1945 and all that

labour-poster-1945-1

Key note speech to the Australian Society for the Study of Labour History,13th Biennial National Labour History Conference, 11 July 2013 

I would like to thank Nick Dyrenfurth and the Australian Society for the Study of Labour History for the invitation to speak here.  I am happy as well as honoured to be with you for a range of reasons; political, personal and professional.  Coming to Australia is for me, one of those things that could be summarised under the heading of a dream come true.  For reasons that I am sure you will tell me are entirely wrong, I thought of Australia as country where workers could be free and speak their mind without the discombobulating sneeriness of the English ruling class, of whatever politics to stop them speaking their minds.  It says something that I felt I had to come to the other side of the world to speak mine and your hospitality is greatly appreciated.

I am, also, by training and vocation, a historian.

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Tackling Poverty Together

imagesKeynote address to Church Urban Fund Tackling Poverty Together Conference on 13 November 2013

I would like to thank Paul and the Church Urban Fund for your gracious invitation.  My thanks are at many levels.

The Church Urban Fund also supported London Citizens in its early years and the decade that I worked with them transformed my life, not only in terms of my understanding of organising, the most important of which are the iron rules, ‘relationships precede action’ and ‘never do anything for anybody that they can do for themselves’, not only for the relationships that it brought and the support they gave me over many years as I struggled to find my own vocation, but also for the truth I discovered; which is that a common good can be found in society between faiths, races, classes and places but that such a common good is impossible without a generous and robust engagement by the Church.  The English Church, Catholic and Reformed, carried within its tradition and memory a conception of a common good, of a balance of interests, of vocation, of place and of family, of relationships bound together by love and duty that are the basis of a good life.  A conception of the common good which had a place for work and working people.

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Work as a value

 

LSE This talk was originally given at an LSE  Department of Economics public discussion  with Lord Skidelsky on 29 October 2013  

A podcast of the event is available  here 

It is wonderful to be here at the LSE.  I’ve had debates with Michael Gove and Jesse Norman, and with Lord Skidelsky, but my fondest memory of the LSE remains the Living Wage Campaign with London Citizens.   In that campaign we discovered the London School of Economics was precisely not supposed to be the Chicago School and reproduce the deficiencies of an exclusive reliance on individual utility maximisation as a unit of calculation and, according the Webbs, it was supposed to develop a theory of Labour Value.

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The profundity of defeat

SPD2Paper delivered to SPD event at the Friedrich Ebert Stiftung in Berlin, 30 October 2013

I would like to thank Ernst and Anna and the Friedrich Ebert Stiftung for the invitation to speak today.  I am honoured by it and it is very meaningful for me.

I will be talking about the need to renew our approach to organising, ideology and leadership in the wake of the defeat of both our parties at the last elections.  I will be suggesting that a new period of radical revisionism is required and that our shared traditions are the best place to look for our resources of renewal.

I work from within the Labour Tradition in Britain which has always seen the German SPD as our most important sister party and which drew upon Eduard Bernstein and other German theorists as an inspiration.  It is important, however, to recognise the differences before moving on to what we share.

The Labour Movement in Britain was not a secular organisation but itself the conscious hub of a common good initially brokered by Catholic and Protestant workers in the Dockers Strike of 1889.  There was no serious Catholic or Christian organisation of workers within Britain, that went on within the unions and the party itself.  This meant that the Labour Movement in Britain had no Marxist inheritance to renounce and at least until 1945 was less explicitly progressive than the SPD.  It also meant that there was not an organisational division between social and Christian trade unions.

This relates to the second important difference which is that the Labour Movement in Britain defeated Fascism at home and then abroad, our most sublime achievement being precisely the work in the British occupied zone of North Rhine Westphalia that led to the establishment of Mitbestimmung within corporate governance in the Iron and Coal Industries, a vocational labour market model in relation to Handwerk and the banking system based upon regional and sectoral endowment.  These were extended nationally over the following three decades to form an institutional system of economic governance that was distinctive.  The Americans asserted their primacy through their role in the Constitution but the political economy was brokered by the British under the leadership of Ernest Bevin, the Labour Foreign Minister and founder of the Transport and General Workers Union.

By 1945, my tradition was entirely defeated at home in that we adopted nationalisation and not co-determination, centralisation and not federalism, collectivism not solidarity.  We inherited a war economy and continued with it.  The work done, however, in the British occupied zone is the greatest example of Labour Statecraft in action, renewing and democratising ancient institutions, reconciling estranged interests, nurturing labour power and its representation in the governance of industry and upholding liberty at the level of the state and democracy within the economy.  It was a system that constrained the commodifying power of capital and the domination of the State.  It could be argued that it is better than what preceded it and better than existing alternative models.  From a revisionist perspective, that is quite a good start.

The defeat of Fascism, and the election of a majority Labour Government in 1945 was only possible because Labour had strong mainstream support among working class voters and organised labour.  There was no serious Communist Party in Britain, and no serious fascist party either and the principle reason for this is that both were consistently defeated by Labour who maintained working class loyalty precisely because it was not an ideal or a set of principles, but an organisation that upheld the dignity of work and of working people and insisted that they had a constructive role to play in the governance of the country.  Labour did not flirt with the popular front or the unity of progressive forces.  It pursued a common good which included labour as an interest and as a source of value.

In Britain, dispossessed and exploited people built a better life through the labour movement by building mutual institutions in housing, pensions, burial and assistance in distress.  They built relationships and institutions that were based on reciprocity and responsibility.  The Movement was thick with meaning, ethical categories were used to describe economic practices as they sought to retrieve a human status from the demands of a free market and a poor law state.  The Labour movement was built by the working class and it improved the conditions of the working class precisely because it was not simply left wing, it was also patriotic, conservative in relation to the constitution of Parliament and the monarchy, very strong in support of family life and contribution with a strong sense of place.  Municipal socialism was where we started.  Labour refused to be defined as an alien nation within the body politic and organised its power so that it could not be ignored.  Labour was not sealed off from the political language and institutions of Britain but generated an original narrative from shared inherited resources and reshaped them in important ways.  It offered the hope of a better life and a better country by increasing democratic participation in power and decision making.  But we lost it, we learnt the wrong lessons from victory and we handed over all power to the state in 1945.

