In his barnstorming 2015 and 2016 Labour Leadership campaigns Jeremy Corbyn outlined a series of, very enthusiastically received policy offers of a distinctly left Keynesian, anti-austerity hue. These proposals ranged from renationalising the railways, to fully re-nationalising and refunding the NHS, establishing a universal free national education service, nationalising key utilities, controlling the banks more closely (the last two, significantly, subsequently dropped in the 2016 contest) and creating a National Investment Bank. Unfortunately since his 2015 victory essentially nothing has been done to put flesh on the bones of these proposals, or indeed to position these disconnected proposals within a wider comprehensive radical Left Economic Programme.
This seems most peculiar to those of us old enough to have imbibed in our socialist youth the concept of socialism as intrinsically involving the modification, amelioration, and re-direction of priorities created by the unfettered free play of the capitalist Market, and their eventual replacement by a better, fairer, more rational, society beyond the capitalist marketplace. This transformational process was always seen by socialists as being driven forward by conscious, democratically determined, state-led comprehensive overall direction and planning, even in a still capitalist, “mixed” economy in a process of transition.
The collapse of the socialist tradition of planning
Thirty years of neoliberalist free enterprise capitalist hegemony has bitten deeply into even the ideological mindscape of many people who see themselves as socialist radicals. So much so that the term “State-led Planning”, is too often seen as only suggesting the establishment of the oppressive structures and practices of Stalin era Soviet Five Year Plans, rather than as a normal part of not even particularly radical social democratic practice and philosophy. We certainly seem to have misplaced the left radical interventionist ideology, that still survived intact up to and including the 1980’s ‘Bennite’ Alternative Economic Strategy.
Some of the most successful examples of large scale integrated economic planning actually derive from reforming administrations in capitalist states, e.g. Japanese State-led industrialisation from a feudal base, the Roosevelt New Deal Programme in the USA in the 1930’s, or Singapore’s post-independence ‘economic miracle‘. Not something the capitalist media or neoliberalism’s apologists generally, want us to remember, and much of the left seems not to do so either.
Ironically, even the Labour Right/Centre still periodically toy with long term planning proposals. For example, Ed Miliband and Ed Balls were happy to propose ‘Wilsonite’ forward planning infrastructure development proposals in their 2015 Policy Review document One Nation Economy proposals:
Government too needs to take a more long-term approach when it comes to the major investment decisions facing the UK….. the Armitt Review, commissioned by Labour, has recommended a coherent 25-30 year national infrastructure strategy…
However the dire record of both Labour and Tory governments over the last 40 in all areas of economic forward planning cannot but cast doubt on the seriousness with which these proposals have been put forward at election time. And, unfortunately, for the PLP Right, despite recent allusions to a need for a more interventionist economic approach, we can be sure that any return to forward planning under a non Corbyn Labour government would be in the interests of Big Business, not the majority of citizens.
The centrality of state-led planning for Left Social Democracy
Large scale national economic planning was once a key feature of all European social democratic party manifestos, and political practice when in office, for much of the post WWII period. For instance, the first Harold Wilson government of 1964 to 1970 tried initially to pursue an ambitious national planning agenda. A main theme of Wilson’s economic approach was to place enhanced emphasis on ‘indicative Economic Planning’. He created a new Department of Economic Affairs (DEA) to generate ambitious targets that were in themselves supposed to help stimulate investment and growth, and to counterbalance the conservatism of the Treasury. A Ministry of Technology (known as Mintech) was established to support the modernisation of industry. The faith in indicative planning as a pathway to growth, embodied in the DEA and Mintech, was at that time, of the “Butskellite” consensus, by no means confined to the Labour Party. Wilson built on foundations that had been laid by his Conservative predecessors, in the shape, for example, of the National Economic Development Council (known as ‘Neddy’) and its regional counterparts (the ‘little Neddies’). The Wilson government’s policy of selective economic intervention was also characterised by the establishment of a new super-ministry of technology, under Tony Benn.
The various serious economic crises during the first Wilson government, and its always very limited, timid, “management of national capitalism” objectives, significantly derailed the ambitions represented by these plans and strategies from achieving a significant breakthrough in restructuring the UK economy. No such ambitions marked the 1974 to ’79 Wilson government. Nevertheless the ambitions and forward planning objectives, and establishment of powerful “driver ministries” to implement the strategy, can be contrasted very favourably with the current Left’s apparent lack of similar ambition to intervene comprehensively in the workings of the capitalist market.
What should a radical Labour Comprehensive Economic Development offer look like?
Simply assembling a bundle of disconnected desirable economic aims and outline policies, as the Corbyn team have done so far, amounts to little more than a pick’n’mix of ideas connected only by being favourably regarded on the Left. To have credibility a left economic agenda must outline our overall objectives in the economic field, then identify some key problems with the UK economy, and then outline coherent solutions. We will need a lot of carefully worked out economic statistical detail to support the basic arguments. A consultative nationwide campaign required to create such a programme would be a key part of the process.
