Neal Lawson is absolutely right. Social democracy is "hopelessly prepared for the 21st century."

This is because it is yet another example of an idea that has outlived its usefulness. Social democrats used to think that they did not need to challenge the fundamental power structures of capitalism because, with a few good top-down economic and social policies, capitalism could be made to deliver increased benefits for workers and the poor in terms both of rising real wages and better public services.

But Neal is right. The "golden era" in which this was true has vanished. Instead, we face harsher times. Secular stagnation means real incomes mightn't grow much. Globalized (pdf) labour markets and mass unemployment might exacerbate the effect of this in depressing real wages. Job polarization and the degradation of once-good jobs means workers face deteriorating job quality. And (self-imposed) austerity means that what economic growth we do get won't translate into better public services.

Times have changed. So the left must change. Neal says:

Instead of pulling policy levers, the job is to create the platforms so that people can collectively change things for themselves.

There's one context in which this is especially necessary - the workplace.

Put it this way. Back in the late 90s, many internet startups weren't generating the cash to pay staff well. So instead they offered equity stakes. Their thinking was simple, and correct: if you can't offer money, at least offer hope. The same should be true today. If firms cannot or will not offer rising wages, they should at least offer non-pecuniary benefits: more control over working conditions and the assurance of good rewards if the business thrives in future. There are (at least) three big benefits to doing so:

- Increased power for workers directly raises their well-being. People don't just care about what they get, but how they get it. Processes in which they have a say are better than ones in which they don't. What's more, the quality of one's boss is a huge influence upon job satisfaction. This points to a case for workers choosing their bosses, to increase the chances of them getting good ones.

- There's a good (pdf) body of evidence (pdf) to show (pdf) that worker (pdf) ownership and control can raise productivity. Such a view should not be a leftist one. Econ 101 says that if workers have a stake in the firm being a success - in the form of a profit share rather than flat wage - they'll have more incentive to do well. And Hayek pointed out that central planning was impossible because people at the top of hierarchies couldn't know enough. That's an argument for using the dispersed knowledge of workers.

- A feeling of control at work might have favourable cultural effects. One reason for dissatisfaction with conventional politics is that people feel alienated from the political process - which shouldn't be surprising because conventional politics has been about what "they" do to/for "us." If, however, people acquire more control and agency in one sphere of their life, they might want to acquire it in others. This could eventually improve the quality of our democracy generally. As Tocqueville said, democracy "spreads throughout the body social a restless activity, superabundant force, and energy never found elsewhere, which, however little favoured by circumstance, can do wonders."

Of course, there are countless types and degrees of worker ownership and control, some compatible with capitalism and some not. But this is a strength, not a weakness.

My point here is a simple one. The days when the leftist politics could ignore the "hidden abode of production" because lightly modified capitalism would deliver the goods have gone. Our new times require new politics. The fact that the Labour party is ignoring the question (pdf) of how to empower workers is lousy politics as well as lousy economics.