New Labour and Inequality

Thu, 09/30/2010 - 09:14 EDT - Mathew Yglesias

I’m always blown away by the level of righteous indignation that British lefties are able to muster about the economic record of the Blair/Brown “New Labour” governments. Here’s Christ Bertram:
Blair, Mandelson, Milburn and the rest of the gang not only failed to achieve Labour’s goals concerning inequality and social justice, they abandoned them, an abandonment summed up in Mandelson’s notorious statement that he was “intensely relaxed” about people at the top becoming “fithy rich”. New Labour, taking their cue from the Clinton Democrats, abandoned the distributive objectives of the left on the basis that the rising prosperity engendered by growth, markets and globalisation would benefit everyone. Well it hasn’t. Personally I think it was never going to, for “spirit-level” type reasons, among others. But anyway, that model ran into the wall of the banking crisis and we’ll shortly see the absolute standard of living of the poorest falling as the deficit gets clawed back at their expense.
By contrast, here’s Lane Kenworthy’s chart of income growth by decile under the Tories versus Labour:
didlabourfail-figure1-version1
You see here that New Labour had these (presumably finance-driven) gains at the tippy-top but also major progress for the bottom half of the income distribution. Meanwhile, it’s quite true that Cameron/Clegg austerity is likely to lead to bad outcomes for the poor, but it’s odd to say that New Labour cardinal sin was that it could “only” stay in power for 12 years. If anything that point strengthens the case that voting Labour—even New Labour—is crucial to the interests of the British working class. It looks to me like if anyone has just cause to complain about the New Labour record it’s educated professionals up there in the 70th to 90th percentiles who did better under Thatcher even as they’ve had to watch their classmates move on to riches in finance.
Loosely relatedly, I’d recommend my colleagues Matt Brown, John Halpin, and Ruy Teixeira’s FP op-ed about the future of the European left though again with the caveat that I think they’re a bit too dismissive of the “Third Way” project across the board.

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