Rediscovering our libertarian roots

Peter Hain puts a left spin on Blair's Third Way.

The key elements of libertarian socialism - decentralisation, democracy, popular sovereignty and a refusal to accept that collectivism means subjugating individual liberty - have a strong pedigree, going back to the mid-seventeenth century, the English Civil War and the radical activists of that age: the Levellers, Agitators and Diggers. Chartists and still later Suffragettes carried on this tradition, as did Robert Owen's co-operative movement and groups of workers such as the Rochdale Pioneers who in 1844 put into practical effect local socialist ideas for workers' shops, insurance societies, credit unions and companies. Through such initiatives, early trade unionists and socialists invented and practised what the historian A. H. Halsey described as "the social forms of modern participatory democracy". Another nineteenth century socialist, William Morris, explicitly criticised state socialism for upholding the status quo of a centralised, unequal society. Trade unionism provided a continuing conduit for non-state socialism, especially through syndicalists, such as Tom Mann, who in 1910 started introducing ideas about industrial democracy. Later, G.D.H. Cole's Guild Socialism proposed an alternative to both capitalism and state socialism.

In the 1930s nationalisation was adopted as a model, with the emphasis upon planning and state ownership of still hierarchically run enterprises, rather than industrial democracy. The success of World War II's centralised planning of production and resources, and the imperatives of post-war reconstruction, shaped a consensus which went far beyond socialists, for nationalisation and planning by central government, as well as new national health, education and social services.

But in Western democracies, the huge popular legitimacy for state socialism after World War II was undermined, first, by its attachment to remote and insensitive bureaucracy, second, by a careless disregard for efficient management of the public sector and, third, by a refusal to engage seriously with the reality of market forces operating in any society. In the East, Stalinist state socialism stood condemned for its tyrannical denial of freedom, bloated self-serving bureaucracy and innate economic inefficiency.

Discredited by its association with statism, socialism's rehabilitation can only be achieved through a recovery of its libertarian roots, applying these to the modern age through Labour's Third Way.

Devolution lies at the heart of the Third Way. On constitutional reform Tony Blair's Labour Government is proving to be the most radical in memory. So much so that the old British state - quintessentially centralised, elitist, secretive - is being dismantled. It was not so much a British as an English state, defined above all by hostility to regional or local autonomy. Wales' National Assembly, Scotland's Parliament and Northern Ireland's Assembly allow Britain to be reconstituted into a modern, pluralistic state, with diversity and decentralisation celebrated, not suppressed. The Irish settlement, embracing the South through the British-Irish Council, is perhaps the most radical in the blistering pace of devolution set in the first year of the new Labour Government.

The Third Way constitutional reform Agenda goes beyond devolution. The incorporation of the European Convention on Human Rights into UK Law through the Human Rights Act has also been fundamental. For the first time, everybody will have citizenship rights enshrined in statute. Planned reform of the House of Lords strikes at the very heart of the ancien regime as does planned Freedom of Information legislation.

So does electoral reform. The element of proportionality for the devolved governments breaks with the Westminster tradition of first-past-the-post - also now in question following the recommendation of the Jenkins Commission on Electoral Reform and Labour's promise of a referendum. The absence of first-past-the-post in Wales and Scotland will by itself promote a more pluralistic politics since it will be less easy for a single party to secure an overall majority, and so will encourage government by partnership. The same pluralistic democratic imperative was vividly expressed in the 'pure' proportional representation system adopted for the first time in the 1999 European elections, where Labour has sacrificed its huge majority achieved under first-past-the-post.

Underlying libertarian socialism is a different and distinct notion of politics which rests on the belief that it is only through interaction with others in political activity and civic action that individuals will fully realise their humanity. Democracy should therefore extend not simply to government but throughout society: in industry, in the neighbourhood or in any arrangement by which people organise their lives. The Labour Government's commitment to inserting citizenship into the school curriculum is especially important after a Thatcherite era which celebrated personal greed, privatised lifestyles, a retreat from community and, indeed a denial of the very concept of 'society'.

A statist focus negates the spirit of collectivism and community which ought to be the essence of socialism. The absorption of all social functions by the modern state, whether capitalist or communist, led to a culture of dependency in which individuals become clients of the state rather than autonomous citizens, passive recipients rather than active co-operators with each other. Rundown, untidy council estates with urine-ridden lifts, graffiti everywhere and neighbour disputes are the result.

Although high quality public provision remains a vital priority for socialism, its centralised character and delivery made people dependent upon the state, in the process jettisoning reliance upon communal identity, collective organisation and personal relationships, which are the foundations of citizenship and a good society. Hence the Blair Government's desire to transform a welfare culture based upon 'dependency' into one which is empowering. Examples are the 'New Deal' offering the long term unemployed the chance to work, retrain or undertake full time study together with the Working Families Tax Credit which makes it much more worthwhile for the low paid to work rather than be trapped on benefit.

However, power can only be spread downwards in an equitable manner if there is a national framework where opportunities, resources, wealth and income are distributed fairly, where democratic rights are constitutionally entrenched, and where there is equal sexual and racial opportunity. This is where socialism becomes the essential counterpart to libertarianism which could otherwise - and indeed sometimes is - right wing. It means nationally established minimum levels of public provision, such as for housing, public transport, social services, day-care facilities, home helps and so on. The extent to which these are 'topped up' and different priorities set between them, is then a matter for local decision. Hence also the case for the Labour Government's new statutory minimum wage, above which pay levels can be negotiated by independent agreement. The minimum wage however is not just a matter for the law: its effective enforcement depends partially upon trade union pressure, illustrating another Third Way characteristic which is empowerment from below through support for trade unionism.

Most individuals need active government to intervene and curb market excess and distortions of market power. For choice and individual aspiration to be real for the many, and not simply for the privileged few, people must have the power to choose.

Nevertheless the old left nostrum that markets equal capitalism and the absence of markets equals socialism, is utterly simplistic. As Aneurin Bevan argued, the extent to which markets are regulated or subjected to strategic intervention by government is not a matter of theoretical dogma, but a practical matter to be judged on its merit. That is why a Third Way Labour government is not passive, but highly active, working in partnership with business and investing in the skills and modern infrastructure which market forces and the private sector do not provide.

The principle of partnership also lies behind Labour's legislation for fairness and rights at work, with its twin principle, empowerment, expressed through the removal of punitive restrictions upon trade unions. Here is the Third Way in action: government legislation to establish a balanced framework in the workplace underpinned by the freedom of trade unions to protect and assert individual rights.

However, partnership needs to go further by encouraging industrial democracy. This is one of the keys to the high productivity, investment and wealth needed for economic success, by helping generate greater team working and commitment which is such an important requirement of complex modern production systems.

By rooting the Third Way debate in a libertarian socialist framework it can be given fresh impetus, ideological clarity and greater legitimacy in the labour movement.

* See my Ayes to the Left: a future for socialism (Lawrence and Wishart, 1995), chapter 1.

Welsh Office Minister Peter Hain is MP for Neath. His new pamphlet, A Welsh Third Way? is available price £2.50 (inc. p&p) from Tribune Publications, 308 Grays Inn Road, London WC1X 8DY