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THE DIGNITY OF LABOUR
As with the passage from Cruddas quoted earlier Glasman is highly critical of the Labour emphasis on the 'knowledge economy':
'As Chancellor of the Exchequer, Gordon Brown, for example, predicted in a 2006 speech that there would only be 600,000 low-skilled jobs by 2020. (8) In fact, the number of cleaners, cooks, security guards and builders has grown since that time. A consensus developed that what was emerging was a ‘knowledge economy’, where the knowledge in question was general, abstract and transferrable. This then grew into the idea of the ‘creative economy’, in which the mobile, the literate and the ‘creative’ were the basis of productivity growth and prosperity and state policy were based on increasing their number. The channelling of national resources into higher education was paralleled by the collapse of the apprenticeship system, which fell from 250,000 apprentices in 1973 to 50,000 in 2016. There are, in contrast, 2.54 million undergraduates. The key moment in the humiliation of vocation as an educational practice was the transformation of the polytechnics into universities in 1992.'
(8) Chris Winch has indicated a confusion here which comes from Brown. The Leitch Review predicted that there would be 600,000 people without qualifications. The estimates for unskilled work were far higher, in the millions (figures from the UKCES 2010 - Ambition 2020: World class skills and jobs for the UK. London), so it followed that there would be many people in the Labour Force who were overqualified, confirming Cruddas's point about the overproduction of graduates. These and related points have been developed in articles by Chris Winch published in Labour Affairs.
In a larger historical perspective he attributes this to the nineteenth century when 'The distinction made in the 1830s between a profession and a vocation was decisive in the degradation of vocation as a practice.'
As part of the restoration of the dignity of the vocations Glasman proposes that the long sought reform of the second chamber of Britain's legislature should be based on representation of the different vocational groups, as the House of Commons is representative of the regions:
'The Lords, in contrast, as a chamber which amends and advises, should represent vocational democracy, where people are elected from their working lives. There should be people elected from their sector, whether that be electrical or academic, medical or administrative. Doctors should elect a peer, as should nurses and cleaners. It would give an incentive to the organization of carers, builders and cleaners, who would elect a representative from within their vocation. Central to the Ancient Constitution is the idea of the balance of interests rather than the separation of the powers … The vocational chamber would revise and amend legislation as it does now on the basis of the judgement of people who actually know what they are talking about and who are recognized as experts in their field by their peers through democratic election.'
BANKS OF ENGLAND
But the main target of Glasman's ire is now, as it has always been, the city and the emphasis British politics has placed on the financial as opposed to the manufacturing sector. He starts the book with a conversation he had with his mother: 'My Mum left school at 13 to work in a factory so she could support her four younger sisters and her ill father, who died a few months before I was born … We watched Gordon Brown saying that it was the "destiny of labour to save the global banking system" and my Mum’s eyes met mine and then she shook her head and closed her eyes.' We have become used of late to the distinction drawn in 'geopolitical' theory between sea-based and the land-based economies, with Britain as the archetypal representative of the sea and, perhaps, Russia as the archetypal representative of the land; but Glasman represents it as a conflict of interest within the polity, in this case the British polity:
'the British financial services sector, in practice, comprises two distinct systems: a global eco-system, centred on the City of London, and a local eco-system. This is not surprising. The City of London, founded by the Romans, was part of their extended maritime trade system incorporating Ostia, Piraeus and Marseilles, and was open to the sea, but they built the largest city wall in Europe to protect it from domestic pressures. From Roman times, there were two distinct economic systems: the territorial and the maritime. The domestic economy was strictly regulated; maritime trade was adventurously mercantile. The distinction between the formal and the substantive economy or the territorial and maritime economy was a central tenet of classical statecraft. Ports were placed at a distance from cities, for the sea was a place not only of tempestuous threat and piracy but also of tremendous wealth and speculation. The returns from the domestic territorial economy were always lower than those built around long-distance voyages and insurance. The basis of the British Empire was the City of London as the hub of an oceanic maritime economy every bit as much as the Roman Empire was built around the port of Ostia and the control of the Mediterranean. The distinctiveness of maritime trade is that it was based on commodification, in which everything, from people to precious stones, had a price. In the domestic economy, neither nature nor human beings were commodities and the rates of return on investment were thus constrained. In this, the necessities of life were secured without an exclusive reliance on the price system through a range of local and national measures.'
