Despite Labour's achievements in government, we were too often seen as champions for global capital markets, which worked for bankers but did not seem to be delivering for the rest of Britain.
For example, after 2000 productivity rose but at double the rate of wages, which stagnated. Consequently, people borrowed to compensate and household debt exploded.
And as market mechanisms were unleashed into many aspects of society, institutions we hold dear, like local post offices, were allowed to wither. So how do progressives meet the challenge of democratising markets and ensuring everyone has a stake in them in this new era.
There is also an added dimension: before the crisis struck in 2008 growth levels and profits from the then booming financial services sector filled Treasury coffers with tax receipts that paid for the transformation of public services -- services we often sought to manage from the centre with targets and league tables. How do we go about building the good society in an era of austerity, empowering communities and moving beyond a top-down centralising approach?
A large part of the answer can be found in Labour's traditions of mutualism, localism and civic engagement. The party's genesis was after all in the friendly societies, trades unions and tenants organisations' struggles against the injustices of 19th-century capitalism. It is to this thread of grassroots economic democracy that we should return to do battle with some of the outstanding challenges of the 21st century.
Step forward Northern Rock. It was formed in 1965 by the merger of two small mutuals and operated as a traditional building society until it demutualised and floated on the London Stock Exchange in 1997. That was when the rot set in. The flawed business model it pursued left it highly exposed in the wake of the sub-prime mortgage crisis in the US, leading to the 2007 run on its branches. After its collapse, Northern Rock was nationalised in 2008 by the previous government three years ago this month. The coalition government is now considering its future. Why not remutualise it?
The Big Five banks currently dominate the credit card, mortgage and current account markets. Without the need to pay dividends, a remutualised Northern Rock would be free to set more competitive lending and savings rates, adding choice and diversity to an increasingly concentrated sector.
Most mutuals are inherently risk-averse and weathered the financial storm well. It was demutualised banks and risk-embracing mutuals (such as Dunfermline) that had to be rescued by the taxpayer. Financial mutuals traditionally have been an important part of civic society in the communities they serve. They have strong track records in backing local charities and providing support in kind to voluntary organisations through, for example, the use of premises. Northern Rock can continue to perform this function through the Northern Rock Foundation supporting civic society, particularly in the North East.
Above all, a remutualised Northern Rock would inject a valuable dose of participatory democracy into an industry that all too often puts short-term interests of shareholders above all else. The obsession with short-term gains helped fuel the behaviours which led to the crash. Conversely, a born-again Northern Rock building society would be collectively owned by its customers and not subject to such pressures.
An early day motion I tabled in the Commons last week calling on the government to pursue this course has been signed by MPs on all sides of the House. I welcome this. There will always be disagreements with other parties. Nevertheless, working together where there is common ground is not just key to reforming the economy, it is an important part of rebuilding confidence in the political system in this new era. In the words of LT Hobhouse, a thinker to whom both Labour and Liberal traditions are deeply indebted, as progressives we want "a new spirit of economics -- the spirit of mutual help, the sense of a common good".