I was slightly more prescient when writing about Labour and Venezuela than I realised I might be when commenting yesterday morning. With even Philip Hammond resorting to this new variant on Godwin's Law, and throwing in Zimbabwe and Cuba for good measure, it appears that the only thing the Tories have left to them is fear, and a £10 billion bung to the housebuilders that will do nothing whatsoever for those actually excluded from the housing market. Maybe, just maybe, the Overton Window is not just opening, but actually moving.
If that is true though then there needs to be some pretty careful messaging from Labour and other progressive parties right now. It may be true that the electorate have realised three things about the Tories. These are that they are bereft of ideas, policies based on ideas and ability to deliver anything. But that does not mean that many are doing anything other than seeking a political life raft right now. It should not be assumed that the mass of the electorate have joined an opposition ship at present: it's this remaining awareness to which the Tories are frantically clinging.
Nor should Labour (or anyone else) believe that because people seek the nationalisation of natural monopolies that what they want is full blooded socialism. I know some will, but they're a minority. Labour, especially, needs to read the runes appropriately here.
It's my belief that we are moving through the Gramscian moment, where the old is dying but the new has yet to be born, quicker than many think. I strongly suspect that a majority of the public have had enough of the corruption of neoliberal capitalism. They won't put it like that. They'll talk about tax cheating, executive pay abuse, over-powerful supermarkets, rip off privatised utilities and related issues. Banks will certainly be in that mix. What they all get is that the current system is not working for them.
In saying this they will identify an 'otherness' in what they don't like. Most people do not know members of the 0.1%, and for good reason: the truly wealthy mix with their own type. This feeling that the system has been captured by a few is appropriate in that case. The fact that media has lauded that few will now backfire on them: what was seen as praiseworthy (Philip Green's toga parties with Kate Moss) already looks very tatty.
But what people will not want is a feeling that their own aspiration is constrained. I think that is also appropriate. I have nothing against aspiration. And for many that aspiration comes in the form of wanting to own and run their own business. I have done both. No opposition party can ignore this and survive. The art will come in embracing this and fitting it with the message on the failure of neoliberalism that is necessary.
This is possible. Remember neoliberalism has not promoted competition. It has promoted monopoly where there should be competition. And that's the antithesis of the supposedly 'free' market; more so in fact than nationalisation is.
Nor has it encouraged new market entrants. Far from it. It has used intellectual property rights and the advantages large, well established and multinational businesses already have to use tax havens and other ruses to artificially cut their costs to prevent anyone challenging them.
And when it comes to tax, there is good reason why medium and smaller businesses feel that they pay more, and are picked on more often than big business is by HMRC: the evidence seems to be that both are true. This has to change to ensure competition works.
And let's not pretend we can do without competition. We need a state to make laws. We need a government sector to underpin our economy, providing the education, health, social safety net, infrastructure and so much else without which a modern economy literally cannot function. And that includes those utilities that now need nationalising. But just as clearly, the state does not need to make pizza, sell holidays, make and retail clothes, produce most food, and so much more, including a myriad of services (which does not extend, however, to most social care). Those things can more than readily be done by the private sector. And in that case they should be.
A mixed economy does not just make sense: it's the only thing that we know that works, and yet you'd hardly know that from political debate. That suggests it's Hayek v Marx and there's nothing in between. That is nonsense. And all opposition parties need to call that out.
That's not hard to do. It's about having a manifesto that says:
- Small and medium sized business will be encouraged.
- Smaller businesses will be protected from aggressive competition from larger companies based both in the UK and abroad.
- Restrictions big business try to place on competition, whether by paying late, threatening legal action on intellectual property, pursuing unfair pricing to force out competitors and by imposing artificial standards that only they can meet will be resisted.
- All businesses will operate on a level playing field, which means all will be pursued for the tax they owe, and all will be required to account equally for what they do.
- Cheats will not be tolerated, meaning that those who form companies to undermine fair trade will be made personally liable for the debts they incur.
