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powers—the price of phone calls fell so fast recently because competition came from calls routed through the net. In the early days of the internet, the techies who built it summed up the philosophy behind their creation as the “end-to-end principle”—any entity can reach any other directly, without an intermediary like the centralised phone company to get in the way. Today, politicians and cyber-activists call the approach “network neutrality.” It is like free trade: open interaction among parties. Troublingly, it is under threat. In the US, telecoms and cable companies are making noises about charging customers depending on what they do online, and billing major websites for the right to reach users. This would be in addition to paying for broadband access. Basic things like email or surfing the web may be free, but there would be a surcharge for higher bandwidth activities like watching videos. The matter has reached the ﬂoor of congress, which is debating new telecoms rules. Consumer groups and big web companies want to enshrine the principle of network neutrality in law, penalising attempts to undercut it. Based on the amount of lobbying dollars pouring in from all sides, there will be a political battle this autumn. The controversy is cropping up in Europe, too, where former state-run carriers are laying down new highspeed networks, and are calling for a lighter regulatory touch. In Britain, for instance, BT is building a “21st-century network” and wants to set prices as it sees ﬁt. In Germany, the regulator plans to let Deutsche Telekom run a new high-speed network without much regulation, to the outrage of the EU’s competition authorities. The fear is that without network neutrality, telecoms and cable companies will act as online gatekeepers or tollbooths. Start-ups would have a harder time competing with major websites since they would need to pay extra for the right to reach users. And big sites like Google or eBay would face a form of extortion: pay up, or expect your site to stream to web surfers like clotted cream through a sieve. Moreover, it would undermine the internet’s capacity for innovation, which has enabled its breathtaking success. In some ways, the interest of telecoms companies seems reasonable: building new high-speed lines costs
14 PROSPECT September 2006
money, and they ought to be able to earn income as they see ﬁt. Billing more for better service is only sensible, the argument goes. The problem with this view is that the desire to impose a surcharge is a function of market dominance. When there were scores of independent internet service providers in the 1990s, none dared undo network neutrality since rivals would pounce. But the advent of broadband means the service provider is now also the network owner—and the handful of operators have the power to change the rules. In this polarised environment, the arguments on both sides are flawed. Internet companies are right that network neutrality is vital, but wrong to reach for the law to ensure it. The operators are correct to charge as they see ﬁt, but ought to think twice before trying to overturn network neutrality. Although the principle is desirable, using the law to preserve it is not. Such a rule would implicitly suggest that there is only one economic model that works for the internet. For a network typiﬁed by experimentation and diversity, this is unlikely. It risks encasing in amber the current technical design of the internet, at a time when network engineers are reconsidering its earliest approaches to make the net more efﬁcient and secure. Isn’t it “uninternet-like” to treat the net like this? Yet if a law to ensure network neutrality is a bad idea, that doesn’t necessarily mean the principle will be abandoned. Relying on the market should preserve it for two reasons. First, there is nothing to stop websites like Google, Amazon and others from joining together and announcing that they will disconnect from networks that refuse to respect neutrality—a strategy that would swiftly remind the telecoms carriers that the balance of power on the internet works two ways. Second, telecoms companies have long adhered to “non-discrimination” of trafﬁc partly in order to buttress their claim for immunity from liability regarding the content they carry. If network operators start to monitor trafﬁc in order to charge more for certain types, they also potentially open themselves up to liability for everything from porn to copyright infringement. Ultimately, the operators will see it as in their interest to maintain network neutrality—and the open network will s live to ﬁght another day.
