Latest post on Left Futures

Welcome to a constructive critique of Corbynomics from Liam Byrne

Liam Byrne 1Something more significant than the move against Andrew Fisher happened on the right of the Labour Party last week. It was Tuesday morning, in fact, and the occasion was Liam Byrne’s speech to the Policy Network.

Of course, MPs, particularly former ministers, give speeches to think tanks all the time and most float under the radar, noted only by the hardest of hardcore politics watchers and professional policy wonks. It’s just a shame this one hasn’t received wider coverage because in it, as one of its leading figures, Liam reads Blairism and New Labour the last rites.

In a nutshell, neoliberalism is dead. The unthinking application of its policies are undermining the health of capitalism, both in terms of destroying the social capital on which market economies depend and proliferating the short-termist culture that goes hand-in-hand with widening global inequality. Hence Labour has to move away from an unquestioning embrace of markets and start thinking another kind of capitalism, or what Liam refers to in his speech as ‘entrepreneurial socialism‘.

Shifting away from neoliberalism isn’t a simple substitution of one policy menu for another, however. Liam notes there are powerful new political and sociological realities we have to face up to.

First there are the limits placed on the powers of governments. Arrayed against the nation state are a couple of thousand mammoth globe-trotting companies. Its room for manoeuvre as a territorially-bounded entity in somewhat constrained by their ability to shift resources and capacity from one jurisdiction to another.

Secondly, the collective power of wage labour is diminished by historically low trade union membership rates in the private sector. If you like, the disciplinary power workforces can potentially exert on their employers is somewhat weak (indeed, it goes the other way), and that can lead to all kinds of dysfunctional behaviours on the part of owners and senior management.

And lastly the composition of the working class has completely fractured, making the building of the sorts of coalitions that can assert collective power against capital far more difficult. Reversing that situation cannot be done by progressive legislation from the top, the capacity for people to organise around their interests has to be inculcated from below – capability assumes an importance greater than an abstract notion of equality. Liam’s response – his entrepreneurial socialism – goes like this:

Expecting, encouraging, urging the individual to use their abilities to the full – that’s the entrepreneurial bit. Building a society where each of us are contributing to the common good and a country that makes that easy to flourish. That’s the socialism.

Is this guff? Liam’s name for it might be a touch soundbitey (remember ‘aspirational socialism‘?), but his intervention must be judged in terms of diagnosis and prescription. For example, here is the first time I think a mainstream politician has directly addressed the coming wave of automation, a process well known in manufacturing whereby old jobs are replaced by machinery. Here advances in technology are starting to threaten white collar jobs without the corresponding creation of new, ‘good’ jobs to replace them.

Even more worrying, as the economic centre of gravity shifts eastwards that is where these new jobs are most likely to emerge. Dealing with this economic challenge requires an ambitious but realistic policy agenda beyond quantitative easing and nationalisation. For Liam, this means giving the Bank of England the twin objectives of price stability and encouraging full employment. Married to this would be measures aimed at curbing financial short-termism.

Particularly key here is tackling the proliferation of pension funds and looking at ways of merging them – here Liam approvingly cites the Australian and Chilean experiences where ‘super-funds’ are important investors in infrastructure.

Also useful is creating incentives encouraging longer-term share ownership, such as enhanced voting rights. Corporate governance and leadership must also be looked at. Here, Liam advocates a change in the law so that companies have a responsibility greater than the bottom line. He introduces the notion of ‘fiduciary duty‘, i.e. that directors of companies are legally obliged to recognise themselves as guarantors of trust between a business and its stakeholders – shareholders, staff, consumers.

Liam’s second big policy area is a refashioning of the Office of Budget Responsibility. In a move to strengthen the scrutiny of economic policy by Parliament, he advocates the OBR publish tax receipt projections and what it might recommend to close year-to-year deficits. As a matter of course, it should also comment on the economics of labour markets, employment rates, and impacts of climate change.

Thirdly, we need to be pouring more public money into science investment – every pound spent attracts two pounds’ worth of private investment. Fourth requires a re-emphasis in education on entrepreneurialism. Everyone should be furnished with the basic know-how how to set up and run a business as a means of unlocking energies and talents that are often unspent.

And lastly, social security has to be refashioned so it restores the contributory principle and catches those in insecure work with insecure incomes. The present system is a recipe for insufficient national insurance contributions for a wide range of income support options – perhaps a life-long learning system with provision of grants and loans can help people out of this kind of situation. Liam then concludes the speech with a proposal for a new Clause IV that places the struggle against inequality at its centre.

