Why Ed Miliband should own the big society

Ed Miliband’s first speech as leader of the Labour party reverberated with one ill-defined phrase: the “new generation.” But what does he mean by this? “The era of New Labour,” he told Andrew Marr last Sunday, “has passed.” And yet he detests the “Red Ed” label; he is no socialist of the big state mould. So what is left? He says he wants to "redefine" the centre ground. To do this, he needs a political formula that will please everyone, allowing him to move away from both new Labour and old statist Labour, and win back core and swing votes. In short, he needs to steal the big society from right under David Cameron’s nose.

If there’s one thing both old and new Labour is supposed to stand for, it is the working man and woman. As Tim Leunig outlines in this month's Prospect, new Labour's economic thinking was based on a pact similar to that brokered by Robert Reich and the Clintonistas in the US in the early 1990s. The deal, best articulated by Anthony Giddens in his formative text, The Third Way: The Renewal of Social Democracy, was simple. The left would champion globalisation and the free movement of both labour and capital, but to mitigate against the worst excesses of neoliberal capitalism—low entry-level pay, lack of security and social dislocation—Labour would use the state to levy tax on growth, and redistribute that money through the benefits system to the poorest and most severely afflicted.

For a while it looked like it might work. Yet the problems were always manifest. Taking money away from people once they posses it is difficult and unpopular. The rich simply use their economic freedom to shuttle their assets into tax havens. Meanwhile the poor become dependent. Worst of all, as we a discovering right now, come a downturn, the money for the poor dries up altogether.

Ed Miliband understands this well enough. During the leadership hustings he continuously made the point that immigration and flexible labour helped to drive down conditions and wages. Ignoring these realities played a major role in alienating Labour’s traditional working-class support. The question is now, after a fairly bruising defeat at the polls, what does his party do about this?

There is a fourth way, to Giddens’s third. As both "red Tory" ideologue Phillip Blond and "blue Labour" thinker Maurice Glasman have argued, instead of redistributing cash, the state should be helping to distribute ownership. Whether you call it the "big society" or "mutualism," the idea is the same: that the working and middle classes will reject welfare dependency as a long-term solution if, with help from the central state, they can use their own resources—savings, profits and earnings—to purchase businesses, homes, and the land they stand on, and put money into mutually-owned long term investments—everything from local banks to pensions to infrastructure. In other words, if globalisation cannot be reversed by protecting the border of the nation state, then mutualism can help root capital to make it harder to pull up and outsource to China or India in the first place.

Today, David Cameron is the politician most closely identified with the big society—but, as David Marquand points out in this month's Prospect, the concept does not need to be party political. If anything, it has more resonance with left, appealing to the working classes who loathe welfare dependency. Yet it would also chime across society. Through the idea of community land trusts—non-profit organisations that acquire and manage land in order to provide affordable housing for local communities—mutualism could offer a lasting solution to Britain’s housing crisis. According to a recent survey for the Council of Mortgage Lenders, this would resonate with around 96 per cent of the population.

Modern day mutualism would also undercut the Tories on their right flank. Labour could once again begin to advocate for building a better existence—not through charity and guilty concern for those less fortunate, but through work, fair pay, lasting institutions, and most of all family, home and community.

Even Giddens believes there is real mileage in the idea. In a little noticed piece for the New Statesman just after the general election, entitled the "Rise and Fall of New Labour," he wrote about how Labour could move towards a new method of defining the public sphere. Blairites, he wrote, were perceived to lean more towards the market than Brownites, who were keener on the state. "However, the public sphere is distinguishable both from markets and from the state, and can be used as a platform for reconstructing each. Labour can be seen to be groping towards such an insight with its attempts, in the wake of the financial crisis, to reintroduce the idea of mutualism to political debate. These rather primitive efforts should be developed further and applied to the task of constructing a form of responsible capitalism, coupled to a sophisticated approach to issues of sustainability.”

In effect, this is an endorsement for mutualism, the big society, call it what you will, from one of the chief architects of the third way. And yet those on the left who favour this approach are not hopeful that their new leader will adopt it. It was his brother, David, who emphasised the need for mutualism with an essay to the Fabian society back in the summer. David was also the one to promote the creation of 1,000 trained community organisers—the very tools of mutualism. Today those organisers will meet to decide how to use their skills when David is no longer leading them.

Ed Miliband's first speech to the Labour conference was thin on policies, but he doesn't have long before he'll have to come up with some. The emergency budget later this month will force positions to harden, and will be crucial to setting an ideological direction for Labour. In the Labour leadership race, Ed Miliband managed to steal his brother's place. As Labour leader, stealing David Cameron’s one novel idea would be another devilishly canny manoeuvre.