LABOUR’S GOOD BOOK
BY DENIS MACSHANE
“The Future of Socialism” was the last important book written by a Labour politician
Labour produced its only complete work of political theory: The Future of Socialism by Anthony Crosland. It sought, over 500 pages, to create a synthesis of economic and political theory and pragmatic policy proposals in a way that no Labour politician had tried before or since. Compared to today’s Labour cabinet, which has only one intellectual in it (see News & Curiosities, p6), the Labour cabinets of the 1960s were studded with Oxford dons, serious thinkers and fully qualified economists, of whom Crosland was a star example. In contrast to European social democracy, where sociology was the discipline that held the key to left politics, British Labour in the 20th century remained wedded to economics. Hugh Dalton, Harold Wilson, Hugh Gaitskell and Crosland were all trained economists. Michael Young tried to get the postwar left interested in sociology, but his writing had little direct inﬂuence on policy in the 1960s and 1970s, when Labour held ofﬁce for ﬁve-year periods. The success of New Labour lay in part in its willingness to stop listening to economists and start listening to sociologists like Anthony Giddens. The closest we have to a contemporary Michael Young is Geoff Mulgan, who trained as a structuralist under Colin MacCabe at Cambridge (as, curiously, did the brilliant rightist ideologue, Simon Heffer). Mulgan’s endless sociological curiosity informed much of Gordon Brown’s writing in the key years after 1990, during which Mulgan worked for him. Mulgan went on to
IFTY YEARS AGO,
Denis MacShane’s biography “Edward Heath” (Haus) will be published in September
run the Downing Street policy unit for Tony Blair. Labour’s success in winning and holding power lies in the triumph of Weber over the Webbs. Not so in the 1950s. Back then there was still something called socialism, which not only had a future but could be arrived at if the correct policies were followed. Nonetheless, Crosland was cross with militants, quoting Strindberg’s Olof at them in his book: “It was not victory I wanted, it was the battle!” and noting that, “Labour governments… found responsibility harsher and quite different from anything they expected.” Blair and Brown might say “amen” to that, as former cabinet ministers fill the Today programme with appeals to return to battle. In 1956, it was Crosland’s task not to warn of the difﬁculties of power but to exult in how Labour might advance to socialism. So he devotes hundreds of pages to the need for redistributive taxation and for greater government regulation of business. But at the time, Crosland was seeking to educate Labour out of its 1940s worldview, which saw state ownership and planning as the only way forward. “We no doubt want more nationalisation than we now have. But I at least do not want a steadily extending chain of state monopolies, believing this to be bad for liberty,” he wrote. Crosland’s book remains a pleasure to read, even over 500 pages. He has a discursive style that has since disappeared—modern political writing resembles books of sermons, hectoring readers and telling them what to think and do. Crosland is Panglossian, almost proto-Cameronite in his dismissal of economic growth and his embrace of happiness as the goal of politics. “We stand, in Britain, on the threshold of mass abundance; and within a decade the average family will enjoy a standard of living which… will certainly convince the reformer that he should turn his main attention elsewhere.” Alas, poor Tony. In the 1960s, it was precisely the absence of that growth which allows for extra public spending without raising taxes that derailed both Labour governments Crosland served in. In 1960, a worker on average wages paid 8 per cent of his
income in tax. By 1970, workers paid 20 per cent of their income in tax. Labour voters moved from the “You’ve never had it so good” decade of Macmillan to the “You’ve never been so highly taxed” decade of Wilson. Today, a socialist theory of tax cuts is urgently needed, as there is growing European and international evidence that reducing tax on earned income is one of the surest ways of increasing growth and getting money flowing into the public sector. In the 1950s, British Labour did not need to learn from abroad. One of the oddest absences from The Future of Socialism is any discussion of what is happening in other countries. Island
Anthony Crosland in 1974
Britain still existed alone unto itself. But in a marvellous section entitled “Liberty and Gaiety in Private Life; the Need for a Reaction against the Fabian Tradition,” Crosland called for “more open-air cafés, brighter and gayer streets at night, later closing hours for public houses… better designs for furniture and women’s clothes.” He also called for relaxed divorce laws and the legalisation of homosexual relationships, which at the time were not high Labour priorities. In the drab, waistcoated and pipe-smoking Labour party of the 1950s, this was shocking stuff. Crosland’s other sustained argument was on secondary education, which he saw then, as it is now, as the Achilles heel of building a reformist,
classless, creative Britain. In his book, he called for 75 per cent of all places in private schools to be given to a range of pupils from all backgrounds. Comprehensive schools should be based on streaming by ability. Crosland would turn theory into practice when he became education secretary in 1965. His famous circular 10/65, which “requested” local education authorities to move toward comprehensive education, is today widely recognised as a disaster. His junior minister, the much tougher, more experienced Reg Prentice, begged Crosland to make the verb “required,” not “requested”—an order, not a plea. Crosland refused. As a result, instead of a major reorganisation of education on a par with the creation of the NHS after 1945, the move to comprehensive schooling was a long drawn-out agony, with a leakage of richer families to private schools. Today we have an apartheid secondary education system as a result of Crosland’s botched reform. The metropolitan elites reject state secondary education for their own children. So in the one area where Crosland did try to lead Labour away from the economism that dominated Labourist ideology until the 1990s, his theory was excellent but his practice was a disaster. Harold Wilson used to boast he had more Oxford ﬁrsts in his cabinet than any previous administration. Today’s Labour government has no one who has written anything of the sweep and power of Crosland’s The Future of Socialism. But even with current local difﬁculties, Labour ministers appear to be making a better ﬁst of reforming and running the country than their intellectually more distinguished predecessors. The half century of The Future of Socialism will be celebrated with conferences, lectures and seminars. But the end of the reign of economists in Labour’s top ranks liberated the party by 1997 to become more reformist and innovative and, paradoxically, able to run the economy better than Crosland ever managed. As we enter the postNew Labour era, though, it would be good to have any book on Labour’s future with half the ambition and style s of The Future of Socialism.
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