- Smaller businesses will be provided with better access to capital via a National Investment Bank acting as a private equity fund.
That list could be refined and expanded. But the point is a critical one. It is that there is a strong pro-business, pro-tax justice, pro-growth agenda for the left to be claimed here that sweeps away the arguments from the Right. It's time for the left to claim it.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
It is indeed time.
And I’m all ears.
And can add my usual rider and say that there needs to be a new deal in this country between investors and businesses who need to get away from the American ‘get rich quick rent model’ to thinking more long term? That would be lovely if this could be dealt with. Will Hutton raised this in his book The State We’re In in the 1990’s and if anything things seem to have got worse.
I was deeply touched by the staff they interviewed whom have just lost their jobs at Monarch Airlines. The stupid Guardian called this ‘the market at work’ in all most celebratory tones (because many of it’s middle class hypocrite/over leveraged readers no doubt love cheap fares even though they could afford to pay more perhaps?).
To think that one of the net beneficiaries of all this is going to be Michael O’Leary who treats his staff and customers like shit. What does that tell us about the viability of socially responsible businesses in the post Thatcherite world?
We have a long way to go but Labour might as well get cracking.
The Guardian does continue to astonish
It’s newish editor seems to be revealing her hand as a Tory
I agree with all of this, very important that the Labour Party sets out its business development agenda with some care.
Having worked with small business owners I have seen at first hand the obsession with tax and the need to avoid paying it if at all possible. The party must make the connection between taxation, investment , growth and wealth distribution.
Unfortunately nearly all successful business people believe that they have succeeded because of some divine spark within themselves when, in fact, their success depends upon the continued existence of a functioning society.
Technology threatens the small business class just as it threatens the worker. As we have seen an economy cant function without a demand for the goods and services it is capable of creating. Machines don’t eat and don’t wear trousers and so the more they replace those that do the less will be spent in our shops.
Unless this problem is tackled we are facing a new serfdom. Increased use of technology must go hand in hand with a fairer distribution of the income that a society produces.
Isn’t the key to a new direction for business, better forms of business ownership? And isn’t John McDonnell talking about precisely that? It all comes from LEAP.
In part it is
But let’s not wholly dismiss the possibility of the owner enterprise: doing so would alienate a mass of people
Work to encourage wider ownership and coops is, however, something I also warmly welcome at any time
I have no problem with small enterprises employing people who have no share in the profits. Not everyone wants to share the risk. But over a certain level of employment, especially where managers are employees – so owner(s) are not workers – they should all become worker-owned co-ops with owners given some compensation, perhaps in the form of long-term bonds.
Who takes the risk though?
Bloody right. Pensioners.
That’s a sort of oversight, but….
Funny how many people have forgotten the Hanson White asset stripping programme. Much lauded by Mrs T and rewarded via honours and huge profits. The principal asset taken in many of these rationalising takeovers was the pension fund. Interest rates were high pension funds appeared to be flush and tying-up capital unproductively so they were …..robbed.
Government has consistently failed to legislate to protect pensions. Managements have used pension funds as free capital for ‘investment’. If pension funds had been ring fenced their capital would have been earning returns. But funnily enough when the companies go bust the pension funds have been spent. Plenty of funds for golden handshakes – well a contract is a contract (except when it isn’t. All contracts are equal under the law, but some are more equal than others)
Board level pensions should be (by law) provided by the same scheme as the workforce pensions. Currently this is frequently not the case.
Company goes bust pensions are a separate asset. Should be.
In which case. No, I haven’t missed anybody.
Carol Wilcox,
“… owner(s) are not workers — they should all become worker-owned co-ops with owners given some compensation….”
I don’t think you can get away with this. And I don’t think it’s grounded in reality.
What you describe is not quite even a management/worker buyout. It would be tantamount to theft and ignores the important issue that the business proprietor is not just a boss, but the driving force and (visionary) creator of the business. May also have quite distinct skills without which the business has no future prospect of viability. Are you proposing to coerce that person into continue participating?
