Labour’s chief task is to envisage asmarter state, not a bigger one| Rafael Behr

All week this series looks at the questions Labour will need to answer if it is to win the next election. Today, what is the best size and shape of the state for the 21st century?

The Hungarian mathematician George Polya had a rule for dealing with anything that looks intractable: "If you can't solve a problem, then there is an easier problem you can solve: find it." This applies in politics too. One of the hardest problems Labour faces is how to rebuild a reputation for economic competence when the Conservatives have successfully painted the opposition as unrepentant budget wastrels. To concede the point feels like surrender on enemy terms: accepting a mendacious account of what caused the financial crisis; signing up to cruel cuts. Yet to dispute the point looks like denial of political reality - blaming the voters instead of listening to them.

So, following Polya's maxim, how does Labour find a solvable problem within the unsolvable one? The trick is to take the Tories (momentarily) out of the equation. Posit super-benign circumstances in which there is no blame for the great crash and even George Osborne says all fiscal paths are equally valid. In this fantasy land the left would still have to confront failings of the Labour state that cannot simply be cast as inadequate funding or corruption by private enterprise.

There is a vast political space between monolithic state control and a privatised market free-for-all

Related: Who should Labour speak for now? | John Harris

Related: Britain won't recover while its economy is dominated by magical thinking | Aditya Chakrabortty

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