Steve Richards: If only we could see such audacity of hope

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I have just read Barack Obama's book, The Audacity of Hope, the personal manifesto that shaped his victorious campaign. To my surprise, he goes well beyond vacuous and safe slogans about change. He is more daring than any senior figure in the British Government about the role of the state, exuding a confidence in a defining policy area that New Labour has always lacked.

Obama maps out a route that he hopes will lead him to the White House. In doing so, he points the way forward for a left-of-centre party in Britain that has lost its sense of direction and suffers, as a result, from an identity crisis that is deeper than superficial questions relating to leadership. Labour's leaders, aspiring leaders and scheming dissenters should read or in some cases re-read The Audacity of Hope. The book is much more than a bland appeal of an aspiring candidate.

Obama puts the case for active government in ways that even the most anti-statist reader would find difficult to refute. First Obama puts the broadest argument: "In every period of great economic upheaval and transition we've depended on government action to open up opportunity, encourage competition and make the market work better." The words are a statement of the obvious, but are rarely expressed with such clarity. There would be agonies in Downing Street about the two words "government action" and worries, too, about publicly arguing that governments can make markets work better. Help! Would that appear too left wing? Would such an endorsement of government action lead to another rise in the polls for the smaller state views of David Cameron?

Obama is untroubled by such thoughts. Instead he develops his case, arguing that active government is necessary to "build the infrastructure, train the workforce and lay the foundations for economic growth". He writes of the "vast potential of a national economy" and proceeds to give specific examples, always important when politicians make abstract points: "The Hoover dam, the Tennessee Valley Authority, the interstate highway system, the internet, time and again government investment has helped pave the way for an explosion of private economic activity."

We do not hear such a robust defence of government investment in Britain. Instead when new Labour invests, which it has done bravely and necessarily, we hear about the pivotal role of the private sector and the need for the Government to be more self-effacing, to stand back and do less. In policy terms this does not mean the British Government is in a different place to Obama, but in making a case robustly and clearly it is miles away in a state of tortured insecurity.

Although written before the current credit crisis, Obama is equally strong about the role of the state in such precarious economic situations. He writes: "Active national government has also been indispensable in dealing with market failures." What a shame no British minister uttered that sentence with a triumphant flourish after a range of voices, many of them on the right, called for the public ownership of Northern Rock. One of the reasons was the timidity of the Government in becoming directly involved, the shadow of the 1970s continuing to make its destructive mark.

In contrast Obama again offers precise examples: "Roosevelt after the stock market crash in 1929 engineered a series of government interventions that arrested further economic contraction ... he set up a regulatory structure that helps limit the risk of economic crisis." What was that, a defence of regulation? It is a defence which chimes with the popular mood after the chaos caused by the lightly regulated banks, but again in the UK we rarely hear such a case compared with the relentlessly uncritical focus on the virtues of markets from New Labour to the Thatcherite right.

Obama puts his case for government in a much wider context. He makes clear that markets can work better than government intervention. In some cases, he rightly points out, there are unforgivable inefficiencies in government activity. He is a fan of the private sector and hails that old Blairite phrase that what matters is what works. But his clarity and self-confidence about the role of government gives him the space to demolish the disastrous domestic record of President Bush: "Without a clear governing philosophy President Bush has responded by pushing the conservative revolution to its logical conclusion – even lower taxes, even fewer regulations, and an even smaller safety net."

Cameron and ultra-Blairites are fans of Obama as a symbol of potent change. But they would not make the argument for government in such a fashion. Instead they emphasise the opposite, putting the case for the smaller state with a bigger role for lower taxes, the private sector and charities. Blair did not use the pulpit of Downing Street to put the case for government activity either. Yet in the end it is the great divide between the centre-left and centre-right, the former seeing government as capable of being in some circumstances a benevolent force, the latter instinctively suspicious. Gordon Brown, his well-known ministerial allies, and others such as David Miliband would almost certainly agree with every word of Obama's. Indeed Brown's views about the constructive role for government in helping people to fulfil their potential, and the value of markets in many situations, chime directly. Barack is a Brownite.

If Brown and some of his other colleagues agree with Obama, they should start to make the case with the same clarity and deploy the same language, in doing so exposing the limits of those in Britain that stride closer to President Bush's domestic terrain. So far Obama has not done badly out of it.

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