On Wednesday night Lesley Ward, president of the Association of Teachers and Lecturers (ATL), furiously denounced the depths of depravation teachers now see in their classes, "There are perfectly healthy children who enter school not yet toilet-trained. Children who cannot dress themselves, children who only know how to eat with a spoon, and have never sat around a table to enjoy a home-cooked family meal."

With 2.9 million children still living in poverty, despite the brave pledge of 1999 to have halved child poverty levels of 3.4 million by 2010, this is like so much about the now old New Labour, grimly predictable.

One might take comfort from the fact that at least on child poverty Labour seem to show some metal. "Eradicate poverty in a generation", the allocation of an extra 2 billion in tax credits in 2006, and Financial Secretary to the Treasury Stephen Timms' speech on the Child Poverty Bill which ended determinedly - "let's keep working together to make a reality of the ambition all of us share: to eradicate child poverty in Britain." Yet strength without imagination is brute, New Labour must look back to its best moments if Timms is be in government in a year's time - let alone the end of the "generation" in 2020.

Lifting half a million children from poverty is a triumph to be celebrated. Equally important however was the definition of poverty as a relative concept - that what constitutes poverty depends on one's state relative to that of others in society, or in the case of the UK, where one's income falls below 60% of the median. With poverty as a relative concept a strong egalitarian ethic was concreted. Degradation is not only about being unable to afford shoes, but social exclusion. This was a major triumph for progressive politics; Labour has sold itself short with the abandonment of this imagination.

In our emerging hourglass economy a High Pay Commission would simply be the other side of the coin to New Labour's 1997 initiative that led to the creation of a minimum wage - unfinished work, a discussion that must be had on whether the type of high earnings we see in the financial sector, among others, are justified. Such a discussion offers New Labour an opportunity to resurrect the best of its principles, its commitment to levelling up against social inequality and create the bold policies to match it.

Given all parties (let alone the public) recognise the role of risk promoting pay structures in causing the crisis, it is both ridiculous and grimly predictable that a call to investigate high pay should cause such controversy. Tom Harris MP fears it to be populist grandstanding in the "politics of envy" as we go after the bankers then scratch our heads and wonder whoever will be next.

Why? Because an open discussion will inevitably consider broader questions of social equality, ideas such as maximum wage ratios in response to the obscenity noted by the petitioners, that "an employee working a 40 hour week earning the minimum wage would have to work for around 226 years to receive the same remuneration as a FTSE 100 CEO does in just one year." Such a fear is clear in Osborne's response, "It is one thing ensuring city pay structures don't jeopardise the banking system - and quite another trying to reintroduce a prices and incomes policy across the economy".

Osborne would like to split the debate into a serious one about how to get the market back on track, with an "alternative" debate for those idealists unconcerned with the gritty pragmatism of the market. Yet the economic crisis concerns citizens not because "a deregulated market failed to properly account for risk" but because this failure caused public loss, and because that is unjust. Market stability and performance would undoubtedly be enhanced through avoiding bonus structures that promote short-term risk taking, but these results are only important relative to our conception of the good society. It is this vision that demands that the poor should not pay for the mistakes of the rich, this vision that was so deeply offended by the bailout of the banks. Though the market has internal dynamics which must be understood and used, it is not self-justifying. We should never let our means dictate our ends.

The hugely popular minimum wage was brought in after extensive investigation and against the claim that by setting a minimum wage government intervention in the free market would increase the cost of labour and thus raise unemployment as employers take less people on. The objection was taken seriously and found wanting, it turned out that labour demand at extremely low levels of pay was generally inflexible - many jobs that would have been vulnerable having already been outsourced with East Asia's integration into the world economy and the subsequent undercutting of labour prices internationally. As a result the floor on our hourglass was raised along with the life chances of millions of Britons and the spectre of social justice in this country. 

The true fear is that New Labour will re-find its roots, its moral voice that has been sold over the past twelve years through weakness, greed and a lack of imagination. The minimum wage was introduced to lower inequality and poverty after concerns that it would be self-defeating were assuaged. It was Third Way "levelling up", where equality is considered a social bad that must be eradicated as long as doing so does not harm the prosperity of others. It was Rawls's difference principle by which individuals pursuing their own prosperity is fine, so long as it promotes the welfare of the worst off too. It was the best of New Labour principles.

A maximum earnings ratio, linking the incomes of the least well paid to that of the highest paid in an organisation, would represent the kind of audacious experimentalism the left has lacked this last decade. Record volumes of compensatory cash transfers to the poor have manifestly failed to build sustainable social solidarity and the left is left fighting a rearguard defence of public service spending. By shrinking the domain in which high pay is required to contribute to the welfare of the worst off to individual firms a ratio would force workers and bosses to cooperate in the workplace, not just in their resented income tax receipts. Were Labour to really embrace its own values and seriously consider maximum wage ratios, it might resurrect its roots, radicalise, and re-emerge as an electoral challenger.

