The Good Society

THE PROJECT OF THE DEMOCRATIC LEFT

Jon Cruddas and Andrea Nahles

BUILDINGTHE GOODSOCIETYTHE PROJECT OFTHE DEMOCRATIC LEFT

Jon Cruddas and Andrea Nahles

1. EUROPE AT ATURNING POINT

Europe is at a turning point. Our banks are not working,businesses are collapsing and unemployment isincreasing. The economic wreckage of market failure isspreading across the continent.But this is not just a crisis of capitalism. It is also a

failure of democracy and society to regulate andmanage the power of the market. At this moment ofcrisis we reject the attempt to turn back to the businessas usual of unsustainable growth, inequality andanxiety economics. But we recognise too that there isno golden age of social democracy to go back to either.The future is uncertain and full of threats; before us

lie the dangers of climate change, the end of oil andgrowing social dislocation. But it is also a moment fullof opportunities and promise: to revitalise ourcommon purpose and fulfill the European dream offreedom and equality for all. To face these threatsand realise this promise demands a new politicalapproach.On the tenth anniversary of the Blair–Schroeder

declaration of a European Third Way, the DemocraticLeft offers an alternative project: the good society.

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This politics of the good society is about democracy,community and pluralism. It is democratic because onlythe free participation of each individual can guaranteetrue freedom and progress. It is collective because it isgrounded in the recognition of our interdependencyand common interest. And it is pluralist because itknows that from a diversity of political institutions,forms of economic activity and individual culturalidentities, society can derive the energy andinventiveness to create a better world. To achieve agood society based on these values we are committedto:

� restoring the primacy of politics and rejecting thesubordination of political to economic interests;

� remaking the relationship between the individualand the state in a democratic partnership;

� creating a democratic state that is accountable andmore transparent, strengthening our institutions ofdemocracy at all levels including the economy;

� enlarging and defending individual civil liberties;� reasserting the interests of the common good, such

as education, health and welfare, over the market;� redistributing the risk, wealth and power associated

with class, race and gender to create a more equalsociety;

� recognising and respecting differences of race, religionand culture;

� putting the needs of people and the planet beforeprofit.

The foundation of the good society is an ecologicallysustainable and equitable economic development forthe good of all. There are no short cuts or ready-madeblueprints. Instead, based on these values and aspirations,we will take each step together and in this way we willmake our world a better place to live in. AsWilly Brandtsaid: ‘What we need is the synthesis of practical thinkingand idealistic striving.’Working in our own national arenas we can achieve a

great deal, but we need to recognise that capital has goneglobal while democracy has remained largely stuck atnation state level. This statement brings social democratsfrom Germany and Britain together and in doing so makeseach stronger. The next stage is to use this exploratory textto build a pan-European network of social democrats who,like us, don’t want to turn back to the past but are lookingahead to build the good society.

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2. LEARNING FROM EXPERIENCE

In June 1999, Tony Blair and Gerhard Schroeder, the PrimeMinister of Britain and the Chancellor of Germany,published a joint declaration of European socialdemocracy. Their statement brought together the ideas ofthe British ThirdWay and the German Neue Mitte. Theyclaimed that this newmodel of social democracy hadfound widespread acceptance: ‘Social democrats are ingovernment in almost all the countries of the union.’Todaythe reverse is true. Social democrats are out ofgovernment in almost all the countries of the union.The historic stage of social democracy associated with

the ThirdWay and the Neue Mitte was a response to thelong period of right wing dominance that had taken holdfollowing the economic crisis of the 1970s. A new historicstage of capitalism had emerged, destroying the post-warwelfare consensus and establishing a new consensusaround neo-liberal values and a free market economy.The electoral successes of the ThirdWay and Neue Mitte

were tempered by compromises and limitations. NeitherNew Labour nor the SPD were able to build lastingcoalitions for transformational change. In the 2005election both parties had millions fewer votes than in 1997

and 1998 and both have lost out in local and regionalelections. Substantial numbers of traditional working-classsupporters have lost faith in New Labour and the SPD asthe historical advocates of their interests. Many abstainfrom voting while an increasing minority identify withother parties who would claim to represent their interests,such as the leftist ‘Die Linke’ in Germany, and – of greaterconcern – the fascist BNP in Britain. The institutions andcultures of the working class that sustained Labour andthe SPD through the 20th century have either disappearedor lost their social vitality.The ThirdWay and the Neue Mitte models of social

