The Labour Party, as they reflect on their biggest loss in 92 years, is struggling to come to terms with the consequences of being environmentalists. No self-respecting westerner these days would say they weren’t concerned about the deteriorating environment. The threat of global warming is a massive wake-up call. Even the Rockefeller Fund founded on oil has just divested from coal and tar sands. Politicians finally have to face reconciling protecting the environment with creating the fiscal and monetary conditions for a thriving economy.

That is a huge challenge. The Greens can talk all they like about ‘smart growth’ and a ‘green economy’ but unless they address the money system and stop the growth imperative at is source ‘smart growth’ will just continue to be nice rhetoric.

Over the last few years we have noticed the Labour Party aligning itself more and more with the Greens. But in the last weeks of the campaign Labour leader David Cunliffe actually stole the Greens rhetoric. He said, “It’s got to be a clean, green, smart, strong economy” (14 Sept, Stuff)

So while Labour has moved towards the Greens, for strategic purposes it had also to distance itself from them right at the beginning of the campaign. Doing the splits eh? Electoral realities dictated that it could no longer afford to align itself with a party who questioned every job creation initiative the National Government started. But there is a large faction in the Labour Party that wants expressways, deep sea oil drilling, mining in conservation areas and fracking – all for the sake of jobs.

But Labour’s resounding defeat in the 2014 election should really be seen in the international context. Labour Parties and Social Democrat parties are struggling all over the western world – in Australia, UK and Canada and even Sweden they are losing ground. Cunliffe hasn’t got it on his own. All social democrat parties are struggling to reconcile protection of the environment with the economy so voters just cast their lot with the conservatives who promise “economic growth” (no matter what kind of growth). IN the case of New Zealand you can add in a personable Prime Minister with the common touch, a Leader of the Opposition who is prone to lecture and the challenge is almost insuperable.

The price of West Texas oil on 23 Sept 2014 was $91.50 and Brent Crude was $97, due to falling demand. But it is costing $100 a barrel these days to produce “tight oil”, the sort that is costly and difficult to extract. As Richard Heinberg recently wrote “Extracting and delivering those resources at an affordable price is becoming a bigger challenge year by year.” We have the perfect storm of peak resources, climate change and economic instability and no Labour Party is has the facility to deal with them. Moreoever it is no good reminiscing about the great days of Micky Savage, Norman Kirk or David Lange. The Labour Party now has a huge leap to take to adapt to the real world of 2014.

While the Greens move towards the middle, the Labour Party probably has to move to the right for electoral purposes. With so many environmentalists in the party these days they are damned if they align with the Greens and damned if they don’t. The alternative is for the Greens to move over and let Labour occupy more of their territory.

The challenge requires much more than bandaid solutions of Kiwibuild, raising minimum wages and Working for Families. It requires the complete rethinking the political economy, one which works for a post fossil fuel age.

Over the last three years the New Economics Party has been doing this and we have come up with some proposals. We believe it requires a massive change to the tax system and fundamental currency reform so that we get public creation of money with strict inflation control. Furthermore it requires recognising we live in the age of automation so a Universal Basic Income must replace our welfare system. The Labour Party has been talking jobs, jobs and jobs. But it is more realistic to talk of having enough money and enough choices. Only a Basic Income will emancipate the welfare system, improve working conditions and provide a real incentive to work.

As Michael Bauwens, Founder of the p2p (peer to peer) Foundation said “any movement dependent on labour and the power of labour is futile, because labour is disappearing.” They are stuck in a Cold War narrative and have no stories for the future. The workforce has also been casualised as employees are made redundant. Many of them set up a small consultancy. The trend continues. Labour is bleeding and becoming freelanced.

There is another factor. According to economic historian Philip Mirowski the left doesn’t understand neoliberalism. When they don’t understand it, they underestimate the cleverness of their foe and simply cannot counter it. Neoliberalism has re-engineered society. We need to tackle Capital in a different way, by disempowering it through the empowerment of people. Through real democracy, through new technology allowing real people to own the means of energy and production. Maybe this is 3D printers in microfactories in small towns with a local bank. Many on the right will get on board with that.

Perhaps we have to write Labour off and accept they are not a movement of the future. Do they really have to move into National’s space to better “play the game”? Well, it’s not a game, it’s about survival and it’s about now. Fewer and fewer people will vote. Labour will be seen as a weak ineffectual version of National. And if the Greens continue to sing from Labour’s songbook, they’ll likely stay at 10% too. The more they try and portray themselves as CEOs the further they will lag behind the international Greens movement.

However, given the fact that the Labour Party is unlikely to adopt either the massive currency reform, tax reform and welfare reform required for a redesign of the political economy, it may either continue to thrash itself to death or stagger on as a less environmental party. Neither option is good. The challenges of the post fossil fuel age will indeed be very hard on social democracy parties with a proud history.

by Deirdre Kent and Aaron McLean