I am aware that I have been posing a number of questions aimed at Labour activists over the last few days but that's because I really do not know a great deal about what the new social movement that Labour is apparently set to become is all about. I doubt I am alone.
Let me continue my theme then, on a pretty core issue. This is the role of the private sector in the economy.
Many Corbyn supporters seem very keen to say that they are opposed to neoliberalism, and believe Jeremy Corbyn will achieve the goal of beating it. It would appear that by this they mean they want a society that is organised with a focus on people and not profit. Implicit in this appears to be a massive antipathy towards anyone who has worked in the private sector, which explains a great deal of the venom directed at Owen Smith.
That sentiment could be entirely consistent with a belief that the old Clause 4 of the Labour Party constitution - which sought the common ownership of the means of production - should be restored. If that were to be the intention then this would, in effect, be a statement that the private sector has at best a small role to play in the economy under any future Labour government.
But that's not what Jeremy Corbyn has talked about when, excepting railways and the NHS, he says he wants partnership with the private sector. If that's his view then his talk and the walk of many supporting him - who he says will have the real power in future - seem to be inconsistent.
In all this the possibility that the private sector can be embraced but the logic of the Washington Concensus can be rejected does not seem to have been discussed, although this was the agenda that tore the post-war consensus apart. It's worth checking this issue out, here. Much of my work is in practice opposed to that Consensus. I am certainly not opposed to the private sector per se, or to the making of profit.
This then leaves me confused. Are we heading for socialism, clause 4 style, or not? And if not why do many seem to think otherwise? And what structure for the economy are they now suggesting, because I really don't know?
And whilst that's the case, and given the power that is to be given to the Momentum led Labour membership, I do not think anyone can really have any proper confidence in anything Corbyn is saying because on one of the most basic questions that could be asked about the economy he, and they, seem to have no clear answers. And that's pretty worrying, on whichever side of the debate you might happen to be.
Might anyone offer unambiguous clarification?
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Thanks Richard, I have exactly the same questions. He dictionary definition of socialism is that it means public ownership of the means of production. Does this mean that the aim is to work towards nationalisation of all manufacture? Some State support of Steel might seem reasonable, just as the banks were given state support, but *all* manufacture? I wish we could have more clarity. Maybe the dictionary definition needs to be updated.
I wish I knew the answers
I think you misunderstand the antipathy to Owen Smiths role in the pharma industry. If you look at his CV, he had a revolving door between Westminster and big pharma. He is on record as saying that private providers in the NHS should be encouraged. This is not about saying the private sector does not have a role in delivering new drugs etc.., but I am sure you agree that we do not want to end up with a US style health system.
Why write complete and utter crap and instead take nite if what he has said
If you want to drag politics to new lows of credibility please don’t do it here
I am shocked at the venom of your reply. Do you deny that large corporates are manoeuvring to get a ever more valuable share of NHS contracts, something Smith was a part of? There was an article in the Independent yesterday saying the same thing.
I will not be posting here any more if I am attacked for saying what I think.
I do not deny that: I did research for Unite on the issue
But you wrote pure undiluted nonsense about Smith and as editor I reserve the right to say so
So what he worked for the private sector? I worked for KPMG and was senior partner of a firm if chartered accountants. Does that man that I am a tax industry stooge?
For heaven’s sake use some common sense and even some intelligence or please don’t bother to comment again . Right now your inference on Owen Smith is crass, to be polite
You are being rather ill tempered today, Richard! Owen Smith said today that he would fund core policies through issuing Government long-term gilt-edged bonds. These could be bought up by a rich individual/company who could exert undue leverage on Government at a future date if they owned enough of them. Smith`s love and trust for the private sector is alarming!
I will be as ill tempered as I wish with comments as stupid as that
a) John McDonnell has said the same thing
b) Most such bonds are owned by pension funds
c) They give no right of influence whatsoever
If you’re going to comment get your facts right
And don’t apply crass dual standards
I’ll tell you, you’re going to be in for a mighty shock when you realise just how timid and right wing John McDonnell really is
Unambiguous clarification?
I think you’ll get relentless obfuscation: some, from market fundamentalists hiding their agenda, but most from shallow thinkers hiding their unwillingness to examine the issues in depth and formulate a working philosophy of markets and the mixed economy.
My own position is that there are certain things the state does better than the market, and vice versa: trite, but I doubt that you’ll get even that in your ‘clarifications’.