democracy uncritically embraced the new globalisedcapitalism. In doing so they underestimated thedestructive potential of under-regulated markets. Theymisunderstood the structural changes taking place inEuropean societies. They believed that a class-basedsociety had given way to a more individualised,meritocratic culture. But the new capitalism has notcreated a classless society. Under market-led globalisationthe economic boom created unprecedented levels ofaffluence but ThirdWay politics were not able to prevent itfrom dividing societies. After a decade of socialdemocratic government, class inequality remains the


defining structure of society. Success in education and lifechances in general continue to depend on familybackground.The era of neo-liberalism was always going to end in

self-destruction. Now the economic crash has created aturning point. We have a choice: we can go back to howthings were before – the unsustainable growth, theindividualised and consumerised world of free markets,high levels of inequality and anxiety, and the failure toconfront the danger of climate change. Or we can define anew vision of progress based on justice, sustainability andsecurity in which there is a balance in our lives betweenproducing and consuming, and a balance between workand our lives as individuals and members of society. Thereis an alternative, and it must be constructed at a Europeanlevel.

3.THE GOOD SOCIETY

Our values of freedom, equality, solidarity andsustainability promise a better world free of poverty,exploitation and fear. We have a vision of the good societyand a more egalitarian economy, which will create asecure, green and fair future. But to achieve it capitalism

must now become accountable to democracy; anddemocracy will need to be renewed and deepened so thatit is fit for the task. A good society cannot be built from thetop down, but can only come from a movement made byand for the people. Creating the good society will be thegreatest challenge of our time and it will shape the lives ofgenerations to come.

Our valuesA newmodel of social democracy begins with our values.On these we can build the good society.In this new global age we must live together as free and

equal individuals in multicultural societies, and as citizensof Europe.We must build political institutions that create asense of belonging in a just society, and we must reachout to the rest of humanity by creating democratic formsof global governance.The ideal of a better, fairer and more open world

resonates among millions of people who are searching fornew ways to live together. It is a hope expressed in globaland local social movements, countless single-issuecampaigns, community actions, pressure groups and amultitude of informal individual engagements withpolitical, charitable and social issues. The task of the


Democratic Left is to develop the idea of a sharedcommon good through argument, collective politicalaction and campaigning among the people.The good society is about solidarity and social justice.

Solidarity creates trust, which in turn provides thefoundation of individual freedom. Freedom grows outof feelings of safety, a sense of belonging, and theexperience of esteem and respect. These are thefundamental preconditions for the good society. We seek alife of self-invention and self-fulfillment. This desire for self-fulfillment involves the right of everyone to achieve theirown unique way of being human. But it is not theselfishness of market capitalism, because to dispute thisright in others is to fail to live within its own terms.Solidarity expresses our interdependency. In a globalisedworld solidarity has no boundaries.The notion of autonomy is central to a future in which

people have the greatest possible control over their lives.Autonomy is not licence; it carries with it the obligationsand constraints of living with others. It requires that eachcitizen has the resources – money, time, relationships andpolitical recognition – to make a good life for themselves.This means the right to decent work, education and socialsecurity. The market cannot distribute freedom fairly and

so a wider political community must be created in order todecide the just distribution of resources. Individualautonomy is the product of a political community.Democracy and its renewal is central to the politics of thegood society.The guiding principle of the good society is justice, the

ethical core of which is equality. Each individual isirreplaceable and of equal worth. In the good society eachis afforded equal respect, security and chances in life,regardless of background. Discrimination based on class,racism, homophobia and prejudice against women isoutlawed and rigorously contested in culture, educationand the workplace.Framing all these values is ecological sustainability. The

good society is part of the planet and attuned to itsecology. It develops ways of flourishing within theconstraints imposed on it.

