Henry McLeish: time for ethical economics

For Labour, the economy should be the main focus of any political strategy designed to win back electoral support from the SNP in the forthcoming Holyrood elections. It needs a social democratic agenda that prioritises the social investment state and social partnership model in the mould of the Nordic countries and some of the other Western European states and regions.

Their approach embraces a number of political, but essentially ethical, principles.

Labour’s approach to the economy should be based on the politics of moral engagement, which are not only more inspiring but a more promising basis for a just society. 

The philosophy of the common good is a politically relevant creed based on fairness, justice, equality of opportunity, social mobility, inclusion, equal worth and realising the aspirations of all citizens. It rejects the idea that society merely comprises atomised individuals.

Instead, it accepts that people should live their lives as citizens, deeply embedded in social relationships, with markets and money serving people, not vice versa. Labour must instigate a public debate about the moral limits of markets, setting out a distinctive narrative and identifying the progressive practical policies required to boost Scotland’s economy that are credible, radical and relevant. 

We have failed to recognise that most so-called economic issues are moral and political questions. The market is a human construct not some immutable gift of God! We need a public debate about the moral limits of markets.

In Scotland, the gap between the rich and poor has grown since the1980s. Yet inequality of income, wealth and opportunity has not become the burning issue it should be. There has been a real lack of urgency and attention given to inequality in contemporary politics. The key point is that too great a gap between rich and poor undermines the solidarity and community that democratic societies need to remain stable, cohesive and productive.

These are difficult and complex issues but Labour has an opportunity to make an impact. The Conservatives are not interested and the SNP, a recent convert to more progressive policies, has no philosophical depth on this issue or any track record of achievement. For a party that has now been in power for a majority of the devolution years, their policies on education, health and the economy have made little impact on inequality or poverty. The lack of powers argument is no real defence against a lack of progress. 

Labour is well placed to argue a comprehensive approach to a moral economy especially with a more convincing commitment to tackling inequality. In Scotland it could argue a much deeper philosophical embrace of social justice, running with the grain of Scottish society, and promoting their case as progressive centre-left politics rather than the more centrist populism of the SNP.  
Labour needs a public platform from which the links between social and economic policy can be established in the wider context of social democracy and social partnership.

This approach rejects the market logic of low wages, low taxes and light regulation, which inevitably leads to low levels of public service and growing income inequality. It needs a new narrative for the economy, combining the moral philosophy that enthused Labour over a century ago.

We need a quantum leap in our approach to tackling the growing inequalities of income, wealth and opportunity and the inexcusable and avoidable poverty and deprivation which are poisoning the well of Scottish society and wasting the lives of so many children, young people and adults. 

Education and learning are the keys to unlocking our economic potential but we need to tackle the educational inequalities reinforced by the very uneven provision of such opportunities, the impact of generational inequality, the lack of social mobility and the obvious geography of poverty. 

Over time, all these elements are mutually reinforcing. Scotland and its economy cannot prosper unless we recognise that our 80/20 nation is not sustainable. We are wasting a large part of our future. At a time of punishing austerity, hostile attacks on public expenditure, little debate on the morality of markets, an increasingly selfish society, a grotesque low-wage economy and a regressive taxation policy, we need new thinking and more inspired investment. This has to be linked to new political ideas and a greater sense of urgency. Let’s not forget the bigger globalised world we live in. 

What is Labour’s vision for the future? Education, learning and the development of human capital have to be the driving forces behind any concept of a modern and successful economy. Our greatest renewable resource is human capital. Our long-term future as a nation depends on how serious we are about embracing this idea and accepting the common sense and timeless assertion “that a mind is a terrible thing to waste”.  

Therefore, the key question is: how can Scotland achieve its potential when one in five of our population can’t achieve theirs?