Such a strategy would need to take a holistic approach to our economic development, from regional policy, the role of services and finance in our economic sectoral mix, forward planning of labour supply and skills – interconnected with long term education, and apprenticeship provision, forward housing needs, health service provision, etc. The document Building An Economy For The People: An alternative economic and political strategy for 21st century Britain, produced a few years ago now by a group of radical Left economists in the orbit of the CPB created an excellent benchmark model for just such a radical, transformative, strategy. Many trades union research departments also already have on their shelves important potential component parts of a future Comprehensive Economic Development Strategy.
Conclusion
Without such a plan, as a core strategic mobilising and narrative changing weapon, and without the required nationwide consultation campaign involved in creating such a National Plan, the Left in the Labour Party will never recover its ideological power as a mobiliser of a genuine anti-austerity and radical Left alternative to the current neoliberal status quo. In the event of a radical Left Corbyn-led Labour Government taking office, without a hard-nosed, well thought out, radically transformative Plan to guide its path, and anticipate the inevitable hostile Market response to an even mildly reforming anti Austerity government, a Left government with a haphazard ‘policy offer’ of disconnected ‘nice things to achieve’ will be immediately blown of course by the first harsh winds of Market reaction it meets.
Dear Santa,
Please send John Penny a Plan for Christmas. John has been a good boy this year and has written countless articles on Left Futures. John doesnt know what a Plan looks like, he would be happy with a “mildly reforming anti Austerity government” Plan, if you have one, but a “radical Labour Comprehensive Economic Development” Plan would be his favourite.
Thanks for this JohnP. Spot on, an excellent article and absolutely what is needed at this time.
There is a real, serious opportunity to win wide and committed support for such a programme -particularly at this time of uncertainty, and political and economic vacuum.
But there is also a very real danger that Labour could miss this moment, unless it gets its act together sharpish.
Well done – an excellent piece and let’s hope it can reach a wide audience.
I am glad that this article has FINALLY been published. It deserves wide circulation. The lack of a comprehensive economic programme based on economic planning is indeed Labour’s greatest inadequacy. It would make a world of difference if Labour had an economic programme which would actually INSPIRE.
I would add a few additional points.
First and most importantly, economic planning goes hand-in-hand with the extension of public ownership. Ownership, after all, is merely the legal arrangement by which one controls something, and there is no point in a Plan unless the government has sufficient control of the economy to achieve the Plan’s objectives. It is therefore lamentable, as John reports, that there has been a loss of interest in nationalising key utilities and controlling the banks more closely. More broadly, there is in any event no call for public ownership of a Left-led Labour government to adhere to the limits of the 1945-79 social democratic consensus as regards public ownership. Effective economic planning requires a far more extensive expansion of the public sector beyond Butskellite “utilities”, to embrace other sectors which have failed the nation – for example the banks and other financial institutions, construction, telecommunications-internet,
pharmaceuticals, retail supermarkets. Furthermore we surely would not wish the hoped-for massive programme of public works of a Corbyn-McDonnell government to be one in which private companies get paid to do the business, a Thatcherite Rooseveltism in which G4S rules the roost. We should expect the McDonnell investment programme to give birth to a new and very substantial PUBLIC sector.
Secondly, when considering planning, neoliberal theory is one thing, neoliberal practice quite another. As David Harvey writes in his “Brief History of Neoliberalism”, laissez-faire only really exists in Medieval England and contemporary Abyssinia. Wasn’t the bank bail-out a plan? Aren’t the corporate-composed free trade treaties (including the EU Treaties) plans (and very long-term ones)? Don’t the giant transnational corporations have plans? Don’t the super-rich convene at Davos to concoct yet more plans? So in a sense the neoliberal economy is a planned economy – in which the plan is to wage war on egalitarianism. Perhaps John accepts this when he says that the Labour Right would plan the economy in favour of Big Business.
Thirdly, John’s article considers the Labour governments of the 1960s and 1970s. But what happened between the 1964-70 Labour government and the 1974-9 one is also instructive. With the Tories in government, Labour in opposition concocted a more radical programme in response to the disappointments of the Wilson government This programme’s core was the taking into public ownership of one top company in each of the leading 25 sectors of the economy, together with planning agreements with those companies remaining in the private sector so that they too would have to play their part in the national plan. This policy (promoted by Labour’s left-leaning NEC) was, however, vetoed by Harold Wilson at 1973 Annual Conference. The experience of the party leader thinking he could veto a Conference policy led to the formation of the Campaign for Labour Party Democracy and the long march towards mandatory reselection of MPs and widening of the franchise for leadership elections beyond the PLP. Bereft of a radical programme, the 1974-9 Labour government was a reed shaking in the wind, and soon succumbed to an IMF demand for spending cuts and pay restraint, leading to the Winter of Discontent and advent of Thatcherism. Such is the price for abandoning economic planning and public ownership.
