There appears to be a worrying trend appearing amongst some on the left. That is to assume that business is necessarily a bad thing. I have detected it in a number of comments, articles, interviews and interventions I have witnessed of late. And I have to say I think it not only not helpful, but also wrong and as a consequence deeply unhelpful to the left's electoral prospects.
Let me be unambiguous: there have been many aspects of many businesses behaviour over many years that are entirely worth condemning because they are wholly unacceptable. From tax abuse; to discriminatory employment policies; to indifference to the environment and a broad range of human rights, and a willingness to exploit from behind a veil of secrecy, there is much to have disquiet about when it comes to business.
But let me also be clear: democratic politics has also suffered all these traits, and too often from across the political spectrum. I am not, however, arguing for the end of democracy or politics as a consequence. I call for reform instead. And in my opinion that is what business also requires.
Business does need to be vastly more transparent than it is now.
Tax haven, and other tax abuse, does need to end.
So do discriminatory practices need to be called out wherever they happen.
And the time to take the environment seriously has arrived, more than belatedly.
Business as was once usual is now not acceptable. But does this mean that business needs to cease having a role in society? I suggest not.
Most certainly some natural monopolies need to be run in the public interest. There is a case for some renationalisations. And in come cases, such as of the structure on which banking trades, there is every reason for new nationalisation given the risk that failure in this infrastructure poses. But the businesses in question are very specific. And they are clearly identified by the strategic risk inherent in them or the absence of effective competition. These situations apart, I continue to believe in the importance of private sector business.
There is good reason for that. I do not think there is a remotely successful model for an economy in existence anywhere in the world that does not now embrace a mixed economic model. The precise nature of the mix is open to question. But the mix of state, private sector and stakeholder interests does, when each is properly represented, respected and served, best meet population's needs, in my opinion.
I cannot think of any situation where it might generically be said “business is bad” even if I can think, day in and day out, of ways in which the partnership between state, private sector and stakeholders can be improved. If anyone can honestly say otherwise I am open to persuasion, but suspect anyone trying has an uphill struggle on their hands.
And if that is the case might I make a gentle plea to those on the left who are pursuing this rhetoric? I believe it entirely possible for business to be run well, and embrace the profit motive, and still be socially and ethically responsible. I think transparency and positive processes of engagement, representation and accountability help that. As a result, I think the suggestion that because not all business has embraced these ideas that it is beyond redemption is wrong.
The left will be running a mixed economy in the UK for the foreseeable future, in my opinion. In that case to use rhetoric that alienates many of those who will be engaged in the real process of partnership that government necessarily entails makes little or no sense at all.
Cajole businesses that are out of line. Provide carrots, and sticks when necessary for sure. But do so positively, embracing the reality of the continued existence of this sector as a necessity, please. Surely that makes sense?
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Well said.
“Let me be unambiguous:”
You have been. Consistently.
Only the trolls think you’re an unreconstructed ‘Trot’ and they have no basis for that.
This is a very timely warning and very necessary piece of advice. And as a counterpoint we have another tedious piece in the Grauniad:
https://www.theguardian.com/commentisfree/2018/dec/17/tories-strong-economy-brexit-austerity-theresa-may-corbyn
along the lines of “how can so many voters be so dumb”, when the likelihood is that many voters are rightly sceptical about the economic literacy and political credibility of the Corbyn-McDonnell duumvirate.
McDonnell has floated a number of ill-thought through policy proposals among which were including some vague measure of productivity in the BoE’s interest rate setting process, granting workers 10% of the shares in companies employing more than 250 (but with the Treasury snaffling the lion’s share of the proceeds), renationalisation of utilities and the “democratisation” of local energy supplies. Almost all of these proposals fell apart when they were subjected to scrutiny – and even by friendly analysts and commentators. The McDonnell promoted “Economics for the Many” is a curate’s egg of the good, the bad and the dangerous.
Even the loudest cheer-leaders for capitalism and markets recognise that major reforms are required, but it appears that McDonnell, presumably with Corbyn’s acquisence, continues to be committed to ferment (sic) the overthrow of capitalism. There is no way a plurality of British voters will go along with that.
@Paul,
I agree that some aspects of the employee ownership plan (specifically the part that ended up being diverted to the state) seemed a bit daft. However the overall thrust of Labour policy is at least heading in the right direction whereas the Conservative offering is tearing apart the social cohesion of the whole country.
Paul,
If you think that Corbyn and McDonnell have credibility problems on the economic and political fronts, then you have a problem. What do you think the past 40 odd years have proved, other than that the ideas promulgated by the Tories and their New Labour/ LibDem bag carriers, have been nothing but lethal for whole swathes of the population. A return to the principles of the postwar concensus, which Labour now proposes, of greater social equality, decent jobs, decent pay, and decent chances for all, is desperately needed now.
Fairy tales about ending capitalism have no place in serious debate.
And all the best for the coming season!
The post war consensus was based on coal
we have to do better than that
“The post war consensus was based on coal……….we have to do better than that”
This is what is do damnably annoying about the past ten years in particular. The 21st century consensus and economic renaissance could be perfectly well built on sustainable clean energy.
If ever an opportunity was squandered, the response to the 2008 crash was that opportunity.
The post war consensus was also built on huge inputs of dollars injected into the global economy in the finest Keynesian manner, following-on from Roosevelt’s New Deal and the centralised planned economy that fought the war on all sides and constructed the peace. Americans seem to have totally forgotten this was a golden age of prosperity in the US.
