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To see the importance of this seemingly abstract sentence, we need to step back for a moment into Labour history, as Mr Blair did in the most evocative section of his speech when he reflected on James Callaghan’s 90th birthday. How brilliant were the old Labour luminaries, Denis Healey, Roy Jenkins, Shirley Williams, who assembled at Downing Street to honour the last “old Labour” Prime Minister. Mr Blair didn’t need to gild the lily by comparing these charismatic figures with the people who sit around the Cabinet table today. Yet how little all those brilliant Labour leaders ever achieved. Not only did these great men and women fail to win elections but they “sowed the seeds” of Labour’s 18 years in political exile. They refused to respond to the modern world by changing Labour’s traditional socialist policies and methods — the punitive tax rates, the trade union bonds, the faith in public ownership — while holding fast to the party’s “progressive ends”.
What is the relevance of this parable about the 1960s and 1970s to the party that is now preparing for the transition to Gordon Brown? To me the meaning seems clear: the great mistake of the traditional Labour Party, as of all socialist movements, was to concentrate on means rather than ends — and this is the error which still often tempts Mr Brown.
While socialists have always paid lip service to the ultimate human goals of progressive politics — eliminating poverty, ensuring opportunity and empowering the weakest — the means for achieving those goals were what provided the adrenalin rush in socialist debates. The doctrines that inspired traditional Labour politicians — nationalisation, punitive taxation, council housing, comprehensive education — were all about processes, not end results. Issues of process fascinate theorists and government officials, but they are of little interest to ordinary citizens, particularly to the poorest who find themselves repeatedly cast as the guinea-pigs in the well-meaning experiments of the metropolitan socialist elite. The citizen cares passionately about whether he has a decent home to live in and a job with a reasonable income, whether his children are properly educated, whether he can see a doctor if he needs one, and whether he can walk the streets without fear. But most citizens care little about how these ends are achieved.
The besetting sin of socialism has always been to express the passions of political vanguards, rather than ordinary people: to insist on one particular way of trying to meet human aspirations, through public ownership and government intervention, rather than concentrating on the objectives of progressive politics, which are prosperity, opportunity and freedom for all. Socialism has crumbled around the world because the means it chose — state control — turned out to be fatally flawed. An even greater handicap was the refusal of traditional socialists to redefine their movement entirely in terms of its laudable objectives, instead of its discredited means.
Both Mr Blair and Mr Brown have gone a long way to correct this error. Their speeches in Brighton were testament to their unity of purpose and to the continuity of the new Labour project in this crucial respect. Anyone who seriously believed that Mr Brown would try to lead a restoration of socialism or old Labour should have been disabused of the notion by the time the Chancellor sat down.
On two of the touchstone issues of old Labour — state interference with the market economy and redistribution of income — Mr Brown is no more of a traditional socialist than Mr Blair. Labour under Mr Brown will continue to be a pragmatic party, supportive of private enterprise and market competition, focused primarily on achievement, rather than ideology. And yet on the third axis of socialism — the balance between the state and the private sector in delivering health, education and other services — there is still a huge difference between the two leaders. The Chancellor is still deeply entangled in the old Labour confusion about means and ends.
For the Prime Minister there are now almost no taboos about means. He is ready to try whatever it takes to attain his “progressive ambitions”. Health services will increasingly be delivered by private contractors. “I will never allow the NHS to charge for treatment,” he said, but carefully left open the question of privatised treatment providers, or indeed of charges for “hotel services” as opposed to medical treatment, in the NHS. Schools will compete among themselves and seek private sponsors. “I will never return to school selection at 11,” he promised. But was he hinting at the possibility of selection, streaming and setting at 13, 14 or 16, reforms which could offer real hope of achieving the ultimate objective of improving standards of education and behaviour in secondary schools, especially at the lower end of the academic range? For the Chancellor, by contrast, the state control of health and education is still very much a matter of principle. State provision, and above all state financing, of these so-called public services — in reality some of the most personal and private services imaginable — is the remaining bedrock of his socialist beliefs.
But will this position prove sustainable as the Treasury runs out of money to finance the never-ending expansion of health and education that a prosperous and sophisticated society is bound to demand? Should government policy then focus on the ultimate objective of improving education and health, even if private citizens must bear more and more of the costs? Or will the principle of state funding become an end in itself, even if this means starving health and education of resources? These are questions Mr Brown has never dared to address, either as a thinker or as Chancellor. By the time he becomes Prime Minister he will have to come up with some answers.

Anatole Kaletsky writes for The Times Comment pages on Thursdays. One of the country's leading commentators on economics, he was formerly Economics Editor and is now an Associate Editor of The Times. He has won many awards for his financial and political journalism. Before joining The Times, he worked for 12 years on the Financial Times
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