I think and tend towards sympathy with the idea that you should start your own co-operative venture if that’s what you want. It’s a great model for a business, but you can’t create a co-operative enterprise without fellow co-operators and some specific vision and business plan. Forcibly confiscating someone else’s creation doesn’t quite cut it IMO.
I have no problem with employee share ownership
Or coops
But there is risk and I do want to know who takes it
In the standard business model the risk is borne by the business owner. Flip side of the reward prospect.
In the case of a co-op , by the members. The beneficiaries of its success.
We ameliorate the penalties of failure, because we think enterprise is a good thing to encourage, with Limited Liability , and Bankruptcy settlement laws.
Costs of failure can be borne by society as a whole as the quid pro quo of revenue contributed by a proportion of the taxation.
Or it can be borne by contributory insurance.
Or it can be dumped onto hapless suppliers which is what happens now. (I include redundant labour in this category.)
It is the function of government to set the ground rules here. That the consequences of failure are not borne fairly is a failure of government.
A common fallacy is that senior, board level management is carrying responsibility for risk and that justifies their enormous remuneration. Observe a company failure and those carrying the can are the unpaid (sometimes knowingly defrauded/misled) suppliers. I include shareholders as suppliers of operating capital.
Have I missed anybody?
Yes, pensioners, who are often hit hardest and longest
What I will say is Labour definitely needs to work hard on developing corporate form further
Your pro-business agenda is precisely what is required – and deserves to be expanded and developed. But do you seriously believe that the voters who either don’t vote or don’t currently vote for Labour, but who would subscribe to such an agenda and need to be convinced to vote Labour, will put their Xs beside Labour candidates if Jeremy Corbyn and John McDonnell start advancing this agenda? They have spent their political careers damning every aspect of capitalism. These voters aren’t stupid. This is just one aspect of the credibility gap that will keep Labour from power with these two in charge.
I think it would help no end
Especially when they are already inclined to vote for them in England and Wales, at least
Paul Hunt,
“These voters aren’t stupid.”
Do you have any evidence to back-up that assertion? Some are very stupid about the sources of their information and don’t seem to exercise any due diligence in regard to it.
At the risk of sounding like the old bore in the corner of the pub that everyone steers clear off, because he keeps on repeating the same thing, I repeat what I’m sure I’ve posted here before, that the Left was stupid to let the Right capture the idea of the “free market”, because, properly understood, the free market is a Socialist instrument.
That’s because it is – or, to be truly “free” should be – about equality of bargaining power, with Government intervention and regulation to ensure that occurs, which is exactly what you have set out in your main post here, Richard.
I’ve had people tell me that such a market is not “free”, because it is constrained, which shows that their definition of “free” is “totally unrestrained”, so they’re happy that a river in flood bursts its banks and unrestrainedly floods and destroys useful lands and livelihoods, rather than being managed, with the power of the water put to good and useful work!
Accordingly, I think Labour needs to talk about the “fair market”, where the force of competition and real business activity are fairly channelled into useful activities, and not allowed to spill over destructively into areas, or in ways, that are counterproductive.
A contrast between a “fair” market that encourages real competition and entrepreneurial activity, and a “free” (actually, a “stitched-up”) market that encourages monopoly and non- entrepreneurial activity, would enable people to decide which they preferred.
Labour should be banging on about the fair market in everything they say and do.
No Labour should bang on about fair markets
Free markets abuse most participants
Fair markets sustain them
‘Fair’ instead of ‘free’?
I get it.
I like it.
I think others would too.
Now that’s what I call a good morning’s work!
Jeremy? John? Are you reading!?
I’ve said repeatedly in this forum (I think) and others besides (and will keep on doing so until someone persuades me otherwise)
The default currency of the free market is violence.
People are actually familiar with the concept of ‘Fairtrade’ where it relates to …bananas and coffee beans etc. So far it’s only a chink of light.
