by Mark Seddon

Future historians may well look back on 2008 as the year in which the free market consensus was finally broken. They may even pin-point the collapse of US Bankers, Lehman Brothers as the tipping point; the point in which all of the received wisdom of the past twenty five years was finally turned on its head.

‘Events! Events!’ former Conservative Prime Minister Harold Macmillan said when asked what shaped his Government. Political parties that can loosely be described as on the Left have not shaped these latter day events. The European social democratic parties have been floundering for the best part of two decades, unsure where to go. Britain’s Labour Party transmogrified into ‘New’ Labour, going much further than the French Socialists or the German Social democrats in embracing de-regulated, privatised free market economics. Peter Mandelson, now Lord Mandelson, the high priest of ‘New’ Labour once famously said that he was ‘seriously relaxed’ about the super-rich, and by extension the massive growth of inequality and insecurity, that has now culminated in the collapse and nationalisation of a number of major banks here and elsewhere, and job losses amongst the middle classes that are beginning to resemble the job losses experienced by the working class as manufacturing industry was allowed to go the wall, since the future, we were told lay in financial services and the retail sector.

Britain is likely to suffer more in this new economic depression than many of its European counterparts. Along with the United States, Britain is more dependent on the collapsed financial sector and collapsing retail sector. For it was turbo charged Anglo American capitalism that was offered as the model to what was disparagingly called ‘Old Europe’, and it is Anglo American capitalism that is at the root of our current crisis.

Much has been made in recent years of the ‘special relationship’ between Britain and the United States, usually by members of the political and commentariat class on this side of the Atlantic, who like to believe that Britain is more important economically and militarily than is the case. The so called ‘special relationship’ must be a modern development, since the American colonies were only to keen to be free of Britain in the 1700s. However, the phrase has been used more describe the military alliance between the two countries, one that is based on British dependency more than anything else. Under first Margaret Thatcher, and then Tony Blair, this alliance deepened, and to such an extent that Britain ceased to have an independent foreign policy at the time of the Iraq War.

But what of the other part of that relationship – the economic one? De-regulating both Wall Street and the City of London, the respective ‘big bangs’, the reliance on privatisation to boost State coffers, all of this was common to both countries. As was the scramble to out source, to encourage people to take out mortgages they couldn’t afford, all of this now wrapped in suitably anodyne phraseology such as ‘sub prime lending’, and the ‘credit crunch’, all designed to persuade the public that these disasters are somehow acts of God, and not of de-regulated greed and irresponsibility on a truly historic scale.

Many commentators believe that Barak Obama’s historic victory was based largely on his opposition to the Iraq War and his commitment to end it. This was a factor undoubtedly, but it was not the most important one. A sizeable section of the American public had had enough of President Bush, but they also knew that the military campaign in Iraq was drawing to a close. The main factor behind Obama and the Democratic Party’s victory was the economy, America’s massive and growing deficit and the fear that massive job losses could follow. It was Bill Clinton’s advisers who famously coined the phrase ‘It’s the economy, stupid!’ when asked what would decide the Presidential election, and as ever it was the economy that decided it for Obama. All this despite not a great deal of evidence of much of an alternative economic plan.

That said, Obama’s victory would not have been as decisive without some of the following factors:

A belief amongst core and swing voters that the Democrats were essentially more ‘pro-labour’ and more likely to support the vulnerable in difficult times.

Solid organizational and financial backing from the Democrats traditional allies, the unions

And last, but not least, the phenomenal grass roots campaign that had been in progress since the ill-fated attempt to have John Kerry elected President.

In candidate Obama, the Democrats also stepped away – out of necessity from the sectional politics favoured by sections of the Left in recent times, ie gender, sexual and racial politics. Of course campaigning was directed at target groups, and of course black Americans came out to vote in record numbers, but Obama deliberately did not appeal over the heads of other Americans; his was a carefully calibrated call to the American ‘Middle Class’, which is a code for both the Working and Middle classes, who now share job and wage insecurity and whose lives are utterly divorced from the super rich who have become a law unto themselves, because the laws have been re-written to suit their interests.

Many Labour activists will have read about the ‘virtual Town Hall meetings’, the activities of Move-On.Org in mobilizing both the arguments and the vote. And of course they will have heard about the astonishingly successful use of the Internet to generate record fund raising. Of course the Obama campaign benefited from the largesse of some very rich people and organisations, but the reality is also that in riding the crest of a popular wave, the Obama campaign brought in record amounts of small donations from individuals. Using the Internet to revive the Democrats political base could not have happened without there being an activist base in the first place. Battered and bruised it may have been, but enough of it was still there to oil the mighty machine that was the Obama election campaign.

So what can we in Britain learn from the Obama campaign, and how relevant will an election in another predominantly English speaking country that we have less in common with than we think influence the next General Election campaign in Britain?

It will be the ‘economy stupid!’ that decides the British election whenever it is held. There are two factors however that stand out. First that the incumbent Government is our own, a Labour Government, and secondly that that Government has begun the transition from ‘New’ Labour to a more recognizably Labour Government – one that is re-discovering the merits of tax and spend, reflation and Keynesian pump-priming and public ownership – even if the beneficiaries have so far largely been the banks,

The return of the Labour Party under Gordon Brown has been endorsed by recent opinion polls. Despite widespread fears of unemployment and real job losses, a majority of voters currently support Brown’s approach. Written off barely a few months ago, Labour and Brown are back with a fighting chance, although the timescale for that chance is short and may be decided by the levels of unemployment, which is likely to grow sharply in the coming months. Voters are not likely to take kindly to bailouts for bankers while friends and family lose their jobs as some of the big high street names go under. Much also will depend on the Conservatives, currently caught between sounding like ‘Old’ Labour without the Socialism and more primordial Tory core beliefs on cutting spending and taxes.

Gordon Brown is no Barak Obama, but others have foolishly under-estimated him in the past and may be tempted to do so again. The point about Brown – unlike Blair – is that he is rooted in the Labour Party, and if he thinks it makes for a winning strategy will pump-up the rhetorical volume, and policies.

But let’s also be realistic. Labour’s roots are shriveled and have aged. Membership, and most importantly active membership have declined very sharply. ‘New’ Labour like to argue against ‘un-representative activists’ who spent their time voting on motions that went nowhere. This sneering, arrogance was almost as damaging to party loyalty as many of the nonsensical policies.

And what of the unions? Despite a slightly more receptive atmosphere, many have largely failed to recapture public imagination and have continued to decline and merge. With a few exceptions the political leadership of Britain’s trade unions is weak, and the union movement has failed to articulate new policies for our new times.

That said, they remain organizationally important, the link between party and unions has not been broken although at a local level it has atrophied, along with local party structures.

Whether Labour loses or wins, the work to re-build, re-energise and re-connect begins now, and it may well be beginning here.

All of this needs to be re-built, learning from the American model and adapting it accordingly. Some trade unions could effectively find themselves being the activist base in some constituencies.

And this Grassroots Labour Internet based initiative has the potential to build on a smaller activist base, reaching out to sympathisers, friends and family, developing the Internet nucleus needed to at least begin the Labour recovery.

And given the right support and nurturing, this Internet initiative could have the power to become the UK version of MoveOn.Org.