British Politics, 2007, 2, (282–288)
r 2007 Palgrave Macmillan Ltd 1746-918x/07 $30.00
www.palgrave-journals.com/bp
New Labour or The Normalization of
Neo-Liberalism?
Bob Jessop
Institute for Advanced Studies, County College South, Lancaster University, Lancaster LA1 4YD,
UK.
E-mail: r.jessop@lancaster.ac.uk
British Politics (2007) 2, 282–288. doi:10.1057/palgrave.bp.4200059
For some, the landslide victory of the Labour Party in 1997 held the promise of
a reversal of the socio-economic transformation of Britain that had been
achieved through nearly 18 years of Conservative government. But it did not
take long for the Blair government to disappoint these hopes. For, in many
ways, the three successive Labour Governments under Blair’s continuing
authoritarian plebiscitary tutelage have deliberately, persistently, and wilfully
driven forward the neo-liberal transformation of Britain rather than halting or
reversing it. And, as Blair proudly proclaimed at the 2005 Labour Party
Conference, every time that he has tried to introduce modernization, with
hindsight he regrets that he has not been more radical. Moreover, having
announced that he would not serve a full third term as Prime Minister, he
seems determined to constrain his successor’s capacity to depart from the neoliberal agenda.1
The immediate political background to the rise of New Labour was the
lessons drawn from the Blair camp’s reflections on the rise of Thatcherism as
a dissenting social and political movement and its subsequent consolidation as
a radical neo-liberal project for the ‘modernization’ of the British economy,
state, and civil society. It is a curious paradox that radical left-wing critics of
the rise of Thatcherism had a better grasp of the role of political discourse in
preparing the war of position than did ‘Old Labour’; and yet it was the centreright in the labour movement that applied those lessons to enable ‘New
Labour’ to defeat an increasingly demoralized and disunited post-Thatcher
Conservative party and thereby prepare the ground for a renewal and
consolidation of her neo-liberal project rather than its radical reversal.
Consolidated Thatcherism was characterized above all by a ‘two nations’
authoritarian populist hegemonic project, a centralizing ‘strong state’ project,
and a neo-liberal accumulation strategy (Jessop et al., 1988, 1990). It is crucial
to distinguish these three aspects of Thatcherism not only because they
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developed unevenly in the Thatcher–Major years; but also, and more
importantly for present purposes, because the so-called ‘break’ with
Thatcherism initiated by New Labour’s ‘Third Way’ affects Thatcherism’s
hegemonic vision more than its state project and has left its neo-liberal
accumulation strategy more or less intact. Following Mrs Thatcher’s ejection
from office, the Major government maintained the main thrust of consolidated
Thatcherism, albeit in a less charismatic manner. In turn, the crisis of
‘Thatcherism with a grey face’ facilitated the emergence of the ‘New Labour’
project within the labour movement and, especially, the Labour Party. This
enabled the emergence of another phase of Thatcherism, this time with a
‘Christian socialist face’.
It is tempting to attribute New Labour’s first electoral victory to a cunning
combination of ‘an organizational fix and floating signifiers’. For its
organizational reforms had enabled the leadership to distance New Labour
from its past and to assert control over its future; and its resort to soundbites
and malleable ‘big ideas’ enabled it to leave its strategic line and detailed
political programme undefined as far as the electorate was concerned. It was
sufficient for many voters that New Labour was a serious, disciplined
alternative to a discredited Conservative Government and Party in a period
when the electorate felt overwhelmingly that ‘it was time for a change’.
Paradoxically, following its election, New Labour was content to administer
much of Thatcherism’s legacy in regard to the neo-liberal economic strategy, as
if considering their effects to date as so many economically or politically
irreversible faits accomplis.