Labour in Britain is learning the profundity of defeat.  A great hope has died.  The ideal of a perfectly just state administered system that eliminated need and increased equality.  Post-war Labour ideology in Britain has reached the end of the road.  We tried the state (1945), we tried the market (1997), then we tried them both together (2007) and Britain is still not generating value in anything other than financial services and high end university teaching and research.  Paradoxically, both sectors are protected by the two most ancient, and most democratic self-governing institutions left in the country.  Cambridge University on the one side and the City of London Corporation on the other.  It is time for our socialist tradition to rediscover the social.

Germany took a different path.

It is of crucial importance in understanding Blue Labour that we claim the post-war West-German economic system as part of our inheritance, of what could have been in Britain if we had not learnt the wrong lessons from our victory which was based upon a war economy, planning and centralisation.  We claim it, first, as a form of statecraft in foreign affairs, or in our own language a model of internationalism in which civic peace, solidarity and free and democratic trade unions with real labour power in economic governance were given a central role.  It has certainly not been improved upon as a model of development from dictatorship to democracy or of economic growth.

We also claim it in terms of the expression of an exiled tradition within our own party and movement, in which decentralisation, the preservation of skill and status and different forms of democratic governance within the economy were all subordinated to nationalisation, collectivism and administrative methods in which procedural justice subordinated all forms of particularity and associative power.  Politics ceased being about the negotiation between interests but about the passing of laws.  To acquaint you with Blue Labour political language, after 1945 England suffered a severe home defeat but a surprising away win in the form of the enduring power of the German economy and I am pleased to say that we are through to the next round on the away goals rule.  In the debate in Britain, Blue Labour was immediately accused, as socialist thought has been since 1848, by liberals and Marxists alike of being nostalgic, pre-modern and irrelevant.  The German economy saved our credibility.

I will suggest towards the end of the paper that a different narrative is required if the SPD is to renew itself as a vital and virtuous force in European Politics, one that praises and seeks to export the German model based upon worker representation in corporate governance, vocational regulation of labour market entry, regional constraints on banks and the co-determination of pension funds which could provide an effective means of renewing trade unions, civic virtue and re-establish meaning to the term ‘social-democracy’.  When Bernstein said that ‘the movement is everything, the ends are nothing’ he was really on to something.

The suggestion of this paper is that there is real common work to do on reworking a narrative, strategy and identity for our parties and that can only be done from within our traditions by retrieving neglected practices and perspectives (exiled traditions) which will enable us to function more effectively in contemporary conditions and enable us to talk more straightforwardly to our voters.

One of the assumptions, that needs to be made explicit in this conversation, is that it is not a question of whether Germany is, or is not, the hegemonic force in Europe.  The question is: what kind of hegemon is Germany to become?  The role of your party and Labour Movement in shaping the institutional form of a European common life, in moving the contest away from free movement towards shared beneficial constraints, is an important one.  This is essential to our interests as well as yours.  Another way of putting this is that we must move away from an exclusive concern with external goals and aims and re-acquaint ourselves with two neglected aspects of our tradition.  The first is to remember that capitalism is characterised by a tendency to turn human beings and nature onto commodities and centralise ownership and that this can lead to authoritarian statism.  A social democracy is one characterised by democratic systems of governance within the institutions of society and the economy.  We need to strengthen the body politic and not exclusively the administrative mind.

The second retrieval is of a politics of the common good which is based upon the reconciliation of estranged interests; capital and labour, immigrant and local, secular and religious, north and south, east and west on the basis of democratic association and institutions that promote a non-pecuniary value within the economy.  It is a politics that is social and democratic.

The argument I will make is simple.  The vitality, popularity and power of the SPD is a necessary condition of a better European system based upon a balance of power in public and private corporations in which Labour plays a constitutive role.  This is not, therefore, a good time for Europe.  You are not powerful or popular enough to be the good that you need to be.  A blunt way of putting it is that the SPD is neither internationalist enough in shaping a social-democratic vision of Europe based upon the balance of power in self-governing societal institutions nor patriotic enough to lead your nation to the ends of democracy, civility and liberty.   This is a time characterised not by contradiction but by paradox.  One of these is that there is no effective internationalism without patriotism.  Another is that in order to achieve a more democratic society it is necessary to have effective leadership.

The problem is deeply rooted.

I am honoured to be speaking in the Friedrich Ebert Stiftung for Friedrich Ebert was in a very difficult spot in 1919 and upheld the rule of law and parliamentary government as any good Social Democrat should.  In recognising the chimera of progressive unity and calling the Communist Party for what they were, the tyrannical agent of a foreign power, he unfortunately made an alliance with the Freikorps and a coalition of forces who would never accept the democratic governance of industry and the recognition of labour and labour value.  It was a tragic choice because it did not need to be made.  In conceptualising the conflict between the National Assembly here in Berlin and the worker and soldiers committees that grew in the factories and demanded the end of the military management of the economy as a conflict over sovereignty he demonstrated the weakness of an assimilation of the socialist tradition to the liberal conception of unmediated sovereignty in which the individual and the collective are the only two meaningful units of political agency.  It was possible to have a rights based state and a democratically negotiated economy, as the post-war settlement has indicated.  That distinction was not a meaningful one to Freidrich Ebert in 1919. It did not stop, however, a particular development within Social Democratic thought in Germany that was not exclusively Statist in form and which stressed the status of skilled work, forms of partnership and democratic governance and a greater power for the workforce within the economy.  An idea of a civil economy was developed.  Internal as well as external goods characterised your tradition, in which virtue took its place alongside rights.

One of the major works of the inter-war years was Franz Naphtalie’s, Wirtschaftdemokratie, Ihr Wesen, Weg and Ziel, which was published in Berlin in 1928 which is the clearest articulation of a decentralised economic system based upon interest representation which were in turn organised within sectors and in which organised labour played a constitutive role.  It was presented as a modernisation strategy which would improve efficiency and skills within a framework of national industrial development; it was also a very good way of knitting the Unions and the Party together for mutual advantage.  It was a remarkable achievement, particularly at a time when modernity, and socialist modernity in particular, was conceived in geometric form with scale and centralisation the dominant trend.  It was adopted as Party policy but that didn’t amount to very much at the time.  Naphtali survived the war and ended his career working for the Histadrut, the Israeli Trade Unions, but his legacy, I would argue, is a very important one for German Social Democrats as it provided a non-Keynesian, decentralised, democratic conception of economic governance which embedded the price system and a negotiated partnership between capital, labour and the state within the economy.  It corrected weaknesses with the works council system established during the Weimar Republic by strengthening labour representation in terms of a three level negotiation namely collective bargaining, co-determination and works councils.  It upheld liberty of conscience, religion and association in politics, and a robust democracy within the economy.

