Post-socialist politics
Dear David Willetts,
It seems churlish of me to take issue with your comments in Blair's Gurus [Willetts's critique of Blairism] because your comments on my own work are all favourable and, I am therefore disposed to think, fair and accurate. My only deficiency, in your eyes, is to have been misunderstood by Tony Blair.
Yet the issue involved is important enough to deserve further debate. You emphasise my own conviction that the origins of economic success, for countries as for firms, are founded in the unique historical experiences of these countries and firms; and that while we can and must learn from others, imitation of what we suppose to be a superior model is bound to fail. You describe this as "English exceptionalism." As a Scot who feels that the contribution of his compatriots to British economic development was critical, I demur slightly; but I am sure that you will accommodate me and that you recognise that there is, similarly, an American exceptionalism, a German exceptionalism and a Japanese exceptionalism.
Actually, I doubt if Tony Blair would have any difficulty in agreeing with us on this. There is in fact a paradox here: what we are all agreeing on is a deeply conservative doctrine. Indeed for modern conservative philosophers such as Michael Oakeshott or Tony Quinton, the notion that what is valuable in social or economic institutions is the product of their unique historical evolution, is central to their argument.
Much of what the public finds attractive in New Labour is that it is, in this sense, conservative. The public believes that New Labour will cherish the National Health Service, maintain the values of the welfare state, and be hesitant to change the structure of British Rail or the Post Office-despite the widely recognised deficiencies of all these institutions.
The point is that the collapse of socialism has left our political bearings confused; it has removed the pole around which all political economy has been organised until now, influencing the discourse of its opponents as much as its supporters. Today's proponents of Oakeshott's rationalist fallacy-the notion that an ideal model of social and economic organisation can be developed independently of a particular culture, society and history-are not on the left, but on the right. They are emissaries of the Adam Smith Institute, who know what is right for Azerbaijan even before they step off the plane. You, and I, and Tony, know that this is ludicrous, and that markets can only operate within a social context. But I am not sure that everyone in your party recognises that.
This is a problem which you will have to confront. The Conservative party in the 20th century has been a coalition of economic liberals, conservatives in the Oakeshottian sense and people who had done rather well out of trade, the war, or the City; they were united, not by any intellectual thesis, but by the know-ledge that all were threatened by the socialist state. With that threat removed, nothing remains to keep them together.
I suspect that it is this, rather than different interpretations of the Single European Act or the Maastricht treaty, which underlies the increasing division in the Conservative ranks. When you lose the next election-and that must be the reasonable man's planning assumption-the real intellectual debate in the party will begin.
There is the New Right-which believes that market outcomes are not only efficient but, necessarily, fair, and that state action is not only inefficient but inherently coercive and unjust. This rationalist ideology is at odds with pragmatic modern conservatives, whose support for markets is based on the recognition that pluralism and rivalry, decentralisation and openness, are both good in themselves and necessary to economic progress. These conservatives believe that government does well when it promotes these things, and badly when it restricts them. Your own work qualifies you for the intellectual leadership of that modern conservative tradition-and I would be flattered if, when you take on the mantle, I could be one of Willetts's gurus.
Yours sincerely,
John Kay
29th September 1996
Yours sincerely,
Dear John Kay,
I also very much agree with the argument in your book on business strategy that business success cannot be copied as easily as some management theorists would have us believe. What is true of a business is even more true of a country. We must play to our strengths, and those are shaped, although not determined, by our history. That is why there is, as you say, a valid British exceptionalism just as much as an American or a German exceptionalism.
It is when you talk about the Labour party that our disagreements become stark. I disagree with your account of what Tony Blair is trying to do. Your version of New Labour comes straight out of Michael Oakeshott, who famously asked us to look at "intimations" from our history as guides into the future. I simply cannot recognise your picture of Tony Blair as a Labour Oakeshottian guided by his intimations from our country's history. All his rhetoric is about New Labour, a young country, a fresh start. He seems much more interested in trying to copy foreign models-Australian welfare or German social democracy. It is more a matter of imitation than intimation.
