Unless there is a decentralisation of power, in the financial markets and in politics, then there can be no negotiations that can transform the present system of domination. Domination by the rich of the poor, by the educated of the uneducated, by the City of the country. Perhaps a simpler but more controversial way of putting it is that the German economy, with workers on the boards, regional banks, vocational labour market entry and co-determined pension funds has proved to be more capable of producing goods than ours. Their system is based upon subsidiarity and vocation, the cornerstones of the Christian inheritance. Secular modernity is not working. It is inappropriate for our times. Here’s a new paradox: Modernity is out of date.

Old Labour’s international solidarity did not require the abandonment of the national democratic inheritance. But today’s left-liberals simply do not understand the traditional commitment to earning and belonging. This puts them at odds with how people understand themselves. We are beings with a tendency to attachment; in order to be open to the environment our bodies must also be closed; and in physics, atoms have a tendency to cluster. And yet in politics an ultra-liberal ideal developed that belonging, attachment and sociability, reinforced by institutions, should be replaced by the almost unmediated movement of people through space.

And what is going on is that the SPD (Social Democratic Party of Germany) has lost the trust of working class German voters, is overwhelmingly a party of the public sector, social science graduates and ethnic minorities and won barely more than a quarter of the vote. It has moved its concerns from those of the internal governance of the political economy to a political and legal orientation that requires the passing of laws, external regulation and redistribution. It has not seriously defended the internal virtues of its economic system, preferring to stress external factors such a stimulus and taxation. Justice and rights rather than democracy and the good have come to define the position. I am strongly suggesting the party has become liberal rather than socialist and that is the fundamental problem.

The institutional settlement of post-war West Germany has endured because it generated value. They retained pre-modern artisan organisations and turned them into the foundation of their contemporary economic success. They entangled and constrained capital in a myriad form of national, sectoral and localised arrangements and they emerge from the crash, virtually alone, with a productive economy and a functioning democracy, with greater equality than us and more meaningful work.

The last thing I watched on telly with my mother, she died in very late 2008 in the middle of the financial crash, was Gordon Brown saying that it was the destiny of the Labour movement to save the global banking system. And that statement –‘the destiny of the Labour movement to save the global banking system’… I looked to my mum and the last movement she made, really, was to shake her head. You know, it may be the fate of the Labour movement but it can’t be its destiny, that’s just crazy. She just looked bewildered by that.

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Labour is apparently pursuing a sectional agenda based on the idea that disaffected Liberal Democrats and public-sector employees will give Labour a majority next time around. But we have not won, and show no signs of winning, the economic argument. We have not articulated a constructive alternative capable of recognising our weaknesses in government and taking the argument to the coalition. We show no relish for reconfiguring the relationship between the state, the market and society. The world is on the turn, yet we do not seem equal to the challenge.

Labour freed up enormous amounts of money for third sector initiatives, which was magnificent. But it also became too statist. Charities became very reliant on state funding to pursue their agendas, so charities became distant from local communities. Despite all the funding, there was no transformation of the lives of excluded poor people. The greatest gift of the big society will be the renewal of the Labour Party. If it takes civil society and people power seriously, and listens to people who have a following in their own communities, it will find that it has reconnected with its own political traditions.

This is why it is vital that Blue Labour’s vision of a democratic self-governing nation that honours and rewards work, restores institutional integrity to the places that people live and supports family life based upon love and mutual sacrifice becomes Labour’s vision. It is also vital that Blue Labour reasserts its internationalism and makes free and democratic trade unions, all over the world, From Beijing to Tehran, from Havana to Halifax a central role of Foreign Policy.

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Post-war Labour ideology in Britain has reached the end of the road. We tried the state (1945), we tried the market (1997), then we tried them both together (2007) and Britain is still not generating value in anything other than financial services and high end university teaching and research. Paradoxically, both sectors are protected by the two most ancient, and most democratic self-governing institutions left in the country. Cambridge University on the one side and the City of London Corporation on the other. It is time for our socialist tradition to rediscover the social.

It is perhaps a redeeming feature of the year that celebrity endorsements may be seen as the kiss of death to any political campaigning. The unanimous acclamation of Clinton by the famous and the lovey chorus for Remain were to no avail. It is better to build relationships and do politics with the poor rather than the rich.

Blue Labour has complete disrespect for the managerialism of New Labour and has much more honour for the workforce. If you talk about schooling, we'd like to see parents have a third of the power, teachers have a third of the power and the funders – whether it's the state or local authority – a third of the power, and negotiate a common good. New Labour sought managerial solutions in the private sector and that's what led to the banking collapse; they sought managerial solutions in the public sector which led to the erosion of the public ethos – so we will put people first, relationships first and that's a very different thing.

I would suggest that we use 5% of the bailout money to endow the Banks of England, which would be established in the counties and cities of England and would be constrained to lend within the county or city. The principal of the endowment would be in trust to the people of that county or city, in perpetuity so that it could not be liquidated by its members, and the balance of power in its corporate governance will be held by a third being held by the Bank of England, a third by its workforce and a third by the civic institutions of the locality. These newly constituted ‘Banks of England’ are one of the essential feature of Blue Labour statecraft built upon endowment and institution building.

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I realised that over a few years through these London Citizens campaigns we’d developed a more radical political economy than the Labour Party. For me, it was catch up, catch up, catch up. I was always a Labour, secular, left-winger and this was all new. One of the big lessons for me was which people would turn up. If the mosque said 50 people, the Catholic church says 50 people, the local black church says 50 people, they turn up. When the trade unions said 50 people, no-one turns up. So suddenly the crisis of secular institutions and their reproduction came to me.

The vision pursued by the founders of the EU was one of economic self interest, (subsidies, protection and investment) and lofty aspiration, (peace, prosperity and justice). It was predicated on a Europe without borders where mutual economic interests would lead to perpetual peace. A soft Kantian Marxism underpinned the European Union from the start, in which economic interests and a legal order would displace local institutions and national politics.