It's political economy, stupid

As much as I enjoyed myself, a weird feeling stalked me as I shuffled through corridors from event to event, panel discussion to panel discussion at last weeks' Fabian conference. In retrospect it was a restlessness that the answer to every question earnestly pondered – What can the left learn from the right? How do campaigners deal with the deficit?- belligerently remained the same, even if the wording changed, or the faces of the speakers differed from the last.

When you drill down into so much of centre-left soul searching in 2011, the absence of a coherent political economy lies at the root of almost all of it, even if it's rarely acknowledged.

The last few years have finally seen progressives get their critique of neo-liberalism right. Space has opened up after the financial crisis for us to question effectively previously untouchable dogma over the efficiency of free markets and the evil of state intervention. Meanwhile, the extent of public anger over bank bonuses and popularity of the 50p top rate of tax chips away at Blairite mythology that 'aspirational' swing-voters will always view increased taxation as 'the politics of envy'. Labour has even started to find its feet in arguing against the pace of deficit reduction (Ed Balls' famous Bloomberg speech is still the pick of the bunch), while turning to focus on stagnating average incomes (Liam Byrne is good on this here).

These are all sound intellectual advances. But the problem is that at the moment, they remain just that. It remains for progressives to colour these in with practical policy, and then to sell these in a way that is accessible to the wider public and activists knocking on doors. The reason the right has been ascendant for so long on economics is because they have a philosophy that cascades down from the the thinktank ("Free markets are the best way to efficiently allocate capital, government intervention always leads to inefficiency") to the doorstep ("governments shouldn't pick winners, it's bloated and should get out of the way"), translating to peoples everyday experiences or emotions ("why should the government waste my money? I am the best judge of how to spend it"; "We can't go back to the 1970s"), out of which flow practical policy implications (e.g cutting corporation tax, privatisation, deregulation). The latest example of this is the Tories misconceived idea that the private sector will necessarily 'pick up the slack' on unemployment resulting from cuts to public spending.

Meanwhile on the deficit, the right remain aided by the famous imagery of 'maxing out the creditcard' or 'household budgets' ("I have to balance my books, why shouldnt the government?").

The centre-left still cannot compete with this. Even if we are now challenging these ideas at the level of the thinktank, our arguments from there remain fractured or incomplete. For example, if we are agreed that New Labour became over-reliant on tax receipts from financial services, how should we look to 're-balance' our economy? This will usually prompt talk of 'broadening our industrial base' (as echoed recently by Ed Miliband), but what does this mean? How do we make our industry competitive in a globalised economy? Likewise, if we are agreed that median wages are stagnating, how do we get them to rise? Is it just a case of growth as an end in itself, or should the government be directing investment in to certain areas? If so, how? By what means? Assuming we believe in capitalism, what should it look like? How should we translate complex Keynsian arguments over public spending into bite-size chunks of common sense?

These are just a few of the critical questions that, from what I can see, are not being progressed or followed through on. Even the most prominent centre-left writing of the last few years (e.g Ill Fares the Land, Them and Us, 23 Things They Don't Tell You About Capitalism) is vague on policy, usually impotently acknowledging that it 'doesn't have the answers', but we should at least 'ask the questions'. A lingering sense I got from people at last weeks conference was that if we just taxed the bankers more, everything would be ok. Some are happy for the left to simply be the new 'conservatives', acting as stalwarts of public services under attack from budget cuts.

This is not enough. As popular as it may be in the short term, it doesn't constitute a coherent economic argument and it will not win elections or change the country in the way we want. For all the huff and puff over the end of neo-liberalism, it is still the right who are the radicals, still social democrats who are on the defensive. This does not represent a substantive change in the pre-crash, post-1970s state of play; progressives just have more numbers on the field than they used to, more men behind the ball. To win, it needs to be far more creative.

The rewards for doing so would be great. A coherent alternative political economy would give the left the chance to turn so many debates on their head. Take welfare dependency as an example. Instead of pandering to hatred of those dependent on welfare and extending the current logic of just cutting benefits (or alternatively ignoring the issue), we could legitimately ask why bottom end wages are so low that living on meagre unemployment benefit is a more attractive option, and map out how we can get them to rise. Or, on the banks, we wouldn't need to be held to ransom by obscenely paid financiers who threaten to pack up and head for pastures new every time the status-quo on tax or bonuses is challenged.

Unfortunately, this seems a long way away. Gordon Brown's 'markets need morals' was a good start, but what was it underpinned by in practice? It read more as a plea. Ed Miliband's current problems on the economy are just a projection of the centre-lefts wider dilemmas. Increasingly, it seems we have started an argument we cannot finish. This is the the extent of the challenge for the likes of Ed Balls, as he puts his feet under the table as shadow chancellor. Obviously, I don't have the answers, I'm just asking the questions...

Why ending control orders might not be such a 'fucking car crash' for the coalition afterall

Jerry Hayes has an interesting blogpost this afternoon over at ThinkPolitics on the ending of control orders and the inevitable screams of anguish and betrayal it'll bring from the Tory right. Cameron has been whispering for months that the political battle over the powers, which give the police the right to put terrorist suspects under virtual house arrest, will be a "fucking car crash" for the coalition.

But i've got a niggling feeling that in the long run it might not be so bad for the government. Or, at least, if it is a car crash not as many voters as they think will slow down to take a look as they pass by.

Firstly it almost goes without saying that headlines such as "Nick Clegg 'wins fight to scrap control orders'" (if not the Sunday Times' spin on it) are fantastic for the Liberal Democrats and exactly the sort of coverage I think they need to be generating in order to stand a chance of survival in the run up to the next election.

But even for the Tories, are Cameron's fears really justified? While polls may still suggest public support for strong anti-terrorist measures, all polling on voters' priorities in the run up to the election put the economy far above terrorism/national security. This is not to say they don't care - when confronted on the issue - about the latter, but it is clearly not at the centre of the agenda in the way it was under Blair and in particular following the 2005 attacks. Economic, not physical, security now dominates the political landscape. While the Tory papers will kick up a stink, I'd be amazed if it's not knocked off the front pages by the end of the month. I suspect there is no longer the climate of fear among ordinary voters to sustain it further than that.

Another - little discussed - reason to believe the hysteria will tail off is that control orders is also an awkward topic for Labour. Ed Miliband has made obvious his desperation to dispel the perception that Labour is authoritarian, especially as he seeks to woo disaffected Lib Dem voters. Under pressure from Blairites to out-flank the Tories to the right on crime and human rights, I'd be surprised if he goes to any length to keep an issue in the air that would serve to again highlight his own internal divisions. A trap is laid for him there.

To this backdrop, as Hayes recommends, some political manoeuvring with the security services and a narrative around greater surveillance should provide enough cover in the short-term for the Tories to credibly argue they are not soft on terrorism.

Finally, if the storm on control orders does pass and the idea of the government being weak on terrorism fails to set in among voters, it's worth quickly considering the wider implications. With any luck, it could help shape something like a new political consensus on national security with - heaven forbid - some balance restored to the debate, ending (or at least changing) Westminster's long established tradition of dutch auction whereby each side tries to out-posture and out-scream each other, whipping up as big a shit storm as possible in an effort to prove the other is 'weak'. Cameron's predictions of a "fucking car crush" are predicated on such rules of the game, but it's possible - and here's hoping - the PM himself hasn't quite caught up with the new landscape the economic crisis has foisted upon us. The fact that Brown's attempt (straight from the New Labour rulebook) to posture on detention without trial fell flat in late 2007 is a promising omen in this respect. If the Government stand firm, they can ride this out and the country will be a better place.