What on earth should we do about this mess?

There are two ‘big ideas’ around at the moment. One is austerity and the free market. The other is Keynesianism and defence of public provision. They were the same ‘big ideas’ that were around the last time we were facing severe economic stress. And the time before that too.

Politicians are too busy defending their core constituencies, intellectuals their core ideas, and newspapers their core readership find a different way of doing things. Few are taking the time to ask if there really is an alternative let alone one that has a practical shot at success.

Yesterday, George Osborne told us we are turning an economic corner. If the singular measure is whatever the growth rate is then that could be true. The irony of course is that he had to ditch austerity to get to that position. Mortgages backed by Government support will fuel a sugar rush of a feel-good factor. That should get things beyond the next general election but then who knows how long the bubble will take to inflate and then pop? Re-inflation is not re-balancing.

Today, Ed Miliband went to speak to the Trades Union Congress to offer an alternative. When that alternative boils down to the a slight extension of the living wage and a crack-down on zero-hour contracts, you might be forgiven for asking what’s the big idea? These interventions are worthwhile in themselves, but do they really constitute the big economic reforms that Miliband seems to be promising?

It was a missed opportunity. Trade unionism is stuck in a rut. It is so busy defending the status quo – understandably perhaps – that it is left without much of an argument for doing things differently. Today, Miliband promised radical change but offered little more than tinkering. The American left thinker, Gar Alperovitz, describes trade unions’ reaction to the current crisis in the following terms:

The reaction of most unions…has so far been almost entirely defensive: “Don’t cut wages, don’t cut benefits, don’t cut retirement programs. Defensively attempting to hold the line to the degree possible is obviously necessary. It also obviously keeps the initiative firmly in the hands of those making ever-increasing cutback demands and is ultimately a very weak posture.”

This was the missed opportunity for Miliband. He could have challenged trade unionism to raise its sights. We need something that isn’t the two old ‘big ideas’. Instead, Alperovitz argues for a reconstitution of political economy along democratic lines.

You will have heard all this before. The difference with the Alperovitz case, as outlined in ‘What then must we do?’ published earlier this year, is that the new way of doing things is already happening. Many focus on America as a big powerful, rich monolith. Underneath that external projection is a civic and economic life that Tocqueville would have recognised. Institutions are flowering and flourishing in ways that hint at wider transformations that may be possible.

Through, amongst many other things, new public-led venture funds to socially purposeful businesses, new ways of reinforcing communities while meeting housing needs, environmental  initiatives, new forms of worker power, voice and ownership, innovative use of government procurement, a new institutional tapestry is emerging. It’s driven by local initiative and buttressed by municipal support: bottom-up and top-down.

Some trade unions are getting involved in this newly blossoming crop of institutions. United Steelworkers have announced a major strategy to help build “union co-ops”. The SEIU has launched a worker-owned and unionised laundry project in Pittsburgh. The United Food and Commercial Workers Union are involved in a 100% employee-owned business.

Alperovitz sees these institutions replacing traditional forms of capitalism over time with the right power strategy. He seeks to go beyond the Galbraithian notion of ‘countervailing power’. Instead, he envisages an evolutionary patchwork of institutional growth, swelling to major transformations over time.

And then focus shifts back to the politics of this week and a feeling of disappointment starts to nag. After a brief flirtation with the ‘big society’ which had potential, the Conservatives have reverted to type. Labour genuinely seems to want to be open to a new big idea but still seems stuck between the old ‘big idea’ and a lack of appreciation about how there are changes afoot that provide it with many of the answers that it is looking for.

What on earth should we do? Freeing ourselves from the old ‘big ideas’ might be a start. Then we could be open to the potential for bottom-up with top-down support model of transformative change. It’s already happening. If political energy is  then applied to institutional innovation, small scale at first but then swelling as models sustain and grow, the old ‘big ideas’ will start to be replaced with a different type of politics and society: democratic, involved, innovative, adaptive. There are literally thousands of ideas out there to help us understand how to create a new mixed economy. We should do something.

Anthony Painter is Director, Independent review of the Police Federation. His new book ‘Left without a future? Social Justice in Anxious Times’ is now available.