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Making Progressive Politics Work

In an excellent collection of essays the Policy Network has collected together for their “Making Progressive Politics Work” publication, we found the following comments by various authors in support for the fundamental principles that LIFE’s policies are based on.

Philippe Aghion is Robert C. Waggoner professor of economics at Harvard University:

The political imperative is that social democrats have to devise new welfare state policies that appeal to the 75 per cent (and at the same time benefit the bottom 20 per cent) rather than making top-bottom inequality the basis of their appeal, or surreptitiously targeting resources to the bottom.

The greatest challenge for social democrats, therefore, is the battle to sustain political coalitions in favour of collectivised social security and public provision in a world where structural change may be eroding the cross-class coalition in favour of welfare states.

Writing a fairness contract for the ‘new insecure’ depends on the centre-left’s ability to politicise and lead a strategy premised on predistributive reform and multi-level governance. It has to stand up for the 75 per cent if it is to help those most in need in our societies, to maintain consent for universal social security, to generate the growth needed for investment in public goods, and to ensure a dynamic economy and society. As the great Swedish social democratic leader Olof Palme once declared: ‘secure people dare’.

There must also be a new role for the state. Creative destruction means there is a perpetual cycle of creation of jobs and the destruction of others. The new state must be there to help by providing the unemployed with good income insurance and good training so that workers can bounce from one job to another.

Jacob Hacker is the director of the Institution for Social and Policy Studies and Stanley B. Resor professor of political science at Yale University:

Four themes should define a new predistributive agenda: a true commitment to equality of opportunity, embodied in universal access to affordable pre-K education and college; the encouragement of faster, more broadly shared, and more stable growth through public investment and stronger discipline of finance; a concerted campaign to expand and improve public services so that all citizens have access to a basic set of goods essential to human flourishing, regardless of income or wealth; and the fostering of countervailing power and participation through the empowerment of communities, civic organisations, and economic watchdogs, including, of course, trade unions but also collective investors (such as pension funds) and public-interest organisations (such as anti-poverty advocates).

Andrew Gamble is professor of politics at the University of Cambridge

If austerity, however, is not quickly followed by recovery and renewed growth, the legitimacy of the economic and political order will come under increasing strain, and the support for anti-system populist parties will grow. To avoid this, political parties have to find ways to avoid the deflation trap, as well as addressing questions of distribution and social justice, in particular finding new and innovative ways to narrow inequality and strengthen social cohesion.

Disengagement and disaffection of citizens has to be countered, otherwise the capacities of government to take a lead in tackling many problems will be impaired. Governments are going to need greater, not fewer, resources in the future to do all the things expected of them, but gaining the right to extract those resources from citizens is becoming increasingly difficult. Finding the means to create new forms of solidarity and to re-legitimate public action are essential if governments are to be able to negotiate reforms to international governance and build a new growth model.

Monika Sie is director of the Wiardi Beckman Stichting

A substantial body of recent academic literature and research can support a progressive left alternative that would simultaneously increase economic efficiency, fairness, and opportunity (e.g. the work of Dani Rodrik, Roberto Mangabeira Unger, Jacob Hacker and Paul Pierson, the Centre for American Progress on middle-out economics, several European authors on a social investment pact, and the Stiglitz real economic reform agenda). That agenda comprises measures to encourage macroeconomic stability, promote full employment, broaden economic and educational opportunity through a public social investment agenda, promote substantial public investment in research, stimulate innovations and investment that are more focused on reducing environmental costs than on reducing the labour-intensity of production and use the power of government to enforce higher standards in the labour market and to curb the excesses at the top.

Eric Beinhocker is the executive director of the Institute for New Economic Thinking at the University of Oxford
and Nick Hanauer is a venture capitalist and philanthropist based in Seattle.
Adapted from a longer article that appeared in Democracy: A Journal of Ideas, issue no. 31, Winter 2014

The difference between a poor society and a prosperous one isn’t the amount of money that a society has in circulation. Rather, it is the availability of the things that create well-being – safe food, antibiotics, air conditioning, etc. It is the availability of these ‘solutions’ to human problems that makes us prosperous.

In order for capitalism to work it must have institutions with popular legitimacy that can sort out the conflicting interests. When such institutions fail, become captured by interest groups, or lose their credibility, then capitalism as a system itself loses public support and becomes increasingly conflict ridden. This is why with a democratic deficit in Europe, a US system flooded with special interest money, and public distrust in the wake of 2008 and the Eurozone crisis, the foundations of the economies that delivered post-war prosperity are at risk.

In addition, the creative, problem solving genius of capitalism emerges from the diversity and participation of a broad population. The best ideas don’t necessarily come from the top 1 percent. Widening inequality and declining social mobility ultimately undermine the problem solving capacity of the system itself. Broad investments in education, health, and infrastructure not only increase fairness, but are also essential drivers of capitalism’s future creative dynamism and effectiveness.

In the conventional view of capitalism, government is something that interferes with and reduces its efficiency. Economic policy becomes a trade-off between efficiency and the need for societal fairness. But if capitalism is an evolutionary problem solving system, it cannot work without effective government, fairness, and inclusion. By focusing policy on enhancing the long-term problem solving capacity of the economy and including all of our citizens as problem solvers, we can deliver true growth and prosperity.

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