True colours? Is Blue Labour the way forward for the left?

In the Westminster village, the talk is of 'Blue Labour'. But does this nascent ideology offer a real way forward for the left, asks Amol Rajan – or is it just another empty political buzz-phrase?

It was hard, watching Barack Obama and David Cameron play table tennis together for the benefit of cameras recently, not to be struck by their synthetic similarities.

Wearing crisp white shirts, nearly identical in height and both left-handed except in their high-fiving, these two young leaders with picture-perfect families embodied the telegenic imperatives of democracy in the internet age.

Such fun. But appearances deceive. Obama and Cameron are products of vastly different cultures. America's President came to maturity via Hawaii, Indonesia and the streets of Chicago; he is a one-man melting pot, whose very face speaks of a union between ethnicities. Cameron is an exceptionally competent sub-aristocrat from Berkshire, who never sought out the company of a poor person until it was politically expedient to do so; his face, by contrast, speaks of unblemished wealth.

At least by their heritages, then, they are not personally similar. And what of their politics? The conventional answer has been: not really. And the evidence comes from economics. Obama is a Keynesian, Cameron is a monetarist. And they have chosen opposing responses to the grand economic fact of our times, which is indebtedness. That analysis is fine as far as it goes (though both leaders, bent as they are on retaining power, are more flexible and more centrist than most caricatures allow).

But just as the past can highlight differences of personality, the deeper divergence in their political stances stems not from where they are going, but where they are coming from. And they are coming from two cultures that have chosen opposing responses to the grand political fact of the 20th century, which is the collapse of socialism.

Socialism is the great ideological casualty of modernity. But it died many different deaths. In Europe, socialism dominated the minds of both those who espoused it and those who despised it. It also, for much of that time, had a reasonable chance of high office (think Tony Benn). In the United States, by contrast, there was no socialist alternative on offer. Deriding socialists was frequently the surest route to power (think Richard Nixon).

But this meant that when, in the 1980s, socialism went into terminal decline, Europe and America responded in different ways. In Europe the collapse of socialism removed what divided the main parties. In America, it removed what united them. As a result, in much of Europe politics have been dominated by a bloated centre ground, while in America that centre ground has been a vacuum – until Obama turned up.

The European response is best demonstrated by what has happened on our own shores. In Britain, politics is now sequential rather than adversarial. Strong differences of opinion have emerged over public spending and Ed Miliband is more left wing than he lets on in public. But no party seriously thinks it can win from anywhere but the centre ground. New Labour was a triumph of triangulation. Tory modernisers understood a decade ago that their party must be more like New Labour if they wanted to be in government.

We shall return to what this implies about Obama, for now the key point is that many modernisers in the Labour Party (they do exist) are continuing this pattern by arguing that their party must be more like the Tories if they want to be in government. The proof is in Westminster's most voguish intellectual tendency. This is the cult of Blue Labour.

Blue Labour is an attempt to reclaim dormant traditions within the labour movement – in particular that of co-operatives – rather than reinvent the party. Crudely, this has been described as tapping into a "small c" conservatism. But that is too nostalgic. Blue Labour thinkers argue that love of community and respect for institutions and settled ways of life is fundamental to the concerns of organised labour, which was originally represented by the Labour Party. They argue that the Labour Party is the offspring of a marriage between two parents: a co-operative, trade-union-endorsing mother, who cherished strong relationships, and a Fabian father, who felt government could fix everything. The former venerated society; the latter, the state. After 1945, this marriage descended into domestic violence and the brutish father became dominant in the Labour household. What is needed, Blue Labour thinkers argue, is for the father to be tamed and the mother to be nurtured back to health.

I say "thinkers" because there are many voices in this conversation, not least Jon Cruddas, the brilliant MP for Dagenham and Rainham. But one man personifies Blue Labour more than any other and has been leading its charge. He is Maurice Glasman, now Lord Glasman of Stoke Newington and Stamford Hill.