I very much doubt team Corbyn has ever thought about it
That’s my concern
I’m not sure either but the way in which Corbyn and others mention workers rights I’d like to think that they are pushing for a ‘social market’ style economy where the intent is a balance of the rights and responsibilities on both sides (labour/private owner).
However, given the increased fiancialisation of the economy the sentiment about workers rights is not enough – a root and branch modernisation is needed – some of it legal.
If current legal practice enforces investors rights over others and corporations are seen as ‘persons’ under the law, then any ideas posed by any oppostion let alone Corbyn is just talk unless these fundmentals are dealt with in my view.
My concern is that a focus on ownership wil prevent a necessary focus on reform
But I also very much doubt the thinking has been done
And that is inexcusable
Would be interesting to see if a bald policy announcement adopting reinstatement of Clause IV would be the catalyst for further burgeoning Labour support/membership —- or not (?!)
Although I’m coming from a very different starting point to you I agree with that very much. Debate in modern politics should have as one of its central elements an argument about competing kinds of political economy. It’s all very well saying you are against one kind of political economy, however you define it, but that isn’t enough by itself – you need to have a broad idea of what your alternative is. If you don’t have that you just have emotional reactions to a particular agenda but the alternatives you come up with (if indeed you do come up with anything) will be incoherent or even contradictory. Historically the European ‘left’ had two political economies in mind, both of which were articulated in the 1920s, one was the kind of democratic socialism that Clause 4 symbolised, the other was social democracy as developed by people like Evan Durbin and John Strachey. It could be that the social movement that is taking over and transforming the Labour Party wants to revive one or both of these but I don’t get that feeling and if that is the case then people should be saying this. If alternatively the idea is to develop a new kind of political economy in opposition to whatever is seen as the dominant one then it needs to be worked out. I am genuinely interested in what kinds of approach people will come up with in that event and in particular what kind of role is envisaged for the state and/or the political process more generally in economic matters.
I am also interested
But it would be good to know what the starting point is
A critical question, not least because it is about how the country’s wealth will be generated, rather than how it will be spent.
During years spent working (and studying) with the development world and academia the majority of people I’ve met, with impeccably left wing credentials, have tended to conflate the Washington consensus, neo-liberalism, and the private sector. They also tended to have a deep antipathy to anyone who had worked in the private sector.
When pushed, their vision of the ideal economy was a ‘Clause 4’ world with a very limited role for a highly controlled private sector, reminiscent of the Eastern Europe of the recent past. When I listen to Corbyn and his immediate team, my sense is that this is what they have in mind, when they talk about ‘proper socialism’. Never mind that this has been pretty disastrous for the countries that tried it, economically, politically and socially
Defining what the alternative to today’s financialised, shareholder-dominated, private sector should be as you say the critical question. There are exemplars out there who amongst other things, pay their taxes, treat their staff fairly and take actions to protect the environment. Genuine innovators who might be creating the decent jobs of the future, given the right support and funding. We could be looking at them for ideas and indeed support, as they too tend to resent the behaviour of companies who behave in ways that are fundamentally anti-competitive. However, for those politicians (and their supporters) who are fundamentally anti-capitalist, none of these companies will satisfy their ‘standards’ and ambitions. Nothing much less than wholesale nationalisation will suffice
Much of what you have written Richard is highly relevant, together with propositions from people such as Will Hutton and Jonathan Porritt. The team that were put together to advise Corbyn and McDonnell contained a lot of the right people but it was hugely telling that their advice seemed not to be wanted. There are answers to the questions about what an alternative might look like. The difficulty seems to be in developing the political will and energy to adopt these answers, turn them into policies and put them to the electorate.
Agreed
I think the ideas exist
I don’t think JC and JM are near them
It’s fair to say I don’t know if Owen Smith is either
This is exactly the kind of question that should be getting a thorough airing during the leadership contest. Where Labour stands on its relation to business, and how it sees a modern economy working are precisely the kind of fundamental issues that the party needs to grapple with and come up with a coherent policy.
I don’t think Corbyn has much to offer here beyond harking back to clause 4 style state ownership. I really don’t think the economy is his strong suit. The door is ajar for Smith to put forward a far more nuanced and thoughtful position, but either hes unwilling to make a bold pitch, or he too, doesn’t possess much imagination.
That both leadership contenders have literally nothing to say on these matters is deeply unsatisfactory.
Agreed
I may have missed something but I can’t recall any of the current prominent Labour members expressing clearly articulated, constructive views on how to develop a different kind of private sector, to provide the stable decently paid jobs and wealth needed in future. The Lib Dems have got much closer through the likes of Vince Cable, who also seems to be supportive of cross-party alliances.