The credit for the Social Market has for far too long been taken exclusively by Ordo-Liberals such as Ropke and by Catholic Social Thought and its magnificent theoretical connection between subsidiarity, labour value and the balance of interests.  The contribution of both should be acknowledged.  What is more neglected is the constitutive theoretical and institutional role played by the Labour tradition in Germany, unions as well as party, in developing the inheritance out of which such a distinctive arrangement could be negotiated.  It was a settlement brokered by the Church and Labour which involved a settlement between capital and labour and the fundamental agreement concerned the human status of labour, the importance of their self-organised representation in the governance of firms and labour markets.  This was an extraordinary achievement by the Party and the Unions but I rarely hear it claimed.

It was a settlement between a range of political and economic actors that could only be achieved due to the profundity of defeat.  The defeat of the Nazis was not simply military but ideological.  What was defeated?  In terms of the new political consensus that emerged there was a profound shift from military to civil ends.  There was a rejection of unaccountable leadership and a proper system for the decartelisation and decentralisation of power.  There was a replacement of the fuhrerprinzip by a balance of power and a strong stress on the specificity of place and region as well as the establishment of democratic self-government for those places.  It was not a revolution.  Such a thing is impossible and can never account for the necessary continuation of things and people through time.  It was, however, a great transformation in the governance of societal institutions.  I mention this because I have read some social democratic work which stresses the continuities and it is worth emphasising the rupture.

It is customary among political elites of all traditions to unwittingly become trapped by Lenin’s question of ‘What is to be done?’  It is far more important, at this moment to ask Marvin Gaye’s question of ‘What’s Going On?’ And what is going on is that the SPD has lost the trust of working class German voters, is overwhelmingly a party of the public sector, social science graduates and ethnic minorities and won barely more than a quarter of the vote.  It has moved its concerns from those of the internal governance of the political economy to a political and legal orientation that requires the passing of laws, external regulation and redistribution.  It has not seriously defended the internal virtues of its economic system, preferring to stress external factors such a stimulus and taxation.  Justice and rights rather than democracy and the good have come to define the position.  I am strongly suggesting the party has become liberal rather than socialist and that is the fundamental problem.

Nowhere is the empty space where the SPD should be more noticeable than in the shaping of Europe.  Unless there is a decisive change of approach the very institutions of economic governance in Germany could become illegal according to competition and free movement laws.  Germany has exported its goods to Europe but it has not exported the good of its system.  There is no question that the German economy generates value and that it is the dominant force in the economic sphere.  That is what I meant earlier when I said that the question of not whether Germany is or is not a hegemon but tried to draw attention to the kind of hegemon that it is.  It cannot be compatible with our shared Labour tradition that Germany has a unique and distinct system that is not part of the European system.  The rest of Europe is institutionally depleted, it lacks virtue and vocation and does not have the institutions to generate value yet the entire debate is about money.  Bailouts, solidarity loans, stimulus and other forms of state spending within a system where sectoral and regional banks have been decimated by financial centralisation, Trade Unions have become marginal and lack a constructive role, cities are bankrupt, regions dependent and universities degraded.  The SPD should not be only talking about a redistribution of money but a redistribution of power in which capital is constrained by robust local and sectoral organisations and where democratic self-governing institutions play a fundamental role.

As a member of the House of Lords I put an amendment down two weeks ago calling for the regionalisation of the Royal Bank of Scotland which was nationalised during the crash in 2008 and now being returned to market.  It used to be a trusted local financial institution but in order to maximise its returns it became a normal bank and lost its assets.  I was regaled by Peers telling me about the failure of the Landes Banks without mentioning that the same thing had happened to them with the loosening of constraints and they too had become profit maximising.  This is another area where our Parties could make common arguments concerning the greater resilience of banks working within a system of beneficial constraints.  The economic rationality of social democracy should be affirmed in that constraints on capital protect the asset.

Watching from afar, as a friendly observer, it is hard to discern what the SPD strategy is in the negotiations.  The demand for a strong minimum wage, which we would call a Living Wage, is excellent but the list of demands does not cohere into a strengthening of labour value, a constructive alternative to an abstract and generalised form of the EU or to a renewal of the consensus in which the SPD and trade unions will play a vital and growing role.  The success of the post-war settlement was built upon relational accountability not a universal regulatory system, on the formation and reproduction of vocational skills, not a stimulus package, on the establishment of regionally constrained capital not the bailing out of failed homogeneous banks.  The key strategic posts should be the foreign ministry and economic portfolios so that solidarity, subsidiarity and status can be pursued in the national and international arenas which promote practices that strengthen a social democracy.  The vision needs to be mundane and concentrate on the daily lives and needs of people to earn and belong in their society.

One of the great strengths of Blue Labour is that we are, by our nature, blue.  We live with tragedy, defeat and  loss.  It is what we expect, even when things are going well.  We are not looking for happiness, or tranquillity, but find meaning in trying to be good.  That goodness is found in building relationships, and unlikely friendships that can resist the domination of capital and the state, the domination of the uneducated by the educated, the poor by the rich.  We are anti-revolutionary revisionists, we are true to Bernstein and Naphtali.  It goes without saying that we admire Helmut Schmidt.  We are constitutively part of European Socialist history and your defeat is ours too.  It is fundamental to our approach that defeat needs to evaluated and discussed honestly.  Otherwise we learn nothing from the experience.

When Labour lost in 2010 it was our second worst defeat since women got the vote in 1921.  Labour had also lost the trust of working people, the art of politics, the ability to reconcile estranged interests and redistribute power to people.  We had become progressive and hostile to the concerns of our voters.  In talking in this way we were considered disloyal by many within the party while we thought we were being faithful to our party and its traditions.

We analysed three areas that needed fundamental change.