A fair and sustainable economyAt the centre of the good society is the individual asproductive agent. Only by reorganising the system ofproduction can we create a society of freedom and equality.The neo-liberal consensus did not deliver the individualfreedom it promised. It created a winner takes all culture of

capitalism that has damaged society and so also theindividual. It failed to create free, self-regulatingmarkets.We need to develop a new kind of economy rooted in

the values and institutions of the good society. It will beone characterised by a variety of different economicstructures and forms of ownership. It will make sure thatworkers codetermine economic decisions of theircompanies. From this economic pluralism we can ensurethere is no going back to the globally unbalancedeconomic growth that led to the crisis.We need ecologically sustainable development thatmeets

human needs equitably and improves the quality of life ofall. Climate change, peak oil and the need for energy andfood security demand large-scale economic transformations.The time has come to start to discuss and then implement anewmodel of prosperity, which can be globalised butwithout leading to ecological disaster. Quality growth,meaningful work and technological progress can lead tomorewealth and a better quality of life, butmarkets alonecannot achieve these goals. The future will demand amoreactive state engagingwith long-term economic planningand development to build a sustainable economy.The reform of the economy can begin with

government taking services of general interest – utilities,


transport, post, banks and public services – back intopublic ownership or placed under public control, wherethis is the most accountable, equitable andeconomically sustainable way of guaranteeing theseservices. New rules for markets have to be establishedand stronger incentives fashioned for a more sustainableeconomy.The market state and its agencies need to be

transformed into a civic state that is democratised andmade more responsive to individual citizens and smallbusinesses. We need to balance a strong centre witheffective power at local level for economic and socialdevelopment. The advocacy roles of civil societyorganisations and the trade unions need to bestrengthened.The primacy of politics over the financial markets has to

be restored. In the banking sector a plurality of morecustomer focused business models must be established,which include commercial banks, mutuals, regional andcommunity banks and credit societies, all operating on avariety of scales. We have to make sure that the bankingsector is restructured and that it develops transparent andaccountable forms of corporate governance. A newregulatory and supervisory framework will define the role

and practice of banking and the system of executiveremuneration. Only government with its democraticauthority, global alliances and tax revenues can achievethe necessary level of reconstruction.The economic crisis requires new global alliances;

countries must start working together rather thancontinuing the race to the bottom. We needinternational and European regulation of financialmarkets. Transnational corporations must be made subjectto democratic oversight through the introduction ofglobal economic democracy with defined rights ofinformation, consultation and codetermination of workers’representatives. Private ratings agencies, which have ahuge influence on economic performance, need reformand supervision by public authority. The liberalisation andglobalisation of capital has redistributed wealth from pooreconomies to the rich and increased systemic risk ofworldwide economic collapse. Capital controls, the closingdown of tax havens and the taxation of global financialtransactions are needed to aid economic developmentand protect vulnerable economies.A new industrial policy needs to map out the future

priorities and needs of Europe and its national economies.Manufacturing is in decline as a share of GDP. Industrial


employment is falling and wages have been stagnating.Domestic demand has been falling and in some countriesthe gap was filled by cheap mortgage-backed credit. Thatshort cut option to economic growth is now closed. Corestructures of industry have to be maintained andmodernised, because they secure employment andprovide a basis for the services sector.We have depended on the global economic imbalance

between the huge trade surpluses of some economiesand the deficits of others. This is unsustainable and wehave to rethink how regionally in Europe and globally wecan have more balanced trade relationships.Economic policy must ensure a diversity of business

models and forms of economic ownership.We do notwant to substitute monopoly capitalism for statemonopoly. But we want markets to be regulated for thecommon good and the greatest possible degree ofeconomic pluralism. Government on different levelsincluding local states should be encouraged to raise fundson the capital markets, issue mortgages and raise fundingfrom bonds for their own infrastructure projects.New green markets and a renewable technologies

industry need developing, both for a carbon neutraleconomy and for energy security. In the short to medium

term the most effective solution to fight climate change isto establish a global carbon market based on a cap andtrade system. In the meantime energy efficiency shouldbe at the heart of the response to the economic crisis, as itis the quickest and fastest route to take for both jobcreation and emissions control. A Green Strategy needs tobe developed and coordinated by governments acrossEurope. Advances and price reductions in large-scalerenewable technologies have potential to replace carbon-intensive power-plants and nuclear. To ensure affordablewarmth the energy markets and prices must be regulatedand the energy companies brought to account.The knowledge economymatters and we must focus

on investment in innovation and the generation of highvalue added products. But knowledge and culture relatedeconomic activity must be extended beyond the limits ofits current privileged zones and its demands should notbe prioritised over the rest of the economy.The market is failing to deliver high quality research and

