How Left-wing Is Jeremy Corbyn?
As the warnings about a Corbyn leadership become more and more hysterical, we need to ask – just how left-wing is Jeremy Corbyn? His critics may not like him much, and may doubt his appeal to the wider electorate, but there seems little in the policy stance he has adopted to warrant such extreme alarm.
The fears voiced by his critics seem to depend for substance entirely on the critics themselves. Their warnings are likely to become self-fulfilling prophecies if we do not pause for a moment to examine what Corbyn and his supporters are actually saying. Writing in the Guardian, his ally, John McDonnell – presumably speaking with the authority of his leader – quite reasonably set out the substance of a Corbyn economic policy. So, how irresponsible and terrifying is it?
It seems that – shock, horror – Corbyn and his advisers do not believe that austerity is the proper or effective response to recession. This is more or less the position reached by the IMF and endorsed now by a large number of reputable (even Nobel Prize-winning) economists. It is in essence no more than mainstream Keynesian economics. We can see the consequences of its rejection in the travails faced by an austerity-ridden euro zone economy.
Corbyn also takes issue with the British version of austerity – the insistence that the wealthy should be spared, with the help of tax cuts and quantitative easing, from assuming any of the burdens or responsibilities for recovery, while both are heaped on the most vulnerable whose job prospects and living standards have taken massive hits. It is surely the merest common sense to assert that, if we are serious about a sustainable recovery, every shoulder should be put to the wheel.
A Corbyn government would also recognise, it seems, that there is actually a point to electing a government that is ready to play its proper role in achieving a fair, balanced and productive economy. It’s enough to make the blood run cold! Yet surely, it makes sense for a government to use – alongside the private sector – its powers and resources to do the things that the private sector cannot, or at least will not, do.
And isn’t it time that we reclaimed from an irresponsible banking system the central responsibility for a monetary policy that serves the interests of everyone and not just those of speculators of one kind or another? Why does so much of the huge volume of lending created by the banks out of nothing go on house purchase and asset inflation rather than productive investment?
The fact that policies such as these create so much alarm and despondency among Labour’s erstwhile and would-be leaders tells us more about them and the current state of the Party than it does about the merits of the policies themselves.
Oddly enough, the one point made by John McDonnell – and made forcefully at that – about a Corbyn economic policy that should give cause for concern is the acceptance of the priority to be given to eliminating the “deficit”. We must assume that it is there to pander to the ignorance of an electorate that has never been told that to treat the government’s deficit in isolation is an economic nonsense.
John McDonnell, like almost everyone else, appears not to distinguish between the government’s deficit and the country’s. If we are to focus on a deficit, it should surely be the country’s failure – over more than three decades – to pay its way in the world. It is that deficit that measures our deep-seated economic failure, and that inhibits us from putting in place policies that would allow us to grow at a satisfactory and sustainable rate.
Indeed, for as long as the country’s deficit is ignored, our recent experience confirms that the government’s deficit is virtually inevitable. An external deficit will exactly match the combined total of the private sector and government deficits; they are accounting identities. For as long as we have an external deficit (and there is no sign that anyone is proposing to do anything about it), a government that wanted to move into surplus could do so only at the expense of a larger and larger deficit for the private sector (that is, households and businesses) – and that would simply intensify the imbalance between consumption and investment and all of our other problems.
The Corbyn economic policy platform is, in other words, disappointing, but only in this one respect. Far from being too left-wing, it is based for the most part on what is now becoming the new – less doctrinaire, more common sense – orthodoxy. And getting the economy moving properly is, in any case, the most likely way of getting the government deficit down. Its deficiency arises because it makes too big a concession to economic nonsense – but then, those other candidates who have had nothing to say of any consequence about the real issues of economic policy and who have left a vacuum for Jeremy Corbyn to fill can at least have something to agree on and applaud.
Bryan Gould
13 August 2015
Are We Willing to Pay any Price?
No one doubts the benefits of extending our trade opportunities – but many are alarmed at a dangerous naivety in what passes for our trade policy. That policy reflects our unfortunate dependence on a single commodity; our anxiety to maximise our one trading advantage by currying favour with powerful trading partners has led us into some treacherous waters.
We have, for example, rapidly built up a Chinese market for our dairy produce with the result that – without any assurance that that market will remain open to us – we are now virtually economic prisoners, forced to meet almost any Chinese demand in order to retain a market that has become our life blood.
We have chosen, for example, to avert our gaze from the obvious effects of Chinese intervention in the Auckland property market for fear of offending Chinese opinion. More importantly, we have apparently not recognised that the Chinese interest goes beyond merely buying our products in a normal trading relationship, but extends to obtaining control of the productive capacity itself.
Dairy farms themselves, processing plants, manufacturing capacity, expertise of various sorts are now owned by Chinese operators; their production increasingly by-passes New Zealand economic entities and suppliers and is marketed by Chinese companies directly to the Chinese consumer.