The first is the recovery of a tradition of labour organising that is rooted in the politics of the Common Good.  Ed Miliband, our party leader, invited Arnie Graf from the Industrial Areas Foundation (IAF) in Chicago, the organisation founded by Saul Alinsky, to Britain to direct Labour Organising in the Party.  There is a very strong emphasis on leadership development from within working class and immigrant communities who vote for us, local campaigns that attract new members to the Party and public assemblies where local manifestos are agreed.  This has only been in place for just over two years but there is a clear increase in party membership in those areas where it has been tested and a strong improvement in candidates from non-professional backgrounds coming forward for selection.  The change from a transactional culture to a relational one has been championed by the General Secretary Ian McNichol.  In Lancashire in the County Council elections where the local party wrote its own manifesto and ran an exclusively local state of candidates built around town hall assemblies and testimony from Party members the vote was doubled from four years ago.  ‘The Movement is Everything’ is now firmly established among regional organisers and constituency parties as their credo.  There is an extensive programme of leadership training, based upon the IAF method for Parliamentary candidates and party members.  It is developing into a very different kind of ground game in which local leaders and organisations galvanise the vote.

The second fundamental change is ideological.  Jon Cruddas, the MP in charge of the Policy Review has articulated this re-orientation most effectively in his speeches ‘The Condition of Britain’, ‘Earning and Belonging’ and ‘The New Statecraft’.  All are available on the internet.  This involves a central concern with family, place and work as the key themes of policy organisation and the renewal of old institutions relating to vocation and of civic politics.  This has been organised around the idea of One Nation, itself borrowed from Benjamin Disraeli the Tory Prime Minister.  By listening to people, by building relationships the position is not articulated in terms of first principles and guiding philosophy but through concentrating on reversing a sense of powerlessness and national decline through common action.  This links directly with the renewal of Labour language in how it describes governance.  In the economy the One Nation policy review talk of virtue vocation and value.  In welfare, responsibility, resilience and relationships.

Blue Labour argues that New Labour and the Third Way were naïve in their understanding of finance capital and immigration and forgetful in its approach to labour value.  The Hartz reforms here did not seem to grasp the paradox that through the preservation of status within the economy efficiency and productivity increase.  I think they were based upon New Labour assumptions concerning flexibility and innovation that turned out to be false and were brutally exposed in the financial crash of 2008.

The final change relates to leadership acting as a generator of change.  There is the need for a consensus change across Europe that puts a greater stress on labour value, democratic participation and the common good.  By actively promoting the Labour Party as the only organisation that can bring immigrants and locals together, that can negotiate with powerful private corporations through political campaigning Ed Miliband gives practical meaning to the idea of One Nation.  He is seeking to resist the domination of unaccountable elites through embedding the political position in the organising. He has done this with the energy companies and the Murdoch and Rothermere Press.  He has also confronted the Trade Unions in their unaccountable power and the party reforms will indicate the position to the country.  The definition of a good leader is that she has followers.  There is an active attempt to generate a following for Ed Miliband in the changes he is leading in the Party and wishes to do in the country.  He, in turn, generates a following in the country around accountability, the redistribution of power and solidarity.  The goal is a consensus change away from Thatcher and New Labour and towards a Social Democracy built around the common good.

There is more to be said but I will leave it there.  Blue Labour took a view that the defeat on 2010 required a new period of revisionism that challenged the prevailing orthodoxies, particularly the uncritical assimilation of liberalism as an economic and political philosophy.  It also required a retrieval of neglected or abandoned internal traditions that could enable us to innovate in policy so that we can redistribute power and challenge the domination of finance capital and other unaccountable elites.  The destiny of social democracy is to resist domination through the building up of associations that strengthen the social, that democratise those institutions and hold market and state elites to account.  Our shared inheritance and tradition makes such a joint venture a potentially beneficial one.

Australian Labor’s search for ethics

Australian Labour Party - DAVID JACKMANSONIn the ashes of the federal election, the Australian Labor Party is seeking to rebuild after its lowest vote in more than a century. But where should it seek inspiration?

While its acting leader, Chris Bowen, argues that it should become a party of individualism and enterprise, a British intellectual says Australian Labor and British Labour need to go back to the ethical principle on which they were founded—the common good.

Listen to ABC’s Andrew West interview Maurice Glasman here.

Let’s join Justin Welby’s war on Wonga

Justin Welby - CATHOLIC CHURCHThe archbishop of Canterbury, Justin Welby, is a brave man. Not only has he told payday lender Wonga he wants to “compete” it out of existence, but he was also the first prelate since Archbishop Laud in the 1630s to stand in the Lords and denounce usury. The Puritans cut Laud’s head off.

I was there when Welby spoke out against payday loans in the House of Lords last month, and judging by the look on the face of business minister Lord Younger, the peers regretted the loss of power to repeat the execution.

Read more in The Guardian.

How does Germany do it?

Engine - AUTOMOTIVE RHYTHMS“The lives of the dead hang like a nightmare on the minds of the living,” wrote Marx. His words apply to the relationship between Margaret Thatcher and the Labour Party.

She defeated us in life and her ghost was not laid at her funeral. Thatcher’s inheritance still sets the parameters of political rationality and government policy today. She argued that Labour spent too much, taxed too much and borrowed too much.

The trajectory of the Labour Party over the past 35 years has been defined by the challenge Thatcher posed. What is the alternative to the market as the exclusive generator of innovation? What is the alternative to managerial prerogative in the pursuit of efficiency?

Part of Labour’s challenge is historical: to show that the durability and comparative strength of Europe’s most successful economy – Germany’s, which has come to be understood exclusively as a function of its monetary discipline –was in fact rooted in a series distinctive, decentralised institutions. The “equalisation of burdens” act of 1952 stipulated that there had to be negotiation between capital and labour both inside firms and in society as a whole.

Read more in the New Statesman.

The fight for the “People’s Port”

PageLines- DoverForeverEngland3.pngRight now Dover is the site of a battle. The local community is fighting to stop the privatisation of the town’s historic port. Lord Maurice Glasman, godfather of the Blue Labour movement, has been talking wide-eyed about this campaign to anyone who will listen.

“The port could be endowed in perpetuity to the people of Dover on behalf of the nation,” Glasman tells me. “It’s a story about Labour helping workers and exports. About Labour winning in the south. About nationhood and building the common good. It’s everything Blue Labour stands for.”

Read more at the New Statesman.

An ancient polity for a new economy?

Northern Rock - EWAN MCDOWELLThis lecture was originally delivered at the Centre for Research on Socio-Cultural Change (“CRESC”).

It is a great honour to give the CRESC annual lecture this year.  Your work has been an inspiration to all of us who have tried to stitch together the political position that has become known as Blue Labour.