development. Organisation and product transformingand enhancing innovation require substantial initialgovernment funding and a strong venture capital marketaligned to it. Success needs buoyant, assertive andconfident institutional cultures of risk taking. Such


conditions do not currently exist in higher education.Instead, universities driven by commercial imperatives andperformance indicators are neglecting the convivialcultures in which innovation happens and ideas andcommunication flow. The higher education systemmustbe decoupled from the market and from commercialimperatives and treated as a public good.The full potential of the services sector has to be

developed, especially in the fields of education andtraining, and in health, care and social services.We need a new system of agriculture, both local and

global. Investment should be made in sustainable organicfood system where food is produced, prepared andconsumed locally and where wealth created remainswithin local communities.

Good work and social securityWemust work for a social Europe in which people comebefore profits and where society asserts its interests overthose of the market. This means economies that prioritisefull employment, fair levels of pay, and labour marketrights that guarantee good conditions and protectworkers against discrimination and exploitation. It standsfor social insurance against sickness, unemployment,

poverty and disability, and for good value pensions in oldage. Economic democracy is central to the social Europeproject. A social Europe must extend beyond work todecent housing, high quality energy and transportationnetworks, good quality health care services, egalitarianeducation systems, and skills training that preparesindividuals for a good life as well as good work. Thisagenda is a competitive asset in a globalised economy, notan obstacle to economic success.We need amix of cash benefits and social

infrastructure to lift people out of poverty and to helpstimulate demand. The tax systemmust contribute to amore equitable distribution of income and wealth. Lowwage earners should not pay taxes. Those at the top muststart paying their fair share and legislation must tightentax loopholes and tax avoidance schemes.Welfare policies that provide preventive approaches are

important and should be strengthened, but they must notbe used to disguise cuts in benefits. Fixation on personalresponsibility can create anxiety and social insecurityamong the most vulnerable people in society, especially ina recession. People need help to lead dignified lives freefrom poverty and social exclusion. Social benefits are aright of citizenship and should help people manage


changes and vulnerable situations over the whole life-course.Pensions are about the total economic system and they

will play a key role in social investment strategies andwealth redistribution. The longevity revolution and thefailure of financial markets to guarantee decent returns onpersonal pension plans make social insurance aneconomic priority. In the last decade, the replacement ofdefined benefit schemes with defined contributionschemes has created a fundamental shift of wealth infavour of the rich. They have transferred risk from the stateand business to the individual. This trend must be reversedin favour of public pay-as-you-go systems for both theprivate and public sectors.Labour market policies face the challenge of flexibility.

The growth in short-term contracts, agency work, sub-contracting and use of the ‘self-employed’have often leftworkers with fewer rights. Growth in employment hasbeen in both low skill, low wage jobs in poor conditionsand high skill, high wage jobs, but sometimes also indifficult contractual and working conditions. The growinguse of temporary and agency workers is spreading theseconditions to other parts of the economy. Regulation canend low pay, low skill and casualised labour. Strong trade

unions are the best defence against exploitation.Work andquality of life can be improved by introducing a livingwage. But we must ensure that conditions of employmentare compatible with caring responsibilities. The skillsagenda should be extended but also democratised andradicalised so that it can provide the means not only to‘good work’but also to a good life.

A new politics of democracyThe institutions which have in the past given peopleaccess to political ideas and activity, such as tradeunions, churches and political parties, face the challengeof steep membership decline. Many people aredisaffected with representative democracy. They havelost confidence in politicians and political parties. We livein societies where large numbers are pessimistic aboutour future. This is because for thirty years ourdemocracies have offered only one vision of society: thatgoverned by markets and profit. The economic crisis is acrisis of democracy but it also provides the opportunityto revitalise politics.Despite the disillusionment with political parties, there

are extraordinary levels of political, cultural andcommunity activism in our societies. Politics has become

more individualised and ethical, and rooted in a diversityof beliefs and lifestyles. The old collective styles andpolitical monocultures are being rejected by some. Thesedevelopments are stimulating a search for new kinds ofdemocratic political structures and cultures that arereconnecting institutions of political power with socialmovements and political constituencies. Communityempowerment and campaigns around social justice andsustainability are becoming more vigorous.Power must begin at the bottom and be delegated

upward.We cannot create the collective agents of socialchange; people can only empower themselves. But we canstrengthen democracy and so create the conditions fortheir emergence and our capacity to build alliances withthem.With real power and policy making influence theycan develop the ethos of democracy.We need a new culture of freedom of information and

more open access to the media. Networks and databasesfacilitated by the web are of growing importance incampaigning, bringing political power to account andmobilising popular opinion. Political parties remain anessential part of our democracies. They provideinstitutional continuity while networks are often transient.There is much to be gained by synergies between the two.


