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Outsource till you drop

Ellie Keen — Sun, 13 Jul 2008 00:00:00 +0000

What exactly is the point of John Hutton? Every week seems to bring news of Labour's dread political predicament: the loss of support not just in the supposedly affluent marginals, but also at the heart of Labour's core constituency, as demonstrated by government shivers about the looming Glasgow East byelection.

For the business secretary, however, this is evidently no time to be moving away from the old Blairite behavioural tic of defining yourself against your own side. Having already counselled his party against any move on the mega-paid new olympians who are making Gordon Brown's call for pay restraint all the more difficult ("Rather than questioning whether high salaries are morally justified, we should celebrate the fact that people can be enormously successful in this country," he said back in March), today found him enthusiastically launching a report from his department's public services industry review, a funny old document that amounts to a brazen call for New Labour's privatisation drive to be accelerated.

Despite protests from such union leaders as Mark Serwotka, the old "ideological battle" over the relentless extension of the private sector is, Hutton claims, long over. In the report, the multitude of "service companies" who have sprung up to make the most of 30-ish years of outsourcing are grouped into a "public services industry" that now accounts for 6% of GDP, and is in the midst of what Hutton sees as an admirable export drive, advising foreign governments about how to break up and sell off their public services, and then reaping the benefits. In the UK, says the report, handing these firms all manner of contracts has led to cost savings of between 10% and 30%. It acknowledges that evidence on what outsourcing does to the actual quality of services is "weaker and more limited" than the financial stuff, but that doesn't get in the way of the essential point: that "Government authorities need to reinforce and demonstrate their long-term commitment to open up public service markets" – whatever "public service markets" actually are.

On the ground, of course, it does not take much effort to discover how those miraculous savings come about, and what such cost-slashing causes. One thinks, for example, of the burgeoning private prison industry, in which average pay rates are a third lower than in the public sector, and staff turnover runs 10 times as high. In my home turf of Cheshire, there was a flurry of outrage a few years back about the grim reality of one of privatisation's most mind-boggling aspects: its extension into police custody, and the replacement of scores of local holding cells with outsourced "custody suites", often several miles from where people might be arrested.

You might also cite the experience of hospital caterers like the woman I once met at private finance initiative hospital in Carlisle, told by her new private sector employers that preparing food in the traditional way was now prohibitively expensive, and it was time for the staff to get with the "cook-chill" method: that reassuring cheap culinary technique whereby hospital patients are now served up a grim version of airplane food.

Under duress, the government has occasionally - and belatedly - tried to smooth over the worst effects of its privatising zeal, which has often only served to point up the near-lunacy of what's been done: in 2005, for example, the Department of Health finally made moves to ensure that outsourced hospital staff would be employed on the same wages as their NHS counterparts, which involved local health trusts paying subsidies of £75m a year to the private companies who had taken over so-called "ancillary" services. Even with that wheeze, however, the essential problems remained. The best example, as demonstrated by loud noises from the Royal College of Nursing, is that of hospital cleaning, and a story that comes up time and again: that when you outsource, you fragment the workforce, standards tend to drop, and the wards get dirty and diseased.

Against an unbeatable combination of New Labour zeal and corporate lobbying, unfortunately, all that counts for precious little, and we continue our passage into a grim future - in which schools, hospitals and jobcentres are adorned with the flash logos of the aforementioned service companies (Serco, Capita, Sodexho, Interserve), accountability counts for very little at all, and the public service ethos is superseded by a dried-up combination of output-specified contracts and the profit motive.

Thinking about all this, my mind goes back to a trip I made in 2006 to the Adam Smith Institute (ASI), the free-market think tank where the ongoing privatisation drive of the last 30 years partly originated ("We propose things which people regard as being on the edge of lunacy", its president, Madsen Pirie, once boasted. "The next thing you know, they're on the edge of policy."). While I was there, I spent a couple of hours talking to Dr Eamonn Butler, ASI's co-founder and director, who exhibited the unflappable confidence of a man who reckoned that history was on his side.

