This article can be found on The Liberal website at https://theliberal.co.uk/issue_9/columns/kaletsky_9.html
IS Gordon Brown far to the left of Tony Blair? Will Brown, an unrepentant socialist, abandon the ‘New Labour’ project? Will the Blair-Brown transfer of power signify a return to the miserable days of Old Labour? With the Blair government in its death-throes, these are the questions that will dominate British politics in the year ahead.
It is a platitude that modern politicians can no longer be positioned on a simple Left-Right axis, but this does not mean that Left-Right concepts are irrelevant in trying to understand the Blair-Brown transition. To do so, however, we have to replace old Left-Right axis with a three-dimensional grid. This corresponds to three strands of progressive politics which are in principle quite separate, but which have been confounded, until recently, because of the dominance of Marxists in socialist thought. For the original Marxists, socialism came down to one question: who controlled the economy and owned the means of production? True Marxists openly scorned a second socialist goal quite distinct from economic control: income redistribution and poverty alleviation. Fabians socialists, who focused on poverty, did not so much want to destroy capitalism as to civilise it, to ‘give capitalism a human face’. Fabian socialism evolved, in turn, into a third school of ‘welfare socialism’ in the 1940s, with the key issue shifting from income distribution to state provision of public services – especially health, education, pensions and housing. These three separate strands of socialism have become completely tangled, mainly because the Marxists who dominated progressive thinking always saw the end of capitalism as the ultimate goal. If capitalism was to be destroyed, arguing over income distribution or public services was a revisionist diversion.
With the collapse of Marxism, however, the three axes of socialism have clearly diverged. Denmark has a very redistributive tax system, but a wholly capitalist economy and largely non-state provision of social services. Britain, by contrast, has a very unequal distribution of income but fully nationalised health and education. Meanwhile, in North Korea, and even China, we see a totally state-controlled economy with huge income inequalities and essentially no social welfare safety net.
This three-axis framework helps to position Brown and Blair. On the first axis, Brown – far from being an unrepentant socialist – is, if anything, to the right of Blair. Not only has Brown proved a competent steward of the capitalist economy, but his attitudes to regulation, taxes, employment legislation and European social initiatives have been generally pro-business. As Chancellor, he has been the main cabinet opponent of most business regulations, especially those emanating from Brussels. By contrast, the Blairites appointed to run the departments directly responsible for most regulations – employment, trade and environment – have generally been much more willing to intensify regulations, whether at the behest of European lobbies or in response to short-term political pressures, media scares or special interest groups. Thus, on the most fundamental question of socialism – whether the economy should be dominated by the state or the market – Brown is even less of a socialist than Blair.
Now consider the second axis: income distribution. Brown has done more than most Chancellors for Britain’s poorest citizens, but his redistribution has not been of the traditional socialist kind. Instead of ‘squeezing the rich until the pips squeak’ with high income taxes, he has imposed less punitive ‘stealth taxes’ on the middle class. Meanwhile, for the rich, Brown’s cuts in capital gains and corporation taxes and his treatment of foreigners living in Britain have arguably been more generous than Margaret Thatcher’s reforms. In terms of income redistribution, therefore, it is difficult to see why Brown is to the left of Thatcher, never mind Blair.
Thirdly, what about public services? This is supposed to be the real divide between Blair and Brown, but their relative positions are less clear than often supposed. While Brown has opposed Blairite policies on school and hospital autonomy, he has championed private financing for public transport and hospital construction. He was furious about Blair’s decision to increase NHS funding to EU levels and fought doggedly against the Prime Minister’s expensive plan to upgrade state pensions in line with average earnings, and seems genuinely determined to halve the growth of spending on the NHS.
Brown may be more sympathetic than Blair to state monopolies in health and education, but he is also more worried about the economic implications of growing public spending, and more aware of the inevitable tensions between a capitalist economy and a welfare state. In this respect, then, as in many others, Brown is probably more ‘New Labour’ than Blair.