Chapter 6 traces the meaning of ‘modernisation’ in Labour’s economic policies. ‘Modernising the economy’ to achieve sustainable growth was a consistently crucial idea for Labour from Wilson to Blair. Notwithstanding the abandonment of nationalisation, the endurance of state-led ‘modernisation’ in Labour’s economic imaginary reveals a continuing strategic role for the state, even for New Labour. After establishing this continuity, the chapter highlights a crucial change. In the 1970s and 1980s, Labour policymakers assumed that manufacturing was the key sector to ‘modernise’. Yet, under the influence of deindustrialisation, ideas of ‘post-Fordism’, and New Keynesianism, by the early 2000s manufacturing had been usurped by ‘human capital’. For New Labour, education and training became the new ‘commanding heights’ and the foremost economic priority for the active state. These developments show the ongoing influence of technocratic, social-democratic thought worlds, and thus expose the inappropriateness of shoehorning New Labour into ‘Thatcherism’ and ‘neoliberalism’. But they also speak to important, and ambivalent, shifts in British political economy by the twenty-first century.

The conclusion considers the wider significance of the book’s arguments. The concept of ‘modernisation’ was a potent resource for projects for social-democratic renewal over the late twentieth century. Many had the potential to become defining influences on a Labour government – even if, at turning points in the early 1980s, the late 1980s and the early 1990s, they lost out due to a combination of social and economic, intellectual, institutional, and political forces. This means that the rise of New Labour was not inevitable and that its opponents were not straightforwardly ‘traditionalist’. It also means, however, that New Labour’s leaders drew heavily from the left when forging their own agenda, including policies and institutions that endure today. This has implications for the histories of Britain after the 1970s: the rise of neoliberalism, though important, should not obscure other pivotal forces, especially deindustrialisation, constitutional agitation, and popular individualism. The conclusion ends by using this history to suggest that ‘modernisation’ is an idea that is unusually prominent in the tradition of social democracy.

Chapter 2 recovers a distinct interpretation of ‘modern socialism’ that focused on diffusing power to producers, consumers, and communities. Over the 1970s and 1980s, several left-wing thinkers and politicians championed redistributing economic and social power through industrial democracy or consumer and community empowerment. These explorations were fuelled by critiques of the post-war state, trade union assertiveness, corporatist experiments, municipal socialism, and market socialism. In the 1980s, they were championed as ‘modern socialism’, mainly as a response to Margaret Thatcher’s flagship policies like popular share ownership and the ‘right to buy’ a council house. Drawing on maverick academics and Eurocommunist journalists, ambitious Labour MPs argued that a ‘modern socialism’ needed to diffuse power through schemes like employee share ownerships. They embraced socioeconomic democracy as ‘modernisation’. However, while some decentralist ideas remained influential, the popularity of diffusing economic power peaked in the late 1980s. This helped scotch subsequent attempts to make the ‘stakeholding economy’ a foundation of New Labour’s ‘modernisation’.

This chapter explores how ‘globalisation’ became a common frame of reference about the ‘modern world’ and the rise and fall of both nationalist and pan-European socialist responses. It is widely recognised that the ‘discourse of globalisation’ was a lynchpin of New Labour’s ‘modernisation’, and some scholars also argue that it drove the party’s capitulation to ‘Thatcherism’. However, this chapter reconstructs an overlooked source of the idea of globalisation in Labour: the Alternative Economic Strategy (AES), which underpinned the 1983 manifesto. It traces how, from the 1970s, Labour policymakers diagnosed a powerful new force – ‘multinational’ production and finance – which placed novel constraints on the socialist state. Over the 1980s, these policymakers went from attempting to reassert the British state’s sovereignty to trying to transcend it through European integration. The AES collapsed after the 1983 electoral catastrophe, while Eurosocialism failed to decisively shape Labour. Yet, these ideas show that the spreading idea of ‘globalisation’ as an unavoidable feature of modernity had many parents in Labour and originated from the party’s left as well as its right.

The introduction begins by demonstrating the importance of ‘modernisation’ for left-wing debates in the second half of the twentieth century. After recapping the key staging posts of Labour’s trajectory from the 1970s to the 1990s, it then argues that existing histories obscure the diverse meanings and appeal of ‘modernisation’ through their current use of the term. I suggest that this hinders our understanding of both New Labour and many of their left-wing critics, and too readily accepts a teleological reading of history. Following a brief discussion of the method of the book, the introduction touches on the wider historical significance of this revised understanding of Labour’s ideological debates. It questions the idea of an ‘age of neoliberalism’ and introduces other themes of the late twentieth century of comparable significance to market liberalism: the challenge to the nation state from above and below; the rise of post-1968 ‘liberation movements’; deindustrialisation; and constitutional agitation. It ends by outlining the chapters.

Chapter 4 explores a more marginalised interpretation of modernisation, which foregrounded race and multiculturalism. Throughout the late twentieth century, the left wrestled with a growingly multiracial society and the rise of both the far right and a more self-confident anti-racist movement in post-colonial Britain. This profoundly shaped the Labour Party, which this chapter illustrates by exploring the 1980s ‘Black Sections’ controversy. Yet, there were only scattered arguments that linked either antiracism or multiculturalism to ‘modernisation’. This chapter explores some isolated explorations of antiracism as modernisation, notably by Ken Livingstone, and explains their intellectual context. However, it also explains why they stalled, stressing institutional and electoral factors, but also the growing discomfort among anti-racist movements with concepts like modernisation. Thus, ‘modernisation’ only became consistently linked with ‘multiculturalism’ in the 2000s, and even then, this association was hotly contested. The implications for Blair’s governments of this absence of race and multiculturalism in 1990s discourses of modernisation are explored at the end of the chapter.