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Chapter 1
Introduction

The Labour Party - rebranded as `New Labour' - has moved rightwards, to occupy the centre ground of politics, over the last few years. Many of its members, particularly the more active ones, have views which are firmly to the left of the orthodox party line, and there is evidence that they are becoming increasingly discontented with the party's political direction. However, membership has not significantly fallen. The question is why this is - surely people who are dissatisfied would simply leave. It seems that members, however dissatisfied, are by and large not leaving (and those who do leave have tended to return). I intend to look at this disagreement between members and party leadership, what members' options are, and which option they are likely to choose, in the light of Hirschman's theory of Exit, Voice and Loyalty[1]. This considers the options available to dissatisfied customers (in this case, the party members), how these options interact, and how actors balance costs of actions against their potential for success. This theory should help shed light on why members are not choosing the exit option.

The question of whether party members have viable voice options is institutionally interesting in terms both of the structure of the party, and of who has control over policy. It is also worth considering whether, if central control of the party has increased, this could adversely affect the party in the future, even if it might be helping them now. Less responsiveness to the views of members might adversely affect future policies, and if activists are less satisfied, there are likely to be knock-on effects on electoral campaigning. This in turn has implications for the events at the next General Election, and beyond. Has campaigning really moved on to be satisfactorily managed centrally, or are the activists on the ground still essential? If they are, and Labour loses them (or loses their work), it could have serious consequences for the party.

An important question is whether Hirschman's theory is really appropriate for application to this particular problem. In fact, Hirschman himself, although he does not apply the theory directly to political groups and parties, does mention that this would be a useful application of it. Intuitively, it does also seem to fit the opportunity structure quite well. If one disagrees with a party, one does indeed have the choices of leaving it, of vocalising one's disagreement, or of remaining loyal. It is also possible to combine loyalty and voice, however, which needs to be borne in mind when considering the opportunity structure - loyalty need not be silent. Loyalty can also be considered in the terms in which Hirschman sees it, as a factor which delays exit. The theory analyses how the options interact, and what factors can influence actors' decisions to take the different options.

The choice of which strategy to use (exit, voice, or loyalty) depends on how the options available to the membership, the factors affecting these, and their costs and benefits, are weighed up. Hence, I will be considering the problem from a rational choice standpoint. This involves looking at the options available to actors, their costs and likely consequences, and drawing conclusions about what choices will be made on this basis. In order to do this, it is necessary to establish an opportunity structure for activists - i.e. to look at what options are open to them (exit, voice, or loyalty), and what costs and benefits are attached to those different options. It is also necessary for this approach to look at the preferences of the actors. Basic assumptions on activist preferences include the assumption that they would prefer a New Labour government to a Conservative government (even if a New Labour government is not their ideal government) - an acceptable assumption, given the nature of left-right politics. From the point of view of the leadership, it is assumed that they wish to stay in power, and also that their preference is to maintain control over the party - an assumption which seems from the events of the last few years to be well-supported. Another factor which has an important impact on the decisions of the members is the likely reactions of the leadership to their actions. These reactions can also be predicted using a rational choice approach - analysing the costs and benefits of each option and the likely outcome - which I will do in Chapter 4. Having set up an opportunity structure in this way, it is then possible to assess the likely results.

There are drawbacks to this method of looking at the problem. One is the necessity to assume perfect information, which is rarely the case. However, it is likely that any information available to an outsider examining the situation would also be available to the actors involved in it. Thus, one can assess the situation on the same basis as the actors. Another issue, however, is that rational choice does not take into account any possible psychological factors which might make actors behave less than rationally. It is important to bear in mind, though, when considering the costs and benefits of possible courses of action, that the material benefits are not the only benefits - expressive benefits can also be very important, especially in such an emotive issue as politics and political parties. An action which may not seem `rational' from a purely material standpoint may well be so when such expressive benefits are taken into account.

It should be possible to set up the problem in a game theoretic way. This requires assumptions about the preferences of both the leadership and the members. It can be assumed that in all circumstance, the optimal leadership action is to retain members without changing their policy. I will also assume that ultimately, if there were to be serious loss of members, they would prefer to change policy in order to keep these members. Thus, their preference structure is as follows:

The situation with the membership is more complicated. One possible preference structure is where the membership would prefer to remain within the party, even if they disagree with policy and can effect no changes. This would give a structure as follows:

The first structure (where the members prefer to remain within the party) would give the following iterated game:

										    _(3,3)
								           Loyalty |
                                                                         __________|
							     __Members__| 
                                                             |          |_________
						     Ignore  |		   Exit   |
						      _______|			  |__ (1,1)
                                                      |
			Voice        __	Leadership ___|
		____________________|                 |
		|				      |   Change
		|	          Exit		      |_________________(4,2)
	Members---------------------------(1,1)
		|
		|_______________________
			Loyalty		|_(2,3)

The second structure (where the members are prepared to leave rather than remain in a party with which they disagree) would give this alternative iterated game:

										    _(2,3)
								           Loyalty |
                                                                         __________|
							     __Members__| 
                                                             |          |_________
						     Ignore  |		   Exit   |
						      _______|			  |__ (3,1)
                                                      |
			Voice        __	Leadership ___|
		____________________|                 |
		|				      |   Change
		|	          Exit		      |_________________(4,2)
	Members---------------------------(1,1)
		|
		|_______________________
			Loyalty		|_(2,3)

It is, of course, possible that the leadership would in fact be unconcerned were they to lose their more left-wing members. However, this is a less interesting situation as in that case then it is clear that the members will be unable to pressurise the leadership into making any policy changes. While there would still be a question as to why, in that case, members choose to remain, there would not be any possibility of forcing policy changes, even if members are (as in the second preference set-up) prepared to leave the party.

It seems that it is the first game that is a better fit with the Labour Party situation. In this thesis, I aim to demonstrate firstly that this is the case, and secondly why it is the case, using the framework of Hirschman's theory and a rational choice approach.

The thesis will be structured as follows. Chapter 2 explains Hirschman's theory, and its applications to this particular arena. In Chapter 3, I will look at the current internal structure of the Labour Party, what voice options discontented members have within this structure, and what exactly (if anything) they are able to affect. Chapter 4 combines the previous two chapters to analyse the options available to both members and the leadership, the factors affecting choices of these options, and the likely outcome. In Chapter 5, I compare the national situation of New Labour with Ken Livingstone's bid for the London mayoralty, with the intention of bringing out important factors. Finally, in Chapter 6 I draw some overall conclusions.

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