Inclusive growth can bridge the divide between evolution and revolution
The party conference season is a time when political leaders turn inwards to address and rally their own. It’s the time for soaring rhetoric and ‘in’ jokes as the parties appeal to the most devoted of their following. But the best conference speeches are always carefully balanced with one eye on the national audience – with neat sound bites that capture the essence of their values and ideas, and how these compare to the other side. For many years, people lamented that the political parties were ‘all the same’. It cannot be said anymore.
Let’s look at the economics.
John McDonnell, the shadow Chancellor, reflected on the ten-year anniversary of the financial crash. To blame? Greed, deregulation and the “power of a small financial elite who exercised too much power over our political system.”
In response, the Labour Party in government would pursue a radical agenda for economic democracy, with public ownership, workers rights and increased collective bargaining power at its heart. He announced a consultation for increased democracy in public services, a democratic rewriting of the Treasury Green Book and investment in infrastructure, education and R&D paid out of the ‘social dividend’ derived from an Inclusive Ownership Fund to be applied to large corporates.
It would be a taking back of control, so that – in the sixth richest country in the world – no longer would 5000 people be sleeping on the streets, or four million children live in poverty. Real wages would provide a decent life for all. The “age of insecurity” – which ushered in the Brexit vote – would be overturned by giving people back control over their lives. 100 years on from the establishment of Clause Four, Labour would usher in a brighter future. One that it would be proud to call socialism.
A week later, Philip Hammond, Chancellor of the Exchequer, set out his stall. Recognising much of the same analysis of the Brexit vote, which “did not happen in a vacuum” but was the product of the last 20 years, Hammond spoke of the challenge “to ensure that 21st Century capitalism delivers” for ordinary people. He explained that “a gap has opened up in Britain and in other developed countries, between the theory of how a market economy delivers and distributes rising prosperity and the reality” experienced by too many people for who the system is not working for them.
But in response, the Chancellor called “for the renewal of our economic creed to secure for Britain the benefit of the market economy.” Now was the time to “regenerate capitalism”, for “evolution over revolution.”
It is here that the idea of inclusive growth bridges a seemingly gaping ideological chasm. Inclusive growth demands that we move away from the ‘grow now, redistribute later’ model of productivity and prosperity. It calls for a broadening of our understanding of economics and what drives local and national economic growth. It requires the blurring of the boundaries between social and economic policy, so that they work hand in hand – investing in social as much as physical economic infrastructure as a driver of productivity and broader-based prosperity. High speed transport links, for example, are only as effective as the ability to connect skilled people to high quality employment opportunities. Education and skills, affordable childcare, mental, physical and public health are the foundations of our economic success, where we define our interest not only in the rate or quantity of growth, but its quality.
The inclusive growth debate has been around for several years and is increasingly gaining political traction across all sides of the ideological spectrum in the UK and globally. Whether we call it inclusive growth, economic justice or anything else – the aim of a new model for a fairer economic system is shared. In this way, inclusive growth presents a powerful way for us to bridge ideological divides and create a shared political space for finding the collective means for long-term, structural change. I discuss more on this in my latest essay, ‘Inclusive Growth: Why it can rekindle progressive politics’ published today.
Whether there is yet a tight definition or a shared theoretical framework of what inclusive growth means is of less importance currently. In cities, towns and villages across the country and in places as far apart as India, Barbados, South Africa and the USA, people are innovating practical ways of making sure their vision for inclusive growth becomes a reality. In time, theories, principles and metrics will emerge, and the Centre for Progressive Policy will be at the forefront of this endeavour – working with local, national and international policymakers to develop and test the new ideas.
Join us on 30th October at our inaugural Inclusive Growth Conference in London where we will explore the ideas, challenges and tensions – both practical and conceptual – amongst leading practitioners and thinkers.
Image credit: Geoff_C | iStock