Recapitalizing the Poor: A new Tory, old Republican theme
by Richard Reeves
"The third goal of modern, progressive conservatism is the recapitalisation of the poor. Under the reign of the monopoly market, the poor have been wholly dispossessed. In 1976 the bottom 50% of the population owned 12% of the nation's liquid wealth; by 2003 they had just 1%. In the same period, the share enjoyed by the top 10% rose from 57% to 71%. Even when property is included, the bottom half of the population still only owns just 7% of the country's wealth."
The concern of conservatives with wealth distribution in not new: remember the calls for a 'property-owning democracy' and the drive to allow council tenants to buy their properties. But the concern of Phillip and other progressive conservatives (I like to call them the ProgCons) is not simply with home ownership. Indeed, they recognise that a fixation on owner-occupation has been partially responsible for our current economic predicament. The point is that capital underpins independence, builds resilience and fosters responsibility: all key themes in the ProgCon philosophy.
This element of the new Toryism overlaps with a rich vein of republican thought, from Cicero through Rousseau to Harrington - who urged a true 'commonwealth' of citizens. For republicans, a good society is one in which no individual is at the mercy of another. To be dominated or dependent is to lack liberty. Everyone must have an equal say in collective government if they are to be free; but they must have a stake, too. So Harrington argued in 1656 for 'the liberty not only of the commonwealth but of every man'.
In the hands of modern-day exponents such as Stuart White, Cecile Laborde, Quentin Skinner and Philip Pettit, republican thinking is undergoing something of a revival. And ensuring that all citizens are members of a true commonwealth - have a real capital stake - is a republican demand which, post-2008, looks anything but old-fashioned. Labour made a small amount of headway in the right direction with its Child Trust Funds (or at least the idea behind them), while the Conservatives were still flailing around in search of ideas or leaders. But with 'recapitalising the poor' back on the agenda - and this time from the Conservative side - a new republican moment may have arrived.
Stuart White
I agree that we need to see more details of what 'recapitalising the poor' really means. When I chaired an ippr fringe event at the Conservative party conference (at which Richard reeves spoke), I was struck by just how little by way of concrete policy ideas the Conservative spokesperson, Greg Clarke, had to offer. So what, concretely, does 'recapitalising the poor' involve? Will the Conservatives put more resources into the Child Trust Fund, perhaps acting on David White's (of Children's Mutual) proposal to offer matched savings into CTFs for low-income households, thereby reducing inequality in matured CTF accounts at 18? Will they develop the Saving Gateway policy which is shortly to be rolled out nationally, and which provides matched saving for asset-poor households? We should be told.
Bruce Smith
Of course, Polly Toynbee, Ceila Hannon and Stuart White are right the Tories now need to start working out their policies for implementing the "re-capitalisation of the poor" and the "re-localisation of enterprise". This should not be too difficult with a little lateral thinking and knowing firstly, that there is still a big pool of global capital out there looking for a modest rate of return in these troubled times and secondly, that governments have the power to manage economies and tools to direct investment.
Richard Reeves
We do indeed need to see the policies now. The danger is that this theme is the Tory equivalent of Labour's embrace of 'stakeholding', which lasted for approximately five minutes in early 1996. My principal concern is that the Conservative polices on inheritance tax fly in the opposite direction of the avowed aim of a more equal distribution of wealth. (Of course Labour is not in a position to throw stones here.) Matched savings into CTFs is a great idea. But there is no clear political monopoly here. Stuart White's work shows that the Liberals have probably been strongest on this issue historically. It may seem unlikely that the Conservatives will truly embrace this agenda; but politics is in flux and there is much to play for. Rather than dismissing the goal of 'recapitalising the poor' as 'incredible' simply because comes from the mouths of Tories, we should hold them to it. Demos is not interested in making it 'credible'; we're interested in making it happen.
Stuart White
Richard Reeves is right that there is no party monpoly on the idea of 'ownership for all'. The Liberals made the most running on the idea historically - which, as I never tire of saying, makes their current opposition to the CTF somewhat odd. Labour's revisionists, such as Tony Crosland, developed similar ideas under the heading of 'property-owning democracy'. They were inspired, in part, by the work of James Meade who worked for the 1945-51 Labour government, was later an economic advisor to the SDP, and a contributor to Liberal party debates. Meanwhile, the very term 'property-owning democracy' originated with the Conservatives, and there have certainly been some in that party who have taken the idea of universal asset ownership seriously as part of a 'popular capitalism'. If the Conservatives can come up with some genuinely progressive proposals on these lines, that would be great. There is, however, one point on which left and right might turn out to disagree. Those on the left tend to see universal ownership policies - or inclusive assets policy as I call it - as largely a complement to the welfare state, which they do not see as failing in any comprehensive sense. Those on the right might see such policies as substitutes for the welfare state: Don't give people welfare, give them capital! So it will be important to look at the whole package of 'ProgCon' proposals. Even if the Conservatives did come out with radical plans to 'recapitalise the poor', we'd need to consider whether the plans come at the price of something else which progressives would want to defend. It will be interesting to watch this space.