Before delving deeper, it is worthwhile noting that if the right of the Labour Party are to ever recover, it needs to do more of this sort of thing and fewer clandestine press briefings, fewer silly speeches and articles, and attempt to win intellectual leadership of the labour movement. Whatever you think of Tony Blair and New Labour, this is certainly something they managed for a time. Being seen to undermine the majority choice of our huge, growing membership will only cause them significant problems further down the line.

Overall, from a technical point of view there is little to dispute here. Liam is right that British capitalism is effectively eating itself, and that a strong hand is required to get the thing back on the straight and narrow. Also, rarely for a mainstream Labour MP, Liam shows how all of our economic problems are interconnected – particularly how the behaviour of business, rocketing boardroom pay, the prevalence of low paid work, and under investment cannot be considered separately from the weak hand labour has to bargain with in the workplace, and the wider changes to the class structure that undermine the capacities and solidarities working people depend on to prosecute their interests. Now, while Liam might not see himself as a class warrior engaged in class struggle, he certainly acknowledges its importance via the stress he places on capability building from below to turn this situation around. If it walks like a duck …

The weakest part of Liam’s prescriptions for me is what he has to say about social security. While he is right confidence in it is low (30-odd years of hostile propaganda by all parties haven’t helped), I’m not sure how restoring a contributory principle might work – especially as Liam recognises that contributions are sometimes made difficult by the advance of insecure working and the long-term tendency to destroy (presently constituted) white collar jobs. Opportunities for life-long learning and encouraging more entrepreneurialism can only go so far. Both, after all, represent individual routes out of low skill, low pay work comparatively few would go for. And then the problem of their material well-being remains. As Jeremy has argued, more has to be done to assist the self-employed both in terms of growing their business and making sure they have a decent standard of living. I haven’t got any easy answers, unfortunately.

As our old friend Loius Althusser was fond of noting, what is not said can often be as important as what is. This was always going to be read through the prism of critiquing Corbynomics, though I don’t think all the tribes of Labour are that far away on matters economic than the rhetoric sometimes suggests. Yes, unsurprisingly, Liam is uncomfortable about people’s quantitative easing and nationalisation – in the age of the global economy, both might diminish the state’s position vis a vis international finance and as a place to invest. I think there are two things worth noting here:

  • On QE, there is danger of both sides turning it into a shibboleth – for naive Corbynomics it’s a get out of jail free card, for naive critics it’s a totem of Jeremy’s lack of seriousness and should forever be ruled out. The truth is it’s neither. It’s an instrument that is appropriate to certain sets of circumstances. As European economies wobble around deflation, its judicious use might be appropriate right now, for example, to get infrastructure built and put more money into people’s pockets.
  • On nationalisation, I can understand the historic reasons why Liam and others from the Progress-y wing of the party are sceptical. But there is nationalisation and there is nationalisation. Jeremy’s position is not swapping one set of men in an energy company’s office for another set of men sat in Whitehall, but of democratic nationalisation, of introducing democratic principles into how our energy and transport infrastructure are run. This is a fundamentally different fish from what went before in 1945-79 and, crucially, offers opportunities for the kinds of capacity building Liam has in mind.

On the similarities though, Liam, Jeremy, and pretty much everyone else in the party can go along with the proposition that market fundamentalism is a blind alley (and some, like me, would maintain it always has been). All advocate an expanded role for the state, and all believe we need proper plans rather than the government’s vapid nonsense. And because there is a shared policy outlook, there is a (largely) shared view on political economy.

In his opening passages, Liam attacks the short-termism and the bad behaviour that has weakened the British economy. While British capital does have certain dysfunctional cultural quirks, there is no getting away from the fact that capitalism is a dynamic system, but a fundamentally antagonistic one. On paper, all of Liam’s policy measures would, if implemented, lead to a kinder, more secure, more sustainable capitalism. But getting there means struggling against and defeating those interests who would either see their present sectional advantages lost (hello finance, hello labour intensive industry), or see potential dangers in a more confident, better skilled, entrepreneurial, self-activating, independently-minded, and solidaristic workforce.

There is no getting away from class struggle, alas. If this is the sort of programme ‘moderate’ Labour would like to see, then they have to be prepared to wage it.


  1. David Ellis says:

    Neo-liberalism is over. Globalisation is unravelling at an alarming rate. Capital needs the state again. The violence of the retreat from globalisation will be ten times the violence that got us there in the first place. Naturally the Labour right wing like the Labour left wing are going to sell this new collaboration between capital and state as good for the working class when in actual fact it spells their doom.