Fourthly a radical economic programme based on planning requires hard Brexit. We cannot plan without freedom over State aids and nationalisation and without control of the movement of imports, labour and capital. (Similar considerations apply to other supranational agreements, WTO, CETA, TTIP, which may need to be swept aside so that the state can perform its duty of economic planning.)
Finally – addressing those who agree with planning and public ownership – to bring these ideas to a wider audience I would suggest that we need more debate yes: but we also need a campaign, including promoting a model resolution in favour of a radical economic programme which we should strive to get through LP Conference. As John demonstrates, the leadership’s performance so far suggests that pressure from the party membership is an absolute necessity.
Excellent post, Danny. I agree with all your points. Unfortunately , the quite reasonable brevity required by Left Futures articles required considerable editing of additional points I would have liked to make.
You are of course absolutely correct that there is actually nothing really “laisse faire” about the neoliberal economy , in terms of its overarching framework. Its institutions and structures, TTIP, CETA, TPP, etc being prime examples, are indeed highly “planned” , to provide an optimal arena for the ruthless competition of globalised Big Business, whilst repressing any restrictions on their best interests , such a trade union power, the national sovereignty to protect key industries from this unfettered competition, and the ability to impose taxation on the profits of the mega corporations, and their superrich owners.
Sometimes the ability of the capitalist classes to work collectively , as a class, beyond their eternal mutual rivalries, and plan very long term to achieve their ends is very impressive, an example being the 40 year project (or more accurately “conspiracy”) the US Health industries have waged with UK Big Business and their hired creatures in Parliament (both Tory AND Labour) to carefully undermine our NHS (via totally unnecessary PFI debts, cynical disaggregation into inefficient local/regional units, and inefficient internal “competition, and contracting out ) , with the ultimate aim of replacing it with a totally privately delivered health service, paid for via private health insurance.
If only we on the Left were as capable of this long term strategic planning !
Thanks John, I agree.
If you – or anyone – would like to discuss the organisational aspects of campaigning within the Party in favour of an economic programme based on planning and public ownership, my email is
drdanicol@netscape.net
I’ll do that Danny. As an indication of just how unprioritised this vital issue has for the Labour Party “Corbynite” Left currently, I put up a proposal for the need to develop such a comprehensive economic plan on the MxV Momentum online discussion forum (when it was still supposed to determine Momentum Conference discussion topics). Supporters of the proposal, out of 20,000+ Momentum members ? Twenty-five people ! I rest my case.
A major problem in getting such a vital project( ie, the writing of a Left Economic Plan , including mass consultation) underway within Labour’s current byzantine National Policy Forum processes, is that, the NPF is dominated by the Labour Right, AND , without a clear commitment from Jeremy and John , it is unlikely to gain much “traction” on the Labour Left as a priority. The task is a vital one for the Labour Left nevertheless.
Yes, agree with JP but there are also some other tools in the toolbox that we could consider too to supplement such a strategy and to help fund it.
More democratic public ownership, windfall taxes on big business, serious taxes on the rich and corporations, and hedge funds, and private landlords with multiple properties, and grouse moor owners, and remove tax subsidies on private schools (and public schools) plus working with global partners shut down the illicit offshore banking industry (where the rich stash cash to avoid giving to communities and some argue it could be 50 trillion dollars plus!).
Could perhaps also support a global financial transaction tax and a global living wage.
And with what’s coming – driverless cars, trains, tubes, trams, ships steered by computers, and if Amazon gets its way the end of supermarket check out staff, the left also needs to seriously look at shorter working weeks with good pay to share the work out and free time poor working humanity!
Someone a while back also suggested a whole new industry if we can get technology to serve us first and not big business and probably one what human beings can do best – ’empathy workers’ (professional friends) which could help counter rarely talked about loneliness and this may also help with issues like dementia and social care.
I have always argued the greatest victory of Neo-Liberalism was to stop the Left from dreaming.
So could I suggest our New Year’s Resolutions should also include to start dreaming again!
Solidarity!
The Achilles heel of the left is its economics. So many thanks to John for writing this piece.
It is indeed a worry that there has been so little fleshing out of headline proposals from the Labour leadership and nothing reaching party members to inform them what has been done and to ask for their help in taking things further.
There are massive interconnected issues of timing/staging, long-term perspective, short term goals and even such things as electoral reform involved in all this. What can seriously be on the agenda for 2020? I don’t know but I am sure that it is impossible to know without engaging in the sort of discussion that John is proposing.
Another aspect is the international dimension. It was one thing to make an extension of public ownership in the 1940s in a world in which capital controls were still the norm. It is another to try such things in our globalised world in which the free movement of capital has come to be the norm. There can be little doubt that a left-government trying to make democratic inroads into the economy would face very stiff resistance including boycott, investment strikes, transfer of capital and lots more. That is surely something that needs to be discussed when proposing a radical economic turn of the sort proposed here. (That is not a criticism of John, only so much can be said in 1200 words. But it needs to come into the debate all the same.)