Well said. And worth reading this in conjunction with Nick Cohen’s piece from yesterday’s Observer on ‘disaster socialism’. Not easy to find as it seems to have been relegated from the opinion section (perhaps it’s true what Private Eye says that Seamus Milne still has influence at The Guardian). Anyway, here’s the link: https://www.theguardian.com/commentisfree/2018/dec/16/why-are-labour-party-leaders-so-quiet-on-europe—maybe-it-is-the-lure-of-disaster
I have some sympathy with Cohen on this occasion Ivan
But he is a man whose judgement it is not always easy to trust
Indeed. And for that reason I have a wry smile when I catch him have a pot at Milne.
Since it’s Christmas – can you offer any case for “Tax Havens” or “Regulation Havens” as they usually are?
The Duty Free Allowance may well be big business for some but it has beneficial purpose for many who travel and presumably your “Plan B” is still possible…and the BREXIT negotiations have reminded us that boundaries between territories do give rise to all sorts of harsh problems that might be eased quite simply through a “third party” role.
Can I not tempt you with just a small portion of seasonal pudding to fill a corner?
Is that an apology for Jersey?
I cannot apologise for Jersey – it exists and has developed like many other little places because larger places have encouraged it – and smuggling – over centuries.
I hoped that you might offer a more rounded view of the regulation havens in the context of your pro-business posting. I want to learn about a better way.
If business is to be allowed to cross borders then it is inevitable that differing rules and regs will be encountered and the havens do provide a useful lubricant at the points of friction.
The havens could possibly be closed down entirely but presumably business would find alternatives. Presumably too accountants, economists and lawyers have already worked out how to abolish the tax abuse culture that they promote.
I don’t know – I am just a bemused onlooker.
It’s not business as such that’s the problem, it’s capitalism. It’s one thing to suggest that there’s not much point trying to transform capitalism at present, so we have to live with it as best we can. But to gloss over it’s dire intrinsic defects is dereliction. It has taken humanity to the cliff edges of ecological catastrophe and nuclear annihilation, and pursuit of the profit motive leads inexorably to Depressions like the one we’re in now and so to the driving down of costs, particularly wage costs, but also taxation and interest costs and massive concomitant increase in inequality, and weakening of the labour movement so that profits can be raised. This is bad bad bad.
You are assuming that there is only one form of private enterprise
That is very obviously not true
The alternative to a mixed economy is ‘state capitalism’, and who wants that? Hence, for me, one of the principal areas requiring structural & legal reform is the whole of issue of ownership, viz. monopolistic practices, common ownership (co-operatives, mutuals etc.), democracy in the workplace (employee representation) and limited liability. But it would require a progressive government with a substantial majority to push through the requisite radical legislation. Hopefully it’s simply a question of time, as the status quo continues to under-perform for the benefit of the many, becoming indefensible.
Agreed
Mervyn Hartwig says:
“It’s not business as such that’s the problem, it’s capitalism. ”
It’s not even just capitalism that’s the problem. It’s the new version of financialised ‘casino’ capitalism that for a large part produces nothing it just plays musical chairs with ‘money’.
In reality traditional capitalism which raises and accumulates capital to invest in industry (in its widest sense) is almost entirely redundant in a world of fiat currency, were the behaviour of that currency to be properly understood.
The logical result does not by any means exclude private sector involvement in a productive healthy economy. It is not the employment of private sector construction companies that is wrong with PFI it is the underlying and deceitful financial jiggery pokery that makes them smell; and the abject failure of government, either deliberately or through incompetence, to write fair contracts in the public interest.
Capitalism is not intrinsically bad or intrinsically good. Neither is socialism. Neither are most other …isms that get bandied around. They only become bad when they become the only …ism that is tolerated and see it as their obligation to crush every other …ism underfoot. They only become good when they coexist peacefully and collaboratively with a variety of other …isms. Your fundamentalism is bad. Try opening your mind a bit to realism. If you’re reading this blog, you’re exposed to plenty of it.
What sort of business are we talking about? Arcadia, or KKR or perhaps John Lewis or Mondragon? As Mazzucato has shown the State can be highly entrepreneurial – except when it comes to socialising the profits, which usually flow to private companies, like Apple, their shareholders and executives. Mondragon is a highly successful multi-business co-operative where the workers share in running the business, the wage differential is 1:8 and their social commitment is “The willingness to ensure fair social transformation with other peoples by being involved in an expansion process that helps towards their economic and social reconstruction and with the construction of a freer, fairer and more caring Basque society.” Capital is subordinate to labour and its rewards are fair and reasonable and not extractive.
Of course, it is not all rosy and there are problems when a co-operative has to work within and compete with red-blooded capitalists. So, if there is to be any kind of progress in developing alternative ways of running business which isn’t forced to compete with those happy to offshore production to “slave labour” in poor countries we need a political project that aims to euthanise the rampant capitalist wealth extractors.
This seems to me the nub: what should be the relationship between capital, labour and society? Too often business is a vehicle for capital and executives to extract wealth which is then hidden offshore, leaving society to pick up the pieces. It’s time to take back control, to coin a phrase.
(Richard D Wolff, a Marxist US economist, argues for “co-operatives” like Mondragon as an alternative to capitalism. https://www.rdwolff.com)
I’ve never been convinced we’ve had capitalism or any free democracy. This said, I’ve worked in about a dozen much worse than here. Revolution gas turned up mostly leadership turkeys. The essence is an open society with control over political leadership (Karl Popper). Current democracy is very much the demagoguery the Ancient Greeks thought just about the worst feature of government. We clearly need very radical change and I shudder thinking of Parliamentary goons trying something much more complex than Brexit. Most people still think we can fudge along with economic models that have us at the abyss and can’t see the cliff. Money-tax-green is the only good sense about. What worries me is this is way more radical than Soviet Paradise or the futility of Corbyn in charge of the neo-liberal spreadsheet.