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Book of the week at the Labour conference? Damian McBride's Power Trip is the obvious and, in many respects, the correct answer. I'll come back to McBride in a moment. But if there is one political book that marks more truly the interesting but slippery place that Ed Miliband's Labour has now reached – while simultaneously showing where it still has to go – it is an altogether less racy tome than the one penned by Gordon Brown's media hitman.
At Brighton this week I chaired a Progress fringe meeting in which David Sainsbury discussed the ideas in his book, Progressive Capitalism. Sainsbury, who helped manage the family supermarket firm for a quarter of a century before serving as Labour's science minister from 1998 to 2006, might seem at first sight a classic Blairite. He is, after all, a millionaire intellectual with a strong social conscience who bought into New Labour's business-friendly moderation.
Start reading Sainsbury's book, on the other hand, and you are soon hit between the eyes by a critique of New Labour's political economy which in some respects could come straight out of New Left Review or the London Review of Books. New Labour's problem, he says, is that it swallowed neoliberalism whole.
Though it was strongly committed to rebuilding a reformed welfare state, New Labour lacked a more generally robust view of the state's role in a modern capitalist economy. It therefore failed to see how dysfunctional the financial markets were becoming, and was clueless about how to use state power to correct that dysfunctionality until it was too late.
As a result, says Sainsbury, in opposition Labour now needs to embrace a new form of political economy – the progressive capitalism of his title – in order to govern better and better understand the future. That means embracing capitalism in two particular ways – the recognition that most assets are privately owned and the understanding that goods and income are best distributed through markets. But it also means embracing progressivism in three distinct ways: the role of institutions, the role of the state, and the use of social justice as a measure of performance.
Miliband's speech on Tuesday has, somewhat inevitably and unimaginatively, been jammed into outworn old political frames. The right, as in the Daily Mail on Wednesday , sees it as a call to go "back to the bad old days", and the revival of "70s socialism". But the left is equally off-beam if it sees the speech as heralding a 1960s German-style era of tax-and-spend union-friendly social democracy, as if government coffers were bulging.
To me, Miliband's speech makes better sense within the frame provided by Sainsbury's book. The Labour leader's bold critique of energy cartels is the work of a man who has rejected neoliberalism's fundamental belief in unfettered markets and minimal government – this is a perceptible difference between Miliband and Ed Balls – and who has also embraced a classic progressivist "square deal" approach. But nor is it the work of someone who wants to return to the failed past of nationalised industries, national economic plans or incomes policy either – not yet, anyway.
That's not to say that Miliband is simply acting out the progressive capitalist programme that Sainsbury is advocating. There is clarity in some parts of his economic world view – the generalised calls for responsible capitalism and one-nation approaches made landfall this week in the form of a proposed cap on energy prices and a corporation tax transfer from large to small- and medium-sized business. These are popular notions and not, as the stale Mail assumes, unpopular ones. They are also a recognition that, post-crash, Labour will need "a new approach to delivering social justice in an era when there is simply less money around", as the booklet handed out after Miliband's speech puts it.
But there are other areas of the Miliband approach that remain miasmically unclear, as well as at odds with Sainsbury's approach. The corporation tax transfer plan, for instance, attempts to place Labour on the side of small businesses and against big ones. But there are bad small businesses and good big ones, as Sainsbury would obviously be quick to point out. Small is not necessarily beautiful.
Miliband would do better to focus far more on what makes a good business, big or small, and to do more to put himself alongside businesses that embody those principles, whether in their corporate governance, employment practices, training programmes, green credentials, or research and innovation. Such an approach would give a much clearer political signal about what Labour is seeking to do as a party of government than the ambiguous message Miliband has given out this week.
This brings us back to McBride's book. The approach this week has been to say that McBride comes from a failed Blair-Brown past on which Labour has turned its back. This is understandable, given the way the Labour spin culture operated, especially but not exclusively in the Brown camp, from 1994 to 2007.
But Labour's entire record can't be consigned to the failed past. Much of it was good; there is still a majority for it, and that bit needs reclaiming. It's the bad bits that need owning up to and dealing with – not least because Balls, in particular, was so much part of it. Brown, in particular, owes it to Labour and Miliband to take public responsibility for what happened under his watch from 1994, to say it was wrong, to show remorse, even now.
In general, Miliband is surpassing expectations. He articulates a genuinely progressive project. But we live, as Germany and Norway have shown, in extremely difficult times for the left. His is a bold gamble. To succeed, almost everything needs to go right, including his own poor ratings. Miliband gave himself a chance this week. But he can't afford to stand still. Brown could still help. And Sainsbury's book can undoubtedly do so.
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