It is the continental social democratic model which informs Labour policy. It began as their model of how to modernise their own party. It now influences their rhetoric of stakeholding and social partners, and their hard policy commitments on, for example, the minimum wage and the European social chapter. I am willing to concede that such a model once worked on the continent. But it could never work properly here because of our different traditions-and it does not even work on the continent now. To try to implement such an agenda here cuts across our own history and the latest evidence.
You end by claiming that we Conservatives are only held together by our shared hostility to socialism and that with the collapse of our enemy we ourselves can no longer unite as an effective political force. But the battle against command economy socialism has only occupied a part of our party's history.
Our origins lie in Edmund Burke's response to the French revolution, and the birth of the modern radical belief in achieving a fundamental transformation in human affairs. That is, and remains, the left wing instinct. It sometimes takes an economic form, but not always, and never exclusively. The role of left wing progressives in the destruction of British cities after the war in pursuit of modernisation through total reconstruction has still not been properly exposed. Now Labour's itch to "transform" us is displayed as much in their constitutional agenda as their economic one.
Tony Blair has rightly described Labour's constitutional agenda as the most ambitious programme ever put forward by a British political party this century. We Conservatives regard it as a crucial electoral and intellectual battleground. It is one of the touchstones which reveals a fundamental divide in British politics between us and them. Their constitutional agenda simply will not bear the interpretation which you fondly give to Tony Blair's Labour party.
Perhaps I can begin with the common ground. I recognise that one of the effects of the collapse of the Soviet bloc and the attempts by western reformers to introduce free markets there has been to remind us of the cultural and institutional underpinnings of capitalist society. We are so used to a currency we can trust, and the existence of an independent judiciary to enforce contracts, that we sometimes forget that without them the free market is impossible.
David Willetts
3rd October 1996
PS If you have not already read Alan Macfarlane's Origins of English Individualism, I do recommend it. It is the best single account of how, even in medieval times, we were an individualistic, mobile market society and never experienced the classic peasant social order. When Margaret Thatcher said that socialism did not fit in with our national character, she was right.
Dear David,
You touch upon quite a few of the areas of agreement between us. We both agree that markets necessarily operate within a social context. I think you would also agree that this social context extends far beyond the existence of an independent judiciary to enforce contracts. When we buy goods from Sainsbury, trust our doctors, or work with our colleagues to achieve common objectives, we do not do so because a judge looks over our shoulders. We do so because reputations, confidence and teams are fundamental to the functioning of modern economies; and they do not function well when contracts and courts are the primary mechanism of enforcement.
We both agree that economic success is based on exceptionalism, an exceptionalism derived from our historical experience, and that we need to understand and cherish that exceptionalism. Our exceptionalism is, indeed, exceptional; I enjoyed Alan Macfarlane's account of the long tradition of individualism in English life, yet it is clear that concerns of social solidarity are important too. Note the extraordinary sense of common purpose which gave us an empire and served well in wartime; which led the British electorate to respond to recession by supporting moderation and unity while others raced to extremes; or which today generates such affection for our tattered National Health Service. It is not surprising that Francis Fukuyama, distinguishing high and low trust societies, could not decide where Britain should be placed.
But I have an unfair advantage over you. With no particular partisan allegiance, I am not constrained by the increasingly artificial categories of party politics. You have to pretend that a chasm divides you from Tony Blair, when in reality the difference between you is small relative to that which divides him from traditional socialists, or you from the free market ideologues.
The strain is obvious when you equate Blair's call for a fresh start with the excesses of the French revolution. Your own thinking is indeed in the best traditions of Burke. But you must surely acknowledge that the Conservative party of the 1980s had moved some way from these traditions-one might even see in it elements of "the modern radical belief in achieving some fundamental transformation in human affairs." Burke said "All government, indeed every human benefit and enjoyment, every virtue, and every prudent act, is formed on compromise and barter." I fear that Margaret Thatcher might have found that Burke was not one of us.