I agree that there can hardly be enough debate about the international dimension and other political issues concerned with a radical economic programme. It would be good, however, if such discussion were firmly orientated towards seeking to overcome the difficulties of globalisation and so on, rather than being orientated towards throwing up one’s hands in despair and settling for neoliberal globalisation for ever and ever.
The notion, however, that electoral reform would somehow boost a radical economic policy is bizarre. Proportional representation would mean no more majority Labour governments. Every parliament would be a hung parliament. We cannot rely on non-Labour MPs to vote in favour of the National Plan Bill (or whatever it gets called) which would need to be passed in the first few days of a Labour government. Such a statute would above all need to include an enabling provision empowering the Labour government to take companies into public ownership where the government deems this necessary for the implementation of the plan. We would not have time to go down the road of individual statutes for each and every company, or even sector, which needs to be taken over.
There may be difficulties getting Blairite MPs to vote in favour, which is a good reason for mandatory reselection to make MPs more accountable. But the idea that we can somehow rely (or rely more) on Lib Dem, UKIP, SNP, Green, Plaid Cymru parliamentarians to support such a Bill is entirely unrealistic. The notion that jettisoning First Past the Post would somehow serve the purposes of achieving a planned economy based on public ownership is nothing short of outlandish. Precisely the opposite is the case.
I intend to respond to John’s piece, but Danny is quite wrong on PR.Firstly, it is pessimistic to see no possibility of a majority for Labour under PR. Labour got 48% of the vote in 1945, and 49% in 1951, gaining 250,000 more votes than the Tories in the latter, but losing to them – so much for FPTP! My point is that it is not unrealistic to suppose that an extra 2/3% could not be achieved.But what is crucial to understand about FPTP, which Danny doesn’t, is that the compromise that takes place under a coalition after an election with PR ( although ,as I have said, not necessarily) takes place before an election under FPTP in that the programme has to be broad based enough to command the support that will potentially gain a parliamentary majority.A social democratic programme, which is what Corbyn/McDonnell are proposing, can do this, a socialist programme can’t, at least at the moment.
PR allows a socialist and a social democratic party to co-exist, as in Germany and Spain, and any move towards socialism is likely to come from a coalition of both, and although that has not yet happened, it almost did in Spain.
I should have provided this direct link to the excellent BUILDING AN ECONOMY FOR THE PEOPLE: AN ALTERNATIVE ECONOMIC AND POLITICAL STRATEGY FOR THE 21st CENTURY economic plan produced by Left economists just a few years ago, in my article. Anyway, anyone wanting to look at a good effort at a contemporary comprehensive Left Economic Plan, go to http://manifestopress.org.uk/images/pdf/aeps.pdf to get it as a free download (Sorry, I don’t know how to hyperlink from these comment boxes). Well, worth a read ,as a model of just what Labour itself needs to create. And it takes up issues like the need for capital controls too.
Blimey, I take that back , it does indeed hyperlink from the , red highlighted, address I provided above, to a free download of the excellent “BUILDING AN ECONOMY FOR THE PEOPLE” document ! So I thoroughly recommend anyone interested in a good example of a very thorough attempt at a radical Left Economic Plan downloads it and has a good read.
A very good piece by John Penney, this is absolutely the orientation the left must have, or acquire. There is much moral outrage, and much to be outraged about, but that does not automatically translate into a plan for change.
But I do believe that although we can start to move in this direction, as JMD has done, we cannot go further than a social democratic programme until we achieve PR, for reasons I outlined in my response to Danny above, although nothing more than this is being proposed. Neither can an independent Left UK based on a hard Brexit work. The nationalist right and big capital would see to that. ( The AES in the 70s and 80s wouldn’t have worked either, in retrospect, although I fervently supported it at the time.)
Let us develop our left Keynesian approach, stay in the single market, deepen links with our left friends in the EU and hope for a better day.
I am reading Rethinking Capitalism edited by Michael Jacobs and Mariana Mazzucato. MM is one of the of John McDonnell’s panel of economic advisers. Another big name from the panel contributing to the book is Joseph Stiglitz.
The tone of the book is set by the introduction by the two editors. This makes very clear what they understand by “rethinking capitalism”. They believe that a reappraisal of “some of the dominant ideas in economic thought is required” because that is needed to enable us to “more successfully tackle modern capitalism’s problems”.
In discussing the contributory chapters the editors say that “in each case their conclusion is that capitalism can be reshaped and redirected to escape its present failures”. Further on we read “Western capitalism is not irretrievably bound to fail; but it does need to be rethought …”. They complain that mainstream economics does not really understand how it works and therefore cannot understand “how to make it work better”.
In other words the whole work is written from entirely within a capitalist perspective. The unstated assumption is that capitalism is the only game in town. The word socialism doesn’t occur in the index and is not mentioned in the introduction. Capitalism is treated as all there is without the slightest consideration of what a non-capitalist economy might look like.