For this to happen, parties will need to allow their owncultures and organisations to be opened up anddemocratised in the process.We must, in the words ofWilly Brandt, ‘dare more

democracy’. We need to strengthen our democraticcultures by introducing electoral reform where it is neededand by increasing opportunities for active participationand deliberative decision-making processes also insideour parties. This is a precondition for strong SocialDemocratic and Labour parties in Europe. The time of top-down communication is over. The same is true fortechnocratic governments that tell people aboutnecessities rather than persuade with reasons. People donot believe in spin-doctors anymore.Themain task in the years ahead will be to create and

consolidate political trust in public life. Trust is thebasis of all political and social action. It is best created bybringing people together to agree common aims anddecisions, not by excluding them. It is achieved byinitiating and engaging in open debate not by seeking toavoid it.In the process of democratic renewal, nation states

can and must do more, alone and together. But it is thepolitical community of Europe that must be used if the

economic crisis is to be a turning point for a new futureand not a return to the failed politics of the past. TheEuropean ideal of a continent of secure citizens who alllive as freely and fully as they can in sustainable andjust societies is within our grasp. But it will take a leapof imagination and powerful ambition to make ithappen.

4. A POLITICS FORA BETTER EUROPE

A politics for a Social EuropeEurope needs a ‘Post Lisbon Strategy’ that is based on theconcept of ‘social productivity’. Social productivity is aboutsocial growth: increasing the social value and quality ofwork, accounting for the environmental and social costs ofmarkets, and developing sustainable patterns ofconsumption. The wellbeing of citizens and generalquality of life must be improved beyond simple numericaland monetary values. Wealth needs to be redistributed ina more equal manner. Effective regulatory standards needto be introduced to guarantee good, affordable andcomprehensive public services, fair wages, good workingconditions, free education for all and a human approach toimmigration and global solidarity.


The financial economyOur strategy for a social Europe must begin by tackling theeconomic crisis. By working together we will set thefoundations for a Europe of greater cooperation, fairnessand social justice. Member states are pursuing their ownseparate policies often at the expense of their EU partners.There is an urgent need for a coordinated Europe-widefiscal stimulus. The multiplier on coordinated fiscalexpansion is much greater than for any one country. In acoordinated response the tradeoff between increaseddebt and effective stimulus is much better for the EU as awhole than it is for any one country.We need to introduce European-wide reforms in

financial and economic governance. The regulation offinancial market actors in Europe is not sufficient.A European supervisory institution can enforce adequatecapital requirements, increase transparency in financialmarket actors’ investment behaviour and facilitate efficientinformation exchange between national supervisoryauthorities. European financial markets must become asource of stability and development in a production-orientated European economy. The emphasis on achievingshareholder value hinders capital investments in fixedassets, and thereby growth and employment.

To this end we need to reform the European CentralBank and the European Monetary Union. This will improvethe prospects of Britain applying to join the Euro. Themandate for the European Central Bank needs to bebroadened in the form of a law which the Council andParliament can also amend. As well as price stability themandate should permit other social objectives wherenecessary. These objectives would include the preventionand reduction of unemployment, the stability of thefinancial system, support for other EU economic policiesand monetary cooperation with outside powers.The EU’s central budget needs to be significantly

increased and it must be able to redistribute considerablymore resources than at present. Alongside this reform, theCommission must have the right, when supported byCouncil and Parliament, to run deficits.The Stability and Growth Pact should be replaced by an

agreement on the coordination of member statebudgetary policies. Coordination and centralisation are tosome extent alternatives here; the greater and morereliable the coordination, the smaller the central budgetcould be – but between them the two measures mustmake possible some control over aggregate tax andspending policies in the EU.