"For many years," he told me, "people have said to us, 'Well, where does it all end? Would you privatise the army, or the police?' And I say this. Mrs Thatcher did the easy ones first. It took her a long time to get on to health and education, which were difficult. There's no such thing as an easy, simple privatisation. Every one has been a very complicated political process. And if you look at things like the police, Post Office, health, education, welfare services, all of those things – in theory, all of them could be outsourced. But how should it actually be delivered?"

His conclusion crisply proved what John Hutton will never tell us: that all this has less to do with anything "evidenced based", than the most hare-brained kind of dogma. "All you can do is try," he said, "and see what happens."

Need for a new social alliance

Ellie Keen — Wed, 18 Jun 2008 21:59:14 +0000

Interview with Susan George

FLORENCE, Jun 3 (IPS) - A global alliance of human rights activists, environmentalists and ethically run small enterprises is needed to save the planet from self-destruction, says Susan George, chair of the Board of the Transnational Institute in Amsterdam. The institute works "to contribute to social justice."

Susan George, author of several books on development, now focuses on neo-liberal globalisation mirrored in the World Trade Organisation talks, international financial institutions and in North-South relations.

"Even if committed to the social and environmental challenges, none of these groups individually will be able to save our future, which is dominated by powerful economic forces that have a short-term view and, if allowed, will continue exploiting and destroying the planet," George says.

We must recognise, she says, that change does not happen at an individual level. "Yes, I can change my light bulbs or reduce my carbon footprint, but we need a radical revolution that cannot be achieved individually."

IPS Italy correspondent Sabina Zaccaro spoke with Susan George at Terra Futura, an exhibition of 'good practices' in social, economic and environmental sustainability held yearly in Florence. In its fifth year, Terra Futura was dedicated to strengthening social alliances -- and trying some audacious ones such as alliances among private citizens and financial institutions.

IPS: Will the political-economic system really allow these alliances to happen?

Susan George: The market ideology works to separate people, it is a model that separates people on a competition basis. Social contact is the only response to economy that works all the time to prevent this.

People do not have to abandon their own field and commitment, but become used to working together. We are free agents, and if we understand that there's an interest, that the vast majority of people can often no longer see where their interests lie -- and that is part of the political fight that we have -- then it is possible.

If you show to people that they have an interest in alliances, and this is true for farmers, trade unionists, small medium enterprises…then yes, I think it possible to make those alliances.

IPS: And who sets the rules?

SG: It is hard to get binding rules, it could be easier at the level of the regions. In many places this is not possible because of corruption, or because the will of the government is to prevent this kind of thing and allow transnational corporations to do whatever they like. I would say that that's what the European Commission is there for -- to allow finance capitals and transnational capitals to operate as freely as possible.

IPS: Can the ethical argument alone convince business?

SG: No, not at all. They say how green they are, how caring they are, but it's rubbish to believe it...Corporations and transnational organisations preach self-green regulation; 'we will bring the proper solution', they say, but it is totally illusive.

IPS: So, what can be a convincing argument?

SG: The right arguments are the arguments of force you cannot argue with, you don't discuss; you don't say 'please'. When you are in a position where you are able to dictate.

IPS: How?

SG: Well, through alliances! At a much larger scale, at a big scale...the problem is scale. Alliances must be as broad as possible. Economic power is way ahead of us, so to me the problem is, can we go fast enough, become important enough in order to put a stop to that, to escape the current impasse.

IPS: Does politics have a role in that?

SG: If it would be just politics, I would not be that worried, since things due over centuries sort themselves out; but with the environment we don't have that kind of time. I don't say it often in public, because I don't want people be in despair, but I am often in despair.

IPS: Are you totally pessimistic?

SG: I am hopeful; the only thing you can work on is hope. Generally, politicians are the last to move, but we need to make alliance with them.

When politicians have an interest in something, they show that they are able to listen. Look at what happens with prices...and scarcity. Politicians and business do listen to that, they listen to the price of oil -- they bring the wrong solutions, but they listen to price signals.

IPS: Can oil be replaced with agro-fuels?

SG: It's criminal. There's a lot of talk about using plants that are bio -- but any plant is bio. I've just read that some of the species they're intending to use are invasive species, they take over, and then will spread all over and take all the water out of the ground, and so on.