The editors also refer to “some of the greatest economists of the past century – such as Karl Polyani, Joseph Schumpter and John Maynard Keynes”. They fail to mention that the first two both believed that socialism, in the clear sense of the replacement of private by public enterprise, was hovering on the horizon. As Polyani put it “Socialism is, essentially the tendency inherent in industrial civilisation to transcend the self-regulating market by consciously subordinating it to a democratic society. It is the solution natural to industrial workers who see no reason why production should not be regulated directly and why markets should be more than a useful but subordinate tool of a free society”.
Of such visions of an alternative to capitalism there is not a hint in the overview of the book by the editors. The same view is shared, as far as I know, by all the advisors appointed by John McDonnell. And yet JMcD has made a thing of saying that the word “socialism” is once again usable in the Labour Party. To this we have the right to say “Yes, but what do you understand by it and why are their no socialists among your advisers?”
The simple fact is that here, as on so many other points, the rhetoric is several places removed from the reality. John P’s plea for comprehensive economic planning, if it is to mean anything in socialist terms, surely must mean that, however long it takes, we have our eyes set on a transformation of society which recognises that capitalism cannot solve its own problems and that we need, however slowly, to move beyond it. Without that longer term view we will remain stuck in the same old mess, fiddling on the margins and waiting for the next crisis to hit.
So please, John McD and Jeremy C, give us a clue about what socialism means to you. Is it a purely “ethical” concept, as Tony Blair would have it, or does it have a clear economic meaning?
Good post, David. A quick read through of the many proposals on the Momentum MxV site will quickly disabuse anyone of the notion that most of the Momentum Membership, supposedly the “Far Left Red Guard of the Corbynista Insurgency” if the mainstream media are to believed, are even “socialist” in any recognisably coherent way. Most of the MxV proposals , apparently take for granted that there is simply no alternative societal form “beyond the capitalist market” and would not have been out of place in the raft of radical Liberal policy proposals churned out by the 1970’s and 1980’s Young Liberals.
Given the current overwhelmingly middle class composition of Labour activists, (and Far Left activists of course – but with a different “Leninism as religious dogma” outcome), it is hard to see how the innate individualism of the middle class mindscape, is going to be replaced with a return to collectivist, class-based, traditional socialist , politics. For me, the current fad on the self identifying “Left” for the diversionary chimera of the entirely individualist, market-based “Citizen’s Universal Income” , rather than fighting collectively to restore and broaden our Welfare State, illustrates how disastrously all the traditional socialist assumptions and perspectives have been sidelined by 30 years of near complete neoliberal hegemony.
If people can’t even imagine a society beyond the capitalist marketplace, then they can’t even effectively fight for transformationally serious reforms which threaten the current capitalist status quo today either. One of the most powerful,
ideological arguments of any social system is “There is no alternative”, whether a Slave Society, Feudalism, or Capitalism. too many people who see themselves today as “socialists” simply don’t have that faith that a better , socialist, society can be built, that inspired all previous generations of socialists through the very worst of times.
JohnP, you make some brilliant points. And also many thanks for posting the link to the updated Alternative Political and Economic Strategy.
I strongly recommend everyone to have a read of this – it was apparently published in 2012, but I’ve never come across it before – it needs to be widely read across the labour movement as a whole.
One aspect of it I found particularly striking is its patient, logical, and point-by-point explanation of why we need to leave the EU and that withdrawal is an absolute necessity in order for us to make serious steps in a socialist direction.
Now that we’ve had the debate over our membership of the EU and that we’ve decided we’ll leave, this programme has to be the basis of the way forward.
Funny how capital wants everything for free. Educated and healthy workers, a new generation of workers, R&D, infrastructure, and why we even pay our own fares to work or buy cars and petrol to get there thus subsidising employers!
It is the labour of the working billions which really creates the wealth and makes societies work.
The rich and powerful legally steal our surplus labour (and we all sign contracts to endorse this).
Time to get this message over to working people.
And to transform society in a global left wing democratic socialist direction and if all our sister parties in the world are doing the same things then later its time to consult working humanity on building a fairer, egalitarian, and greener global economy to replace the capitalist freeloader!
Solidarity!
This is a very good article. I held off commenting for awhile in part because there was a lot to mull over, especially in terms of people’s comments.
There is some debate in the comments section about whether the UK could pursue a socialist (or even left-Keynseian) program on a national basis. Clearly it would be easier to achieve this through a democratic, left-wing European federal government, if such a thing existed. It is also clear that, in the short to medium term, membership of the single market will massively constrain what can be done–free movement of capital is sufficient for that. So, the question is, what would the consequences be of a short- to medium-term return to the national sphere. Peter Rowlands clearly believes that these would be so severe as to make it unviable. (By the way, I’m curious what his reasons are for saying that the AES wouldn’t have worked.) Danny Nicol and John Penny disagree, while David Pavett seems unsure.