It is difficult to strike the right balance between being stubborn and open.  Through the political failure of the Left to resist Thatcherism and then the grim accommodation of New Labour it was very hard to stay true to the insight that something bad was going on and at the same time overcome the limits of failed progressive paradigms and articulate something more politically appealing and economically plausible.

All at CRESC had to be stubborn in maintaining a sustained objection to the impoverishment and humiliation of working people by the power elites of the market and the state, and open in finding an interpretive framework that could best explain the radical nature of reality.  C. Wright Mills and Andy Haldane make unlikely partners but the relationship works and has been an inspiration to me.

My relationship with Karel, however, didn’t get off to a good start.  Blue Labour did make an appearance in the CRESC literature but only as an aspect of faddish elitism that gestured to the right problems but could find no means of affecting them.

Given the scale and range of attacks on Blue Labour this was received with a slight pang of disappointment, an emotion common to academics, rather than grief but I did wonder how this relationship could be brokered.  It was with subdued delight therefore that I received an email from Karel supporting an argument in a New Statesman article in early January and suggesting a conversation.

I had one lingering misgiving.  For many years I wrote a very specific genre of literature which one might call ‘lonely academic’ in which you are rejected by the mainstream and despised by the alternative.  Unread and bereft it is hard to describe such a life as brimming over with friendship and laughter.

The effect of recognising how much unnecessary suffering there is for working people, how superficial and inept our political elites can be, how venal our financial elites really are and how far we are from having a popular expression of hope and disaffection can be debilitating.  A certain humourlessness can pervade the heart and an unrelational superiority that is the very opposite of what the political position requires.  It is not called Blue Labour for nothing.

Was Karel going to be a person like that?  It was with trepidation and excitement that I approached a distant bearded figure at the entrance of the House of Lords and as I walked up to Karel he smiled at me he said, ‘It really is a load of bollocks isn’t it’ and I knew that everything was going to be alright.  As the opening line of a public relationship it may not rival ‘Dr Livingstone I presume’ but it has stayed with me.  We then sat down and had a political conversation the type of which there is far too few of in Parliament and the invitation to speak here followed from that.

I honour all at CRESC for the quality and quantity of your writing.  I think it will turn out to be the most important contribution to the new political economy of any academic centre.  There are two distinctively CRESC themes that I have drawn upon in my own work and which will be developed in various ways in this lecture.

The first concerns the political power of the City of London and its economic consequences.  The Alternative Banking Report not only rightly questioned the claims of the financial sector in terms of job creation and tax revenues but also the type of internal investment the financial sector pursues which was overwhelmingly in property and loans and underpinned the debt based model of growth characterised by subsidised badly paid jobs.

The City of London Corporation is the most ancient continuous democratic commune in the world and it represents the interests of the financial sector alone which is the most important economic interest in our polity and CRESC were among the first to understand this causally and in terms of power.  A sentence from the report which said ‘the only credible response is radical new economic policies which can usefully be launched through local and regional initiatives’ is one which has organised my own work and will be developed this evening.  The central theme here is financialisation and how it leads to concentrations of ownership and the centralisation of decisions.

The second is the concern with the failure of leadership and statecraft.  ‘After the Great Complacence’ introduced me to two new concepts to describe this, ‘the elite debacle’ and the ‘fiasco’.  I have tried to work with both ever since.  The theme was continued in ‘Groundhog Day’ which is a personal favourite.  There is also a common interest in the work of Andy Haldane at the Bank of England.  My respect for Mr Haldane is profound and it is necessary that he is part of the conversation that lies ahead of us.  CRESC drew attention not only to the consequences of financialisation but also the failure of leadership, which was not personal but systematic.

The crash of 2008 will turn out to be the decisive moment in the emergence of 21st Century politics.  In its aftermath there is the need for an articulation of a strategy through which to harness popular disaffection with the power elites and an agenda for economic transformation through a democratic politics of the common good.

Blue Labour is an attempt to do that and tonight I want to particularly emphasise the link between tradition and modernisation, between retrieving our inheritance and competing effectively in a global economy.

Relationships, paradox, tradition, power, leadership, institutions, vocation, virtue, reciprocity. I find these words cropping up in unlikely places in the work I do but before attempting to show how they fit together in the framework of a political strategy it is necessary to tell a brief story about where we are now as concerns the economy.

The combination of finance capital and public administration, which have been the dominant drivers of employment and growth over the past 30 years have not generated very much energy or goodness.  Of the 1.3 trillion pounds lent by banks in the British economy between 1997 and 2007, 84% was in mortgages and financial services. The practical predicament we confront is that in the combination of household debt and those held by our financial institutions we are indeed a world leader and this comparative advantage has been building for a long time.  Private indebtedness was the most recent method by which we borrowed against our future to serve the present and it has reached its limit.

The theoretical predicament is that on their own, neither a Keynesian nor a neo-classical approach has the conceptual means of understanding the importance of institutions; of vocation, virtue and value in generating competitive advantage, reciprocity as the foundation of good practice and the importance of long term relationships between capital, labour and place in generating growth and innovation.  It sounds like a foreign language but ethos, virtuosity and leadership are fundamental to a firm’s success in contemporary capitalism.  The ugly economic phrase is value added.  The importance of these institutions and practices is the lesson of the comparative strength of the German political-economy which did not pursue a Keynesian model after 1945 but one based on worker representation in firms, a vocational economy and robust regional banks constrained to lend within the region or the sector.  The importance of the body politic as well as of the administrative state is one way of describing this, the renewal of the Labour tradition of political economy, another.

Labour was born out of the decimation of the common life of the people by enclosure and the abolition of any status or association between non professional people.  The Glorious Revolution was truly glorious for lawyers, accountants and professional partners, it was not so good for peasants, carpenters and plumbers.  The professions were protected in law and retained their status but the vocations were dissolved into the labour market.

It was through the establishment of the institutions of the labour movement; the burial societies, mutual funds, building societies, combinations, as trade unions used to be known, that the people organised themselves and protected their status from being that of a commodity in the economy and an administrative unit of the poor law state.  The working poor buried each other in proper graves, they built houses and ensured each other from calamity.  The party was radical and conservative, democratic and traditional.  Labour was a partner in brokering that most extraordinary of political settlements: the democratic monarchy.

