Miliband 4 – 0 Critics
When Ed Miliband delivered his party conference speech drawing a distinction between productive and predatory capitalism last September, the gatekeepers of free market orthodoxy reacted with fury and scorn. He had insulted British business, the wealth creating heart of the nation. More than that, he had scored an own goal that would surely cost Labour any chance of recovering its economic credibility and winning the next election.
In applying a moral judgement to the behaviour of business, Miliband had broken one of the most engrained taboos of modern British politics: the idea that that there might be more to corporate accountability than the market alone. According to the common sense of the age, there is no place for right and wrong in the conduct of business. The only distinction that counts is profit or loss. The market must therefore remain an autonomous, value-free sphere of activity, above and beyond the claims of society. Even the Labour mainstream, which had become accustomed to hiding its market scepticism like a guilty secret, worried that he couldn’t possibly get away with it.
It is striking how this mirrors almost exactly the experience of Margaret Thatcher when she started raising questions about the role and behaviour of British trade unions in the late 1970s. At first her arguments were treated as a dangerous personal obsession; nowhere more so than in her own party. The unions were a major power in the land and Ted Heath had just lost office largely because of his inability to do business with them. The great minds of the day agreed that no party could ever win election on an anti-union platform. Thatcher stuck to her guns and elements of the union movement contrived to prove her right in the eyes of the British public.
The significance of the Barclays rate-fixing scandal is that it validates everything Miliband has been saying about how predatory business practices conspire against the public interest. It turns out that the banks that have plunged the country into a spiral of economic decline and shrinking living standards were not just incompetent, they were also lying and cheating and ripping us off. Moreover, all of this must have been known about when the banking elite were telling us that the time for apologies was over and the time for stratospheric bonuses was back.
This is the fourth time Miliband has got a major strategic judgement call right while his critics have got it hopelessly wrong. The first was on the economy where the critics insisted that George Osborne’s ‘expansionary fiscal contraction’ was bound to work, so Miliband had better sign up or else. The second was on the 50p top rate of tax where they warned that continuing to support it would make Miliband look ‘anti-aspirational’ and out of touch. The third was on phone hacking where Miliband was told he was picking a fight he couldn’t possibly win.
It is argued that Labour’s newfound strength is really all down to Government weakness. But one of the main reasons the Government is floundering is because Miliband has consistently out-manoeuvred David Cameron over the last year, forcing him into a series of costly errors. His refusal to join the austerity consensus has robbed Cameron of the alibi that a Labour government would have done exactly the same. His championing of tax fairness helped to make the Budget the most politically disastrous in living memory and showed that he is more in touch with the public mood than his critics. And his decision to lead the charge on phone hacking has crippled the Murdoch empire and put Cameron’s circle of intimates in the dock.
If the prime minister is now on the run because of his failed economic policies, his broken promise to share the burden of austerity, his bias in favour of the wealthy and his unfortunate choice of friends, it is due in considerable measure to the decisions Miliband has made and his success in framing the debate.
So why does Miliband keep getting it right while his critics keep getting it so badly wrong? It’s because he understands the dynamics of political change while his critics suffer from a debilitating rigidity of the mind. When Miliband announced his intention to “rip up the rulebook of British politics” last year, the very idea was dismissed as absurd. Can’t he see that the rules of politics are as fixed as the law of gravity? You have to be pro-City (morality is for losers), in favour of aspiration (tax for the rich should be optional), tough on defence (let’s play Tonto to America’s Lone Ranger) and media friendly (in bed with Murdoch).
In Miliband’s view there are moments of crisis when the rules themselves are open to radical change. He recognises that we are in such a moment now and he is determined to make the most of it. It’s the reason why he’s turned his leadership around and put Labour back in contention.
There are still huge obstacles to winning the next election. No party that has lost a majority at one election has regained a majority at the next election since 1931. The closest post-war example is Thatcher in 1979. This suggests that the quickest way for a defeated party to transform its electoral prospects is to start by transforming the terms of debate. That’s why Miliband’s decision to rip up the old rulebook of British politics has proved so important. It continues to unsettle his colleagues, but it remains Labour’s best chance of becoming a one term opposition by far.
Perhaps it’s time Miliband got the credit he deserves. Then again, it might be better if his critics continued to underestimate him. By the time they realise their mistake it will hopefully be too late.