There are of course many instances of Chinese capital being deployed across the globe in pursuit of assets and capacity. This is not a cause for criticism – the Chinese are entitled like anyone else to pursue their own interests. It is simply a statement of fact.
We, however, seem unaware of what is happening. It is no accident that this direct supply to the Chinese market has accompanied a fall in the proportion of New Zealand dairy production handled by Fonterra. While the proportion of our dairy production under Chinese control is still quite small, there can be little doubt that it will grow. Low dairy prices will force the sale of a number of farms to foreign owners. As the Chinese increasingly control their own sources of supply, their reduced requirements for dairy produce on international markets will inevitably mean downward pressure on prices.
Nor is it just the ownership of the physical product that has passed into foreign and often Chinese hands. The decision to allow non-farmer ownership of “units” (or, in other words, shares) in Fonterra has meant that we must now face the prospect of a significant part of the income stream from our most important industry to pass into private and often foreign hands.
Our anxiety to improve the markets for our dairy produce has led us into another potentially dangerous relationship. Free access for those products into the US market has long been touted as the “holy grail” of trade policy. So keen are we to achieve this that we are apparently ready – in a so-called free trade agreement – to give up significant benefits, such as Pharmac’s role in achieving the relatively low prices we pay for pharmaceuticals, and to accept severe limitations on other aspects of our ability to organise the way our markets operate.
Even more importantly, we will concede a large part of our powers of self-government by allowing foreign corporations to sue our government in specially constituted tribunals, and to force that government to change its policies and legislation – a power not, of course, enjoyed by domestic companies.
The irony is that these sacrifices are most unlikely to achieve much of what we want. The US (and, more generally, the North American) dairy industry is too powerful and too protectionist to throw open its market to competition from efficient producers overseas; and they have yet to reveal their hand and to bring their political influence to bear on the negotiations we are still pursuing. We have, it seems, spent months making concessions in the hope that the US will at some point deign to offer a deal on dairy produce, with little evidence that such an outcome is at all likely.
In instances like these, we over-estimate our ability to hold our own against the interests of much more powerful economies and over-state the degree of trust we can repose in them as economic partners. The Greeks have shown the price that can be paid for getting into bed with more powerful (and often more ruthless) economies.
Perhaps the most recent instance of what we are prepared to give up for the sake of a free trade deal is the $11 million paid to a Saudi businessman in the hope that he would use his influence to swing such a deal for us with the Gulf States. There can have been no other reason for such a payment. John Key duly turned up, ready to sign the deal, but departed empty-handed. We appear to have traded away our corruption-free record and reputation for the sake of a payback that didn’t materialise. “Naivety” doesn’t really cover it, does it.
Bryan Gould
11 June 2015
Who Are the Ideologues Now? (UK)
It is a truism of today’s political analysis that, over the three or four decades since the so-called “free-market” revolution swept across the western world, the centre of political gravity has moved substantially rightwards. Most of those of middle age or younger will have grown up, after all, in a world where it has been widely accepted that markets are infallible, that government spending is wasteful and a drag on economic development, that running a country is just like running a business, that we all benefit if the rich get richer, and that private profit justifiably overrides all other considerations.
So insidious and comprehensive has been the advance of this orthodoxy that even those who choose to question or oppose it are hard put to understand how complete has been its victory. As we see from the current plight of the Labour Party, political leaders who seek to offer alternatives are disarmed and enfeebled, without realising it, by their experience of growing up within its confines. They are, in any case, urged – on electoral grounds and even by their friends – to accept the new reality; and that reality, of course, keeps on moving inexorably rightwards.
This re-definition of the political landscape has meant that what would once have been regarded as the extreme outer edge of what is politically possible is now the new centre ground. Any divergence from this central position is, by definition therefore, literally eccentric; and any move away from “free-market” orthodoxy is condemned as either a return to the past or an irrational lurch leftwards.
These definitions of centrality and divergence have the further advantage, for their proponents, of confirming a long-held public perception. In the days when the political left was prepared to challenge existing power structures, they were undoubtedly helped by their development of an ideology of sorts that allowed them to ground their objections to orthodox policies in some loosely defined analytical framework. The consequent identification of the left as the doctrinaire element in the political spectrum seems, however, to have inhibited today’s leaders of the left, if the current contest for the Labour Party leadership is any guide, from straying too far from orthodoxy for fear of appearing too ideologically driven.
The right, by contrast, was usually seen as pragmatic and concerned solely with what would work. Politicians of the right still seek to prolong that advantage by clothing their steady move rightwards in the language of experiment and exploration of what is possible, rather than of ideology. They have also learned to proceed stealthily, one small step at a time, with the intention of concealing from the public that each new step is in reality a further development of a highly ideological agenda.