If others know of something I might have missed, please do let me know. Not just how to stop the the negative stuff (tax dodging, zero hours contracts, executive pay etc), but really how to create and encourage the positive aspects. Just where are all the jobs of the future going to come from? How should new (or existing) sectors be supported and encouraged? Perhaps developing them in neglected areas of the country? And how might this link to state driven policies on for example transport and energy?
Just as a start…
A Natuonal Investment Bank should be a partner in this process, I think
Absolutely – in itself not a new idea. But lacking support from a critical mass of politicians or a party to make it happen. Even the Green Investment Bank was half-hearted (and may not last long)
Absolutley………………or even ‘Absoluately’ I should say.
The person usually credited with having drafted the labour party’s original constitution was Sydney Webb (oh, sorry, Lord Passfield), Fabian socialist and examplar par excellence of lenin’s “useful idiots”. I’m indebted to Wikipedia for this:- “Marxist historian Al Richardson later described (Webb’s book) Soviet Communism: A New Civilization? as ‘pure Soviet propaganda at its most mendacious'”. It was during a visit as a VIP to the Soviet Union at the height of Stalin’s show-trials, while the purges raged in which tens of thousands perished at the hands of NKVD executioners working feverishly to fulfil the quotas he had set, that Webb had his publisher remove the question-mark from the title of that book’s second edition!
If history teaches us anything (always supposing that ideologues are capable of learning anything from it that they haven’t already decided in advance to be true) it is that attempts at building utopias *always* end in copious tears. There is no one more blind to or repressive towards ordinary human impulses than truly-committed (=deluded) utopians: just consider IS.
Clause 4 and everything that inspired it was a utopian project pure and simple, and to the extent that zealots in Momentum or even – perish the thought – Corbyn himself
harbour the slightest desire for its reinstatement they condemn themselves to futility (and for my money to ignominy if not infamy into the bargain).
How so?
Well, my own personal view is that I think Labour should re-word clause IV so as to commit the party to bringing about the democratisation of the economic sphere, but that it cannot go back to the original wording, which was ambiguous (‘common ownership’ and ‘popular administration’ were both phrases that lent themselves to a variety of interpretations) and, coupled with the overlooking of other forms of public ownership besides national state ownership by Labour, both in government and in opposition, as well as the fact that nationalisation was advocated and practiced in the name of clause IV, allowed the clause to acquire the connotations that it did. To avoid repeating this mistake, I believe that the clause should be re-worded to enshrine a clear commitment to expanding non-state forms of public ownership (e.g. co-operatives, direct community ownership).
In any case, I strongly dispute that reverting to the original clause IV would condemn Labour to ignominy. I find it highly doubtful that the vast majority of voters out there give a damn about party constitutions.
I said that Labour’s advocacy and practice of nationalisation was done in the name of clause IV. I should probably qualify that. I think it was true of Labour’s advocacy and practice of nationalisation during the first half of the 20th century. I don’t think it was so much the case with Labour’s renationalisation of steel in 1967 or Labour’s nationalisations of British Leyland, air travel and shipbulding when it was in government from 1974-9. Those nationalisations were undertaken for pragmatic reasons. In the former case, it was to rationalise production by enabling investment to be concentrated on plants located in proximity to coastlines to allow ease of access by sea; in the latter, it was because the industries in question had been let down over many years by poor private-sector management and were on the verge of collapse.
@ David J Parry
“‘Clause 4 and everything that inspired it was a utopian project pure and simple’
How so?”
There’s no space here (or need) to enter into a discussion as to what exactly is the meaning of “utopian project”. I think you know perfectly well what I intended by it – ie as popularly understood – and are nit-picking.
But yes, you’re right: when after its landslide victory in 1945 Labour was for the first time in a position to begin to put Clause 4 into effect, it didn’t. Even though abolition of all private ownership was contemporaneously proceeding apace in the Soviet satellite countries no one in the West apart from dedicated communists really believed any longer by then (if they ever had) in the literal meaning of Clause 4.
Instead “clause 4” was a symbol, to the defence of which self-named “real socialists” rallied whenever what they defined as true socialism was threatened. When in the ‘nineties a majority of Tony Blair’s “New Labour” voted to abolish it as an anachronism and an electoral liability, many were still doing that.