So, it's always the same thing -- you cannot have just a techno solution because there's the entire environment that you have to consider. I am not an agronomist, but I would refuse any introduction, any crop until the impact of that crop on the rest of the environment has been studied. You cannot just say 'Ok, this is good, we will harvest it, and we will do ethanol out of it', because you don't know.

That's also what's wrong with GMO (genetically modified organisms) seeds. They only look at the plant and what that plant is supposed to do, to repulse insects or whatever, but they don't look at the whole of the environment, it's not their task.

Scientists are perfectly able to make a plant that can repulse insects, but they have no knowledge at all of how the birds, the butterflies, the worms, the bacteria, will react. (END/2008)

Susan George is a Fellow and Chair of the Board of the Transnational Institute. Her latest books are La Pensée enchaînée: Comment les droites laïque et religieuse se sont emparées de l'Amérique [Fayard, 2007], to be published in English as: Hijacking America: How the Religious and Secular Right Changed What Americans Think [Forthcoming, Polity Press 2008], and We the peoples of Europe [Pluto Press, 2008].

Europe Deserves Much Better than the Lisbon Treaty

Ellie Keen — Fri, 16 May 2008 20:18:25 +0000

European history provides a showcase of human beings at their worst. Constant conflict, the two bloodiest wars ever waged, famine, brutal industrialisation, oppression of workers and women, religious strife, colonialism, fascism, communism - all these stain our past. But Europe also represents the best humankind has accomplished, giving the world the Renaissance, the Enlightenment, a constant struggle for emancipation, democracy and the separation of powers, the welfare state - not to mention universally recognised cultural contributions from Greek drama to Finnegans Wake , from the symphony orchestra to Irish folksong.

Born in the United States and a citizen of France, I am a fervent European. At this point in history, I believe only Europe can provide all its citizens with democratic government, dignified living standards, greater social equality, public services, universal healthcare and education. This small continent, with just 15 per cent of the world's people, can lead the way towards ecological sanity and a liveable planet and prove nations can overcome even the most tenacious hatreds and live together in peace. Europe can be a counter-model to the myriad brutalities, affinity for war and stupendous inequalities on display elsewhere.

For these and other reasons, I voted no to the deeply flawed, undemocratic European constitution in May 2005. Had the French government not confiscated the people's right to another referendum, I would have voted no again to the Lisbon ("Reform") Treaty - a clone of the rejected constitution, except for "cosmetic changes" making it "easier to swallow", as Valéry Giscard d'Estaing, principal author of the constitution, said. No flag, no Beethoven hymn, but the rest is there as Angela Merkel, José Manuel Barroso, Bertie Ahern and other relieved European notables all agreed.

The treaty contains no substantive changes. It's just much harder to understand, worse even than the immensely complex constitution. Now we must deal with two European treaties (Rome, 1957, and Maastricht, 1992, with their subsequent revisions) to which Lisbon adds 145 pages of amendments plus 132 more pages of 12 protocols and 51 declarations, all legally binding, all superseding every law of the 27 member states.

There is no single text - you must cut, paste and collate the hundreds of pages for yourself. The very least one should require of a treaty that will dictate at least 80 per cent of all future legislation throughout Europe is that it be comprehensible. But complexity can be an effective weapon against democracy. Let us recall what commission vice-president Gunter Verheugen said after the French and Dutch No votes: "We must not give in to blackmail." So much for universal suffrage and popular sovereignty.

There are a few beneficial changes to the defunct constitution. The new treaty gives the European Parliament, the only elected body, marginally more power to co-decide on legislation, although it still cannot initiate legislation.

However, the unelected European Commission remains all-powerful, particularly in crucial areas such as trade. A new article specifies the European goal of "integration of all countries into the world economy through the suppression of barriers to international trade". Already trade commissioner Peter Mandelson is pushing for European corporate penetration in even the poorest countries, defining "barriers" as any government measure regulating foreign investment, public procurement, environmental or consumer protection.

The European Central Bank gets an even more iron-clad statute of independence from political supervision; its mandate remains control of inflation with no mention of full employment. The "market" (63 mentions in the text) remains the supreme good and "competition" (25 mentions) the overarching rule. Public services are specifically subjected to competition: government subsidies or other forms of support will become more precarious. European-wide social policies will require unanimous approval - this is a euphemism for a race to the bottom. The Charter of Fundamental Rights is inferior to most existing European constitutions.