That may, however, be about to change. As the tide of ‘free-market” orthodoxy has reached its high-water mark and appears to be receding (at least in most parts of the western world other than the euro zone), it is more and more likely to leave exposed to public view those new policy initiatives that seem to have little to do with common sense and practicality and to reflect much more clearly what are doctrinaire preoccupations.
Those preoccupations are becoming increasingly apparent. The priority accorded to the drive for private profit, for example, has led to well-publicised failings in delivering what were once public services, epitomised by the misfortunes of Serco – an international firm operating, among other things, as a private manager of prisons and under pressure for its failures in a range of countries.
Privately owned academy schools, an idea that has now been shown even in Sweden, its country of origin, to produce disastrous results in terms of educational standards, will nevertheless no doubt continue to be supported by enthusiasts on the ground that business people are best placed to decide educational priorities for our children.
And what about the wacky idea, now being contemplated by New Zealand’s right-wing government, of financing the delivery of social services to some of the most vulnerable, including the mentally ill, by selling bonds to private investors who will then look to make a profit from their “investment”?
What links all of these and many other similar ideas is that they have little to do with what will work and best serve the interests of society and its citizens. They are instead all statements of ideologically driven preference – in each case, a preference for private provision, not because it works better, but because it is a faithful rendition of “free-market” theory.
It seems, in other words, that the usual view of the left as doctrinaire and the right as pragmatic is in course of changing. It is now the right that espouses the ideological approach and that will go on doing so for as long as it is not held to account and its bluff is not called. It is the left (when it can make up its mind and, like the lion in the Wizard of Oz, reclaim its courage) that has the opportunity to offer new alternatives to free-market orthodoxy – alternatives that are not the product of doctrine, but that are simply sensible and practical and likely to produce better outcomes. Isn’t it time that Labour’s leaders caught up with this new reality?
Bryan Gould
3 August 2015
Are “Realistic” Labour Leaders Best Placed to Win An Election?
Conventional wisdom has it that the outcome of the Labour leadership contest most feared by the Tories would be the election of the candidate perceived to be nearest to the middle ground. Conversely, it is suggested that a candidate who espouses policies seen to be further to the left, (which seems to mean simply offering something different from the Tory programme), would gravely prejudice Labour’s chances of winning the next election.
There are, of course, many criteria that might be relevant in deciding which candidate to support – age, gender, personal accomplishments, and so on – and a candidate’s electoral appeal, based on such criteria, might well be important in determining which candidate would be most helpful to Labour’s election chances. But the suggestion, constantly made even by Labour’s friends, that the willingness to offer a clear alternative to Tory austerity, Tory attacks on the public services and Tory victimisation of the vulnerable is somehow a disqualification is surely to be resisted.
The advice to Labour members that they should eschew potential leaders who do not “move forward” (or, to put it more starkly, do not acknowledge the inevitability if not actual desirability of Tory policy) is based surely on a damaging failure of political analysis. It can be justified only on the unstated but mistaken premise that the Tories always occupy the centre ground and that any departure from that centre ground is quite literally eccentric and a mistake, and is doomed to fail.
Yet it is the acceptance of this premise that leads most of the candidates for the Labour leadership to vie with each other in demonstrating how “realistic” they are, how thoroughly they accept that resistance to each new Tory initiative is pointless, how little interest they have in the supposedly hopeless task of developing a credible alternative to Tory orthodoxy.
The paradox is that opinion in the world beyond the Labour leadership contest has moved on – not backwards or leftwards, as the conventional wisdom has it, but forwards to a growing recognition that Tory neo-liberal orthodoxy has had its day. There is now a substantial body of opinion that understands that austerity is not the correct response to recession, that markets are not self-correcting, that running the country is not the same as running a business, that growing inequality is the mark of a failed society and a failing economy.
Among the many who share these understandings, we can now count hard-headed bodies like the IMF and the OECD – hardly raging revolutionaries. What the Labour Party now needs is a leader who can articulate these understandings persuasively. It would not be too difficult. All that is needed is an awareness of how the debate on these issues has progressed and a modicum of competence and courage in putting that to the voters.
It is, in other words, not the left but the Tories, with their determination to press on with a discredited orthodoxy, who now occupy the far reaches of ideology. It is a complete misapprehension to position them in the centre ground, when their policies so clearly represent a distorted and prejudicial view of how real societies and economies work.
It is not just in the context of the leadership contest that this error of analysis is likely to cost Labour dear. If the advice tendered to Labour is followed, and a “realist” is elected to the leadership, the Tories – contrary to the conventional wisdom – will heave a sigh of relief. They will enjoy discrediting a rival who complains about outcomes but is at a loss to explain how things could be done differently. They will know that their task has been made easier, because they will face an opponent who has already conceded the greater part of their policy stance.