  2. jeffrey davies says:

    he says articularly key here is tackling the proliferation of pension funds and looking at ways of merging them – here Liam approvingly cites the Australian and Chilean experiences where ‘super-funds’ are important investors in infrastructure.
    hasnt australia signed that ttip yrs ago making em poorer for it jobs and monies his vision isnt good locking the banksters up would show the peasants they trying to put things right but liam hmm blair baby

  3. Will says:

    So neoliberalism is dead? Somebody should tell George Osbourne.

    Nice to see the realisation dawning that until Labour, and the wider movement can stop bickering amounts themselves about comparatively trivial matters (Trident!) not a lot will be achieved.
    How to improve social security and restore the ” contributory principle” when so many face Intermittent insecure employment? A more “entrepreneurial society”. How about looking at Citizens Income?

    1. David Ellis says:

      True Osborne is about to unleash mass unemployment by removing the tax credit job subsidy and is letting steel go but in general capital and the state are making aggressive alliances against the worker and other capitalist states and globalisation is unravelling fast.

      As for a Citizen’s Income we have that already. It is called the dole. What we actually need is full-employment.

      1. Will says:

        How can we have full employment when technology replaces Labour. Productivity looks set to exceed our ability to consume..

        1. David Ellis says:

          Full-employment can only be achieved by sharing the productive work. The benefits of rising productivity must accrue to the working class via an ever-reducing working week instead of to a tiny capitalist elite via unemployment and profits.

  4. John Penney says:

    This is a strangekly naïve article. Nothing Byrne is currently saying is actually any real departure from the Blairite neoliberal agenda. All that Byrne and co are desperately trying to do is find a way to “orientate their rhetoric” to sound more user friendly to the 250,000 Labour Party members/supporters who resoundingly voted for Jeremy Corbyn’s socialist politics — and gave the full cream Blairite candidate, Kendal, 4.5%.

    Byrne is of course actually still fully signed up to the utter myth of prioritising “social mobility by individual effort” as opposed to collective, trades union structured effort of betterment for all. He is fully supportive of our current grossly restrictive trades union legislation, in favour of TTIP, against controlling/nationalising the banks in the effort to rebuild a more balanced economy – and of course utterly opposed to any serious attempt to redistribute wealth and income in the UK – or even close our huge tax loopholes for the rich and corporations (all hugely enabled by Byrne and co during the Blaire /Brown era). Byrne has nothing new to say – just some new slippery rhetoric to conceal his “business as usual” neoliberal views.

    1. James Martin says:

      But there is a difference. Byrne is asking in a fraternal way for a debate. He came across well when I saw him on the Daily Politics last week, unlike many of the other right-wing plotting muppets on the backbenches.

      Yes, I agree, his proposals are neither new nor radical and amount to a less nesty capitalism, but in fairness this is not massively different from most of the Labour Left – when was the last time we witnessed a serious debate about just how, in the 21st century globalised world, we can move beyond trying to make capitalism nicer to the necessary task of replacing it with socialism?

  5. verity says:

    I am surprised by the positive tone in the author’s contribution to Byrne’s economics. Having read Bryne’s approach I thought it more fittingly belonged to the Conservative Party than the Labour, except for the superficial use of language. I am not sure why and how Byrne could offer Corbyn very much of value since we have moved on considerably since the days of the subservience to the finance markets. At first I thought maybe I had missed something, until I noted that the Chile Pension system was being cited as a positive example, then I new I was correct. The economy of Chile has still, even now, not moved beyond the most aggressive neoliberalism, despite the apparent politics of the president. It is an economy that was one of the first to sign up to the most disadvantageous TTIP with the US and the pensions industry is a model of finance capital’s dominated stock exchange venture. Not working person does not feel cheated.

    Byrne must think we are mugs! I hope there are many more of us who will not again fall for a revised Blair scheme. I now understand why Progress claim Blair has ‘died’ – it can come under different disguises.

  6. Byrne is damaged goods.

  7. Sandra Crawford says:

    Anyone who states that the UK, which is a sovereign issuer of currency, and can never run out of money or default on its debts, as the bank bailouts proved, hasn’t got a clue.

    1. Sandra Crawford says:

      Correction “Anyone who states that the Uk has run out of money, which it never can because it is a sovereign issuer of currency…..”