Employment and social securityDifferent national paths constitute a source of strengthin the EU. To achieve a Social Europe does not meanenforcing a single system on all nations, but agreeing aset of welfare outcomes. A European minimum wage,corresponding to the national average income, wouldhelp limit the increasing wage differentials in Europeand prevent ‘social dumping’. To push forward itsimplementation will require an organisation similar toBritain’s Low Pay Commission with a remit forcampaigning and working closely with the tradeunions.The series of European Court rulings – the Laval, Viking

and Rueffert cases – have deregulated labour markets bychanging the terms of the 1996 Posting ofWorkersDirective. This now needs reform to restore collectivebargaining, workers’ rights to strike, and establish equalityfor posted and migrant workers across Europe.Europe needs fair policies on taxation. Current tax

competition in Europe is leading to a shifting of the taxburden from companies to individual income andconsumption. This is regressive and unjust and thereneeds to be a harmonisation of corporate tax policy tosafeguard the financial basis of national social security

systems. In the medium term, the European Union (EU)should have its own financial resources, based on aEuropean corporate tax and a European financialtransactions tax. Offshore tax havens should be outlawedand corporate profits taxed in the countries where theyare earned.

Energy security and sustainabilityEurope must become the most ecologically sustainableeconomy in the world. If the US is starting a competitionto become the ‘greenest economy in the world’, Europemust take part in this race because all humankind will win.We need Europe-wide green standards for power stationsthat adopt a series of successively tougher targets foremissions standards, which will drive the introduction ofcarbon capture and storage. An efficiency target forelectricity generation, which is similar to that proposed forcars in the EU, would make it difficult for a government toallow the construction of new coal-fired power stationswithout some form of carbon capture technologyattached.Balancing the grid at an EU-wide level will reduce the

need for coal and improve energy security by reducingreliance on foreign oil and gas. It will make significant


cuts in carbon emissions and in the long run bring downfuel bills too. The current bilateral schemes that are beingnegotiated need to be extended across Europe.

Global social justiceA social Europe must work for global trade justice. The EUis still pursuing an aggressive free trade agenda. It iscurrently negotiating Economic Partnership Agreementswith African, Caribbean and Pacific countries which pose aserious risk to the development of the countries involved.The EU’s latest ‘Global Europe’ trade strategy is trying toforce dozens more countries into even more extreme freetrade agreements for the benefit of big business. We needa full-scale review of EU trade policy and a new strategythat puts the rights of poor and marginalised people at itscentre. Trade policy needs to be made more democraticand accountable, and include much greater sharing ofinformation and real participation by civil society.

European democracyTo strengthen European democracy in the economyweshould use the potential of introducing supervisory boardsthrough European Public Companies (SEs) for stakeholders toco-determine control over themanagement board.The EU

needs to build a European-wide civic culture, whichwillengage in voting, sustain its democratic institutions andsubject them to scrutiny. The EU needs to trigger publicdebate before taking itsmajor decisions. To respond topopular opinion the European Parliament, which is directlyelected by the people, needs to get the right to initiatelegislation and to elect the Commission President.

5. INVITATIONTO DEBATE

This paper lays out the principles of the good society. Butthe project of the good society has to be developed bysociety itself, through debate and action. We thereforeinvite civil society, social movements, trade unions andmembers of our parties and those in all other Europeannations to discuss and further develop the ideas set outin this paper. Our invitation to debate extends toeveryone who want a more socially just, sustainable anddemocratic Europe.This is just the beginning.


ABOUTTHE AUTHORS

� Jon Cruddas is MP for Dagenham� Andrea Nahles is Vice-President of the Social

Democratic Party of Germany (SPD), a member ofBundestag and spokesperson for labour and socialaffairs of the SPD group in the Bundestag.

MAKING CONTACT

� You can join the debate by posting comments on thisdocument at www.goodsociety.eu/en

� You can contact Jon Cruddas at the House of Commons,London SW1A 0AA, and at [email protected]

� You can contact Andrea Nahles at theWilly-Brandt-Haus, D-10911 Berlin, and at [email protected]

� For information about Compass please contact:Gavin Hayes, General SecretaryCompassSouthbank House,Black Prince RoadLondon, SE1 [email protected]

ACKNOWLEDGEMENT

Grateful acknowledgement is made to the Friedrich EbertStiftung for the support of the publication.


The Good Society

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