But the argument within the party over what constitutes “true socialism” didn’t go away, it just got muffled. Now it has been reawakened: what might be termed “the clause 4 mentality”, comprising a bundle of causes (eg echoes of unilateralism/CND, of Militant, of Bennite “participation”, of revived extra-parliamentary activism) is much to the fore again.
Whether they are likely to find favour again with an electorate which decisively rejected all or most of them before is debatable (although Scotland might perhaps be another story).
The problem with Clause IV is that ‘common ownership’ was not defined. It could mean many things, but has been wrongly interpreted as nationalisation.
So what does it mean?
Robert – I do hope that you also include the zealots in the neo-lib right (like Margaret Thatcher who supported the chilean dictator Augusto Pinochet – not known for promoting debate amongst his people) whose experiment in free market utopianism effectively died many times previously but went truly terminal in 2008 and is now on state financed life support systems across the globe.
Remember that Clause IV was a response to observed greed and exploitation really – not just a ‘utopian project’. It was a bona fide response to injustice also brought about by one of the worst conflicts in human history (WWI).
And it still resonates today because we are increasingly seeing real wages declining and seeing that cash go to the investment class instead who are then releasing this money back into the economy as debt to those who need to make up short falls in their wages. Debt – intesting bearing debt – that kills the value of the little money many already have.
Is this ‘neo-lib nirvana’ a more desirable cycle than the intentions of Clause IV?
The only people securing anything at the moment are those at the top – as Richard said recently – it’s a good time to be rich!
And your answer Robert to all this is………………what exactly? Come on – I’m genuinely interested?
I agree that the “neo-lib nirvana” (nice phrase!) is no less a utopian project than was, for instance, “the dictatorship of the proletariat” or any of scores of other equally-deluded schemes one might cite, each of which led inexorably to its own corresponding dystopia (as has neoliberalism).
My point – no more than a truism to be frank – was that all utopias are doomed by definition to fail to realise their aims, mainly because they fly in the face of human nature which they presuppose to be amenable to social engineering. Furthermore – and more open to challenge – I would include in that category the current project for Labour to become at one and the same time an extra-parliamentary “movement” (like Chartism for instance) *and* an effective opposition which – above all – means a *credible* alternative government. The idea of Corbyn as a credible alternative prime minister is … well, words fail me.
“Remember that Clause IV was a response to observed greed and exploitation really — not just a ‘utopian project’”.
I suggest to you that it was both.
As to my answer, I’m perfectly content to defer to Paul Hunt with whose diagnosis and prescription I see nothing whatever to disagree.
Robert,
I do know what you meant by it, that it was a pipedream. I was asking you how it was a pipedream, although perhaps a better response would have been to point out that what is a pipedream in one era is common sense in another.
Well, I don’t think that the 1983 election result should be seen as an indictment on the electoral credibility of those things so much as on that of a Labour party that was tearing itself apart from top to bottom. Divided parties don’t win elections.
David
Fair comments!
Your closing remarks are especially resonant at the present time.
I believe the canard of old-fashioned, centralised, state capitalism and nationalisation is appearing again. JM and JC have been at pains to point out that they do not want a return to the days of British Leyland. I think we’re talking about increasing the presence of alternative means of ownership and control within UK industry here, not a seizure of the means of production.
I do recall McDonnell discussing different forms of ownership and operation i.e. worker-run cooperatives within (potentially nationalised) industries. It’s a little light on detail, but the gist is plain to see – http://labourlist.org/2016/01/its-the-new-economics-full-text-of-john-mcdonnells-co-op-speech/
Labour have *always* been a party of pragmatic accommodation with capitalism, not revolution.
Always is not now
And worker run cooperatives are not private business as we know it
So there is still no answer
What was it clause 4 *of*, do you think? (I thought it was of the constitution which the Labour party adopted at its foundation – and upheld until the ‘nineties).
Clause 4 was anything but “pragmatic accommodation with capitalism”, so that to say that Labour was “*always*” in favour of that is air-brushing out the true facts because they don’t fit your thesis.
Which wouldn’t matter much if one could believe that Labour truly has realised the error of its ways in that respect. But some elements never have, and it’s those elements which now seem to be enjoying a renaissance.
Come on, you must know as well as I do that far from being ‘upheld until the nineties’, clause IV was pretty well a dead letter from the 1950s onwards. Labour did not, after Attlee, commit, either in government or opposition, to any effort towards nationalising or otherwise socialising the entire commanding heights of the economy. Its primary focus thereafter became distributive equality rather collective ownership of economic assets.