He sees the development of capitalism since the 1970s in terms of the maritime or globalist financial interest penetrating and colonising the territorial or domestic financial interest, symbolised by the history if the Northern Counties Permanent Building Society:
'It demutualized in 1997 and became simply Northern Rock, which sponsored Newcastle United Football Club and became the fifth biggest lender in the British market. A mutually owned institution which had partnered its region in good times and bad for 147 years, which had weathered four serious depressions and emerged stronger from each, could not last through New Labour’s period in government. It was nationalized in 2008 and Newcastle United came to be sponsored by Wonga, a company that began its lending at 4,000% at a time when the banks were borrowing at less than 3%. The club is now sponsored by a Chinese betting company. It is understood locally as dispossession and disinheritance.'
In this context Glasman recommends the formation of what he calls the 'Banks of England' (the book is very English oriented, there is little if any mention of Scotland, Wales or Northern Ireland). These 'would be constrained by charter to only invest within the area within which they are established.' A model for this is provided by the system of regional banks in Germany and Germany also provides a model for the reform he would like to see in corporate governance. Glasman makes no mention of the Bullock Report of 1977 but he does strongly support its main argument - the need for worker representation on the boards of major industries. He evokes the very opposite approach adopted by New Labour:
CORPORATE GOVERNANCE
'In New Labour’s Corporate Governance Act of 2006, for the first time in British history, shareholder primacy was hard-wired into a company’s statutory purpose.' As a consequence 'the maintenance of share price and its definition of assets and liabilities means that research and innovation are liabilities and intangible, and have no value in the model. In other words, the shareholder model has constrained investment.'
'The resilience of German industry was based upon two fundamental differences with Britain, both relating to corporate governance. The first was that in Germany each stakeholder interest – capital, labour and management – had access to the same information about the state of the firm and the sector and could negotiate a common response. The German High Court ruled in 1982 that co-determination took priority over the claims of shareholders as it was a matter of "public good" and this overruled the civil law concerning the ownership of capital by joint stock companies. This would have been a plausible outcome in British law if the principal/agent problem generated by establishing limited liability had not been resolved through share price alone … In Germany, the governance and strategy of the firm became a matter of negotiation, as the workforce and their representatives gained a knowledge of economic performance and a practical role in the management of the economy. The workforce had interests in the flourishing of the firm and an internal expertise in the work of the firm and they carried risk, in terms of losing their livelihood if the company failed. The sacrifices asked of workers were balanced by their participation in the process of production as an institutional partner.'
In summary, Blue Labour is proposing 'three institutional changes – the establishment of vocational colleges and an apprenticeship system for labour market entry; the endowment of the Banks of England; and changes in the corporate governance so there is a balance of interests within the firm' arguing that these 'would challenge the domination of capital while resisting state domination and control.' It's about as good a political programme as one could want. Though on foreign affairs - Glasman sees China as 'the principal threat to our democracy' - the book leaves something to be desired and we may well wonder why the 'movement' has proved so feeble in terms of practical politics.
Cruddas, in the interview with which this article began, stressed his own distance from the left wing Labour Campaign Group. But the Campaign Group, weak in the Parliamentary Labour Party, had a strong constituency in the membership and ex-membership which provided a base for Jeremy Corbyn's leadership. Blue Labour may have a better sense of the nature and needs of the working class and it has a good understanding of the process by which the Labour Party has been rendered alien to the working class over the past forty or fifty years. It remains to be seen if it could provide a useful political framework for the current wave of union militancy.
'London citizens' however was an effective campaigning group that cut across, and beyond, party divisions. There is a division - call it 'Apollonian' and 'Mercurian' - that passes through the society as a whole and does not correspond to the party division. It passed through both the Brexit (Britain protecting itself against the world; Britain opening out to the world) and anti-Brexit (Europe as a closed market with a Social Democratic tradition; Europe as an open market based on neo-liberal economic theory) camps. It may be that Blue Labour should drop the emphasis on Labour, the hopes specific to the Labour Party, and attempt the sort of appeal Keynes was able to make in the nineteen thirties to the widest possible range of those peculiar people who take an interest in politics, those who know in their bones that our society is faced with near fatal problems that only politics can solve.