The importance of today’s OECD report showing that rising inequality slows economic growth can hardly be over-stated. It fatally undermines free market ideology. While social democrats have in the past relied upon philosophical and ethical arguments for greater fairness, the world’s most respected independent think tank has now conclusively proven the instrumental argument: had inequality not risen over the last thirty years our GDP would be a whacking 8.5% higher and almost everybody in society (outside the top ten to twenty percent) would be better off. If they had any sense of shame the employees of free market think tanks and most university economics departments would surely be offering to perform hundreds of hours of community service for the poor in penance for their sins.
Will this research usher in a new era of social democratic hegemony analogous to the Bustskelite consensus of the fifties and sixties? More immediately isn’t this powerful ammunition for Ed Miliband, coming as it does soon after an autumn statement which was regressive (albeit marginally regressive) in its impact?
Things aren’t nearly that simple. If statistics determined the public mood we would be a lot less worried about crime and a lot more enthusiastic about Eastern European immigration. Instead when working class voters talk about a lack of fairness in society it is migrants and benefit claimants not millionaires or the Government that are most likely to be the target of their ire.
Anyway, it is all very well signing up to an outcome such as reduced inequality but something else entirely agreeing the measures to achieve that goal. For example, two obvious and relatively straightforward steps that would help – a higher and more progressive property levy and a set of measures to increase taxes on well off pensioners - would both probably be wildly unpopular.
The political problem for the left of centre is that when it talks about addressing inequality it always seems to involve the Government assuming more power in the form of spending or passing laws; what I call ‘the policy presumption’. This impression is reinforced by the sense that social democrats see a bigger state as inherently good thing and when we hear Ed Miliband (in his recent Party conference speech) tell us exactly how many extra new homes, new nurses and new doctors he would mandate from the centre.
Given the strength of the policy presumption it might be assumed that it must have served a useful purpose in the past. Looking across the last twenty or thirty years it is possible to put together a strong case for the opposite. This starts with individual policy disasters vividly described by Ivor Crewe and Anthony King in their book ‘The blunders of our Governments’, the poll tax, the child support agency, individual learning accounts and the private finance initiative are among the most well-known and expensive examples.
Then there is the overall record in the single area which has been most subject to the application of the policy presumption; public service reform. Since the mid eighties there has been almost constant top down reform of our education, health and criminal justice systems yet public service performance continues to be disappointing and productivity sluggish. Even when the last Labour Government was pouring new funds into public services, managers and front line workers were demoralised by the continuous stream of ever-changing instructions from Whitehall.
Finally, while most of this policy was said to be responding to public concern and demand, its implementation has been accompanied by a deepening and damaging loss of confidence in central Government and the politicians who vie to run it.
So, although it may seem trite, all these impediments to a commitment to act on inequality demand the same broad strategy.
In an influential piece in the Stanford Social Innovation Review, John Kania and Mark Kramer define the basic premise of collective impact:
That large-scale social change comes from better cross-sector coordination rather than from the isolated intervention of individual organizations
Almost as simple as the definition is the five step method they describe as characterising schemes in contexts as a varied as a city alliance to reduce childhood obesity and a major corporate social responsibility initiative to improve the lives of cocoa farmers in the developing world.
Collective impact relies on a shared mission between the private, public, voluntary and community sector participants. The mission then needs to be translated into a set of smart targets to which all the partners commit and which they then closely monitor. The partners need to agree clearly defined and differentiated roles and to commit to high levels of communication between them. Finally, there needs to a ‘back bone’ or ‘anchor’ organisation which focuses on maintaining the partnership and keeping it on track.
While collective impact schemes may look easier to develop locally, there is no reason why this approach can’t be adopted by a central Government; as long as that Government is willing to look beyond the policy presumption.
With the benefit of hindsight, Labour’s bold 1999 pledge (now effectively abandoned) to abolish child poverty is a good example of an important and radical initiative which would surely have been have been well suited to a collective impact methodology. Blair’s Government should have sought prior public support for the goal (it wasn’t even in the Party’s 1997 manifesto) and garnered commitments from all parts of society including disadvantaged people themselves. Instead the policy presumption turned what could have been an inspiring national crusade largely into a technocratic and unloved process of welfare reform designed by Treasury experts.
It is not that spending and rule changing are unnecessary, but social democrats too often see civic engagement as an optional add on to the transformative task of enacting policy. Instead progressives should see traditional policy tools as a supplement to the transformative work of civic mobilisation.
The OECD report offers a strong guide to the direction we should travel if we want to combine social and economic progress. What is needed is a new type of leadership – one that is adamantine in its commitment to an optimistic and progressive vision for Britain but open, inquiring, humble and adaptive in discovering how to mobilise the country behind that vision. I believe modern citizens are ready to respond to such leadership, but is anyone ready to provide it?