This involved more than an initial prudential desire not to frighten the
electorate with the prospects of radical change or a return to the now firmly, if
unfairly, discredited postwar Labour tradition. It clearly reflected Blair’s
strong Christian socialist leanings and marked personal antipathy to
collectivism and corporatism. Thus New Labour has largely followed in the
tracks of the neo-liberal regime shift it inherited, as can be seen by examining
the main elements of neo-liberalism as pursued in the Thatcher–Major years. It
has maintained the broad strategic line embodied in the six planks of neoliberal economic strategy: namely: liberalization, deregulation, privatization,
re-commodification, internationalization, and reduced direct taxes. Indeed, it
has willingly committed itself to further liberalization and de-regulation in
many areas, old and new; to the privatization or, at least, corporatization, of
most of what remains of the state-owned sector; to reliance on expensive
‘private-finance initiatives’ as a way of raising funds for public investment
while keeping such borrowing off the government’s balance sheet; and to the
extension of direct or proxy market forces into what remains of the public and
social services at national, regional, and local level as well as to the spread of
market forces into the provision of such services elsewhere in Europe and the
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rest of the world. Its policy on this last point reflects its firm attachment to the
internationalization of the British economy, as evidenced in its welcome to
inward investment and the foreign takeover of companies quoted on the
London Stock Exchange, its active promotion of the international interests of
British-based (but not always British-owned) financial, commercial, and
industrial capital, and its support for the Washington Consensus on the
benefits of free trade in services on a world scale. Indeed, spurred on by Blair,
New Labour has warmly embraced the logic of neo-liberal globalization as a
whole, proclaiming its inevitability, desirability, and truly global benefits.
Finally, it has continually re-affirmed a principled commitment to not
increasing the top rate of income tax — which necessitates in turn reductions
in unemployment, ‘efficiency savings’ in the state sector, and social policies that
‘would make a difference at little or no cost’ (Blair, 1996, cited in Panitch and
Leys, 1997, 252).
Finally, the Blairite hegemonic vision rests mainly on a ‘one nation’ rather
than ‘two nations’ social imaginary. Nonetheless, it is not that of ‘one nation’
united under the Keynesian welfare national state. Instead, social inclusion is
to be secured primarily through labour market attachment and the economic
regeneration of marginalized communities; and individual, family, and child
poverty are to be alleviated mainly by a series of ‘stealthy’ (rather than proudly
proclaimed) redistributive measures that ideally involve redirecting revenues
within what would still remain rigid fisco-financial parameters. In this sense
there are strong Ricardian rather than Keynesian elements in the Blairite
economic and social vision of inclusion and a strong focus on ‘workfare’ in the
sense of the subordination of social policy to the imperatives of economic
flexibility and putting downward pressure on the social wage. Thus, to the
extent that the Blairite vision emphasizes communitarian themes and policies,
they usually involve flanking measures to ameliorate the effects of a neo-liberal
accumulation strategy rather than providing the basis for a massive assault on
the profit-oriented, market-mediated logic of neo-liberal capitalism. In
addition, the right to membership of this ‘one nation’ and its plural
communities excludes those who belong to the ‘enemy within’, whether
regarded in terms of a lack of respect for the norms of civilized behaviour and
the responsibilities as well as rights of citizenship or denizenship or in terms of
the now permanent ‘war on terrorism’. In this regard, the tendency to
authoritarian populism and a love for the strong state have not so much
diminished as been reinforced over the course of three New Labour
governments.
Under Blair’s authoritarian plebiscitary leadership, New Labour has sought
to move beyond the ‘roll-back’ neo-liberalism of the Thatcher–Major years
to develop its ‘roll-out’ phase. Conservative governments were mainly
concerned to eliminate the ‘exceptional’ corporatist and dirigiste elements of
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government introduced or intensified to cope with crisis in the Fordist mode
of growth and its Keynesian welfare national state and, in addition, to
dismantle many of the ‘normal’ elements of the institutional architecture and
policy landscape of the postwar settlement. In contrast, New Labour has been
more concerned to introduce the putatively ‘normal’ elements of a neo-liberal
state that would be formally and functionally adequate to a globalizing
knowledge-based economy. The new economy promoted by New Labour
requires a new state form — a Schumpeterian workfare post-national regime
(Jessop, 2002).