So, what would the consequences be of adopting an (initially) national left-Keynsian policy? This is something we should debate, not with the goal of beating our opponents, but as a technical issue. An end to neoliberal free trade would mean severing Britain from the global supply chains. Given that so little is manufactured here, that would probably be less damaging for the UK than for most countries. As the manufacturing sector is rebuilt, we would have to do so in such a way as to have as much of the supply chain domestic as possible. This would likely have consequences for economies of scale and for specialisation, resulting in sub-optimal productivity. How severe would this be and is it something we could put up with, at least temporarily? The other consequence of an end to free trade would be increased prices for imports. This would potentially be a bigger problem and increase the cost of living. Even more seriously, if Britain were to continue pushing towards socialism, is there a chance this would result in trade sanctions from the capitalist world? Even if most manufacturing could be done domestically, Britain has few natural resources and not a great climate for agriculture (no more fresh fruit in winter).
What about other attempts at economic destabilisation? Capital flight is among the most obvious methods for this, especially given the amount of capital sloshing around the City of London. Capital controls would therefore be necessary. What would the consequences of these be? One that I can think of is difficulty accessing foreign capital for investment. Would there be enough domestic capital for a left-Keynsian investment program? How much capital would have left the country before controls could be established, such as in the lead-up to an election where a Left party is expected to win? An investment strike would also be likely. Combating this would require nationalisation of the banks and/or the non-investing industries. Not providing full compensation would result in an intensification of the economic attacks, while paying full compensation (through bond swaps) would increase the country’s debt and could lead to a lower credit rating. Such a change in credit rating is likely anyway. Could the higher cost of borrowing be tolerated, or a could a public banking sector (possibly with some quantitative easing) be able to lend instead? Finally, what consequences could currency speculation have?
The problem is, even a fairly moderate social-democratic program is likely to trigger this sort of response from global capital. The very moderate, but not (initially) neoliberal, social democratic Bob Rae government in Ontario quickly found itself dealing with an investment strike and an attack on its bond rating. In the end it had to abandon the most progressive parts of its platform and then implement austerity. Canadian leftists tend to blame it all on personal failings of the premier, Bob Rae, and there is no doubt that he could have performed better, but the challenges he faced were real. As such, it seems that socialists today are confronted by the dilemma of adopting a left-social democratic platform (which can win elections, but won’t work) and a more radical approach requiring temporary autarky which would begin pushing towards socialism (which would likely split the Labour Party, thus losing elections, but might have a chance of working).
Hi Cmack, if you read the Alternative Economic and Political Strategy document, then several of your questions – in terms of alternative trading relations etc – are addressed there.
Essentially, it argues that mutually beneficial trading arrangements can be made with countries further afield, while simultaneously starting to shift the balance of our own domestic economy from finance and back towards industrial manufacturing.
This would improve Britain’s balance of trade over time, while also reducing the relative power of the City of London to carry out these “investment strikes” that you rightly warn about.
I have read that document. There is certainly some useful content. However, I’m not thrilled with the idea of increased trade with the BRICS. All of these have neoliberal governments and most (all, debatably) have authoritarian governments. Are these people we want to be doing business with? Perhaps it will be necessary from the standpoint of real politic, but it’s very far from ideal. Furthermore, would these countries be able to fill the gap of European trade? They don’t produce many cars, for example. Plus, as these countries are farther away, trade would be more expensive. These are all things which will need to be considered and accounted for when drawing up plans.
A lot of very, very, important issues raised by you, C.Mac. As Karl says, and you acknowledge, the Alternative Economic Strategy document has a fair go at tackling all the issues you correctly raise. Of course ” redirecting our trade towards the BRICS economies” looked a lot more fruitful (for the Tory Brexiters too !) in 2012 , than now. They are ALL in deep trouble , as their main economic expansion driver was always to supply the Chinese economic boom with its raw materials – NOT the “self sustaining” economic takeoff that the bourgeois economists fantasised about for a decade or more !
Give the quality of the Alternative Economic Strategy document , as a good fact-based, starter for a serious Left discussion, it is a tragedy that it has had so little “traction” on the Left . Probably because of its CPB origins. Hard to propose it today as a “base document” for the NPF to work off ! Yet in my view it could indeed be so. Certainly the academics who wrote it may well by now be IN the Labour Party (Andrew Murray now is !) , and a wise NPF would get them involved in an updated version for Labour .
But of course the Labour Right on the NPF will never do that – since they don’t want any coherent Left economic policy development. The status quo of cynical neoliberal collusion is just fine.
My core argument against all those on the Left who quite correctly point out the “difficult days ahead” for any government trying to break out of the neoliberal straightjacket via a radical Left Economic Strategy, is the simply question; “If we don’t fight , and soon, what sort of neoliberal , low wage, low skill, uberised, destroyed Welfare state, privatised, nightmare country will our children be living in in 20 years time ?”
Oh yes, there is certainly more than enough in that document to serve as a starting point for discussion. It’s considerably more than anyone in the Labour Party is thinking about at the moment.