No wonder the idea's inclusion with the proposal was a red rag to the rightwing bull. While their free market dogmatism is to be avoided, they are right to insist that the rules of the market must be considered if such reform is to avoid defeat at its own hands by furthering unemployment and poverty. We must consider whether fixing the distance of the bottom of the glass from the top would raise the costs of labour and so decrease demand for it at the bottom end of earnings while stopping British business offering competitive wages in recruiting the best talent and hence causing us to fall behind in the global market place.

The sad truth is that without better information on high pay we can't tell how important it is to "British competitiveness". The financial crisis may lead us to deride claims of "talent" yet though it tells us about the implications for market performance of bonus structures, it does little to tell us about the role of high pay itself. This however is a case for experimentalism, not a prohibition on discussion. Likewise we need to explore the implications of wage rises at the bottom for unemployment, though London Citizens's successes in forcing big city companies to pay a living wage is testimony to the secret inflexibility of demand for low paid labour.

On the face of it there is no clear evidence against freezing the earnings ratio between businesses' executive directors and their cleaners. Introduction of a living wage would allow further wage based competition among companies fishing for talent, but by increasing the costs of such a recruitment strategy it would discourage what at times appears an inflationary culture rather than market consequence. Once established an earnings ratio could then be experimented with, and progressively used to premise individual pursuit of higher earnings on the furtherance of the common good. Tax credits could then be used to competitively incentivize businesses to reduce the ratio. It could be a policy to match the best of New Labour's principles.

True to liberal tradition Real Change is beginning with the people, the only sovereign authority. One thousand house meetings will be held and feed into a People's Convention, where the campaign hopes the future shape of our democracy will emerge as well as the strategy to see it done.

Real Change is one of a number of ambitious new initiatives rising to the challenge of democratic renewal. 38 Degrees, Vote for Change, Unlock Democracy's campaign for a Citizens' Convention and Real Change have all emerged in what Timothy Garton Ash terms a "constitutional moment", a time of deep disillusionment, economic and political collapse. The bedrock of the establishment, its political legitimacy, has been fatally undermined and each of these responses demand a return to the people for its renewal.

Garton Ash believes with popular legitimacy and expert competence the times we live can be shaped and sustained into the "constitutional moment" we need. Yet the authority of expertise has long been the silencer of popular participation: government knows best. Intelligence in Iraq, the spectre of terrorism in SIAC's secret trials, Belmarsh, Forrest Gate, Jean Charles de Menezes, not to mention the experts' false consensus on deregulation of the banks.

An OurKingdom conversation. [History: Thomas Ash > David Marquand > Thomas Ash > George Gabriel > Thomas Ash > George Gabriel > Thomas Ash > this post]

All ideologies offer conceptions of a person upon which their social vision is constructed. For neo-liberalism this is that of the “rationally self-interested” individual, a being solely concerned with its own self-interest and to be judged “rational” according to the efficacy with which that interest is pursued. Power and self-interest, a nihilistic nightmare.

In his latest post Thomas Ash suggests that “rational man” is a mere “simplifying assumption” which predicts our actions with a relative degree of accuracy and which neo-liberals need not insist captures all the motivations that move us. Likewise we can be comforted that such a philosophy extends only to certain domains of our behaviour, not on the politics of offering one’s seat.

This mushy Jekyll and Hyde human being, free from self-interest in certain concerns and moderately guided by it in others provides no individual ethic whatsoever. Neo-liberalism, as envisioned by Thomas on an individual level issues no directives except for those demanded by the legally constituted neo-liberal system. It is from this lack of something to say presumably that neo-liberal claims to be somehow “realistic” derive.

We have seen the dangers of a macro social vision that provide no individual ethical imperatives before. Historically determinist Marxism stripped values in the name of inevitability and thereby commended only an ethic of acceleration, it was this that Camus observed to lead to “Slave camps under the flag of freedom, massacres justified by philanthropy”. Thomas suggests that neo-liberalism is not necessarily committed to an “egoistic code of ethics”, but if this leads to a vacuous “realistic” conception of personhood the consequences are equally to be feared - the absence of an individual ethic within an ideology is as dangerous as its presence, it’s just that the latter holds the promise of a better future too.

OurKingdom, openDemocracy's group blog on British politics, has been running an exchange on the morality of neo-liberalism - and of the bankers behind the financial crisis. It began with contributing editor Thomas Ash's commentary on a Guardian column on the subject by David Maquand, and Marquand's response. The conversation has now turned to a debate between George Gabriel and Thomas Ash, with Gabriel attacking the 'moral vision' of neo-liberals and bankers, and Ash responding. Read the debate at the links below, and join in through the comment threads:

George Gabriel, 16th June

Thomas Ash, 17th June

George Gabriel, 21st June

Thomas Ash, 22nd June

OurKingdom welcomes submissions and the opening of new debates: send them to thomas [dot] ash@opendemocracy.net

An OurKingdom conversation. [History: Thomas Ash > David Marquand > Thomas Ash > George Gabriel > Thomas Ash > this post > Thomas Ash > George Gabriel]

In our ongoing exchange concerning the nihilistic implications of neo-liberalism, Thomas Ash challenges my suggestion that “the congregation believes in neo-liberalism as a social vision”. Is it true that anger from the bailout is because public money was used to compensate private liability or is it, as Thomas puts it, because it was “our money”?