Presented in ideal-typical terms, the emerging Schumpeterian workfare postnational regime (SWPR) is the product of four broad trends in the crisisinduced restructuring of the preceding Keynesian welfare national state. The
first is a shift from Keynesian aims and modes of intervention to
Schumpeterian ones; the second is a shift from a welfarist mode of
reproduction of labour-power and the broader population to a workfarist
mode; the third is a shift from the primacy of the national scale in economic
and social policy-making to a post-national framework in which no single scale
predominates; the fourth is a shift from the primacy of the state in
compensating for market failures in a mixed economy to an emphasis on
networked, partnership-based economic, political, and social governance
arrangements. There is wide variation in these trends, both severally and in
combination, in the various Atlantic Fordist economies but the overall trend in
the United Kingdom (and, above all, in England) is towards a neo-liberal
variant reflecting the distinctive position of the UK economy in the world
market.
Thus New Labour is committed to high-tech civilian innovation, to
modernizing state and civil society in the interests of international competitiveness, to welfare-to-work programmes and an enterprise culture with flexible
subjects, to devolution at home and ‘putting Britain at the heart of Europe’,
and to an expanding role for public–private partnerships and the informal
sector. Yet all of this is to be pursued within tight budgetary constraints and
without upsetting either international capital or ‘Middle England’ — the
affluent and conventional middle mass of electors. Moreover, despite early
‘Third Way’ rhetoric, aims, and institutional design, many policies are often
niggardly and mean-spirited and subject to Blair’s desire to control all aspects
of the New Labour project. This means that many of New Labour’s initiatives
have failed and this has led in turn to policy-churning, a permanent revolution
in which failed initiative follows failed initiative before lessons can be learnt,
with an emphasis on policy-based evidence rather than evidence-based policy,
and with greater trust being placed in management consultants and other
private sector producer services firms than in the expertise, experience, and
opinions of public sector professionals.
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There are nonetheless significant discontinuities with the Thatcher–Major
years. These are partly rooted in the political legacies of the old labour
movement and its social bases, which provide a measure of resistance to the
New Labour ‘project’ even inside the Cabinet, and are partly related to the
more general aim to adapt neo-liberalism to new exigencies on a global,
European, and national scale. In particular its economic strategy reflects a
further intensification of the dominant neo-liberal mode of globalization and
the increasing equation of post-Fordism with the alleged transition to the
‘knowledge-based economy’. Thus, within the framework of a strong
commitment to expanding the European single market and maintaining the
dominant position of the City of London, New Labour has gone well beyond
the Thatcher–Major commitment to making the economy more flexible and
entrepreneurial by rolling back the rigidities associated with Britain’s ‘flawed
Fordism’. It has also been developing a strategy for a knowledge-driven or
knowledge-based economy based on knowledge-intensive business services,
high-tech innovation (especially big pharma), and the cultural and creative
industries. New Labour is less concerned to manage the transition from rigid
labour markets to flexible labour markets in response to the crisis of Fordism
— a task already largely achieved under Thatcherism — than to create a
framework conducive to a globalizing ‘knowledge-based’ economy. This is
common to most OECD countries and is pursued on many scales but New
Labour’s preferred model is neo-liberal rather than neo-corporatist or neostatist.
Likewise, New Labour’s social strategy reflects not only the continuing
desire to subordinate social policy to the alleged economic imperatives of
global competition but also to address the marked increase in social
polarization and exclusion that has accompanied the neo-liberal project as
pursued by the Thatcher–Major governments. This is especially important
given the markedly uneven North–South development of the Thatcher–Major
years and is reflected in a series of New Labour flanking measures to improve
the efficiency of flexible labour markets as well as to temper the social costs of
labour market reforms and other neo-liberal economic measures. These were
nonetheless limited by cost constraints in the first two to three years of the New
Labour government and by worries that they might create political space for
opposition to the New Labour project. Initially more impressive in their
rhetoric, aims, and institutional design than their implementation, they
received greater weight in New Labour’s second term. This can be seen in
New Labour’s adoption of neo-communitarian rhetoric with a strong USAmerican inflection as well as in the proliferation of area-based economic,
educational, housing, poverty, and other initiatives targeted at the socially
excluded. Indeed Blair, his principal policy advisers, and his favoured ministers
are far keener to export lessons of US enterprise culture and welfare-to-work to
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287
the European Union than they are to export modernized European social
democracy and the European Social Model to the USA.