I raised those points not to say we shouldn’t push ahead with a Left economic strategy. I very much want to find a way to do it, even if it requires attempts to reverse globalisation. I had those questions because there are those who will say that “Doing X will cause [such and such a bad thing] and therefore we need to wait until we have a European government strong enough to overcome it.” What I want to know is what exactly the consequences would be if a nation state were to try to overcome capital flight, investment strikes, etc. People seem to be writing off things like capital controls and nationalisation of uncooperative industries without actually spelling out why this would be impractical. So I want us to actually dig down into that and try to find ways to overcome these problems.
I wonder if there are 4 possible models for a left wing democratic socialist World? 1. SOCIALISED CAPITAL – (and all within the framework of a 25 hour working week with good pay and harnessing technology to serve us all as working human beings) instead of profits going to owners of capital, investors, hedge funds et al – they go to a Social Fund which spends money on human beings needs. Capital distributes everything at a cost as well as unethically legally stealing the surplus labour of the working billions and causes massive wealth inequalities. 2. EVERYTHING FOR FREE AND THE ABOLTITION OF MONEY – exciting but we would need to train human beings to get used to taking what only they need and not packing 10 HD TVs in a trolley.
3. A REWARD ECONOMY – where what you want to put in your move up scales 1-40 and level 1 would give you enough to live on well but could create classes.
But I like model 4 – CONSULT WORKING HUMANITY on their ideas for a fairer, egalitarian and greener economic system – could be exciting.
Arising out of this article and the debate, John Penney and I have drafted a “model” resolution on a socialist economic programme which is geared towards being submitted to Momentum Conference 2017, as well as sending through the Labour Party to the Party leader, Shadow Chancellor and National Policy Forum. We hope that comrades who agree with the urgent need for Labour to have a dynamic and comprehensive national economic plan will consider submitting it. Here it is:
http://socialisteconomicprogramme.blogspot.co.uk/
This looks like a very good start. I do have a few nit-picky and pedantic comments however. Mostly these are related to presentation rather than contents.
1. Nationalisation is a requirement of the plan (and of democracy), not an objective of the plan per se.
2. There are spaces preceding punctuation marks, which is incorrect type-setting. On a related note, there are cases where I would argue for different choices of punctuation. (Sorry, I can be a real pedant.)
3. You mention that the Post Office should be renationalised. I think you mean the Royal Mail; the Post Office remains in public ownership (for the moment).
4. I think telecom should be added to the list for nationalisation, especially if a goal of the economic plan is ultra-fast broadband.
5. You mention the need for “major renewable energy infrastructure projects, from hydro electric, to tidal energy and wind power”. I consider the exact makeup of the new energy infrastructure to be a technical matter, not well suited for a general statement on economic planning such as this. For example, I’m pretty sure Britain has relatively little capacity for new hydro-power. Furthermore, while you might oppose this, at present it is LP policy to support nuclear power and this is something which deserves its own debate. I think it would be better to replace the quoted text with “major clean [alternatively, ‘low carbon’] energy infrastructure projects”. (By the way, I’m hoping at some point in the next few months to find time to write an article proposing the skeleton of an energy policy.)
6. Some terms are capitalised when I don’t really think they should be. Examples include the utilities to be nationalised, “Neoliberalism”, “Economic Planning”, (arguably) “Far Right”, etc.
7. The first word in each of your plan objectives should be capitalised, as it starts a sentence.
8. The final question in your Q&A section is not in bold.
9. There are some run-on sentences which would benefit from being split into smaller ones. The main one I noticed was the first sentence in the final paragraph of your text.
Most of these suggestions will just make the text a bit easier to read. The only substantive ones really are numbers 3-5, which I’d be happy to debate.
Thanks for your very helpful observations and suggestions, C.Mac. Just what we hoped people would respond with. And well pointed out on the Post Office mistakenly put in for the Royal Mail. And your suggestion of Telecoms for possible re-nationalisation. And your observations about the undoubted current rather poorly edited nature of the piece – including some mightily overlong sentences, and too many commas !
We just wanted to get a rough draft “out there” quickly for comments , whilst the issue is getting some attention – if only from a few of us so far. So quite a bit is done via a rough and ready “cut and paste” from existing articles of mine.
More observations and suggestions will be much appreciated from all (friendly) comrades. The usual Trolls need not bother !
Yes much thanks indeed C Mac. And as John P says, any other constructive suggestions from other comrades most welcome!
(fingers crossed that this can be seen as constructive criticism …)
The following ideas/phrases, while being solidly socialist principles, appear to me to be more anachronistic every time I see them spelt out: 20 year plan / nationalisation list / massive investment / tightly constrained finance sector / income redistribution.
For me, the more interesting bits (JP) are when you write about neoliberalism. What I’d like to add on this is that neoliberalism can also be thought of as a cultural phenomenon, that in a sense we are all neoliberals – narcissistic, nihilistic and neurotic to varying degrees. And therein lies where us ordinary members can input into the policy making process.
Better than any bunch of Westminster spads or a carefully selected ‘Team Corbyn’, the mass of members are far better placed for the task of reimagining within our neoliberal age the solid socialist principles, so they are more appealing to the wider electorate.