Common security and defence policy places Europe firmly under the tutelage of Nato "which remains the foundation of the collective defence of its members". We are signing on blindfolded for whatever Nato's future policies may be - we only know for sure the US will remain in command. The treaty also obliges members to "progressively increase their military capacities".

This Lisbon Treaty is a model of failed neo-liberal economic nostrums and misplaced confidence in the market and competition as universal panaceas. Europeans deserve better, beginning with an elected convention for drafting a constitution, time for full debate and a popular ratification process.

Europe has now surpassed the US as the wealthiest political entity. We can afford to retain and perfect the European social model, provide a decent livelihood for all and undertake a swift conversion to an ecological economy; we can afford to embody the ideal of the common good. Not to demand all this and more is a betrayal of whatever is best in our history. This may be Europe's last chance.

Naomi Klein's The Shock Doctrine

Ellie Keen — Thu, 01 May 2008 21:42:31 +0000

Naomi Klein is at her best in explaining the relentless onslaught of neoliberal policies all over the world, and their genesis in academic circles in the USA, particularly surrounding the economist Milton Friedman. Her basic thesis is that the doctrine of neoliberalism has come to dominate the world by using periods of massive public disorientation following collective shock – wars, terrorist attacks, natural disasters – to push through unpopular neoliberal reforms. However, this thesis is not without its flaws.

Klein’s strongest insight is the analogy between psychological damage through torture, and physical damage through neoliberalism. She quotes CIA manuals on torture practices and draws illuminative parallels with neoliberalism: ‘Like the terrrorized prisoner who gives up the names of comrades and renounces his faith, shocked societies often give up things they would otherwise fiercely protect.’ This is a novel and instructive analogy – and goes some way to highlighting the close connections between psychological and physical damage that are neglected by so many other commentators. However, this analogy could be usefully applied much further. For Klein the ‘disaster capitalists’ lie in wait, ready to jump onto ‘disasters’ when they emerge. While this is no doubt the case for ‘natural’ disasters, most disasters are not natural, but are an intrinsic parts of the economic, political and social system we live in, and are increasingly frequent as neoliberalism extends its reach across the world. I would argue for a greater degree of culpability of neoliberalism and its advocates for creating the shocks in the first place - a culpability akin to that of the torturer. Yet Klein shies away taking her own analogy to its logical conclusion. For torture is not merely about the creation of sudden terror, but the normalisation and generalisation of states of fear amongst all who would resist. Similarly neo-liberal ‘shocks’ are merely particular moments in a much longer-term and more generalised attempt to control populations, by normalising fear and insecurity so much that they become part of our everyday experience. This seems to betray an overly narrow framework behind Klein’s analysis; she does not seem to take into account the wider dimensions of how power as a whole operates within a political, social and economic system, wider than just neoliberalism or corporations. This makes the book, despite its 466 pages, feel disappointingly partial, and limited in its analytical and historical scope.

For Klein, neoliberalism is basically the rule of the market and corporations over the state, and therefore over the people. In this scenario, corporations and the state are in direct competition with each other, which leads her to neglect the role of states and state power in facilitating elite power using the market, and more recently, using neoliberalism. This makes her explanation of neoliberalism’s dominance seem incomplete; arguing, as she does, that it is based on the power of opportunistic shock, rather than other, more historically embedded mechanisms. Not everyone has been ‘shocked’ into submission to neoliberalism. There have also been a host of other, often more hidden and insidious attempts to make people give up what it is in their interests to hold onto. These include ideological apparatuses such as education, control of the media, knowledge and information, think-tanks, the co-option of civil society, and repressive apparatuses such the police, the courts, governments, prisons etc. The power of corporations is enabled by a host of power mechanisms, stemming from a relationship of mutual benefit between elites, but this isn’t evident in Klein’s analysis.

Her oversight ensures that she does not analyse the wider context of the shock doctrine she dissects. For Klein, the use of shock is a sign of strength of the neoliberal project. However, it can also be argued to be a sign of weakness. Liberalism is no longer enough to keep populations in check and keep economic growth rising, so a more extreme form has emerged, one which it is increasingly difficult to secure consent for.