  8. Bazza says:

    If capitalism has any dynamicism it is because it controls capital, but where does capital come from – the legally nicked surplus labour of the working billions.
    It certainly has few ethics; for example some people with serious health conditions are robbed of a few extra years of life by market related steep drugs costs.
    If intelligent aliens ever landed on Earth they may ask why don’t you give those drugs to those people?
    Although Neo-Liberalism IS painting itself into a corner with its drive for cheap labour thus restricting commodity purchase.
    I voted for Jeremy and hope Corbyomics succeeds but would suggest we may also need to be prepared to get our share of the wealth back with Windfall taxes on big business, an EC then global Financial Transaction Tax (more than the piddling Robin Hood Tax), closing tax loopholes for the rich and offshore banking etc. (the massive state interventions that support the upper class welfare state) and we need to do this with our democratic socialist partners in every country.
    And also have more democratic public ownership (by country) with staff electing boards and communities having a say, but we could have different models – some like rail to break even and some like public utilities to be public social enterprises paying a community dividend.
    I have always mentioned we could have some publicly owned airlines with less seats and thus more space and comfort for passengers and instead of trying to squeeze every ounce out of profit they would have smaller returns but offer a better services plus perhaps even have crèches in the sky!
    We shouldn’t tinker but empower working people.
    Yes with new techology and driverless trains/tubes/cars & ships steered by computers etc. coming we should be the real radicals and have 25 hour working weeks with decent pay and earlier retirement to free time poor working humanity; I have been arguing for this for years.
    State – led public investment should lead but there will always be a space for cooperatives and business (often some people’s dreams) but business is there to serve working people and not the other way round.
    We need dynamic business with staff treated and paid well (and trade unions encouraged) and staff consulted to draw on their ideas- we need critically thinking business which looks at evidence, research, and acts upon feedback but some Tories it could be argued seem to have an old fashioned view of business – as though people are there as their slaves to be used to make them rich, when these people are actually free citizens in a democracy with rights!
    We need perhaps a more dynamic and progressive view of business; like the health service it is should be there to serve humanity; a more democratic, dynamic and more holistic business model.
    Interestingly whilst I have argued we need to try to trade unionise migrant workers to build community solidarity (and promote trade unions in general) I was reading that the CBI represents industries covering 7m people (if I got this right) which is probably less than trade unions do (out of a working population of about 30m).
    As a democratic socialist I want to try to help us to facilitate people’s dreams (which can often be having their own business or joint cooperative) but it shouldn’t be at the expense of exploiting others.
    On climate change every day the sun and light appear and as well as wind, waves etc we should harness these globally to meet global energy needs (solar panels on roofs of cars, solar panels on roofs of homes, solar panel farms etc.) potentially liberating humanity from its controlled (by the rich and powerful) addiction to fossil fuels, and reversing hopefully climate change.
    New Labour are admittedly realising they are losing and need to think; but this is new rhetoric, same old crumbs for working people and probably desperately trying to re-establish the need for these such top-down ‘expert’ MPs.
    Perhaps it is little thinking from Little People to maintain the status quo and power with the true Global Little People of the Planet – the rich and powerful.

  9. David Pavett says:

    Like Verity I am surprised at Phil BC’s reaction to Liam Byrne’s speech. Let’s be clear about one thin: the speech contains nothing that could be construed as a critique of so-called Corbynomics. Byrne takes a pot-shot at People’s QE and rejects nationalisations and that is it.

    Liam Byrne even has difficulty in pronouncing the leader’s full name. Jeremy Corbyn is mentioned four times, twice as “Mr Corbyn” and twice as “Corbyn”. By contrast LB speaks of “Yvette Cooper”, “Tony Blair” and even “George Osborne”. A small point perhaps but an indication of attitude.

    Phil says “Liam reads Blairism and New Labour the last rites” and understands him to be pronouncing the death of neo-liberalism. This is to confuse Liam Byrne’s rhetoric with the content of his speech. The illusory nature of the “last rights” is clear in the following passage.

    New Labour achieved so much in office. But, we all know it’s time to call time on neo-liberalism. … we need to end neo-liberalism. That, ultimately, is why new Labour is over. In its day, it was an incredibly successful political project. For much of our time in office, we achieved an extraordinary triple: employment, productivity and wages all grew together for the first time.

    That is all that is said about neo-liberalism. There is no consideration of what it is or what is involved in rejecting it. It is a purely verbal rejection which has no substance.

    Byrne says, as Phil puts it, that neo-liberalism is “undermining the health of capitalism”. The leitmotif is thus that capitalism is ailing but can be made well again if it takes Dr Byrne’s medicine.