I should confess that I know Lord Glasman a little from his work with London Citizens, the biggest alliance of community groups in the country, for whom I have had a walk-on part. Lord Glasman worked with London Citizens for a decade, during his time as an academic at London Metropolitan University. It was for this work that Ed Miliband ennobled him.

Lord Glasman describes London Citizens as "the truth". He believes, as Cameron's senior adviser Steve Hilton, London Mayor Boris Johnson and I do, that its extraordinary achievements in generating social solidarity and redistributing power, through such efforts as its Living Wage campaign, prove that community organising is one viable future for democratic politics.

When I meet Lord Glasman for breakfast on the Palace of Westminster balcony, he seems to have lost weight and is clearly revelling in his new role. "Welcome to the magic kingdom," he says as we walk in, an observation that gains some charm from the fact that he still lives above a shop in Hackney. Over fried bread, beans and mushrooms, I ask him to explain Blue Labour. "There are three poles," he says. "First: a conception of the common good. That comes from Aristotle. Second: an impulse to organise labour. That comes from [American economist Hyman] Minsky and [Chicago-based community organiser Saul] Alinsky. And third: decommodification. That means stopping things that were not produced for sale being sold. That comes from [Hungarian political theorist Karl] Polanyi."

But doesn't all this sound like that other recent fad, Red Toryism? Blue Labour is in one respect the left's response to the Red Tory Phillip Blond, an old friend of Lord Glasman's who similarly venerates London Citizens and is a champion of the civic conservatism David Willetts described in the early 1990s. And don't both sound like that other current fad, the Big Society? They do. That is the point.

Between the Big Society, Red Tories, and Blue Labour are small-but-crucial differences. Lord Glasman argues that "only organised people [in the sense of community groups agreeing common ends for which they will campaign] can resist the domination of money". He says that the "Big Society hasn't got a word to say about the market" and that "we might agree about ends but we definitely don't agree on the means". Blond disagrees, claiming he has much to say about the market. Indeed, on 9 February he derided "market individualism" on this very page. Both agree with Liam Byrne and James Purnell, who in Labour's third term were able to describe what they aimed at in politics with a pithy phrase: "powerful people".

There are some substantive policy differences, mostly aimed in the Blue Labour case at increasing worker power. Lord Glasman wants workers represented on management boards and a German banking system, including regional banks. He also wants "works councils" and "pension co-determination". Those are things Blond might want but to which he doesn't attach as much significance. But here, surely, is the rub. We are nitpicking. Lord Glasman wants workers to have more power. Blond's most celebrated phrase is "recapitalising the poor".

Did I mention power is capital and capital is power? "Big Society", "Red Tory" and "Blue Labour" are similar phrases, each two-word manifestoes for the common good, containing a pre-modifying adjective whose aim is to decontaminate. Freud had a phrase for this: the narcissism of small differences. My friend Peter Oborne, a thoughtful conservative, says one should avoid saying this phrase, because it is overused, but it is too appropriate. Nothing is new in politics, except the haircut of a politician claiming otherwise. This trinity of trends demonstrates the point.

And to prove the point further, I want you to take my simple Freudian test. Please select which of the following quotes comes from the pen of a person associated with (in no particular order) the Big Society, Red Toryism and Blue Labour.

Doctrine one: "The intermediary structures of a civilised life have been eliminated, and with them the Burkean ideal of a civic, religious, political or social middle, as the state and the market accrue power at the expense of ordinary people... Thatcherite neoliberalism was determined to terminate all these state monopolies. Instead, markets would become the vehicle by which efficiency was maximised and prosperity attained."

Doctrine two: "Market liberalism... fosters a privileging of choice and a cult of mobility that consort badly with the settled communities cherished by traditional conservatives... the social and cultural effects of market liberalism are, virtually without exception, inimical to the values that traditional conservatives hold dear. Communities are scattered to the winds by the gale of creative destruction."

Doctrine three: "Democratic resistance to the domination of capital through the pursuit of the common good is not really the way that liberals view politics or, more important, markets... [we] must point to the volatility and vice of finance capital and the necessity of a balance of power within the firm and stronger institutions to constrain capital and domesticate its destructive energy."