Iraq is a case in point: a country which had to be deliberately ‘shocked and awed’ into submission, making the companies and states behind it extremely unpopular, and unleashing a powerful Iraqi resistance, which puts the entire mission in jeopardy. Klein sees this as a shock operation, deliberately manufactured by neoliberal (and neo-conservative) architects, but she does not see this as a contradiction of her thesis, more a ‘notable exception’. However, it seems more plausible to see the destruction and ‘reconstruction’ of Iraq as proof that neoliberalism is being pushed to its limit – forced to reveal itself as a force that creates the disasters required to shock subjects into releasing to corporations their resources, their wealth and their labour.

Capitalism needs to constantly expand: exploiting and creating ‘disasters’ with neoliberal shock treatment is the latest weapon to do this. But it is a weapon which weakens the enterprise by exposing its in-built violence, and risks the effectiveness of the other ‘softer’ weapons. Just as torture is an extreme form of repression, so neoliberal shock treatment is an extreme form of liberal capitalism. But Klein fails to locate ‘disaster capitalism’ more broadly in the historical continuities and systemic features of contemporary capitalism. In doing so, she downplays both the everyday violence and the weaknesses of the current world order.

The End of Democracy

Ellie Keen — Wed, 30 Apr 2008 22:43:13 +0000

Over the last few years the political role of the European Court of Justice has become increasingly evident. It has, at the same time, become far more overtly conservative, leaning towards an extreme ‘free market’ philosophy which favours privatisation, deregulation and liberalisation. In favouring these policies, moreover, it has moved to weaken any opposition to them.

This is why the ECJ ruled recently that wages agreed under the tripartite system which prevails in much of the continent need not be respected by foreign firms. Under the system, known in the Netherlands as the Collective Labour Agreement and under similar names elsewhere, employers, unions and government meet once a year to agree rates for particular trades in particular sectors.

This system has its drawbacks, but it does prevent wage competition between workers and undercutting of one firm by another by means of wage reductions. It is part of the post-war settlement, a Cold War product designed to show that there were alternatives to Soviet-style socialism which could offer working people a decent life.

The system has stood more-or-less unchallenged, until now. Because, of course, if foreign firms may undercut their domestic rivals, and any firm may register in any member state – thus becoming a ‘foreign firm’ – then the days of the Collective Labour Agreement are numbered indeed. As for the kind of non-statutory wage agreements which characterise collective bargaining in Britain, these can be forgotten, at least as far as any legal protection goes.

As things stand, the minimum wage itself is not under immediate threat. Minimum rates for sectors and trades are now, however, enforceable, if at all, only by industrial muscle.

All of this would be bad enough if this attack on the rights of trade unionists, and of European Union member states, went no further than this particular issue, important though it is. In fact, however, the ECJ ruling forms part of a wider pattern of abuse which is affecting not only our rights as workers but every aspect of our lives.

This is the phenomenon which has been dubbed ‘depoliticisation’.

The word may be newly-coined and hard to fit into a line of poetry, but its meaning is simple enough. Decisions which have traditionally been taken, in democracies, by institutions answerable to an electorate, are now taken by unelected bodies deliberately constructed to be impervious to political pressure.

Last week, two labour lawyers writing in a Swedish newspaper lamented the way in which “the political role of the ECJ in the development of EU law has become increasingly apparent” and that “through the back door, the judges have gained political power that in practice supersedes that of policy makers.”

Here, the issue of concern was once again the rights of workers, and the institution involved was the ECJ.
It could easily, however, have been another area of concern – an environmental matter, say, or public ownership of essential services – and the ruling could have been one from the European Commission, or the World Trade Organisation – but the same phenomenon of depoliticisation would have been apparent.

Of course, ‘depoliticisation’ does not mean that these issues or these decisions have really been removed from politics. It is simply that this is what the ruling elite, through the ideas which they propagate through their media and by other means, would have us believe.
We cannot have essential service providers in secure public ownership, protected from market forces and under an obligation to provide a service to everyone, including those on low incomes. This is not because we voted for a right-wing government which does not favour such things, but because it would conflict with the freedom to establish a business, the obligation to tender out public procurement contracts, and so on, “freedoms” written into the EU treaty, into trade treaties and other agreements effectively beyond democartic control.
We cannot have an expansive monetary policy, not because we voted for a restrictive policy, but because the European Central Bank makes the rules, even for member states outside the euro-zone.