In other words, Labour from the 1950s until 1995 may have been committed on paper to the abolition of capitalism, but the thrust of its actual policy commitments was about reforming rather than replacing capitalism. The agenda was to ‘tame’ capitalism rather than abolish it.
*rather than collective ownership of economic assets.
It is a great pity that the 1945 Labour government dropped the most pertinent policy related to Clause IV objectives. Annual Land Value Tax, as proposed in every manifesto until then and enacted in 1931, would have achieved the common ownership of one factor of production, by nationalising the rent of land. If that had been done we would never had a financial crash, nor a housing crisis, nor gross inequality of wealth.
I’m not too sure much of this matters at the moment. The continuing saga about the leadership, direction and purpose of the Labour party will grind on towards the inevitable electoral car crash most likely in 2020. It is almost certain that Mr. Corbyn will will win the current leadership contest. The 172 MPs (now 171 following Ms. Champion’s recanting) who voted no confidence in his leadership will have to decide on their futures. I expect quite a few are anticipating de-selection and exploring their post-parliamentary career options. (Andy Burnham was very fast out of the blocks.) Some will seek to make some accommodation with the re-confirmed leadership and seek to maintain some semblance of party unity and effectiveness as an opposition. However, I suspect many others will simply keep their heads down, do what they can to avoid de-selection, represent their constituents as best they can and hope for a better future for the party after the electoral car crash.
The re-heated, but outdated, Marxist clap-trap, the empty virtue-signalling, the anti-western bias and support for opponents of liberal democratic values and the asinine sloganeering of Momentum, together with its totally mistaken view that it is facilitating and providing a “democratic” mandate for Mr. Corbyn, will have to run its course.
In the meantime there is much work to be done to flesh out badly needed microeconomic and sectoral policies before the Tories trample over the territory as proposed by the PM. Pervasive and endemic rent-seeking is a major economic problem that is rarely recognised and is escaping being tackled. It is gradually becoming an issue in the US. (See the April brief on competition and market power from the Council of Economic Advisors: https://www.whitehouse.gov/administration/eop/cea/factsheets-reports).
It should be more of an issue in Britain. Economic regulation is a sick joke being played on citizens as service-users and tax-payers. The Competition and Markets Authority is even more of a farce. The remedies proposed following lengthy investigations of price-gouging and unscrupulous behaviour by the large energy firms and the major retail banks are beyond a joke. Consumer protection has been handed to a non-statutory body, the Citizens Advice Service. And this merely scratches the surface. Most citizens know they’re being ripped off, but a huge edifice of legislation and regulation has been erected to baffle them and the perpetrators have suborned governing politicians and senior officils and hire armies of lawyers, advisers, accountants, PR operatives, consultants, tame academics and other flunkies both to facilitate and conceal the rip-offs.
Much of this is the result of failures of collective action (on behalf of citizens both as consumers and workers)and there should be more than enough for serious Labour politicians to get their teeth in to.
If Labour is, as you say, headed for a car crash at the next GE, then it is because of the antics of the right of the PLP, who’ve sought to undermine Corbyn’s leadership at every turn, not because of ‘Marxism’ (seriously, you must be off whatever medication you’ve been prescribed), ‘anti-Westernism’, support for opponents of ‘liberal democracy’ nor Momentum’s ‘sloganeering’.
Respectfully, wanting Labour to be an opposition is not an unreasonable objective for the PLP
Which is why your comments make no sense
Oh it will be a car crash.
Corbyn has zero chance of leading Labour to an election win, or to even claim enough seats to exercise some influence in the next parliament. The Labour right has certainly been appalling. Sections of the PLP and those outside of Westminster have acted shamefully by undermining the leader from the outset.
All that is accepted but Corbyn has neither the temperament or the skillset required of a major political party leader, something that has become obvious, to me at least, over the past year.
An admirably sane critique hitting all the right targets and reaching the only logical conclusion.
Thank you.
Unfortunately, this “war” between Momentum and the majority of Labour MPs will simply have to run its course. (As an aside, even the most blinkered and zealous supporter of Mr. Corbyn would be forced to concede that when he became leader fewer than 40 MPs were hostile. Most other MPs (with the exception of his core supporters) were dismayed by the outcome of the stupid changes to the rules governing the election of a leader foisted on the party by (Lord) Ray Collins and Ed Miliband, but were prepared to support the new leadership. It is truly remarakable that the fewer than 40 MPs who were hostile (and their allies) were able to persuade more than 130 other MPs to support the motion of no confidence in Mr. Corbyn’s leadership.)