Yours sincerely,
John
5th October 1996
Dear John,
As you say, we do agree on the importance of the cultural and institutional underpinnings of capitalism. We must not push that argument too far, however. There surely is something to the old Max Weber/RH Tawney argument that a sturdy Protestant individualism was crucial to the early flowering of capitalism in northern Europe. We are not Confucians.
I stand by my belief that it is the French revolution which drove politics here into the conservative versus radical form which it has taken ever since. You then challenge me with two very pertinent questions: Is Tony Blair a radical? Was Margaret Thatcher a radical?
I judge Tony Blair partly by his rhetoric, which is full of grandiose moral denunciations of everything that we have done in the past 17 years. Sometimes his particular policy proposals do indeed seem rather small beer compared with the rhetoric. (Is it not one definition of the absurd to use a great force to lift a tiny object?) But Blair certainly wishes to create an expectation of radical change. And as I have said there is at least one area where Blair's agenda is undoubtedly very radical indeed-the constitution.
Was Margaret Thatcher a radical? She certainly left Britain very different-and very much better-than she found it in 1979. After decades when British governments failed to deliver much, a prime minister who delivers so much inevitably stands out. Because she always thought of herself as an outsider, she certainly was temperamentally different from many of her Conservative predecessors. But she was not the caricature neo-liberal from the Adam Smith Institute who appeared in your first letter. I remember one conversation with her when I casually referred to the virtues of laissez-faire: she immediately turned on me and said that was not right. She tried to express her understanding of the moral and legal constraints on the market through her religion-notably in her address to the Assembly of the Church of Scotland. That was not easily understood in an increasingly secular age.
Margaret Thatcher is also authentically conservative in that what drove her was a picture of our past. She wanted to privatise because she thought nationalisation was a mistake and an aberration. She wanted to improve the legal framework for our industrial relations because the massive immunities enjoyed by British trade unions simply did not look compatible with the way British law treats all other individuals and groups. She wanted to cut spending and taxes because she remembered the days when people with low incomes did not pay tax at all. The paradox is that such a Conservative vision is the best possible way of preparing us for the economic challenges of the next century.
Yours sincerely,
David
8th October 1996
Dear David,
Your last letter reinforces my belief that the old categories of British politics no longer apply. Margaret Thatcher's criticism of laissez-faire can hardly be taken as evidence of her adherence to the traditions of Burkean conservatism.
Nor do I find your further attempts to portray Tony Blair as a dangerous radical more persuasive. You emphasise his constitutional proposals rather than his economic policies. But his proposals to curb the voting rights of hereditary peers in the House of Lords can hardly be compared with the treatment of aristocrats during the French revolution. You criticise New Labour for its radical impulse to transform our affairs: the more common, and I think the more justified, criticism is that it has no trace of any such impulse.
But Blair's real achievement is in helping to develop the agenda of post-socialist politics. The key issue on that is how to combine the benefits of market forces with the values of community. It is not an issue which the old left, or the rationalist free market ideologies, can understand. But it is your agenda too.
Yours sincerely,
John
10th October 1996
Dear John,
Your concluding remark that Tony Blair is "helping to develop the agenda of post-socialist politics" neatly brings our correspondence full circle. I have no desire to be one of the last people in the country maintaining that the party of Tony Blair is the party of Michael Foot. The Labour party has changed. The question is what has it changed into.
The purpose of my original pamphlet Blair's Gurus-in which you made a distinguished appearance-was to identify what Labour was changing into by looking at the thinkers who create the intellectual environment on which they depend. As I studied these writers a common theme emerged-a belief that by and large they ordered things better on the continent. This seems to be the source of the belief that modernising the British Labour party means making it more like a continental social democratic party.
This agenda is most stark in the constitutional arena, and oddly enough it ties in with a previous generation of left wing writers who saw Britain as "pre-modern." The economic agenda is expressed in the language of stakeholding and the social chapter. I do not believe such ideas are authentic "intimations" from our traditions nor are they as successful on the continent as they once were.
Perhaps the biggest issue in political thought is how to reconcile community and market. I recognise that it is an interest which we share. I believe the best answer for us in this country is to be found in the British Conservative tradition, not in models of continental social democracy.
Yours sincerely,
David