The fundamental insight of the labour tradition is that human beings and nature are not commodities.  They were not created as commodities and cannot endure their loss of status due to excessive exploitation and subsequent exhaustion.  Capital is committed to securing the highest return on its investment but the consequences of that, unless mediated by non-market institutions, is ruinous for human beings and their environment.  The Labour tradition, while brokering a common good not only between Catholic and Protestant but between secular and religious, is continuous with Christianity and the Citizenship tradition in asserting that the value of the person is not exclusively defined by their price.

The best way to resist both exploitation by the market as well as oppression by the state was through democratic association built around locational and vocational institutions. In terms of CRESC categories I am suggesting adding commodification to financialisation as a core concept.  If commodification is understood as the transformation of that which was not produced as a commodity, human beings and nature, into a commodity, with a monetary price in the market and financialisation as the pressure exerted to turn substantive assets into formal money then both concepts are central to the construction of a better theory and their practical effects need to be resisted by the formation of countervailing institutions with popular legitimacy.  Status and trusts, institutions and endowments are the most effective way of doing this.

The tragic paradox of the Labour tradition is that while there is no alternative to capitalism, capitalism is no alternative.  The politics of Blue Labour is to recognise that and build institutions and solidarity that can domesticate capital and tame its commodifying and financialising force by building democratic institutions and constraints.

This is a long way from the political economy of new labour.  The assumption that globalisation required transferrable skills and not vocational speciality, that tradition and local practice were to be superseded by rationalised administration and production was mistaken.  The denuding of the country and its people of their institutional and productive inheritance by the higher rates of returns found in the City of London, and then the vulnerability of those gains to speculative loss, is the story we confronted in 2008 and is well told in the CRESC report.

It turns out that the German political economy, with its federal republic and subsidiarity, with its works councils and co-determination between capital and labour, with its regional and local banks and vocational control of labour market entry, with its distinctive stress on place, a democracy locational and vocational; was much better equipped to deal with globalisation than we were with our financial services and transferrable skills.

The institutional settlement of post-war West Germany has endured because it generated value.  They retained pre-modern artisan organisations and turned them into the foundation of their contemporary economic success.  They entangled and constrained capital in a myriad form of national, sectoral and localised arrangements and they emerge from the crash, virtually alone, with a productive economy and a functioning democracy, with greater equality than us and more meaningful work.

They have retained ideas of status that we discarded in favour of flexible labour markets and yet they proved better at adapting to the change in circumstances generated by new technology and financial innovations.  They asserted that globalisation was not a fate that required a single response.

An Aristotelian conception of internal goods, of internal negotiation and co-operation, of a balance of interests within a corporation and not an exclusive assertion of external ownership and unilateral managerial prerogative characterised a system built upon strong self-organised democratic institutions within the economy.  The comparative superiority of the social market economy is an important feature of the new consensus.

Blue Labour is considered to be at its most fanciful when talking about the revival of Tudor Statecraft and the commonwealth tradition.  However, the move away from policies and programmes towards institutions and the common good requires this.

In 1500 England was behind in maths and science, literature and munitions, naval technology and theology.  Kings and Trinity College were established in Cambridge with endowed chairs in Maths, Greek, Hebrew and Science, the Greenwich maritime college was established along with the Woolwich Arsenal, the Royal Exchange was established in London as an alternative to Amsterdam as a clearing house for global trade, the gold captured from the Golden Hind formed the foundation of the gold standard and the exchequer.

Within a hundred years our ships ruled the waves, the King James Bible established English as a literary language, London was the undisputed emporium for currency and the emerging Atlantic trade, Bonfire night indicated that when it came to gunpowder and munitions we had enough to fed the needy and there was an institutional body politic capable of underpinning state policy and prosperity.  England was in a very different position in 1600 to 1500 and institutional endowment was a key part of that.  I think we are in a similar position now where long term institutional design and a re-imagining of the body politic are necessary in order to reconstitute our nation as a free and democratic nation with distinctive traditions and practices that are a blessing to ourselves and to the world.

Blue Labour is based upon the assumption that we are living at a time that the Ancient Greeks used to call a Kairos moment.  A time of a challenging of orthodoxies that requires decisive political leadership and a change of direction.  This form of statecraft is consistent with our national traditions and combines the establishment of new economic institutions within a framework of a decentralised democracy and a more durable body politic.

This requires not only that we can tell a story about our successes and failures, about where we have gone wrong so that we can do better, but also that we can tell it within the understanding and experience of our fellow citizens.  Aristotle spoke of doxa, of working within the experiences and meanings of everyday life.  Blue Labour is rooted in the Aristotelian tradition, and as with its predecessor associated with the Tudor Commonwealthmen, it allied that with the freeborn tradition of English liberty.  It is as synthetic as the myriad peoples who have lived here.

So, what are the forms of the new economy that are linked to the ancient polity?  How can an embedded institutional system be brokered from the materials that we inherit and have to work with now?  How can we move from the world as it is to the world as it should be?

The first is to establish new banking institutions in the places where people live and would like to work which can address the fundamental problem of lack of internal investment.  The stranglehold of the City on our pension funds, savings and assets and the relentless recklessness of the money managers who were their custodians proved calamitous.

Constraining banks to lend within specific places, to establish productive and profitable relationships with businesses that function in those places is necessary in order to break the illusory speculative thrall of higher returns on investment.  ‘Best value’ intensified the pressure.  I am inspired by the excellent work of Andy Haldane at the Bank of England and he has gone furthest in probing the causes of systematic unaccountable recklessness in the banking sector.

I would suggest that we use 5% of the bailout money to endow the Banks of England, which would be established in the counties and cities of England and would be constrained to lend within the county or city.  The principal of the endowment would be in trust to the people of that county or city, in perpetuity so that it could not be liquidated by its members,  and the balance of power in its corporate governance will be held by  a third being held by the Bank of England, a third by its workforce and a third by the civic institutions of the locality.  These newly constituted ‘Banks of England’ are one of the essential feature of Blue Labour statecraft built upon endowment and institution building.

Without the endowment of newly constituted banks with a locational constraint the story of the Northern Counties Permanent Building Society and its tragic transformation into Northern Rock will be repeated and generalised within an increasingly financialised economy.  There are always short term rational reasons for improving returns by easing lending constraints but the result is invariably unreasonable. The Co-operative Bank had a policy of ‘relational banking’ based on local relationships with business and it had a half a per-cent of the toxic debt found in the mainstream banks in 2008.  The government has failed to establish these new institutions in the regional economy and, given quantitative easing and targeted stimulus packages, that is its greatest failings.  It is using failed institutions as its instruments for growth and the trend is continuing.  It is a telling statistic that there are nine effective lending banks in Britain and more than two thousand in Germany.