Struggling, are you? Think doctrine one is Blue Labour – but then suspect it's more Big Society? Does doctrine three look Red Tory to you?

Of course you will struggle. But not least because I have cheated, by fixing the results. I'll leave you to guess which of the first and third is Blue Labour and which Red Tory – but I should tell you that doctrine two is not from a recent advocate of the Big Society.

In fact, it appeared in a brilliant essay with the title "The Undoing of Conservatism", published by the Social Market Foundation in June 1994. Its author is John Gray, who is now better known for his best-selling anti-humanist tracts. And thereby hangs a tale.

I read out a long single paragraph from the Gray essay to Lord Glasman. He smiles wistfully before saying: "Yes, that is the Blue Labour critique."

Then he says: "Gray was my doctoral tutor at the European University Institute in Florence. At one of our early chats he said to me, 'I've never read Polanyi'. By the time I left he sure had, because much of my work appeared in his book Beyond the New Right: Markets, Government and the Common Environment." Here, then, is a classic academic dispute. Lord Glasman's thesis was published as Unnecessary Suffering: Managing Market Utopia, in 1996. Gray, whose later career has been devoted to attacking all forms of utopianism, published his work in 1993.

It seems very likely that Gray's important work was deeply influenced by conversations with his brilliant doctoral student.

Whatever the genealogy of it, it cannot be stated often enough – and yet it has not yet been stated – that the Blue Labour critique of New Labour is the conservative critique of Thatcherism elucidated by Gray a decade-and-a-half earlier. (Lord Glasman's other tutor, incidentally, was Steven Lukes, best known for his book Power: A Radical View. The influence of that book on Lord Glasman was profound).

The heritage Lord Glasman invokes is therefore not monopolised by the left; its most recent adherents were those responding directly and quickly to the worldwide collapse of socialism in the 1980s.

And here we return to the American President. On his recent visit, he told Cameron that he had sympathy with the ambitions of the Big Society. No wonder: Obama's own politics are basically Blue Labour, a sibling to that other centrist tendency.

That Obama should be a champion of Blue Labour is not surprising. His main career before going into the law was precisely the sort of community organising that is one of Lord Glasman's three poles; in Obama's case, he was in Chicago, following directly the example of Alinsky, who has been such a profound influence on Lord Glasman. If you log on to www.barackobama.com you will see that his slogan is "Organising for America". By that he doesn't mean filing bank statements separately from gas bills. He means community organising, in the sense of London Citizens. His slogan, in other words, is about as Blue Labour as it can be – though whereas for Lord Glasman, a Jew, the common good is found in Aristotle, for Obama it stems from Christian ethics.

It's true that Bill Clinton used welfare reforms to stake out the centre ground and Reagan owed his popularity to the courting of so-called Reagan Democrats. But coming immediately after George W Bush, Obama's centrism – his Blue Labour tendency – is an attempt to unite a deeply divided country, to take it to a new, post-partisan register. That is leadership. By contrast, Cameron's Big Society, which is in many respects laudable but amounts to a revisiting of the insights Gray and Willetts made 15 years ago, is following an established pattern. That is followership.

Community organising therefore describes not only a way to reweave the fabric of society, but an emerging common ground between Britain and America. Perhaps more significantly, by uniting the allegedly disparate inclinations of those who support Blue Labour, the Red Tories or the Big Society, it reveals that most of our political class is still labouring under an illusion. That is the illusion of choice.

Lord Glasman is a man of severe intelligence, immense compassion and invaluable experience. He and Blue Labour make Miliband a marginally more plausible prime minister and champion many ideas whose time has come and from which the poor will greatly benefit.

His involvement with London Citizens, the most effective demonstration of the Big Society we have, is also propitious. But the claim made on his behalf (though, impressively, not by him) that this political persuasion is new, or markedly different to what immediately preceded it, is unsatisfactory. In fact, it is deeply rooted in recent history and extends a political franchise founded two decades ago.

Blue, red, Labour or Tory: the death of socialism has rid our politics not of ideas, but of ideology.