While this totally self-defeating warfare continues my focus is on things Labour MPs who genuinely want to represent their constituents (and that comprises the vast majority) – either individually or collectively – should be doing.
The new PM has talked the talk on boosting productivity, increasing R&D to support investment, focusing energy policy on reliability and affordability, building more houses, using Treasury bonds to fund infrastructure investment, developing an industrial policy, reforming corporate governance (to tackle excessive executive pay combined with consumer and worker representation at board level), tackling market abuse by the big utilities and retail banks and cracking down on tax avoidance and evasion. But she won’t walk the walk unless her feet are held to the fire. That is what an effective opposition is for.
Many of the reforms about which the PM speaks so eloquently but has no interest in implementing effectively require the effective application of collective action. This goes to the heart of what the Labour party should be about. It emerged from the collective action of workers in trade unions. New forms of collective action are required in an increasingly fragmented workplace. And collective action must be extended on behalf of consumers of essential services. This would begin to tackle the daily concerns and worries of the traditional Labour supporters who are deserting the party in droves – and would be far more effective than the empty virtue-signalling, sloganeering and posturing about “transforming capitalism” of Momentum.
“worker run cooperatives are not private business as we know it” Why not? Is the definition of private business one owner or shareholder controlled? Worker Co-ops are certainly not part of the public sector. I am sure Mondragon and its 80,000 members would be affronted if they were not regarded as being in the private sector.
They are co-ops
They are not the normal shareholder owned business most commonly associated with the private sector
Stop being a pedant
Just how does being a co-op remove them from the private sector? Just what sector do they then belong in? ” the Mondragon Corporation today is an international cooperative BUSINESS empire” The Guardian. The most successful economic region in Italy is Emilia Romagna, which is dominated by co-ops. Operational definitions are important.
You really need to get a grip on the real world of business economics if you are going to teach this stuff. It is not just about finance and governance. There is a context, and you are missing it.
But it’s also wholly atypical so it does not in any way answer the question and so you make no contribution by referring to it: no one has been able to replicate it and I assure you the labour dream team could not
As you say Richard, in the UK worker run co-ops are an insignificant part of the UK economy, though Spain and Italy have more significant worker co-operative sectors. The lates research ( http://www.uk.coop/resources/what-do-we-really-know-about-worker-co-operatives)suggests that they produce significantly better outcomes in terms of productivity and sustainability and as such caan easily fit into an attractive “people before profit” agenda. The current framework provides legislative and financial support ( http://www.theguardian.com/politics/2015/jul/07/corporate-welfare-a-93bn-handshake)and Labour would need to make changes to this if worker co-operatives were to get a fair “crack of the whip”. John McDonnell has indicted that a “Right to Own” (http://www.thenews.coop/101534/news/co-operatives/labour-pledges-expand-co-ops-give-workers-right/)maybe hoping this will chime with the electorate like the “Right to Buy”, but hopefully without the same ill effects as that has had on the availability of affordable housing.
“Just how does being a co-op remove them from the private sector? Just what sector do they then belong in?”
In the not-for-profit sector, I suggest. That has after all always been their defining characteristic. Their capital is owned in common by those employed by them (the two being coterminous), their net earnings are returned to the employees/partners/owners, to the extent that they’re not ploughed-back. There is no third party – in the shape of shareholders – to be remunerated.
“Operational definitions are important”.
In your opinion. In mine they’re only important if they add something useful to the discussion – and this doesn’t.
To be categorised as “private sector” isn’t tantamount to a business having some sort of virility symbol bestowed on it and as “public sector” to having its virility questioned.
I don’t think you can say that co-ops are non profit enterprises, at least not in most cases. Profit after all is a residual, it’s what is left over after all of the costs of production and distribution have been accounted for. The main point of it in a productive enterprise, no matter who owns that enterprise, is as a signal, that the activity in question is creating a value greater than that of the various inputs. Conversely a loss (or at least sustained losses) indicates that the activity is actually reducing value rather than creating it and so you should reallocate all those resources to another use. You can organise activities on a non-profit basis of course but that’s not what co=ops are, they are still looking to run a surplus. The difference rather is that the capital resources of the business are owned by the employees or customers collectively and so the profit goes to them or is reinvested rather than going in dividends to investors who have supplied the capital assets. In some cases capital assets are supplied by outsiders but the payment then takes the form of rent which is a fixed cost and a pre-profit element and in such cases the capital suppliers are not the residuary claimants to the company if it’s wound up so they don’t own it.
