Want a more responsible capitalism? Reform how pensions work

In recent weeks, ‘responsible capitalism’ has risen to the top of the political agenda. A cross-party consensus has emerged that shareholders must do more to tackle irresponsible corporate behaviour such as excessive top pay.

We have also entered 2012, the year of auto-enrolment: a process that will ultimately see millions of workers begin saving for a pension through the capital markets. Thirdly, we have seen the government turning to pension funds as a source of capital to fuel the economic recovery through infrastructure investment.

Put all that together, and it is clear that the way pension funds invest is no longer, “a minority sport”, but a matter of acute national concern.
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New book: ‘The Crash’

The waves of public anger against the bankers surge back and forth without political expression. The media scapegoat Fred Goodwin and reduce the crisis to the problem of few greedy bankers. Fear and the loss of trust are not confined to the markets.

The recession has destroyed the compact between the market and the individual which provided the social cement for the neo-liberal order. The government has no alternative set of values or social politics to replace it with.

For a brief period, history is in the public realm and ours for the making. The opportunity will not come again for generations, but the Left needs to rediscover our capacity for collective change. The political fault lines of a new era are starting to take shape. They divide those who believe that privileging the market and individual self-interest is the best way to govern society and those who believe that democracy and society must come before markets.

These fault lines cut across party lines and divide them from within: Thatcherite politics versus elements in the New Conservatism; market Liberal Democrats versus social Liberal Democrats; neo-liberal New Labour versus social democratic Labour.

In our new ebook The Crash – a View from the Left we argue for a politics of democracy and the social. We need a new socialism not dictated by the few from above, but made by the many from below. It will have a number of broad but defining principles. It will be grounded in the interdependency of individuals and the value of equality. It will be democratic, because only the active interest and participation of individuals can guarantee true freedom and progress.

It will be ecologically sustainable and pursue economic development within the constraints placed on us by the earth. And it will be pluralist, because we need a diverse range of political institutions, and a variety of forms of economic ownership and cultural identities, to provide the energy and inventiveness to create a good society.

Its task is not to win the political centre ground – it is gridlocked and dead – but to transform it and embark on the deep and long transformation that will bring about a good society.

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Contributors: Jon Cruddas, Clive Dilnot, Bryan Gould, John Grahl, Colin Hines, Adam Leaver, Toby Lloyd, Lindsay Mackie, Robin Maynard, Richard Murphy, Carlota Perez, Ann Pettifor, Michael Prior, Jonathan Rutherford, Göran Therborn.

Where does capitalism go from here?

David Cameron was right to call the bankers to account earlier this week. But his ‘day of reckoning’ does little more than tinker with the problem. As the recession hits home, we need a national debate about how we build a new kind of pro-social economy.

It is the tax payer who has stood between capitalism and its self-inflicted collapse. With credit frozen and the banks unwilling to lend, the government is being pushed toward the role of sole lender. Capitalism has been rescued by people’s taxes and it will be dependent on them for its survival. It’s time for capitalism to be made accountable to democracy, and it’s time for democracy to renew itself and make itself fit for the challenge.

This is the great challenge of our time and it will shape our society for future generations.
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We need to take on New Tories better

In ‘Is the Future Conservative?’ we argue (pdf) that it is time for the left to take on the New Tories and that this challenge cannot be separated from creating a post-New Labour social democracy. By critically engaging with Cameron’s Conservatives the left can rethink its principles and renew itself.

Whoever wins the next election, the future does not belong to the Conservative Party. Nor will it be a re-run of the neo-liberal economics of the 1980s and 90s. Three decades of restructuring and liberalisation have been brought to an end by recession and the credit crunch. Neo -liberalism has done its work and its creative destruction is now undermining capitalism itself. The financial bubbles make it structurally unsustainable.
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