In a mixed LRB review of Christian Caryl's book 'Strange Rebels: 1979 and the birth of the 21st century', David Runciman makes a point about the circuitous route of change:
'The world that fell apart at the end of the 1970s had begun to unravel much earlier in the decade, in the succession of crises that included the demise of Bretton Woods, the Arab-Israeli war, the subsequent oil shocks and a world wide recession. That confused and confusing period turned out to be the dawn of neoliberalism, though it wasn't until much later that it became clear what had happened'.
He goes on to say
'Now that neoliberal order is stumbling through its own succession of crises. We are barely five years into the unravelling, if that is what is taking place'.
This analysis sheds some historical light on whether Ed Miliband's return to statist social democracy will prove to be a wise move.
There are two core assertions lying behind the Miliband programme: the first is that capitalism needs to be rebalanced from big business to small, from producer to consumer and from shareholder to worker. The second - implicitly - is that in a global competitive economy this rebalancing can be achieved by the state without major malign side effects.
The first assertion is the easier to sustain, indeed would be shared by people across the political spectrum. In many ways big business has not come up with the goods; in investment, responsible tax payment, resource use, fair remuneration. In key sectors - most notably finance, energy and water - it is clear there has been systemic 'rent seeking' (using market position to make money without adding value).
Whether the failings of big capitalism are enough to overcome public scepticism about the state, about Labour and about its leader is another matter, but here again it is worth quoting Runciman on the origins of neoliberal political hegemony:
'The real story of the late 1970s in the democratic West is that people were tired of political and industrial strife and were willing to try something different, however uncomfortable. It wasn't a revolution: more a collective shrug'
If we replace 1970s with 2010s and the words 'political and industrial strife' with 'falling living standards and high unemployment' the case can be made that while only a minority of voters share the enthusiasm of the left for Miliband's speech, it might yet prove to be a successful gamble. Certainly, the Conservatives now face the challenge of attacking Labour's policies without looking like they are defending unpopular corporate interests.
It is one of our many cognitive frailties that we tend to focus on unusual events rather than recognising longer term trends. The credit crunch and the resulting economic crisis was, of course, critical but the underlying trend is the thirty year neoliberal experiment in the West running out of road, assailed by its own internal tensions and populist critiques from both the right and left.
Whatever his other failings, Labour's leader is not unrealistic: he does not think he can single handedly move the centre of political gravity to the left. Instead - and this realistically is all the boldness we can hope for from democratic politicians - he has made a judgment about where the future centre might be and taken the gamble to go there ahead of the electorate (and most of the media).
Whether or not it succeeds, this was then a historically significant speech. However, the pleasure that Miliband's team gets from reading the reaction of the left may need to be qualified by a final extract from David Runciman:
'What we are waiting for is a counter-counter revolution, led by progressives who have learnt the lessons from the age of neoliberalism and are unafraid to use its instruments to overthrow them....Someone will get there in the end and maybe by the end of the decade.....but it is unlikely to be anyone near a position of power right now'.