I think this is a massive diversion
What is Corbyn’s position on the private sector, barring cooperatives?
Paul Hunt, I am a member of Momentum. You have not a clue what you’re talking about.
He made sense to me
“Is the definition of private business one owner or shareholder controlled?”
Yes.
Any reason why it shouldn’t be (having Occam’s razor in mind)?
Ed note: comment deleted because you continue to make comments that are untrue
Richard, I have re-read what I offered and I cannot see any statements in it that are factually untrue. I would be grateful if you could point them out to me as I put a lot of emphasis on being accurate.
I know my opinions differ from yours but you asked “What does Corbyn’s Labour Party think about the private sector?” I took that to me a serious invitation to respond, so did so. Was that not what you wanted?
Stop lying about Owen Smith
I believe what I said on Smith was true but I’m not going to argue. You asked an important question that deserves a response so I have deleted that sentence.
As a Momentum activist, these are personal comments because we have not yet had the opportunity to formulate a collective view. I disagree that we have “massive antipathy towards anyone who has worked in the private sector”. I did that myself for 32 years and I don’t go in for self-loathing. Most people work for private businesses and it would be folly to write them off.
The old Clause IV contained a commitment to “common ownership” but the party’s ethos and practice were always for a mixed economy, with the “commanding heights” being taken into public ownership but with most of the economy remaining in private hands. Party constitutions are symbols rather than actual programmes and when Blair replaced this clause he turned the party towards neoliberalism. The old clause never committed the party to a state monopoly of industry. A future left Labour government will not abolish private business, which will continue to play a major role in the economy. So we need to define what that might be and where change is required.
There will be an expansion of public ownership. Rail and utilities are obvious candidates but there are others. I used to work in IT and most of that sector should remain in private hands but there is a case for nationalising Openreach and using it as a platform for investment in high-capacity networks. We also need to acknowledge that the private sector leaves important gaps. Pharmaceuticals provides an example. The industry focuses on chronic disease because that provides long-term customers. It underinvests in research into acute infectious diseases because those do not guarantee profits, so we need public research against risks such as bird flu. Housing of course needs public investment. Other examples could be given. So it’s not a question of abolishing the private sector but of working through where the public sector can add value.
As part of an industrial strategy we should look at how to adjust the framework within which private business operates to achieve social objectives. Taxation is one tool. You know far more about that than I do so I will just note that it’s important not just for social justice but also for encouraging desirable behaviour. As one example, shifting business taxes from labour to carbon could benefit both employment and the environment.
There has been discussion on how to make workplaces better and more equal and we shall continue to develop that together with the unions. Changing work practices in the private sector, such as zero hour contracts or ‘uberisation’ need regulation. Consumer protection should be extended. We also need to tackle sources of monopoly or oligopoly profits, such as cross-shareholding and excessive protection of copyright or patents, some of which rest on public investment. The commercial exploitation of personal data needs stronger controls. Rather than providing grants to businesses, the state should take equity stakes so that the returns are shared. Revitalising Britain’s regions must involve the private as well as the public sector.
I could continue but I think there is enough here to show how a left programme could “rewrite the rules” of how the private sector operates but would not abolish it or prevent it from being reasonably profitable. We need a private sector that can respond flexibly to market opportunities in a way the public sector finds difficult. There is a lot to be said for Mazzucato’s idea of ‘missions’ where government sets an objective (such as a low carbon economy) but is pragmatic about the public-private balance to achieve it.
So we want to work in partnership with the private sector but in a way that ensures public benefit. PFI proved bad value in the vast majority of cases and should not be repeated. We need business and legal advice to help work through the details but the “Momentum led Labour membership” does recognise that private business makes an essential contribution.
Looking at the big picture it would appear to be Corbyn’s only “big sin” is attempting to move the pendulum backed from a failed Neo-Liberal emphasis on Independence (Individualism) back to greater Codependence (cooperation within society). To label him as merely offering state capitalism as his main economic solution to Britain’s ills is premature.
No his big sin is not knowing what he’s doing
worked for KPMG , stooge , well I never.
Or actually, working for such people is absolutely invaluable for those on the left
As Owen Smith says of his time at Pfeizer
I do find this quite extraordinary. What parliament needs is far more people with outside experience, be it in private industry or elsewhere. The Westminster bubble is all the more isolated from the real world because many fewer MPs these days have external experience. I see Owen Smith’s the time in Pfeizer as a big plus not a negative.