The primacy of neo-liberalism in this changing policy mix can be discerned
in many aspects of New Labour strategy from 1984 until 1997 (Hay, 1999) and,
in power, many of its economic and social policies display a neo-liberal bias as
they move from initial policy formulation through local experimentation to
full-scale implementation. This impression of neo-liberal primacy is reinforced
when one contrasts the constancy and conviction that marks the pursuit of
neo-liberalism both rhetorically and practically with the oscillation and
hesitation in those aspects of New Labour discourse and actions that seem
to run counter to neo-liberalism. Thus, at different times, New Labour has
invoked ‘the stakeholding society’, ‘the giving society’, ‘communitarianism’,
‘social citizenship’, ‘social capital’, ‘partnership’, and, of course, ‘the Third
Way’ to distinguish its approach from Thatcherite neo-liberalism. But these are
rarely followed through in practical terms lest they threaten the neo-liberal
project. Instead New Labour has implemented its social programme through
‘stealth’ rather than by mobilizing the socially excluded behind a radical
hegemonic project. Moreover, while it toughs out opposition from party
members, trade unions, and new social movements, New Labour is highly
sensitive to business criticism about its alleged neglect and/or backsliding
regarding the market mechanism. Business is also over-represented in scores of
official review and advisory bodies and is being given an increasing role in the
creeping privatization of public and social services. New Labour has embraced
the City agenda and neo-liberalism more generally and pays less attention even
to regional chambers of the CBI, Chambers of Commerce, and other
representatives of the domestic economy, let alone the trade unions. Indeed,
it has become the natural governing party of international capital.
While neo-liberalism has been modified compared to the Thatcher and
Major years, this does not mean that it has been rejected. It is an evolving
economic and political project that has already passed through several stages,
that can be adjusted as its effects unfold in different fields and on different
scales, and that has to be adapted to changing economic, political, and social
circumstances. In particular, as the neo-liberal regime shift comes to be
consolidated, significant changes in the state’s role should be anticipated. As
noted above, the transition period was marked by a concern with rolling back
the exceptional forms of state intervention linked to attempts at crisismanagement in the previous regime (Atlantic Fordism) as well as the more
normal forms of intervention associated with the Keynesian Welfare National
State; and by a concern with rolling forward the institutional architecture for a
new regime, securing the balance of forces needed for this, and establishing the
new forms of state intervention deemed appropriate to that regime should it be
successfully consolidated. This period has been followed by the first steps on
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the road to a routinization of neo-liberalism. Thus more emphasis has been
given to securing the operation of the emerging neo-liberal regime through
normal politics, to developing supporting policies across a wide range of policy
fields, and to providing flanking mechanisms to compensate for its negative
economic, political, and social consequences. All of these measures are being
pursued, of course, in a context marked by continuing political worries about
state unity and territorial unity, political legitimacy, and re-election as well as
more general concerns over social cohesion. This is the legacy of Blairism, and
Cameron’s leadership of the Conservative Party represents the further
routinization of this stage of normalized neo-liberalism. Indeed, if Mrs
Thatcher once proclaimed that her most important legacy was Blair, Blair
could equally proclaim that his most important legacy is Cameron.
Note
1 This article draws on my previous work on Thatcherism and New Labour, especially a longer
paper published in Germany on the dynamics of social democracy in postwar Europe and the
specificities of the British case (Jessop, 2006).
References
Hay, C. (1999) The Political Economy of New Labour. Labouring under False Pretences?,
Manchester: Manchester University Press.
Jessop, B. (2002) The Future of the Capitalist State, Cambridge: Polity.
Jessop, B. (2006) ‘Der Dritte Weg: Neoliberalismus mit menschlichen Zügen?’, in S. Berg and
A. Kaiser (eds.) New Labour und die Modernisierung Grobritanniens, Augsberg: Wissener
Verlag, pp. 333–366.
Jessop, B., Bonnett, K. and Bromley, S. (1990) ‘Farewell to Thatcherism? Neo-Liberalism vs New
Times’, New Left Review 179: 81–102.
Jessop, B., Bonnett, K., Bromley, S. and Ling, T. (1988) Thatcherism: A Tale of Two Nations,
Cambridge: Polity.
Panitch, L. and Leys, C. (1997) The End of Parliamentary Socialism: From New Left to New
Labour, London: Verso.
British Politics 2007 2
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