We cannot write to ask a government minister or our MEP to propose a particular change in European law unless there happens to be a relevant proposal before the Council of Ministers and the European Parliament, because only the unelected European Commission has the right to propose new legislation.

We cannot refuse to have genetically modified organisms (GMOs) in our country because an EU directive says that, except under extremely limited conditions, we have to have them.

And we cannot elect a government on the basis of manifesto commitments to defend public ownership, propose democratising changes in the way European laws are made or keep GMOs out of our farms and food shops, unless that government proposes to withdraw from the EU.

In fact, even that would not restore democracy, because this is not, in fact, a problem caused simply by EU membership.
The GMO example originates, in fact, in a ruling of the World Trade Organization, which put pressure on the EU to force member states to lift restrictions.

No doubt a truly politically independent Britain would suffer similar pressures.

Increasingly, the range of policies available to national governments, including elected national governments answerable to elected national parliaments, is restricted by their obligations under loan agreements, trade and investment treaties, and full-blown regional arrangements such as the EU or NAFTA, the North American Free Trade Agreement.

The Swedish lawyers who complained of the ECJ’s growing political power called for the Court to be made more accountable, and for the appointments of judges to be subject to scrutiny by the European Parliament.

I would not oppose such measures, but they seem to me to miss the most important point.

Elections were once about, amongst other things, determining the mix of social ownership and private economic activity within the economy.
Now, however, the ‘market’ is not to be questioned.

It has been redefined as the equivalent of a basic human right.

Just as the European Court of Human Rights defends the rights of citizens of the Council of Europe’s member states not to be sentenced to death, not to be imprisoned without fair trial, and not to be discriminated against on grounds of their race or gender, so the EU’s European Court of Justice defends the ‘right’ to trade, to establish a business or corporation, to undercut a non-profit public service by paying lower wages or avoiding universal provision obligations.

In this way, decisions which should be in all of our hands are removed from the realm of political debate and thus removed from democracy entirely.

There is an Alternative and it's Called Socialism

Ellie Keen — Mon, 28 Apr 2008 21:27:24 +0000

James Purnell, the Secretary of State for Work and Pensions, recently declared that Labour was now ideologically neutral. He and his ministerial colleagues like to portray themselves as pragmatists unburdened by outdated ideology.

According to Purnell: "Progressives want to make the world a better place. If people can do that using the private sector, the public sector or the voluntary, why not? We are ideologically neutral between all three; we want to use all three."

But ideology is not about dogma. Ideas are not the abstract product of human imagination. The human mind is given its content by the contemporary material world in which it exists. Political ideology reflects the different interests in society and, in particular, class interests.

The dominant ideas of any society are those of the social class that operates as the ruling force in the economy and the production of wealth. That class is also the ruling intellectual force. We live in a capitalist society and so the dominant ideas are those of private enterprise and capitalism.

The present Government has embraced these ideas. In every aspect of policy, private is best. Innovation is seen the preserve of the private sector with modernisation a codeword for the greater involvement of the private companies in public services.

This Labour Government has privatised where even previous Conservative administration feared to tread: air traffic control and the London Underground. Privatisation of the National Health Service by stealth continues through foundation hospitals and the encouragement of independent sector treatment centres and polyclinics operated by multinational companies.

Purnell has announced plans to cut 12,000 jobs in his department while promising private contractors up to £75 billion to deliver employment services and other welfare benefits.
Business people are encouraged to take over schools through the introduction of academies where, astoundingly, they even have control of much of the curriculum.

No serious attempt has been made to reverse the restrictions imposed on the trade unions by Tories when they were in power. Throughout the current Government's period of office, the unions have been held at arm's length with even their financial contributions to Labour's funds being at best grudgingly tolerated. By contrast, business leaders are enthusiastically courted for donations and advice, despite increasingly adverse publicity and allegations of corruption.