Learning from local failure within a decentralised system is different from the centralised fiasco of the banking bailout.  The lack of capital in the regions requires not simply the establishment of one big industrial bank but regional banks and sectoral banks that can build long term relationships with local firms and their specific needs.  Both finance and state administration have a tendency to centralisation.  The building of locally endowed financial trusts recognises and resists this.  There are strong traditions of local and mutual financial institutional in the regions of England that have been largely eviscerated over the last forty years.  Their revitalisation is a central aspect of the work ahead.  All the demutualised building societies and banks have been bought out and on July 5th I am speaking at an event to remutualise the Halifax, I hope to speak at similar events in Bradford and Woolwich.  It is perhaps too late to relocate Arsenal back into their ancestral home but I will raise the issue.

The embedding of the economy in an institutional system is one way of conceptualising this.  It is however, only half the story.  There needs to be a renewal of political institutions and a confrontation with power elites whose lobbying and institutional power is a key fault line in our political settlement.  Central to this is the power of finance within the State.  Let’s take my city, this city, London.  Rather, it is not a city but an authority. The City of London Corporation, the most ancient continuous democratic city in the world, Milton’s mansion house of liberty, with its common council, guilds, livery companies, Alderman and Mayor, with its Remembrancer and sheriffs is, in contrast, a supremely well endowed lobbyist for the financial sector..

It is an important reality to recognise, that our greatest civic inheritance represents only the interests of money.  It has 150 democratically elected representatives while London as a grater authority representing 8 million people has one elected mayor and an ill defined council of twenty-four.  London, which more than any other city has had to experience relentless population churn, institutional disruption and de-industrialisation meanwhile has the greatest need of a sense of place, of a common life.

An example of Blue Labour statecraft would be to extend the City of London Corporation to all of London so that the Mayor of London can live in the Mansion House, that each locality in London can be represented in its Parliament in the Guildhall and the Livery Companies of bakers, plumbers, merchant adventurers and carpenters are no longer dining clubs for bankers but actively renew the promotion of a vocational economy.  London was established as a commune in 1191, its civic retrieval would be an important step towards blocking the domination of a single interest and renewing citizenship as a powerful practice.

That is what Blue Labour mean by radical traditionalism, the way we construct our democratic destiny out of our civic inheritance, part of the virtue through which we confront fortuna, to take a trope from Machiavelli.  The establishment of local banks and city parliaments work together to generate a politics of the common good, a redistribution of power and a challenge to the domination of policy by the financial interest.  I would argue for the establishment of unitary city parliaments in all our major cities.  The entire population of Scotland could fit into North London and all of Wales into South London with something to spare and yet we fret over our national settlement.  Of far more importance is the establishment and linking of institutional power for capital and citizens in a renewed framework of democratic cities and counties.  That is one meaning of the Labour Commonwealth.

A second example of an ancient polity for a new economy concerns the status of work, our lack of regard for skill and the conditions of its preservation and dissemination.  The work I have chosen to summarise this, is an ancient and a modern one: that of vocation.

The endowment of vocational institutions and the establishment of a vocational economy is central to this.  The key link that needs to be made is between the national skill formation regime and the organisation of the labour market.  In the professional economy it is illegal to practice without having served a long period of training and apprenticeship.

Doctors, lawyers and dentists  have self-organised institutions that function as interest groups and internal ethical regulators that control labour market entry.  They used to be called guilds.  This was generalised across skill formation and labour market entry throughout all trades in Germany.  A democratically organised artisan skill sector constantly renewed its skills and this worked as a constraint across the entire economy and provided the tradition within which innovation could make sense in terms of good practice.

A move away from university education as the exclusive goal and towards a system that honours work by hand and brain and renews a sense of virtue within the craft, enforced and sustained by organisations, is one possible consequence of pursuing value.  This would require a re-organisation, a re-orientation of higher education.

One path could be to restore the ex-polytechnics as vocational colleges, and establish a co-governance system within them between unions, private sector and the state.  One could think of placing the medical schools and the law schools within them so that the class distinction is dissolved.  It also requires an intensification of the union direction pioneered by Union Learn in which the Union partners vocational training.  The government makes no link between apprenticeship and labour market entry and their skills agenda thus lacks institutional force.  But who speaks for skill, for expertise, for tradition in the swelter of interests that I sometimes survey in the atrium of Portcullis House?  The vocational economy needs to be linked to the renewal of the ancient polity.

This relates to the reform of the institution I am now a member of, the House of Lords.  The idea proposed by the government of a mirror of the House of Commons called a Senate, elected by proportional representation and serving fifteen year terms is not a very good one.  The Lords is really an extraordinary place.  The hereditary peers are democratically elected, there are people there with genuine distinction in their careers in business, academia, medicine, church as well as politics.  There are moments, listening to debates when I am genuinely moved by the experience that is brought to bear on the issue.  Legislation is very properly amended and revised and a certain breath-taking civility characterises conversation between parties and more eerily, within them.  The number of working class peers on our benches outnumbers those in the Commons.  So, obviously, it has to go.

I would suggest that the Commons is best understood as democracy locational, where people are elected from the places where they live.  The country emphatically rejected losing that link last year.  The Lords, in contrast, should represent vocational democracy, where people are elected from their working lives.

There should be people elected from their sector, whether that be electrical or academic, medical or administrative.  The Vice Chancellors should elect a Lord and so should academics.  The elected Lord of the heads of hospitals as well as nurses and cleaners should be there.  There should be a minimum age limit of fifty so that the people involved are experienced and are recognised by their peers as embodying virtue, that combination of experience and expertise that comes with practice.

There should be elected representatives not only of the Church of England, but of all significant denominations, Catholic as well as Muslim.  I would return the judges to the Chamber so that it is the final court of appeal and the apex of the Common Law, in Parliament.  The English Tradition is based upon the balance of interests not the separation of the powers and that should be pursued in the firm as well as the polity.

The Vocational chamber would revise and amend legislation, as it does now, but on the basis of the judgement of people who actually know what they are talking about, who are recognised as experts in their field by their peers through democratic election.

