to fashion a politics of the common good than Catholic social thought. It is more rational and provides a firm secular footing for thinking about how to strengthen the institutions of society, of constraining the destructive power of states and markets while harnessing their necessity. Status, subsidiarity and solidarity are the organising themes here.
The change our country needs is that which has been nurtured and developed by the Catholic Church since the publication of Rerum Novarum by Pope Leo XIII in 1891. For the first time since Thomas Cromwell was chancellor, Catholic social, economic and political thought is entering the mainstream of British politics, subverting the orthodoxies of Left and Right as it moves.
Blue Labour is the force within Labour that is championing it, but it is not an isolated movement. The bishops of the Church of England, with an unremarked ecumenism, adopted the framework of Catholic political economy in their pastoral letter on the elections. Tim Montgomerie, founder of the Conservative Home website, and the “Good Right” are moving into a mutual space, and the shape of a political consensus is becoming visible between previously estranged traditions. Religious and secular, Left and Right, Labour and Conservative, Catholic and Reformed. That is the politics of the common good in action.
But why is it happening? The answer lies in the reality that neither state socialism nor free market capitalism can explain why they have led to a lack of value in the economy, a lack of participation in politics and the relentless weakening of society. Neither liberal nor Keynesian economics has a conception of labour value, of institutions, of traditions, of the balance of power within firms, of beneficial constraints.
The analytical tools of Catholic social thought can address the present malaise practically. The first of these is subsidiarity, the idea that power should be exercised at the most local level possible. This addresses the problem of the centralisation of capital in the City of London, which got lost in a frenzy of false accounting and state domination. The new politics of the common good need to look soberly at vice and virtue, and how to give incentives to the latter. That is why it is necessary to establish local and regional banks, the “Banks of England”, that could make capital available again to local businesses and families. And that is why Blue Labour supports credit unions as a form of self-help and insists that usury is wicked. Wonga and The Money Shop are realities in the lives of the poor.
When economists talk of a productivity gap they mean there is a lack of skilled work, and that not enough attention has been paid to reproducing it. The vocational system and apprenticeships become a necessity. And with widespread disquiet about managers granting themselves unwarranted bonuses and strategies of cashing in rather than nurturing genuine growth, having workers on boards as a form of accountability becomes common sense.
These are strange times. On the surface it’s more of the same: this election will be characterised by a lack of a common good on all sides amid demonisation, recrimination and blame. But there is also movement, a sense in which exiled traditions are returning, and not the least of these is Catholic social thought.
Maurice Glasman is a Labour peer. He is a contributor to Blue Labour: Forging a New Politics (I B Tauris, £14.99)
This article first appeared in the latest edition of the Catholic Herald magazine (20/3/15).
Take up our special subscription offer – 12 issues currently available for just £12!