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William Davies
© William Davies 2007
The Left often takes comfort in defining its values in contrast to the atomised individualism promoted by free market liberals. Where the market requires us to behave as isolated financial calculators, the Left invites us to work in concert with one another, using democratic mechanisms to identify and achieve our shared goals. Marx recognised that for capitalism to exist there must be labour markets, and for labour markets to exist we must be sufficiently individualised to sell our labour in one-off transactions. Consumerism complements this drift to atomism further. In the late 20th century this bundle of free market economics and individualist ideology was all thrown under the umbrella term 'neo-liberalism'.
This portrayal may be useful in mobilising people, but it hides as much as it reveals. After all, have neo-liberal governments not spent much of the post-Keynesian era - and especially the post-911 era - gradually eroding individual rights? Were the progressive movements and victories of the 1960s and 70s not partly an individualist attack on the community and family values of the right? And how much sense does it make to simply favour 'collectivism' over 'individualism' anyway, without then going on to stipulate where such a collectivism should point?
I want to explore one specific area in which this Manichean vision of Left-Right politics can no longer serve us, namely 'market collectivism', that is, the areas in which the dominant market logic does not lead automatically to greater and greater atomism. It is important for the Left to understand both how this overlaps and differs from their core ambitions.
The regulation school of economics, that emerged in France during the 1970s around figures such as Robert Boyer and Michel Aglietta, spent much of its first two decades focusing on the question of what model of capitalism was going to replace the one that had collapsed under the crisis of the early 70s. That previous one was built on a Fordist mode of production, in which firms were organised hierarchically with routinised work and high job security, and a Keynesian mode of regulation, in which growth was fuelled heavily by government borrowing and spending. But what was emerging out of the ashes of this paradigm?
While 'neo-liberalism' is the rhetorical answer, it is clear that something more subtle took hold over the 1990s, especially inside the policy apparatuses of the Clinton and Blair governments. New types of collectivities were being pursued, resting on new types of market logic. Two in particular are worth thinking about.
Firstly, there is the neo-classical paradigm of 'market failure' that now permeates nearly every corner of Britain's policy-making machine. A market failure is a technical economic term to describe specific circumstances in which markets don't function as the neo-classical economist imagines they do (or perhaps should). These circumstances provide the rationale for state intervention, everywhere from public health care provision through to environmental protection. A national rail system is a good example of where the market manifestly cannot deliver an optimal service, and the state must retain a role; it was a neo-classical logic that led New Labour to take Railtrack out of the private sector, and not a social democratic one.
Secondly, there is the Schumpeterian emphasis on innovation and 'competitiveness', as the bases for future economic growth. Schumpeter himself believed that innovation and entrepreneurship were at the heart of successful capitalism, and not markets as such. In an effort to avoid competing on cost with emerging economies, developed economies have increasingly emphasised the various non-market factors that might provide them with competitive advantage - human capital, social capital, creativity and so on. The economic sociologist Bob Jessop argues that the Keynesian-Fordist mode of regulation has been replaced by a 'Schumpeterian-Workfare' mode, in which a nation's human and social resources are organised to make them as innovative and flexible as possible.
Yet this does not equate to making them as individualised as possible. Strong universities, wide-ranging social networks, cultural diversity and social cohesion can all become viewed as assets which enable nations, regions, cities and even neighbourhoods to compete. New Labour policy-makers have long marvelled at how Nordic economies have used high levels of social cohesion and public spending as a basis for economic success; what they often misunderstand is that these societies have succeeded by pursuing social goods for their own sake, and not for their economic consequences.
How should the Left respond to these new forms of collectivism? Perhaps it should simply celebrate this over-coming of Left-Right divisions, as New Labour has done. But I would argue that these new political and economic configurations require a shifting of critical perspective.
With regard to market failure, we need to identify the ways in which this concept falls short of satisfying public goals and needs. A neo-classical view of the world only permits collective or governmental action when there are technical reasons for believing that the market won't do it. The truth, as any smart policy-maker will tell you, is that these technical reasons are never quite as scientific as the text books will have you believe, and the term is often used pragmatically. But the fact remains that there are circumstances in which highly desirable public goods can be neglected on the basis that a market failure cannot be identified by Whitehall experts. The BBC has been faced with exactly this threat, and responded through producing a new metric of 'public value', a methodologically suspicious attempt to merge economic with social democratic means of valuation. But in a thriving and truly representative democracy, we would not have to rely on social scientific tools for divining the public interest at all.
The Schumpeterian worldview presents a different set of challenges for the Left. This celebration of entrepreneurial and productive potency may be more palatable than the Conservative Party's championing of the financial sector in the 1980s. But it remains in one form or other a force for increasing inequality. The forms of inequality are often hidden from the eyes of progressive policy-makers by the fact that they are accompanied by new types of community. For instance, the 'Cambridge cluster' of entrepreneurs, scientists and venture capitalists is a thriving and cohesive community; which is precisely why it out-performs its rivals. Equally, individual entrepreneurs are often egalitarian, open-neck-shirted networkers… such as Bill Gates. A society which valorises innovation in this way will constantly be separating winners from losers, with an ever increasing share of the spoils going to the former.
The Schumpeterian paradigm overlaps with the market failure one in important respects. Many of the most significant market failures that the Blair/Brown government has focused on have been related to the UK's innovative potential, in areas such as research & development, higher education and so on. But we have to recognise what this has meant in terms of the collectivism that we are left with. Firstly it remains a utilitarian one: social and intellectual resources that do not add to our 'competitiveness' have been neglected in favour of investing in technical and scientific capacities. And secondly it is, at root, a xenophobic and not an internationalist one: it works to offset the 'threat' of Asian economies and seeks to push the UK - and London in particular - further up the international rankings of economic power.
It may be easier for the Left to continue pitting itself against the Gordon Gecko ideology of individual greed, which is admittedly endemic in the worlds of high finance and consumerism. But responding to the market's own preferred collectivisms is the more complicated challenge.
William Davies is a sociologist and policy analyst. His weblog is at www.potlatch.org.uk
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