It has been the greatest honour and privilege of my life to sit in Parliament, each day my heart is full of wonder that such a thing could be true and I have probably enjoyed myself too much and I recognise that I would not win election to such a distinguished house and would not deserve to.  This form of constitutional and institutional renewal serves modern demands within the constraints of a meaningful tradition.  Above all, such an arrangement would ensure that the working life of the country is represented in Parliament.  In a renewed vocational system the Queen would be the custodian of the vocational tradition, and looking ahead it is certainly a job that Prince Charles could do quite well.

The creation of local banking and the strengthening of city councils, the protection of status at work and House of Lords reform go back to the birth of the Labour movement as does the third area of institutional change which concerns the use of endowment and trusts to promote land reform and house building.

As I am fond of saying at Labour Party meetings, within three weeks of the Norman Conquest 90% of the freehold property in England was owned by 12 French nobles and its been pretty much uphill ever since.  There is ten billion pounds worth of public land being sold off by the government in parallel to the cuts.  There are many reasons for thinking that this is the most fruitful area of resistance by Labour.  The sale of the forests and allotments was opposed and reversed.

The further reason is that taking away the freehold cost halves the price of property.  In terms of community land trusts which would be endowed by the state or local authority ‘in perpetuity for the people of that place in trust for the nation’ would enable leasehold house building within a shared freehold structure.  Community Land Trusts were pursued, with extraordinary results in East Brooklyn by the Industrial Areas Foundation in the building of ‘Nehemiah Homes’.  Without freehold costs house building would become affordable, local skills developed and a redistribution of land and assets, both individual and shared, to people who are dispossessed.  The Great Recession, as Wolfgang Streek calls it, is most morose in the construction sector.  The endowment of the land to the people would be one form of stimulus as it could make the generation of the money necessary for house building possible.

This use of community land trusts is not only applicable to housing but to public assets.  Dover Port, for example, is owned by the Government and leased to Dover Port Authority, which is now a private company and they wish to sell it to another private authority as a freehold entity.  This is part of the portfolio rationalisation made necessary by the deficit.  The highest bidder at the moment is a French company.

One of the features of commodification is that it severs meaning from price.  Dover port is a lot of things but French is certainly not one of them.  In contrast, Dover Port could be ‘endowed to the people of Dover in perpetuity for the nation’ as a community land trust and could be governed on the corporate model of a third funders, third workers and a third the people of Dover.  Their vocational college could specialise in travel; maritime, train and motor based, and could be funded partly by the Kent County Bank and by Union pension funds, as in the restructuring of Chrysler in Detroit, thus bringing all aspects of this system together.

Regional banks, vocational colleges, worker and civic representation in governance, the use of trusts and endowment and an audacious and populist local politics are all embodied in Dover Port.  The White Cliffs may yet again represent defiance and hope for the working people of England.  As it stands the citizens of Dover are tenant farmers in their own city.  This is an example of where a populist politics is in alliance with a new economy through the restoration of an ancient city.

Three paradoxes have organised this lecture.  The first has been the suggestion that globalisation requires a national institutional regime, the second is that this is best conceived in a decentralised form that would challenge the primacy of the Treasury in favour of regional variety and power.  The third is that the generation of the new economy and the renewal of our ancient polity are linked.

The recapitalisation of the regions through the endowment of new Banks of England can only be achieved if the City of London Corporation is retrieved by the citizens of London from its capture by the financial sector.  The establishment of a vocational economy by the restoration of the House of Lords as a vocational chamber.  The establishment of community land trusts to redistribute housing is linked to the civic and economic renewal of one of our most ancient and iconic ports.

CRESC have spoken mournfully about the disconnect between elite institutions and democratic politics.  The price of a successful political action is a constructive alternative and I have tried to present one this evening.  There is much more to say and you can’t imagine the self-disciple involved in not saying it but I am aware that I have already spoken for too long.  I would like to thank CRESC again for the work you do and for giving me the opportunity to give this lecture.

The Midlands Seminar 2012

John MilbankIn a couple of weeks I’ll be attending the Blue Labour Midlands Seminar, a day of lectures and discussion headed by Professor John Milbank and Lord Glasman.

The arrival of the seminar seems somewhat out of time; Blue Labour in some way feels like a past trend, already overshadowed by changed political fortunes for Labour and the Coalition since the days of Red Tory, Blue Labour and Progress’ Purple Book. Labour is now resurgent, Ed Miliband far more confident and assured than earlier in his leadership, and the Coalition on the ropes. The future suddenly looks like it could be social democratic. Do we really need talk of political colours and Labour renewal, gurus and academics?

Despite the fact that the hype has passed and Lord Glasman is no longer to be seen at every Labour event I believe that the seminar, and the ideas behind Blue Labour, can still have something important to say to the party and to the country. The political situation has changed markedly since last summer, but the direction of travel, and the aims and strategy of a future Labour government are still not entirely defined. The future is there to be created, and the thinkers and ideas of Blue Labour I think still have something to say. That this is the case is I think evidenced by the continued involvement of Milbank and Glasman, and perhaps more so by the fact that key Labour figures involved, including John Cruddas and Chuka Umunna, are growing in influence and importance, not diminishing.

Entitled ‘The Primacy of the Social and Ethical – How Blue Labour speaks to the social, political and economic situation in the UK in 2012’, the seminar may be something of a relaunch. Blue Labour 2, maybe? The title certainly seems to suggest a recognition of changed realities; this is not 2010 and debates about economics, governance, financial crisis, and society have all been changed by political events, the Euro crisis, the failure of the Coalition to bring about promised economic growth, and last summer’s riots. I will be interested to hear what Milbank, Glasman and the other contributors have to say in Nottingham. Hopefully it will be more than a restatement of Blue Labour ideals and will respond to recent developments, integrating its ideas and sense of history as Glasman and others did before.

Labour has come a long way in a short space of time. Things still looked shaky at last September’s party conference. There were some good ideas in Ed’s leadership speech, but you had to hunt for them. When I heard him speak recently at a Progress event he was like a man transformed, far more coherent in his speechmaking and clear in his thinking. Some of this clarity was built on Blue Labour ideas. Next month’s seminar provides an opportunity for Blue Labour again to contribute to debate, and perhaps to Labour policy and direction.

For details of the conference and how to register click here.

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