We must distinguish between the public sphere and the state

LEADER ARTICLE: Communism Is Dead

The Times of India 5 Nov 2007 Anthony Giddens

India needs a thoroughgoing debate about the future of the Left. The Congress party seems to lack a clear ideological direction, while others expend their energies decrying American imperialism, offering few or no remedies for the future. It would help to begin with a reality check. Self-proclaimed communist parties still exist in India, and indeed are partners in the current coalition. Yet not only communism but more widely socialism too, are dead. The precise date of their death is known — 1989 — but they were ailing for quite a while before. The idea of overcoming capitalism through secular political revolution has almost completely disappeared. Today's far Left defines itself almost wholly in terms of what it is against — sometimes still 'anti-capitalism', more often 'anti-globalisation'. That is why it lacks positive vision.

Reformist socialists, by contrast, have always taken a more sober view. For them the irrationalities of capitalism can be tamed by giving the state a partial role in economic life. The commanding heights of the economy, such as transport, communications, iron and steel, coal and electricity, should be put under state control. For several decades after World War II this compromise seemed to work in the West, and to a much lesser extent in India too. It worked, however, not because of socialism per se, but because of an economic theory produced by a liberal, John Maynard Keynes. The state could exert overall control over the economy by regulating demand, while the welfare state picked up the pieces when things went wrong.

The key question is whether this type of socialism is dead too. I would answer definitively yes. The state has mostly proved inept at running business in a direct way. Keynesian demand management is no longer effective — indeed can be actively dysfunctional — in a globalised marketplace. There is a clear line of descent from reformist socialism to left of centre parties of today, but more in terms of values than policies. The centre-left stands for values of egalitarianism, solidarity, the protection of the vulnerable and the belief that collective action is necessary to pursue these values effectively. 'Collective action' includes a role for the state, but also other agencies in civil society too. To pursue such values, however, very considerable rethinking is necessary.

First, we can no longer define left of centre thinking simply in terms of limiting the damage markets do to our lives. Capitalism still needs regulation. However, sometimes the role of government has to be to expand the role of markets rather than reduce it, or to help markets function more effectively. It is no use saying that liberalising labour markets, for example, is intrinsically an anti-Leftist policy. A divided labour market, such as India has, does not advance the cause of social justice. It is a major factor producing high unemployment. It is significant that the most socially just countries in the world, the Scandinavian societies, have all thoroughly reformed their labour markets.

Second, we must distinguish between the public sphere and the state. The traditional Left, both revolutionary and reformist, tended to equate the two. A robust public sphere is essential to the creation of a productive and socially just society; but not only can the state be a barrier to it, other groups (such as third-sector organisations) are important in providing public goods too. Reform of the state is crucial wherever state institutions are overly centralised and corrupt. In a globalising world, decentralisation and bottom-up power should be the order of the day.

Third, in the contemporary world a great deal of supply-side investment is necessary. We have to invest in people in an era of much greater individual freedom and aspiration than in the past. The education system has to be radically upgraded to cope with a world of intensifying competition; higher education, again of top-class standard, has to be much more widely available; and education has to be open to those in older age-groups, too.

Fourth, the term 'centre' in 'centre-left' has real meaning and substance. It does not (or should not) stand for wishy-washy compromise. There are core issues that do not fit readily into the left-right divide, and where mutual agreements between parties of different complexions may be in the general social interest. The most important is the environment. The days are gone when India could say to the West, 'climate change is your problem, you resolve it'. The debate over nuclear power is not a left-right question, any more than investment in renewable technologies is.

Finally, what about one of the biggest problems India faces, the massive divisions between rich and poor? India must not turn its back on globalisation, the source of its now rapidly expanding economy. But managing globalisation is crucial. There are bound to be growing disparities of wealth as a society grows richer, since development is always uneven. Government intervention is necessary to help redistribute that wealth, provide social safety nets, upgrade health care, protect children and help provide opportunities for women. The key thing is to avoid mistakes other countries have made in so doing. For example, paying out passive benefits to the poor has been shown to produce welfare dependency. 'A hand up, not a handout' is the first principle of modern welfare. The writer is former director, London School of Economics.