So do I
I’d exercise some caution about this.
And my caution is based on seeing what the ex-City boys and bankers in the Tory party who became MPs and Ministers of the Crown have done for the sectors they used to work in!!
The discussion at the moment is centering on one individual (Owen Smith).
What you need in a politcal party is a mix of people – some who are idealists or visonaries – maybe pure politicians – and those who have lived outside of the politics before entering it – the pragmatists (for sake of argument).
You need a balanced team – not just one individual – and the leader can be either – an idealist or a pragmatist – as long as there is counter balance in those around him or her. That’s how effective teams work. Please believe me.
This ‘cult of personality’ created by leadership elections does not help.
This morning I heard that Smith would go to the aid of a fellow NATO member but Corbyn said he would exercise caution and didn’t want any wars. Yet only the day before apparently Corbyn said that Smith’s suggestion of sitting down with IS (in order to forestall war and terror) was basically wrong!
So we seem to be in a childish battle of ‘you say one thing and I will just contradict it’!! How mature of everyone in the Labour party. ‘Great job’ as the Americans would say.
Labour? Sod ’em.
Momentum – what momentum? Speeding up the decline of Labour by any chance?
When a politcal party thinks that IT is more important than the people who support and vote for it (need it!) then it’s game over. UKIP knows this already so my attention is focussed on the other possible left wing parties. Will they try to fill the vacuum? Are they?
Never mind ‘post truth politics’. The people have to accept that we are also in a period of ‘post-opposition politics’.
Depressing…..
Ok fair question to Corbyn and co, but may I ask you two questions:
1. do you think continued growth in rich countries is compatible with stopping global warming? and
2. do you think capitalism and zero growth are compatible?
Regards
Andrew Sayer
1) No
2) Yes
If capitalism is people taking risk to make a living then of course they are compatible
How could they not be?
That’s the broadest and most dilute definition of capitalism I’ve ever seen!
I meant production of goods and services for sale at a profit under private ownership with workers having no rights of ownership or control – the usual definition in political economy – which takes us back to your question to Corbyn. There is an important debate on the question of capitalism and zero growth in political economy and most participants agree they’re not compatible. See for example the journal Ecological Economics, 2012, issue 84.
Depressing……..yes. Sorry Richard. I was looking into the abyss again. I have a tendency to do that but I do believe in squaring up to it (but not long enough for it to stare into me) in order to understand the problem.
This is what happens when a good or justifiable idea is used in a bad way? Yes we need politicians who have led real lives to be in charge of policy in the country.
However these days, the real lives they lead are more likely to be more affluent than that of their forebears and their pragmatism geared towards maintaining their former hinterlands. It may explain why orthodox politics seems beholden to money.
I was musing about Syria the other day. The murder that occurs there everyday demands an intervention.
But the false basis of intervention in Iraq (and also Afghanistan?) has forever muddied the waters of morality in terms of doing the right thing. The confusion, uncertainty and mistrust created by such abuse may indeed prevent us doing the right thing in the future – which is surely tragic.
The only thing I can say is that maybe I’m wrong ? But also, if we are honest about what is going on, hope comes from visualising and putting forward alternatives. And you DO know that too, hence your books and this blog.
What on earth are you on about? No, we’re not bringing back Clause 4. Yes, the private sector will remain but there will be change in monetary and fiscal policy as well as legislation relating to business, unions and workers’ rights. It’s not ‘Momentum led Labour’- what kind of cheap slur is that? Sort yourself out.
Hang on, who is not bringing back Clause 4?
You?
Momentum?
Or Labour?
And how do I know?
My questions were entirely fair when what is meant by what is being said is entirely unclear and Jeremy Corbyn’s one ability is to let anyone project their opinions onto his campaign without contradicting them
Richard,
Can we get back to the central topic, i.e. private sector? What kind of private sector, or, politically, what kind of capitalism.? (Back to operational definitions.) There area at least two genres: Anglo-American and Sino-Germanic. Ronald Dore (Insead) wrote a most useful book on this distinction called Stock Market Capitalism: Welfare Capitalism (2000). It is an examination of the impact of the Washington Consensus (about which you wrote so convincingly a few years ago) on Japan and Germany. Incidentally both countries also have an abundance of cooperatives.
Which of these forms of private enterprise would Corbyn incline to? Would welfare capitalism make any talk of clause 4 redundant?
It would help