Speaking to Labour activists on occasion, what is most remarkable is this disconnect between what they percieve the Labour Party as being about, and what the government does. However much some of them disagree with the government, the Labour Party still has some hidden magical essence that is different. Total cobblers of course. The best way to judge the party is by what it does in government. That is what defines it. The rest is comfort food.
The 50p rate signals the end of the Blair project, which was to get the party to shut up about what it believed in, because that was largely wrong, and adopt a centrist position, or conservative or neo-con as necessary, to be elected and achieve the core agenda of pushing through big public spending, much of which has done some good, albeit inefficiently.
The problem with this was not where the party was moving away from, but where it was moving to. Labour instincts of opposing the bosses and capitalists at every turn had to be suppressed, but there was no real debate of these new centrist/neo-con values. Loyalty matters more than debate anyway. So now the project is ending the unresolved conflict re-emerges: between the moral superiority of socialism and the practical necessity of rejecting socialism. This is a dead debate, but I don't think the Labour Party knows how to have any other. It knows no other values by which it might criticise the rights and wrongs of a policy, but socialist values, and it knows it cannot trust itself to speak these values.
So when a party/government has a culture of a) no debate, or b) if there must be debate, a futile left-right one, it should be no surprise that it cannot listen, that it must become out of touch. Just as the Tories ignored all the sane advice on the mess they were making of railway privatisation, Labour cannot understand the mess of the tax credits system. Political good intentions trump any constructive criticism. And if a policy is wrong because it is illiberal, the same applies. They have put their values away because they are left wing and so can't be trusted.
And this value-free, debate-free politics leads naturally to the cult of managerialism. We know how to run public services, they said. But they didn't. Chris Dillow's book The End of Politics is good on this, where I have dipped into it.
So we have an autocratic value-free government/party incapable of listening, and that is enough - any such party would have to go badly wrong sooner or later. But that's only half the problem. They've also run out of money. In 1999 Gordon Brown was crowing about how he'd fixed the structural budget deficit that the Tories had left. But even before the financial crisis, the golden rule had gone and prudence was dead. Having no money means that New Labour deal - switch off your values and we will give you big public spending - can no longer work. So the party will descend into infighting as both sides renege.
12 years. Where did it all go wrong? The New Labour deal - you can't have socialism, but you can have a bigger state - could only last so long. The working class may have been abandoned, but I don't think the class struggle mentality, or the Hegelian dialectic was. So centrist/neo-con Labour needed enemies and scapegoats as much as Old Labour did. But I suggest most of the problems our society faces are organic, spontaneous, not the result of a clash of interests, and so top-down confrontational answers do not work.
Even a party starting from a good place, which made a virtue of loyalty over debate, would inevitably go wrong over time. Add to that a belief in top-down micromanagement from a position of ignorance; an internal compromise that demands ever-ballooning state spending; adherence to some of the philosophical errors underpinning socialism, if not socialism itself; preference for a value-free attitude to business, rather than admitting your values were wrong; having no regard for liberalism; willingess to go to war on a lie;... etc, etc.
Frankly, it is amazing that things are not already much much worse than they are. Where should Labour go? What should it change? Or is the question: what on earth should it keep the same?