Review
of Political Economy and the Labour Party by Noel Thompson (UCL Press, £12.99)
and A Short History of the Labour Party by Henry Pelling and Alastair J Reid (Macmillan,
£9.99), Tribune, 18 August 1996
Forget
the policy shifts that “New Labour” has made in the past couple of years under Tony
Blair: as Noel Thompson’s timely historical survey of Labour’s thinking about
economics makes clear, the defining moment in the party’s recent recasting of
its identity happened nearly a decade ago. After the 1987 general election, under
Neil Kinnock’s leadership, Labour ditched the Keynesian approach to management
of overall demand in the economy that had dominated its thinking about the
economy for more than 50 years.
Ever
since, Labour has held fast to what its proponents call “supply-side socialism”.
Put crudely, the big idea is that the ability of any medium-sized nation state
to manage demand has been dramatically curtailed by the globalisation of the
economy. The best any British government can do is to secure low inflation and
exchange-rate stability – the preconditions for steady growth – and make the
economy more internationally competitive by encouraging long-term investment
and by improving education and training. Measures to expand demand have to be
internationally coordinated to have any chance of success. Full employment can
remain a goal, but only insofar as pursuing it does no threaten the
counter-inflationary strategy.
Thompson
has serious doubts about New Labour’s “quest for the Holy Grail of
international competitiveness”, finding it at best soulless and uninspiring and
at worst a capitulation to free-market liberalism: he is much more sympathetic
to early-1980s radical-democratic variants of the left-Keynesian Alternative
Economic Strategy. (The AES, which proposed reflation, import controls and
widespread nationalisation, dominated
Labour thinking throughout the 1970s and early 1980s. It did not, however, have
much influence on the practice of the 1974-79 Labour government, which in its austerity programme from 1976 in
many ways prefigured Thatcherism. )
But
this is a scholarly history of ideas, not a polemical work, and Thompson is
consistently fair even when he is dealing with authors with whom he disagrees. His
expositions of the ideas of the key figures, from H.M. Hyndman and William
Morris to Neil Kinnock and Gordon Brown, are exemplary in their clarity, and
his bibliography is excellent. Thompson is particularly strong on Labour’s thinking
in the 40 years after 1945.
The
book could have done with more on the “Eurokeynesian” ideas developed by Stuart
Holland and others in the past decade – the period that, perhaps
unsurprisingly, Thompson deals with most sketchily. More generally, there are a
few places where it is weak on political context, exaggerating the importance
of some marginal figures and downplaying the significance of major ones – but that
is a function of its genre. Political Economy and the Labour Party is more
specialist than the nearest thing it has to a precursor, Geoffrey Foote’s The Political Thought of the Labour Party, published
way back in 1985, but it is also more thorough and much more up-to-date. It deserves
a wide readership.
A
Short History of the Labour Party has already had just that: the first edition
of Henry Pelling’s book was published in 1961, and this is the 11th edition,
with the updated sections (taking the story up to the abandonment of Clause
Four) written jointly by Pelling and fellow Cambridge don Alastair Reid. It certainly
gives the bare bones of Labour’s history, but its prose is wooden and its
analysis banal (and unerringly sympathetic to the Labour right). Worse, its
end-of-chapter guides to further reading are skimpy, dull and often outdated. Strictly
for those with no prior knowledge, to be taken with a large dose of salt.
