Drifting Apart
Fog in the Channel for Britain
In last month’s editorial we pointed out the extent to which both labour politics and trade unionism have declined in Britain over the last twenty five years. What we did not say is that, at the same time we have been drifting further and further away from our north European neighbours, in our politics, economics and welfare policies and have slowly but surely been falling into more of a North American sphere of influence. This is true not just of Conservative, but of Labour politics. Not so long ago we were being assured that the ‘Rhineland’ model of capitalism, such as was found in Germany, was obsolete and was to be replaced by a more dynamic, finance-based and deregulatory form of capitalism exemplified in the United States and successfully practised by Blair and Brown in Britain. One hears less of that now, but more of the need for a housekeeperly approach to the national accounts such as it is practised in Germany.
The fact that the US is slowly pulling itself out of recession through at least some additional government-based stimulus is forgotten, while the example of the cautious Germans is being held up as rectitude. The Germans, we are told, practise a form of market-based economy founded on balanced budgets, small deficits, wage limitation and no bail outs for lame duck industries. While this is generally true, it is a self-serving half truth. It is not, however, difficult to see where the fallacy lies. The trick is to think of societies as abstractions, each of which contains a further abstraction ‘the market’, whose operation determines policy in other areas of life. The state merely provides the conditions for a national market to operate. In effect, the thinking of the three British liberal parties and the journalists who support them, is based on a kind of vulgar Marxism. The economy (‘the market’) determines the rest of social and political life and the State, as part of the rest of society, attends to the needs of the market. This harmonious balance should not be disturbed for fear of deranging the market and bringing about economic disruption.
The fallacy in this way of thinking is that we need to think of actual societies, not abstractions like the market, whether it be a German ‘ordo-liberal’ market or an Anglo-Saxon free market. When seen this way it is very clear that as social cohesion has withered in Britain, it has consolidated in Northern Europe, despite the blandishments of the ‘Third Way’ of Blair and his followers. Germany and her neighbours, in different ways and to different extents, are built on the social ideal of mutual responsibility for the different elements of society. For them, there most definitely is such a thing as society and it is to be looked after. In Britain, despite the sneering at Thatcher for saying that there is no such thing as society and despite the gabble about a Big Society, we act in effect as if what she believed is, in fact, the case: there are only individuals and to a very limited extent, their families.
The Germans value social stability. In economics that means small deficits and balanced budgets so that a stable currency ensures that society can plan for its future in a long term fashion. But macroeconomic policy is part of a wider order in which workers have a decisive role both in the boardroom and in the workplace, where regulations ensure that it is difficult to fire people in cyclical downturns, where young people are assured of a respected place in their society through an outstanding vocational system and where antisocial practices such as loansharking are outlawed. Not only that, but there is generous welfare and public provision of such goods as transport, a decent environment and decent housing. If this is indeed a form of ‘liberalism’ then it is one that is much more attractive than anything on offer in the UK. At the core of it is the idea of social partnership where the state, the trade unions and employer associations further their interests by finding as much common ground as possible for common and concerted action, bearing in mind the responsibility that they all have for the welfare of the society.
The role of the state is to serve as a broker of the various interests, to provide a framework for the negotiation and implementation of social partnership, to provide a stable economic and financial environment and to regulate economic life to ensure that rules agreed on are abided by. On occasions the state will act directly to ensure that the consensus is kept up, as with Chancellor Kohl’s celebrated pressurising of German firms to provide more apprenticeships during an economic downturn in the 1990s. The state, in a word, has a different role to the one that it has in the UK, where it is much more like the Marxist vision of acting on behalf of the bourgeoisie (in our days, the bankers). Any attempt to introduce German style industrial democracy, social partnership and public facilities would be regarded with horror by the three British liberal parties and, sad to report, by much of the trade union movement as well. The fact is, we hardly understand our close European neighbours and fail to learn much that is useful from them. There is currently a lot of chatter in government circles about how wonderful German vocational education is, but there is almost zero prospect of introducing anything like it here, because the sense of social responsibility that underpins it is missing. It could be substituted for by regulation, but no British political party would contemplate that. So it will not happen.
The fixation in the UK continues to be with the US and their version of a free market economy. The fixation however, ignores the American propensity to act decisively when there is a serious crisis in the economy. The car industry was bailed out by the state, which is continuing to act to stimulate the economy. We, in the meantime, continue with a parody of German ‘ordo-liberalism’ without the social solidarity that underpins it. British trade unions bear a lot of responsibility for this state of affairs. They let the opportunity for social partnership through the implementation of the Bullock proposals for industrial democracy in 1977 pass by and have, ever since, contented themselves with largely conflictual and oppositionist policies with little attempt at constructive engagement over such issues as vocational education. Such is the contempt in which they are now held by government and employers that it would be difficult for them to put social partnership back on the agenda. But unless this is done, the drift from the Continent into the mid Atlantic will continue, with social unrest and decline become longterm prospects. Germany is now attracting a bad press for refusing to bail out irresponsible societies which have made a hash of their economic life largely through a lack of the kinds of virtues that the Germans value. The Germans are not punishing them, they are willing to help them but they also need to be assured that they are not pouring their own resources into a bottomless pit of venality and corruption. They are most certainly not saying: create an Anglo-Saxon free market state. It is up to other countries to develop a stronger sense of national identity and social solidarity so that they can take part more effectively in the European Union. The Germans can only show by example. Sadly however, that example has proved to be exceptionally hard for many countries to follow.
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