The financial crisis and resulting recession is feeding a sense that we could be at the end of a political era - in a way, at the end of two political eras: the era of New Labour and the era of ‘neo-liberalism' of which the New Labour years were a part.

But what will the new era look like? What will be its agenda? Unless we sort this out, and quickly, there is every chance that neo-liberalism will win through, again, by default.

On the right, thinkers are already staking out their territory. In his ‘Rise of the Red Tories', Phillip Blond argues that the time is ripe for a new Conservatism based on a repudiation of both social and economic liberalism. On the economic side, Blond advocates greater political and economic localism, the regulation of markets to protect small businesses and the wider distribution of wealth. On the social side, ‘Red Toryism' eschews multiculturalism as morally nihilistic in favour of a ‘common but high civilisation' that ‘binds all Britons together in a vision of a culture worth sharing.'

In our new book, Building a Citizen Society: The Emerging Politics of Republican Democracy, Daniel Leighton and I have drawn together a distinguished group of contributors to set out a different agenda. We believe that republican democracy offers a political philosophy that takes on the contemporary challenges of unaccountability and wealth concentration much more capably than either the traditional Labourist approach or the various new conservatisms currently on offer. It also offers a much more attractive, liberal approach to cultural diversity.

Democracy, liberty, equality

So what is ‘republican democracy'?

To begin with, it is not primarily about monarchy. Of course, hereditary monarchy is a silly and inequitable idea. Of course, the monarchy should be abolished. But getting rid of monarchy is not where the most important action is for contemporary republicans.

Republican democracy is, first and foremost, democratic. It affirms that state authority derives from ‘we, the people'. But democratic authority, to be legitimate, must also justly serve the people. To this end, it must be guided by two core values: liberty and equality.

Liberty demands that individuals be free of what the philosopher Philip Pettit calls ‘domination': of living at the mercy of others who have the power to intervene at will in one's life. This applies to the state. But it also applies in the workplace and in the family.

Republican democracy calls for a high degree of economic equality. In part, this is a just demand in itself. But it also follows from the desire to protect liberty, for liberty as non-domination is easily subverted by accumulations of power that result from inequalities of wealth. It also follows from the concern to maintain popular sovereignty. For such accumulations of power can also too easily displace the demos as the real decision-making force in society.

Not least, republican democracy holds that a free and sufficiently equal society cannot be maintained with a passive, depoliticised citizen body. ‘We, the people' must take active responsibility, through political and other forms of social participation, for the achievement of democracy's moral ends, liberty and equality.

This is all very abstract. So let's draw out some more concrete implications and explain how they contrast with the traditional politics of ‘Labourism'.

Differences with Labourism

First, consider ownership issues. Post-war social democracy tended, at least in practice, to downplay issues around ownership (and we mean ownership of wealth here, not income). It rejected the traditional socialist commitment to take all major industries into public ownership, but didn't put much in its place. Republican democracy calls for renewed attention to ownership questions.

For one thing, a much wider dispersion of wealth is essential to achieve liberty (for all). Without property of their own, individuals become reliant on others - employers, spouses, family - for vital resources. But someone with property has crucial bargaining power. They needn't scramble desperately into this or that job, because they can, for a limited time at least, live off their property. This is why republican democracy looks favourably on proposals to universalize capital ownership or to create near-equivalents like a scheme of unconditional basic income.

From the point of view of popular sovereignty, it also matters who controls property - or, more exactly, who controls investment. While democracy and capitalism are partly complementary, they are in part at odds because the private control of investment flows by a (usually) small elite places definite limits on what a democratically-elected government can feasibly do: if it goes 'too far' in a reformist direction, there will be a capital strike, and reforms will have to be abandoned to revive the economy.

Republican democracy looks in the long-run to overcome this contradiction by bringing investment itself under greater democratic control. This does not mean giving control over investment to central government. Rather, it means democratizing the way in which investment funds are controlled from within society. For example, as Robin Blackburn has suggested, we could establish, by means of a capital levy, new 'social funds' under the control of trade unions and citizen groups.

Second, consider the nature of citizenship. For the most part, post-war social democracy accepted - even encouraged - a relatively passive notion of citizenship. Yes, citizens should usually come out and vote for an MP once every 4 or 5 years. But it was not necessary or desirable for them to do much more than this.

But there are a number of reasons why social democracy is likely to fare badly on this basis. First, participation in collective decision-making arguably has important educative effects in terms of nurturing citizens' skills and sensibilities. Here social democrats might have something to learn from an unlikely source: Alexis de Tocqueville. In Democracy in America (1835, 1840), Tocqueville argued that 'the Americans' of the 1820s/30s had rescued themselves from 'individualism' - the immersion of individuals and families in their own affairs to the neglect of a concern for the wider society - by devolving governmental power down to localities. This, he argued, pushed people out of the narrow circle of their private concerns, increased their sense of interdependence, and their sensitivity to the interests of others. In short: participation in collective decision-making can help to nurture a sense of civic membership and concern for the common good.

Second, participation matters because of its power effects. As the level of popular participation in political life changes so too does the balance of power in society. Stated crudely, 'people power' emerges as a counter-weight to the power of money. This is why republican democracy celebrates the new citizen-organizing movements, like London Citizens, which seek to bring church groups and unions and other organizations together to campaign for policies like Living Wages and better treatment of asylum seekers.

Differences with ‘Red Toryism'

Some of this might sound a lot like ‘Red Toryism': a suspicion of the state, a celebration of civil society, a commitment to spread asset ownership more widely.

To the extent that there is overlap, we say: well and good. But there are also a number of very important differences.

First, while republican democrats are suspicious of the state, they nevertheless see it as having a crucial role in realizing democracy's moral ends of liberty and equality. The point is not to eschew the state as such, but to limit its power to act arbitrarily and to restructure it so that it is more open to popular participation. At the same time, the state - including the central state - must be used to combat economic inequality and, thereby, to protect individual liberty and popular sovereignty.

Republican democrats celebrate ‘civil society'. But it is not celebrated simply as an apolitical realm of natural freedom in contrast to that of the state. Civil society - Edmund Burke's ‘little platoons' - can have its own parochialism, and it is important to have public forums and encompassing social movements which draw people into engagement with society's wider, common good.

And yes, republican democrats seek a wider distribution of wealth. But in contrast to ‘Red Toryism', they have plenty of genuinely radical ideas about how to promote this: citizen's inheritance schemes under which all citizens receive a capital sum at birth or on maturity financed from inheritance tax; compulsory capital-growth sharing schemes under which firms are required to set aside a proportion of their profits in the form of new shares to be held by workers' trusts; or popularly-controlled social funds, as discussed above, which could provide dividend payments for all citizens.

A deeper difference with ‘Red Toryism' is that republican democracy does not set itself up in opposition to something called ‘liberalism'. Liberalism has contributed enormously to our understanding of what liberty and equality, the moral ends of democracy, require. Republican democracy comes to realize liberalism, not to bury it.

The state must not play favourites between citizens of different religious faiths (and none), and certainly should not seek to build a shared political culture on the basis of any particular faith tradition. Religious commitments will of course motivate many to participate in politics. But the core values of the public sphere - democracy, liberty and equality - are independent of specific faith traditions; and it is in terms of a shared commitment to these political values that a sense of common citizenship is properly built.

So that's what we mean by republican democracy. It's not about absorbing society into the state or into the market or about uncritically celebrating ‘civil society' as an alternative to both. It's about using all three in a way that delivers on the promise of democracy and its moral ends of liberty and equality.

Stuart White