Globalisation versus Solidarity

So the Eurozone crisis isn't over after all. By rejecting Prime Minister Jose Socrates' austerity package, the Portuguese parliament brought down his government. Now the Eurozone summit in Brussels is trying to re-inforce the European Central Bank's bail-out fund, against a background of rising interest rates on Portuguese debt, and the downgrading of that country's credit rating in global money markets.

All this highlights the dilemmas facing all European governments, and indeed governments worldwide. On the one hand, apart from Cuba, North Korea and Zimbabwe, they have all embraced globalisation and financial interdependence. For some, like China, oil-rich Middle Eastern states and Norway, this enables them to deploy sovereign wealth funds in a worldwide strategy for investments and loans. But for Iceland, Ireland, Greece, and now Portugal and possibly Spain, it means that they must reduce their welfare benefits and public services, raise taxes and cut wages and pensions.

In the EU, only Germany is for the moment immune from these pressures, but it is increasingly forced to bear the burden of propping up the euro. Commentators argue that only full political union, effectively turning the EU into the United States of Europe, can finally stabilise the currency's future (not that the United States of America has fared so wonderfully well in the global debt stakes).

Politically this situation plays into the hands of the far right, with the rise of anti-immigration parties all over the Continent. For a long time only in Austria did such a grouping get enough support to demand a place in government. Now people like Geert Wilders in the Netherlands have won similar proportions of the vote in national elections, and other such nationalist parties have made big gains in Sweden and Denmark. In France, Marine Le Pen, daughter of the Front National's founder, is a serious presidential candidate, and may undermine the left's hopes of unseating Sarkozy.

But the underlying challenge is more complex than this, and it is the long-term strategic question facing Ed Miliband's Labour Party in the UK. Blair and Brown insisted that the country could prosper as a financial hub in the global economy, open for business and acting as banker to the world. At the 2010 election, voters gave their verdict on the Third Way economic strategy, not just because of the financial collapse, but also as a protest against stagnating wage rates and growing inequality.

New Labour had imposed a regime in which individual self-responsibility in a market environment was the new form of citizenship, and people were nudged towards the banks not the state or each other to meet their needs. There were some who gained from the additional freedom this gave them, but many were losers. For the first time in 2010, the Labour ballot contained more middle class than working class votes. Can Labour win back its working class support, now fragmented between the coalition parties, UKIP and the BNP, but mainly angry or apathetic?

Some believe it must, and can only do so by showing more respect for the solidarities, loyalties and commitments of working-class communities. 'Blue Labour' voices, like those of Maurice (now Lord) Glasman, and Oxford political theorist Marc Stears, have Ed Miliband's ear. They argue that the party must go back to its roots in co-operatives, friendly societies trade unions and Guild Socialism (workers' control of industries), at the expense of liberal individualism.

They see New Labour's 'modernisation' of the welfare state as having taken Beveridge's project to an extreme of centralised, elite-dominated, remote, bossy managerialism. The party neds to get back to a politics of belonging, of relationships and local participation, and away from rationalist administration and abstract, universal principles. There are obvious risks in such a move, given the demographic shift towards a university-educated, aspirational electorate, and the temptations of a backward-looking (and potentially racist) form of nationalism.

But the dangers of a depoliticised, rootless, alienated generation, disillusioned with democracy, are equally alarming. Cameron's interest in the 'Red Tory' vision of a revitalised, active community involvement is bidding for the same political territory - and looking for new ways of rebuilding solidarities in the face of globalisation's destructive forces.