They will not have to defend the fundamental assumptions on which that stance is based. Their principal rivals for power will, by failing to engage them in a real debate, provide in effect the most persuasive evidence that there really is “no alternative”.
By positioning the Labour party as a sort of cordon sanitaire around an incumbent Tory government, a so-called “realistic” Labour leadership would insulate their opponents from any truly effective critique of their policies and actions. The contention that it need not be like this would easily be dismissed by pointing to Labour silence and timidity as proof that the Tories had got it right.
The “realism” urged on Labour and the advice that they should not “fight the electorate” would not, in other words, improve Labour’s chances at the next election. On the contrary, a Labour leadership that – inadvertently perhaps – acted as a sort of praetorian guard for Tory extremism so that they were protected from outside criticism could only increase the chances of that extremism doing yet more damage.
And, if by some chance the voters tired of the Tories and elected a Labour government, a “realistic” leader of that government could then no doubt be relied on not to veer too far away from Tory orthodoxy and would thereby disappoint its supporters all over again. Haven’t we been there before?
Bryan Gould
28 July 2015
Who Are the Ideologues Now?
It is a truism of today’s political analysis that, over the three or four decades since the onset of the so-called “free-market” revolution that swept across the western world, the centre of political gravity has moved substantially rightwards. Most of those of middle age or younger will have grown up, after all, in a world where it has been widely accepted that markets are more or less infallible, that government spending is inevitably wasteful and a drag on economic development, that running a country is just like running a business, that we all benefit if the rich get richer, and that private profit justifiably and inevitably overrides all other considerations.
So insidious and comprehensive has been the advance of this orthodoxy that even those who choose to question or oppose it are hard put to understand how complete and extensive has been its victory. Political leaders who seek to offer alternatives are disarmed and enfeebled, without realising it, by their experience of growing up within its confines. They are, in any case, urged – on electoral grounds and even by their friends – to understand and accept the new reality; and that reality, of course, keeps on moving rightwards.
One of the most significant consequences of this re-definition of the political landscape has been the acceptance that what would once have been regarded as at the extreme outer edge of what is politically possible is now the new centre ground. Any divergence from this central position is, by definition therefore, literally eccentric; and any move away from “free-market” orthodoxy is condemned as either a return to the past or an irrational lurch leftwards.
These definitions of centrality and divergence have had the further advantage, for their proponents, of confirming a long-held public perception. In the days when the political left was prepared to challenge existing power structures, they were undoubtedly helped by their development of, and adherence, to an ideology of sorts that allowed them to ground their objections to orthodox policies in some loosely defined analytical framework.
It was perfectly understandable that, as a consequence, the left in politics was seen as the doctrinaire element in the political spectrum, whereas the right was identified as pragmatic and concerned with what would work. Indeed, it is the fear of being characterised as ideologically driven that inhibits today’s leaders of the left from straying too far from current orthodoxy.
Parties of the right have found it advantageous, on the other hand, to clothe their lurches rightwards in the language of experiment and exploration of what is possible, rather than of ideology. They have also proceeded stealthily, one small step at a time, with the intention of concealing from the public that each new step is in reality a further development of a highly ideological agenda.
That may, however, be about to change. As the tide of ‘free-market” orthodoxy has reached its high-water mark and appears to be receding (at least in most parts of the western world other than the euro zone), it is more and more likely to leave exposed to public view those new policy initiatives that seem to have little to do with common sense and practicality and to reflect much more clearly what are doctrinaire preoccupations.
Consider the following recent instances. The government’s ideological preference for private over public provision has led them to engage Serco – an international firm already notorious for its failures in a range of countries – to run some of our prisons. The outcome? The shambles – and the unacceptable and damaging shambles at that – now revealed at Mt Eden prison.
Charter schools? An idea that has already been shown in its country of origin, Sweden, to produce disastrous results in terms of educational standards, and is now in the process of proving that point all over again in New Zealand, at the expense of some of our most needy and disadvantaged children.
And what about the wacky idea of financing the delivery of social services to some of our most vulnerable citizens, including the mentally ill, by selling bonds to private investors who will then expect to make a profit from their “investment”?
What links all of these and other similar ideas is that they have little to do with what will work and best serve the interests of society and its citizens. They are instead all statements of ideologically driven preference – in each case, a preference for private provision, not because it works better, but because it is a faithful rendition of “free-market” theory.
It seems, in other words, that the usual view of the left as doctrinaire and the right as pragmatic is in course of changing. It is now the right that espouses the ideological approach and that will go on doing so for as long as it is not held to account and its bluff is not called. It is the left (when it can make up its mind and, like the lion in the Wizard of Oz, reclaim its courage) that has the opportunity to offer new alternatives to free-market orthodoxy that are not the product of doctrine, but are simply sensible and will produce better outcomes.
Bryan Gould
26 July 2015