Bruce Smith
Richard Reeves argues quite rightly in his sound blog that empowerment is what “Progressive” politics ought to be about. David Cameron seems to have somewhat muddied the waters about this idea in recent days with his comments. In his e-mail exchange with Will Hutton he says “I think a proper conservative approach to regulating capitalism is to understand that it's not about heavy regulation or light regulation, but about right regulation - appropriate for what you're trying to do”. At Davos last week he also said "It's time to help create vibrant, local economies - even if that means standing in the way of the global corporate juggernauts”. However, yesterday with reference to the Lindsey refinery wild cat strike he repeatedly attacked Gordon Brown at Prime Minister's Questions for his use of the phrase "British jobs for British workers", which he said was "pandering to protectionist fears". According to The Guardian ‘Cameron said the slogan – used by Brown in a number of speeches including in his first speech to the Labour party conference as leader – was "opportunistic and protectionist" and called on Brown to apologise and to promise not to use it again’. The refinery strike is now settled with a compromise but as the Unite union General Secretary, Derek Simpson, says "The flexible labour market is a one-way street that only benefits the employers. We have seen the backlash as the recession bites”Throughout the Developed countries there has been a massive decline in jobs through Offshoring particularly manufacturing jobs. (But see the work of Alan S. Blinder, Princeton University, on “Offshorability of Jobs” to get a taste of the potential future threat to white collar jobs.) The refinery strike could be said to be about “Inshoring”, the twin of Offshoring; with both activities indicative of the disempowerment of Developed countries workforces with regard to obtaining employment and the maintenance of demand in terms of wage levels. I can understand David Cameron finding that he is on the wrong side of the empowerment ideal in this matter because it’s the difficult issue of global trade which is hard to analyse and decide your position. The ideas of Progressive Conservatism cannot really “progress” in my opinion until a clear position on global trade is established. Re-capitalisation of the Poor is not worth the effort if the pricing of their labours is consistently undercut by imports, offshoring, inshoring and currency manipulation arrangements.Demos can play a very useful role by helping to facilitate clarity on Progressive Conservatism’s position on global trade from the “empowerment” perspective. It can do this not by simply marshalling the pros and cons and letting debate rage but using a filter to examine ruthlessly whether particular aspects of global trade, trade policies and agreements operate in a social or asocial way with regard to empowerment of the workforce. I would also argue by way of postscript that always to the forefront of these examinations must be the understanding that of all the various forms of power not least is that “power naturally and necessarily follows property”.
Stuart White
Anyone still following this thread might be interested in this post over at Next Left: http://www.nextleft.org/2009/02/how-to-make-pale-pink-toryism-red.html
Bruce Smith
Stuart White makes some good points. If you are in the business of "capitalising the poor" there is a danger of focussing solely on those in work and there is the need to also think about child-rearer and carer needs. Age related needs is also another important area he identifies. Also raised as an issue is the source and the stability of the capital be it market, or state. For those on modest income who have lost heavily in the market from the economic crash, retirees or recently jobless, government welfarism is seen as an important lifeline.
Bruce Smith
There is some criticism of Progressive Conservatism’s position on Liberalism be it Classical or Social. Surely it can be agreed though that current day Liberalism throughout the world missed the fact that the Market system had a major flaw in it by which CEO’s could become Monarchs and exercise a Divine Right to Rule. The constraints over CEO’s exercise of power under Neo-Liberalism especially in America became almost non-existent and led to the current economic crash. Progressive Conservatism could be said to be recognizing the need for a sort of Magna Carta Two to constrain the power of the Capitalist Monarchs by addressing the issue of economic democracy. This means providing economic social assurance through shared ownership of capital and careful control of the market with regard to monopolies and unequal global trade policies.
polly toynbee
It's all very well praising Cameron for promising to recapitalise the poor but it's utterly meaningless unless he says how, how much it costs and where the money is to come from when he and Osborne spend all the rest of their time saying they will cut, cut and cut again. They say Brown is borrowing far too much and they will only protect health and education. Demos should not indulge Cameron's political cunning in making fine speeches with all the right sentiments, entirely unsupported by policies that could ever make them happen. You lend credibility to the incredible.