    LB’s equation of “entrepreneurial socialism” with “progressive capitalism” should have alerted Phil that all is not as it seems in this speech. Is “entrepreneurial socialism” aka “progressive capitalism” as far as we can go in the critique of existing society?

    Liam Byre’s speech is over 6000 words long and Phil has added another 1800. It is impossible to consider all the issues raised but I will take just one as representative of the nature of the whole argument: global capitalism.

    LB tells us that

    These institutions which we built – free trade, deregulation, low tax, shareholder value enshrined in company law – have created a global super-league of companies bigger than countries that are no longer honouring the deal. These corporate gargantuans dominate the new commanding heights of the global economy. …

    A handful of firms now monopolise the aircraft industry, the world’s auto business, the world’s mobile telecoms infrastructure, pharmaceuticals, beer, cigarettes, aero-engines, computer chips, industrial gases, soft drink cans. They’re able to profit from great rents in intellectual, physical and financial capital. Too few of these companies are behaving themselves – and they’re fuelling our unprecedented income inequality.

    Not much to disagree with there. It sounds strange coming from the right of the Party. But what it shows is not a change of political philosophy but an adjustment to the change of Labour leadership. If people like LB want traction now they need to sound like radicals.
    But the issue is, having pointed to the evils of global capitalism what does LB propose to do about it? The answer is simple: nothing. There is no mention of the rules of global trade, the movement of capital across borders, horrors like TTIP or even the how to reverse extreme concentration of wealth. Instead LB has a plan for giving more rights to long-term shareholders to encourage long-term thinking and for the encouragement of mutuals and coops (its all in Tristram Hunt’s contribution to the Purple Book). He doesn’t say how the global corporations will be brought to comply with that. He complains of the power of global capital but has no proposals to change that.
    LB even adopts the old left phrase to describe his program as an Alternative Economic Strategy. What he offers though is to patch up crisis-ridden capitalism and to smooth some of its rougher edges.

    “Entrepreneurial socialism” is the latest defence of capitalism which is assumed, without argument, to be the only show in town. Even public owner ship is dismissed without discussion (“I worry about nationalising things…”).

    At the end of his review Phil says that we can’t get away from the fact that capitalism is a “fundamentally antagonistic” system. He says that getting to the kinder, more secure capitalism that Byrne advocates would require class struggle because there would be a clear clash of interests. But there is no hint of any such approach in LB’s speech. In fact it is explicitly rejected.

    I can see no good reason for Phil’s positive response to Liam Byrne’s offering.

  10. Eleanor Firman says:

    To be honest all I hear Byrne saying is…
    Neoliberalism is dead. Long live Neoliberalism.

    1. Robert says:

      If ever we had a politician who can be trusted then Byrne is not him.

      His note will go down into history in infamy as the most idiotic thing to do.

      I do not know what Byrne is up to, I can bet it’s not backing up Corbyn.

  11. David Pavett says:

    Phil, to whom do you imagine you are speaking when you write

    As our old friend Loius Althusser was fond of noting, what is not said can often be as important as what is.

    First, the majority of readers are unlikely to have read Louis Althusser who was a passing fashion in the last century. Second, we hardly need the authority of an icon of French philosophical fashion to tell us that what is left unsaid can be as important as what is said.

    I think this sort of pointless academic referencing is seriously off-putting in debate. It marks out the fashionable sheep from the unfashionable goats and as such is very unhelpful.

    This was always going to be read through the prism of critiquing Corbynomics, though I don’t think all the tribes of Labour are that far away on matters economic.

    What an astounding claim! “I don’t think all the tribes of Labour are that far away on matters economic”. Further comment seems superfluous.

    1. David Ellis says:

      `What an astounding claim! “I don’t think all the tribes of Labour are that far away on matters economic”. Further comment seems superfluous.’

      Indeed. Either extremely naiive or very stupid or somebody is on a headlong rightward trajectory. If New Labour or the Labour right or the Labour Moderates as the capitalist press now calls them ever ditch neo-liberalism it will be for a return to naked imperialism.

  12. David Pavett says:

    Here’s a question: do Left Futures writers like Phil BC want a debate? If they do then why do they not reply to the discussion following their contribution, especially to detailed points made in direct response to what they have written? A speaker at a public meeting who did that would be regarded as arrogant and elitist. I don’t see why it should be regareded differently for online debates.

© 2024 Left Futures | Powered by WordPress | theme originated from PrimePress by Ravi Varma