Inequality continues to grow. The top 10 per cent of the population now take at least 28 per cent of the national income - the same as before the Second World War. Yet John Hutton, the Secretary of State for Business, Enterprise and Regulatory Reform, insists: "Rather than questioning whether huge salaries are morally justified, we should celebrate the fact that people can be enormously successful in this country."

In the post-war period, there was a temporary retreat by capital faced with a powerful and organised labour movement. Unions were significantly strengthened in the economic upswing in the 1950s with membership peaking at more than 13 million in 1980. Labour governments were elected which, particularly in 1945-51, delivered real improvements in the lives of working people. The gulf between rich and poor was significantly narrowed in the period up to 1979. However, this was not to last.

The capitalist system remained fundamentally intact and, following the defeat of the Labour 1974-79 Government, there was a reassertion of its ideological dominance. Social democracy was deemed to have failed. The unions were blamed for many of the country's ills. The ideological offensive of capital was immensely strengthened by the development of globalisation and the collapse of communism.

The left did not weather the storm well. The unions suffered a series of defeats. The steelworkers lost in 1980. ASLEF's appeal to the TUC for assistance in 1982 in the dispute over flexible rostering fell on deaf ears. The miners' strike of 1984-85 was lost and the print unions were crushed at Wapping a year later.

Labour was in crisis. In 1981, a section of the right wing of the party broke away to form the SDP, which ultimately collapsed into the Liberals amid bitter recriminations. However, this was not before the anti-Conservative vote had been split leading to huge majorities for Margaret Thatcher in 1983 and 1987.

"New realism" became the order of the day. Post-modern ideas signalled the abandonment of any alternative to the current economic system and a capitulation to laissez faire ideology. The Labour retreat began under Neil Kinnock who condemned the miners' leaders and launched vicious attacks on the left.

The "new" Labour project was the culmination of this process, with Labour lurching ever further to the right and finally into the arms of George Bush and the neo-conservative Republicans with the disastrous Iraq war.

But private enterprise has not proved to be the panacea for society's problems. For instance, trains operated by private companies refuse to run on time despite receiving double the subsidy provided to British Rail.

Private companies exist to make profit first and foremost. Where necessary, they will cut corners to do this - sometimes with dire consequences for service users. It was recently reported that 5,000 National Health Service operations had been cancelled because the private company responsible for cleaning surgical equipment was returning it dirty or damaged. It is no coincidence that the rise of superbugs in hospitals has accompanied the use of private companies to carry out cleaning.

However, ministers are so in thrall to the "free" market ideology that they are blind and deaf to the results of their policies. They simply cannot comprehend why Labour is losing support. All that is needed, they argue, is a little more time to get their message across. That's what John Major's ministers used to say and Gordon Brown's are likely to be similarly disappointed. Northern Rock underlines the real weakness in modern Britain's capitalist economy.

Globalisation has transformed capitalism into an increasingly monstrous system where a small number of companies and individuals own and control unparalleled wealth while much of the rest of the world's population become increasingly impoverished. Regulation by national governments is increasingly difficult, with global corporations simply threatening to move their operations elsewhere. Inevitably, there will be a decline in living standards as one country is played off against another.

The question is whether there is any realistic alternative. The left must have a positive answer if it is to recapture the political agenda. Without this, many of those who suffer most under capitalism will look elsewhere. In Britain, sections of the white working class who feel increasingly alienated and unrepresented are flirting with the far right.

Internationally, increasing numbers have embraced Islamic fundamentalism.
Opposition to the worst iniquities of the capitalist system is not enough and nor are single-issue campaigns, although they can build into powerful movements. Stop the War mobilised two million people onto the streets of London against the invasion of Iraq. But the vast majority of those have not remained politically active. Inevitably, when an issue fades in importance, so does the movement it has ignited. Capitalism reasserts itself.

If the left is to provide a viable alternative vision, it needs a coherent ideology that expresses the interests of those not served by the current system - principally ordinary working people and their dependents who constitute the overwhelming majority of the world's population. That ideology remains socialism.

Every effort has been made during the past 20 years to discredit socialism as outdated and irrelevant. No other ideology has been subject to such an onslaught. But socialism remains the only alternative ideology that can challenge capitalism effectively and offer humanity a future.

Nick Toms is a barrister specialising in employment and discrimination law and a member of Streatham CLP