Making start on remaking Labour

OPINION: You might call it socialism with New Zealand characteristics: lashings of taxpayer money to lucky or shrewd depositors in shoebox South Canterbury Finance who have been creaming high interest, coupled with respite for "underwater" farmers who made bad purchases and businesses that made bad debt decisions.

Is this what the National Party used to call private enterprise and self-reliance? Is this capitalism which prizes risk but allows failure? Is it what the Labour Party used to call social justice?

That last question matters as Labour rebuilds from its 2008 defeat. The Clark-Cullen government reduced income disparities through Working for Families paid to earners with children - but left out the children of non- earners.

It presided over a house bubble and borrowing binge which in effect transferred wealth from the less-well-off to those who could capitalise on the house boom and from younger generations to baby- boomers (who were running the government). It took interest off student loans, to the benefit of well-off families.

An earlier generation of Labour thinkers and doers would have judged those transfers to be in the wrong direction.

Time for a rethink. There hasn't been much public evidence of that yet. But behind the scenes there is some.

Usually when parties are thrown out after a long period in office, they go into denial and self- justification and at most tinker with policy. National did that after 1999 and until Don Brash's 2003-06 shakeup.

Labour this time may be starting reconstruction a bit faster. The challenge for Labour's rising generations is large: to return to first principles and reshape policy in such a way as to apply those first principles to a world much changed from the 1960s-70s when Helen Clark, Michael Cullen and Phil Goff learned their social democracy and even from the 2000s when, as ministers, they applied that learning.

This requires a change of mentality. In David Cunliffe's words, it means shifting from "politics for" to "politics with".

The problem with "politics for", 38-year-old first-term MP Grant Robertson says, is that "for most people, politics is something that is done to them. So they disengage".

"Politics for" fitted the mass- production age that baby- boomers grew up in: standardised public services, grateful constituencies. "Politics with" is a factor of the mass-customisation age under-45s and particularly under-30s have grown up in, expecting that jobs, goods and services , including public services, and news will be customised to their needs and wants and with the new sorts of connections the "social media" facilitate.

This means policies have to change to fit the new age (even if the principles endure). Almost as important, so does the way policies are developed.

At least that's what some Labour MPs think. An example: with Mr Goff's blessing, Clare Curran organised an attempt to do some "politics with" on August 28 by opening up to the public, both in a physical meeting and via various internet channels, a discussion on Labour's "open government" policy.

This is the "yeah right" point. We've heard all this before. After the 1990 wipeout, there was "Labour listens". By 2005, after six years in government, Labour had all but stopped listening - or so many voters thought.

So is anything different? MPs say they are making two other broad changes. One is "economic revisionism", influenced by post- crash international commentary by the likes of Robert Reich, Joseph Stiglitz, Paul Krugman, Dani Rodrik and Tony Judt plus Olivier Blanchard of the International Monetary Fund and Martin Wolf of the Financial Times.

THE emerging policy frame is said to be "internationalist and outward-looking", concerned with economic sovereignty but not protectionist. It will aim for an economy that is "clean, green and clever", not just an appendage of Australia, with an emphasis on saving ("a crucial issue" canvassed by Mr Cunliffe in a recent speech) and innovation, where Labour stalled in the 2000s. The state will be "highly active but not necessarily bigger". Mr Goff and David Cunliffe have been musing on changes in tax and monetary policy.

Labour has also rediscovered inequality. Annette King, who made a mea culpa confession to a post-budget breakfast that Labour had focused too much on "fairness" and too little on inequality (of "opportunity"), has drawn on a high-powered advisory "commission", some not usually associated with Labour, to develop an "evidence-based" - as distinct from "ideas-based" - children-centred social policy crossing portfolio areas. She will outline it at Labour's conference in October.

In short, Mr Cunliffe says, "markets are imperfect and inequality is important". Taking a cue from the popular social epidemiology book The Spirit Level, MPs are saying: "Fairer societies on the whole do better economically." How different will this make Labour's 2011 election platform? Hard to say. But it might be the start of serious long-term rebuilding.

ColinJames@synapsis.co.nz

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