New Labour and the commonsense of neoliberalism: trade unionism, collective bargaining and workers' rights

DOIhttp://doi.org/10.1111/j.1468-2338.2009.00531.x
Published date01 July 2009
Date01 July 2009
AuthorPaul Smith
New Labour and the commonsense of
neoliberalism: trade unionism, collective
bargaining and workers’ rightsirj_531337..355
Paul Smith
ABSTRACT
The assumptions and values of neoliberalism came to dominate the Conservative
governments, 1979–97, inspiring a range of policies that included industrial relations
and employment law. Inasmuch as New Labour has adopted many of these policies
then it can be presumed to have accepted their neoliberal underpinnings. Moreover,
New Labour’s policies owe much to neoliberalism. Wedderburn’s exposition of the
relationship between the writings of Hayek and the policy of Conservative govern-
ments, 1979–88, is utilised and extended to display the continuity and distinctiveness
of New Labour’s policy on industrial relations and employment law in relation to
its Conservative predecessors. New Labour’s neoliberal assumptions and values are
evaluated. The conclusion argues for a fundamental rebuttal of New Labour’s values
as an integral component of a campaign to re-establish trade union rights and liber-
ties, and effective employment protection.
INTRODUCTION: ‘COMMONSENSE’ IN POLITICAL DISCOURSE
In his classic text, The Political Theory of Possessive Individualism, C. B. Macpherson
(1962) argued that any interpretation of 17th-century political theory had to make
explicit the values and norms of the participants—authors and readers—and the
wider society, which, because they were shared as assumptions, as ‘commonsense’,
were rarely articulated. Macpherson set himself the task of reconstructing the political
commonsense of the 17th century: we, however, can trace the propagation and
dissemination of neoliberal assumptions and values in 20th-century political discourse
and policies so that today ‘neoliberalism is no longer a dream of Chicago economists
or a nightmare in the imagination of leftist conspiracy theorists; it has become a
commonsense of our times’ (Peck and Tickell, 2002: 381)—‘an economic and political
orthodoxy so universally imposed and unanimously accepted that it seems beyond the
reach of discussion and contestation’ (Bourdieu, 2003: 11–12).
The assumptions and values of neoliberalism came to dominate the Conservative
governments, 1979-97, inspiring a range of policies that included industrial relations
and employment law. Inasmuch as New Labour has adopted many of these policies,
Paul Smith was formerly Senior Lecturer at the School of Economic and Management Studies, Keele
University. Correspondence should be addressed to his e-mail: paulsmithblist@hotmail.co.uk
Industrial Relations Journal 40:4, 337–355
ISSN 0019-8692
© 2009 The Author(s)
Journal compilation © 2009 Blackwell Publishing Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main St.,
Malden, MA 02148, USA.
then it can be presumed to have accepted their neoliberal underpinnings. Moreover,
many of New Labour’s own policies owe much to neoliberalism. Wedderburn’s (1989)
pioneering exposition of the relationship between the writings of Hayek and the policy
of Conservative governments, 1979–88, is utilised and extended to display the con-
tinuity and distinctiveness of New Labour’s policy on industrial relations and labour
law in relation to its Conservative predecessors. New Labour’s neoliberal assump-
tions and values are evaluated. The conclusion argues for a fundamental rebuttal of
New Labour’s values as an integral component of a campaign to re-establish trade
union rights and liberties, and effective employment protection.
THE NEOLIBERAL CHALLENGE
Neoliberalism embodies a rejuvenated unitary perspective in which differences
of interest between individuals are reconciled by choices exercised within ‘that self-
forming order of the market which serves the general good’ (Hayek, 1979: 151). The
outcome represents a dynamic optimisation of personal choices and an efficient
allocation of social resources (Wilkinson, 2007: 817–818). Neoliberalism ‘reaffirmed
the inevitability and legitimacy of the basic institutions of the capitalist order’, while
providing a standpoint to challenge ‘all the vested interests which had grown up
through the extended state and which helped to perpetuate the policies which were
restricting the rights of managers to manage and were tying up capital in increasingly
ossified economic and organizational structures’ (Gamble, 2006: 25, 27). It thus
combined a conservative view of the social order with a radical programme for its
preservation and enhancement, posing a challenge to the non-ideological, ‘relativist’
Conservatism.1A central role is accorded to the state in the construction and defence
of the free market (Gamble, 1994: 42–43). In this, the law has a central role: ‘Markets
are always constituted by the law that enforces bargains made within them’ (Hay and
Craven, 2004: 26).
It is axiomatic in the neoliberal perspective that trade unions are subversive of
the market and individuals’ liberty. In 1947 Friedrich Hayek had commented to the
inaugural meeting of the Mont Pelerin Society: ‘We must not delude ourselves that in
many ways the most crucial, the most difficult and delicate part of our task consists in
formulating an appropriate programme of Labour or trade union policy’ (cited in
Cockett, 1995: 113; see also Chapter 1). Hayek’s language portrays unions as unjus-
tifiably coercive institutions (Richardson, 1996). The central theme of his analysis of
unions in The Constitution of Liberty (Hayek, 1960: 267–284; see Wedderburn, 1989:
8–17) is that they ‘have become uniquely privileged institutions to which the general
rules of law do not apply’ (Hayek, 1960: 267); ‘the whole basis of our free society is
gravely threatened by the powers arrogated by the unions’ (ibid.: 269), which renders
‘the market system ineffective’ (ibid.: 272), and prevents ‘competition from acting as
an effective regulator of the allocation of all resources’ (ibid.: 273). A strong state is
necessary to curb unions’ power: ‘once union privileges have become part of the law
of the land, they can be removed only by special legislation’ (ibid.: 279). Only trade
unions shorn of any power are acceptable (ibid.: 232–233).
1Relativist conservatism, ‘takes the status quo as being the best capable of achievement in the
circumstances...andtherefore there is no need for separate ideals which contrast with reality and oblige
one to act to change reality’ (Harris, 1968: 124).
338 Paul Smith
© 2009 The Author(s)
Journal compilation © Blackwell Publishing Ltd. 2009

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