Obviously, this is something Momentum could be involved in, but perhaps this is less likely through a delegate based conference? For me, the difficult bit is enabling members to input. In this regard, I’d prefer to see something that is focussed on ‘prompt’ questions for members, rather than a kind of prescription (albeit of solid principles).
Thanks for those observations, John Walsh. I think what you are describing , accurately, as the widespread perception that proposals for significant re-nationalisation of key industries, utilities, and comprehensive radical Economic planning, is “archaic stuff from a different era” , is very true for so many , even self-identifying “radical Lefties” today.
However this surely reflects much more the sheer depth of the triumph of Neoliberalism over the last 30 years, in fundamentally altering the “ideological mindscape” inside people’s heads , rather than evidence that these traditional socialist prescriptions are “wrong”.
The simple fact is , that unless the “Left” once more embraces the fundamental truth that democratic state-led comprehensive planning and direction of resources is the only route out of the destructive domination of the globalised market , (that is owned and controlled by the tiny superrich class , behind the apparent “class neutrality” of the play of market forces), then effective resistance to the globalised capitalism of today, is impossible.
I don’t have an easy answer to the profound transformation of the ideological framework of most of what self identifies as “the Left” in the UK today, that 30 years of neoliberal restructuring and saturated propaganda has wrought. But in my persona opinion, being an oldie who grew up when the “spirit of 68” and the traditional socialist belief in the possibility of a society “beyond the marketplace” was still very much alive, most of today’s “Left” are actually “radical liberals”, not socialists at all. This “radical liberalism” is consumed with “identity politics” , a liberal moralism, and profound acceptance of the eternal nature of capitalist market economics . This is at the expense of class politics and a commitment to political action that will not only oppose the current “Austerity Offensive” in all its forms, but aims longer term to replace the rule of the capitalist market with an entirely different social form.
As Lenin said, correctly, “Without revolutionary theory, there can be no revolutionary politics”. It is equally true that “without an alternative vision of a better, socialist society, beyond the marketplace, and a strategy to bring that about, there can be no effective fightback against even today’s Austerity Offensive”.
John Penney, well said – that’s exactly the kind of analysis of the neoliberal iron cage which we find ourselves in that I was referring to above as ‘the more interesting bits’. In particular, the idea that so-called radical liberalism is ‘consumed’ with issues of identity and a peculiar moralism, while all the time blithely engaging with the capitalist market is important to understand and interrogate. What proportion of the new membership is hostage to this ‘ideological mindscape’?
My point was, though, that rather than simply criticise that way of thinking, there is a need to engage so that the ‘alternative vision’ is shared. Hence, I have an uneasiness with what can be perceived as anachronistic.
Likewise, though, I don’t have an easy answer, but I do think that your analysis of neoliberalism is valuable in the effort to understand the nature of the problem. The tricky bit is to finesse your analysis into a shape acceptable to ‘the mindscape’ – done too bluntly and the ones I come into contact with would likely burst in to tears / pitched right and it can be part of political education. Rather than (or, as well as) a ‘resolution’ does that sound doable?
John Walsh, what you seem to be getting at is the need to make people realise how limited space for reform is without the sort of program John Penny is describing. I’m probably making this process sound more didactic than you intend, but that is the end goal, right?
Over about a year, my politics developed from vaguely left-ish (I suppose what JP calls “radical liberal”, although with a sympathy for more radical proposals) to explicitly socialist. In my case this was purely an intellectual development, brought on by things I read and recorded talks I listened to. This was a few years ago, so I can’t recall exactly which bits of media were important, but a few come to mind which do a good job of showing the need for the sorts of policies JP is advocating. Many of them were published in Jacobin Magazine. One of my favourites documents the rise and fall of the Swedish welfare state (“Waiting in the Wings“). There are many others and I’ve also encountered good material elsewhere. Tony Benn’s short documentary on democracy is very good, as is this discussion of social democracy since the Cold War. It would be nice if reading (and “watching”) groups could be established to discuss these sorts of things.
There is an old , previously well known, “socialist parable” that used to be taught to most young socialists to illustrate the power of capitalist ideology. It goes like this:
Sometime in the early 20th century a newly oil rich ruler of a feudal monarchy visits a British arms manufacturer in Birmingham to buy loads of weapons to “defend his realm”. He’s in the boardroom having a slap up dinner with the company directors – when the factory hooter for dinner break sounds , and the workers all stream out of the factory. The much concerned Tyrant shouts in alarm , “Quickly, call out your guards – the slaves are escaping !” The Directors chuckle reassuringly. “Don’t fear your Eminence , in one hour the hooter will sound again, and our workers will stream in again to continue work”. The Tyrant, looks bemused for a moment, then a great smile passes over his face. “This is truly a miracle – forget my order for weapons – I wish to purchase your hooter !”
@John Penney (Jan 3, 2017 at 3:26 pm).
I’ve never hear that one before. Very funny!