The question is however too simplistic. People’s social visions are normally not highly defined, signposted, or even coherent. My own contains as many contradictions as opinions, despite the ongoing struggle for consistency. The point is that the neo-liberal social perspective informs individuals’ social visions. Neo-liberalism espouses a pure cause and effect individualist paradigm of responsibility; quite simply “I am responsible for what I do freely”. A public bailout to privately incurred risk is a clear violation of this ethic. So though few define themselves as neo-liberals many continue to be profoundly defined by elements of this neo-liberal social vision.

Thomas rightly observes that the logic of the market is not itself nihilistic, nor is contractualism for that matter. But this is a part of what I described as the “social vision”. Neo-liberalism as an individual code of ethics is stridently nihilistic. Why? Because of its utter subservience to the concept of “rational self interest” – the cornerstone of most contemporary microeconomic analysis, the justification of a hyper-individualist money-obsessed life, and at the same time the death of values.

An OurKingdom conversation. [History: Thomas Ash > David Marquand > Thomas Ash > this post > Thomas Ash > George Gabriel > Thomas Ash > George Gabriel]

Does the current popular political rage owe its existence to the ravagings of neoliberalism? Corruption in Parliament should always be cause for outcry but given the dull thuds made by the cash-for-questions, cash-for-honours, and party funding "scandals" in comparison with the resounding "crack" from British legitimacy caused by the expenses crisis we must recognise that the scandal is situational. This "context" is that of economic collapse: high unemployment, home repossessions, the demolition of pension savings, and a future of public spending cuts; in other words a context of consequents of neo-liberalism.

David Marquand expands the debate: neo-liberalism like most ideologies is not only an economic, but a moral philosophy that claims "the unhindered, rationally calculated pursuit of individual self interest in free, competitive markets was not just economically efficient, but also morally right." As such, no political reform will succeed without addressing the "real culprit", the "hyper-individualistic, materialistic hedonism of the entire culture".

I left the UK on the 17^th of September, in the dark hours of one of those dry and cold autumn mornings so particular to this country. The storm clouds of unstable debt, so long hovering over the transatlantic housing bubble had broken furiously with the bankruptcy of Lehman Brothers, but the politicising forces of the recession gave me hope as I heard ordinary people increasingly break the taboo of talking politics. The Hope not Hate campaign, which I'd become familiar with at university, seemed to be effectively battling fascism in the UK, the Independent Asylum Commission was spearheading a creative new form of campaigning with the release of its final reports, and the first rumblings of a Convention on Modern Liberty could be heard in response to the erosion of British freedom. I left this country optimistic, firm in the belief that an organised, effective and ethical citizenry would be strong enough to keep this country together. 

I return in the saddest of days. Each morning of the past month the reputation of Britain's highest authority has been dragged deeper through the filth of parliamentary expenses. 2.1 million people are now unable to find work. Around 70,000 families face the prospect of repossession as the flagship policy designed to protect them has pathetically reached only two families. The government stumbles blindly as Gordon Brown clings to the premiership, the knives in his back inspire confidence in neither this small inept man, nor the disparate and desperate rebels. And then today, one wakes up to read that fascists, who deny the holocaust, aim to expel "non-indigenous" citizens, and who advocate the return of corporal and capital punishment have been elected to represent this country in the European Parliament, an institution that proclaims human dignity is inviolable, the bedrock of Human Rights.

The co-occurrence of the financial crisis and the exposure of a political class riddled with corruption reveals starkly the state we're in: a crisis of representation. Abuse of public trust would violate any representative relation between MPs and constituents, yet the roots of the political and economic crises run deeper, to a specifically British conception of representation that has failed to keep pace with a multicultural Britain in the information age. The only viable response to these crises is the birth of a dynamic new representation, one that breaks with bourgeois paternalism.

In 1774 Edmund Burke declared "Your representative owes you, not his industry only, but his judgment; and he betrays, instead of serving you, if he sacrifices it to your opinion", defining the British representation of the times. Yet this ethos, institutionalised in a British establishment manned by a homogenous political class captivated by the idea of enlightened, gentlemanly rule is ill-suited to a 21^st century society, 21^st century challenges.

Burke's representative relation, by which one individual rules in the place of many and in the name of their interests is now so contorted that three million children in one of the world's richest democracies live in poverty; so corrupted that elected officials clean their moats with public money while over two million people look for work; so subverted that one hundred billion pounds has been pumped into banks saddling the British people with debt while bankers' wages resume their precipitous rise.