It shouldn’t be rocket science to extend that idea beyond it being perceived as paternalistic kindness to poor benighted brown-skinned people. Which is not what it’s about. The clue is in the title.
Whatever little else can be said of free markets they don’t espuse the concept of fairness.
This may be the case of free markets
But need not be of markets, by any means
Absolutely.
It’s the bogus ‘free’ I object to.
Some interesting semantics to be aware of here and some macroeconomics that needs mentioning.
The term “pro-Business” in its current, euphemistic usage is a slimy, wiesel word that really means pro-Corporate – “open for business” is another one. I won’t explain, you know it.
As such, I was slightly alarmed when I saw the headline of this post. But on reflection, I think the idea of pushing a policy that promotes small business and competition – and calling it “pro-business” is brilliant! It steals the conservatives’ BS euphemism, captures it and puts it to good use.
If that is done coherently with conviction, it can’t fail. It is un-opposable. What can the Tories possibly say? If they complain that we have stolen their words we can simply say that is our version of a real, pro-business policy: We promote competition and small business, Sir. What do you do? If they keep complaining we can say that they are protecting their corrupt corporate connections (examples happily provided). In the meantime we continue to promote competition in a positive way. What’s more, the corporate-captive Tories can’t or won’t match it either.
As for the macroeconomics, it is important to realise that competition is more than just fair and efficient. It is a necessary prerequisite to any program that promotes equality, rebuilding or stimulus (like PQE for example). Without competition, the benefit of higher wages and increased demand will, to a large extent be captured, stolen effectively by oligoply and monopoly interests in the form of higher prices (with the technical term being, ‘rents’).
This is not solely a radical or progressive idea. Orthodox economics recognises this as well albeit at a micro level (‘producer surplus’ etc. etc.). Come to think of it this particular notion of pro-business is both radical and broadly acceptable. It is a great way to de-rail and deflect the Tories’ socialist, bogeyman narrative. It could also get a lot of uncommitted voters on side.
Bring it on.
Thank you
So much to agree with in the discussion, in particular re-stating that there is a very real option called the mixed economy, which is not being articulated by either of the two main protagonists. On the one hand the public is being presented with the ‘free’ markets option, which as has been emphasised are not free and are most certainly not fair. On the other hand we hear that all markets are bad, with little or nothing in the narrative to encourage businesses large or small.
However, there seems to be a lurking assumption that all big business is bad and all small businesses are good. That is far from my experience (across all sectors), which would suggest that there are rogues at every level, abusing their customers and staff, and fiddling the tax system. An important distinction is that large businesses are subject much more to the malign pressures of the financial system in the shape of large shareholders with extraordinarily short term views. They are not interested in issues like sustainability, looking after and developing staff, genuine innovation, Fairtrade and the like. Some of those businesses (as I know first hand) loathe and resent the City and are important potential allies in putting the financial system back in it’s box.
Another aspect of a healthy mixed economy is that it has what you might call an ‘ecosystem’ of businesses – large, medium, and small, in which all can thrive. That includes owner-managed and co-ops too – all have a role. Germany is often cited as having a particular healthy population of middle sized businesses, supported – surprise surprise – by a rather different finance and banking system.
Mixed might seem messy to some but then most complex problems don’t lend themselves to simple, one size fits all, solutions
I very much agree with you on good and bad being present in businesses of all sizes
I also agree that many large businesses hate the City and all it represents that they know is actually counter-cultural to what they want to do
Big business may be inevitable to the extent large enterprises (mass production, aviation, global communications) involve economies of scale but the form of that business and its relationship with civil society is increasingly in question. Does it serve society or do we serve it?
Joel Bakan has famously pioneered the case for bringing an end to the limited liability corporation as we know it.
https://www.theguardian.com/business/2004/oct/24/politics.money
http://thecorporation.com/film/book
We may need to reconsider stakeholder relationships in a new light as well as revisit and revive some of the older models like the mutual society among others.