A shrinking state is a rightwing fantasy

Yesterday on LabourList Adam Lent argued that the Labour party has been overrun by ‘vulgar Fabianism’. In saying this Lent considerably overstates the intellectual weight of Fabianism in contemporary Labour debates (perhaps I should be claiming otherwise) and underplays the influence of ideas which I imagine are more to his liking.

‘Spirit of 1945’ Fabianism is certainly part of the Labour conversation, but it is countered in Ed Miliband’s Labour party by two rival strands of thought. First there is the party’s post-1960s social and political liberalism which is locked into the DNA of so many Labour activists and leaders. It’s what makes Labour an open, outward-looking, tolerant and reforming party, far removed from the austere and uniform world of Clement Atlee. This is then juxtaposed with the Blue Labour school, with its emphasis on community, tradition, nation and place. Indeed with Maurice Glasman and Jon Cruddas among the party’s leading thinkers, no one can claim Fabianism is ascendant.

Both these strands of Labour thinking provide intellectual ammunition for Lent’s preference for localised, autonomous initiative and innovation, although they strike the balance between collectivism and personal agency in different ways. Taken together they help explain why Labour has responded to the Blair/Brown excesses of markets and state by turning to municipalism and mutualism in a way that has been embraced by many on both the left and right of the party. Lent should not dismiss the rebellious anti-authority vibe within contemporary Labour politics, even if it sits alongside an enduring belief that the state has a vital role to play.

But what of Fabianism, vulgar or otherwise? It will come as no surprise that I believe the values the Fabian Society represents still have a vital place at the heart of Labour’s politics. First, Labour needs to be egalitarian above all else, when inequalities of income, health and wealth have returned to the Edwardian and Victorian heights which impelled the original Fabians to act. In this post-Thatcherite age it should be unthinkable for Labour to abandon its ‘structural’ take on inequality and injustice and suggest that the barriers people face can be overcome simply through personal and mutual effort and initiative.

Second, we should recognise the place of evidence and expertise in making decisions that are in the best interests of us all, at a time when the press is all too eager to hear the saloon bar solutions of Michael Gove, Eric Pickles or Nigel Farage.

Third, Labour should cherish the optimistic and long-termist ethos of Fabian politics, which is born out of a belief that radical change is achievable through steady, incremental steps. To say anything else is to counsel despair, when we know the economy must be transformed to avoid disastrous climate change and to create a fairer, more balanced form of capitalism.

All of this means celebrating coordinated collective action, including strong central government when needed. This is not to say there is anything wrong with wanting to place greater hands in the power of the ‘little platoons’, to give more people the ability to shape their lives for themselves. But there are times when only central agency at a national level is sufficient – to solve for example the challenge of building decent pensions as life expectancy lengthens; of attending to our mounting housing crisis; and of re-structuring and de-carbonising our fractured economy.

Strong action by national government is not all about spending money. In each of these examples, setting a clear direction and changing the framework in which companies do business sits alongside choices about how to use taxpayer’s money. But there’s no denying that money matters and people on the centre left should exercise great caution before wishing for a smaller state. After all, the large majority of the money we spend in today’s welfare state goes on pensions, the NHS, schools and social security for people in working life.

Only the last on this list is something one would ideally wish to spend less on. Even here there is much hyperbole about reordering the labour and housing market to save public money, when in reality this is a project that will only yield significant savings over decades not years. When it comes to pensions, healthcare and education the state is providing insurance across our lifetimes and investing in future generations. These are things that citizens of all political stripes want to see and if government did not provide them, the market would have to try: the result would be lower economic growth, misery in old age and jarring inequality.

So when leftish iconoclasts rail against the big state they should be careful to distinguish between how much government spends and how the money is spent. Labour can come together for a conversation about better ways of spending public money that places more trust in the hands of people using services and those who work to deliver them. And like it or not, the party faces tough debates on relative priorities and ‘least bad’ spending cuts, as the deficit will not be closed by the 2015 election.

But the pressure for public spending in coming decades will rise not fall as people desire more of the sort of things the public sector offers, like health technologies, skills, economic infrastructure and affordable homes. British politicians will have to dampen down expectations just to keep public spending as a stable proportion of economic output, so a shrinking state is a right-wing fantasy. For the sake of solvency some of those pressures will have to be resisted, but others should be rightly ceded.

Those of us who identify with the Fabian tradition now know that the solution to every problem cannot be more state. But likewise our critics within the Labour family must accept that less public spending and a less strategic central state puts at risk future security, prosperity and autonomy for everyone.