Labour Party policy review chief Jon Cruddas rejected calls for a bigger state-controlled sector of the economy today.
The Dagenham MP declared that the "old answers" of more state or more markets were both part of the problem rather than the solution.
In a brain-teasing speech to the Institute for Public Policy Research, he said: "We do not live by the managerialism of the state nor by the transactions of the market.
"We live in families and relationships and networks of friendships in local places.
"Yet markets and financial transactions have been introduced into areas of life they do not belong while the importance of relationships and trust between people that lie at the heart of public services and institutions has been underplayed."
Mr Cruddas said the Labour Party grew out of the mass popular movements of mutualism, self-improvement and collective self-reliance, creating a "a tradition that believes in opportunity, contribution and the power of relationships."