by William Clouston
The SDP’s Social Market is a vision of how to run the country. It’s been a cornerstone of our political thinking for over 35 years, but what is the Social Market and why is it important today?
The Social Market is founded on three basic principles:
- First, it proposes that the frontier between the public and private sector realms is rationally determinable. If something is a public good, requires delivery to citizens universally and can't be provided without substantial public subsidy - then it should be publicly owned and operated. Think schools, railways and public utilities.
- Secondly, the Social Market acknowledges that open, competitive, free markets are not only the best but should be the main system for providing general goods and services. Government must, therefore, provide an environment in which the private sector can thrive, employ people, generate profits and invest. This includes sound fiscal policy.
- Thirdly, the Social Market rejects the choice between hard socialism and right wing unfettered capitalism and minimal government. A successful society requires a synthesis of government and free market activity. A dynamic commercial sector requires a capable and active state.
So, what happens when the principles of the Social Market economy are ignored? Failure.
- The Conservatives sold essential public utilities such as water to foreign investors, denying citizens any meaningful social accountability. We find that public housing stock has been sold and that government is rendered feeble - incapable of constructing social housing on any meaningful scale and the private sector has failed to adequately fill this void, thus denying many people the means to live a decent life.
- Ingeniously, New Labour managed to combine errors of both the left and the right simultaneously. It effectively privatised large swathes of the public sector such as schools & hospitals via Private Finance Initiative (PFI) and outsourcing deals that have wasted large sums of public money. New Labour just assumed that privatisation was more efficient than state provision and failed to properly scrutinise the costs. So, it foolishly ran fiscal deficits during an economic boom and failed to adequately regulate the city, leading to the banking crisis.
- Labour’s current Marxist stance - which demonizes enterprise - is even worse. It does not occur to hard-left Corbynistas that in despising the financial profits made by British companies they also disdain the very tax base which supports our public services.
Successive British governments have failed because neither Labour nor the Conservatives understand the spirit of mutual cooperation that must shape any successful programme. Labour retains a recurring child-like attitude to fiscal responsibility and the Conservatives simply do not believe in state provision in many key areas – although rather oddly in the case of rail, they have no problem with awarding UK rail franchises to French, German and Dutch State-owned companies despite their official dogma that state-owned companies are incapable of running the railways efficiently.
Most British people are not ideologues. They want good government free from the hard line dogmas of left and right.The SDP, with its Social Market vision, was created to free the British people from this false two-dimensional choice. The public and private sectors are not - and should never be - opponents. They are complimentary elements of the same society.