Sometimes people who desperately don’t want something to happen are more clear-sighted than people who do. It’s like that with capitalism and anti-capitalism. Right-wingers are often able to think and speak more freely and, for that reason, what they say is more interesting and insightful.
There was an example of this at the end of July. An article in the Sunday Telegraph by Charles Moore, for all its blind spots, displayed more of a birds-eye view, than the Left can muster. Moore, former editor of the Spectator, Daily Telegraph and Sunday Telegraph, is a supremely confident scion of the British Right (Eton, Trinity College, Cambridge). He is writing Margaret Thatcher’s authorised biography.
The article was entitled, “I’m starting to think that the Left might actually be right". In it, he said that after 30 years as a journalist, he was now forced to ask whether the Left was correct all along and the “free market” was just a “set up”, a means for the rich to enhance their power and wealth, while everyone else, works harder and is more insecure.
One example he gives is Rupert Murdoch. “It was a great day for newspapers when, 25 years ago, Mr Murdoch beat the print unions at Wapping,” Moore says, “but much of what he choose to print on those presses has been a great disappointment to those of us who believe in free markets because they emancipate people. …. The News of the World and the Sun went out of their way in recent years to give their readers far too little information to form political judgements.”
Then there is the credit crunch – “a system purporting to advance the many has been perverted in order to enrich the few.” Banks, protected by government guarantee aren’t punished, but rather millions must lose their jobs to ensure their balance sheets are healthy.
“We are bust – both actually and morally,” Moore concludes. He ends on a note of extreme pessimism, which may be self-indulgent, but is worthy of note. He thinks something else is on the horizon, and it’s not conservatism.
“One must always pray that conservatism will be saved, as has so often been the case in the past, by the stupidity of the Left. The Left’s blind faith in the state makes its remedies worse than useless. But the first step is to realise how much ground we have lost, and that there may not be much time left to make it up.”
In one way, Moore’s mea culpa articulates, but doesn’t understand, the intellectual prison in which conservatism has incarcerated itself. Conservatism was originally against concentrations of power and not automatically pro-market, but since at the least the 1970s, conservatism has welded itself to economic liberalism, the belief that government should not interfere in the economy and this will release entrepreneurial aspirations. (this economic liberalism was originally, in Britain, aimed at the Liberal Party. The intellectual spark behind it, Friedrich Von Hayek, thought of himself as a Liberal).
And, in turn, this economic liberalism has become synonymous with giving as much freedom and money to large employers, corporations, as possible. And using the state to do it, if necessary. “What’s good for General Motors is good for America”, they used to say. This was still held to after GM was nationalized. That’s not economic liberalism (or conservatism). It’s corporate capitalism, doing exactly what the largest and richest organisations in the economy want you to do.
In Britain, the same constrained logic applies. What’s good for HSBC is good for Britain. The banks were “punished” by a reduction of corporation tax to 23 per cent (it was 33 per cent in 1997). Everyone else is given a rise in VAT. In Ireland, one thing that has conspicuously survived after the economy completely tanked, and massive bailouts financed by the taxpayer occurred, is a corporate tax rate of 12.5 per cent.
Moore relates how he was recently in the company of “intelligent conservatives” (as opposed the other kind) in the US. “Conservatives” have just forced through a package of spending cuts as a result of which, as one ex-Republican senator puts it, “the little guy is going to be cremated.” Raising taxes on corporations and the extremely wealthy is out of the question. This, after three decades of tax cuts for them and not middle or low income earners. In 1970, corporate profit taxes contributed 20 per cent of the Federal Government’s tax revenues. In the early 2000s, it hovered around 7 per cent.
This isn’t conservatism, it’s masochism.
It is also flogging a dead horse (which also makes it sadism but let’s not go there). If the basic economic problem is a lack of demand (the stock market collapse of 2000 hinged on internet companies not actually making money, and the wave of borrowing that resulted from reduced interest rates post-2001 created the housing bubble that collapsed when those interest/borrowing rates went up), you don’t solve it by cutting taxes on corporations and rich people in the hope that they will magically use the money to produce goods that people, already massively in debt because of stagnating wages, will then go and buy.
But about the Left, Moore is right, or half-right. “The Left’s blind faith in the state makes its remedies worse than useless,” he says.
Taxing and not borrowing, ending tax evasion and defaulting on debts to Goldman Sachs, is not worse than useless. It’s obvious. If the question is “who pays?” the answer should be not the majority of people.
But a blind faith in the state remains the default position of a lot people on the Left. The state is not the answer, and reason is partly given by Moore himself.
He says he believes in free markets because they emancipate people. But the market economy, which Moore has such faith in, is a fiction of academics, and politicians and journalists. As the British writer Dan Hind points out, “The neoliberal description of society, in which self-seeking individuals compete under the watchful eye of an enabling state, is radically at odds with reality. The economy is not an entrepreneurial free-for-all but a space dominated by very large organizations, where the state uses taxpayers’ money to subsidized favoured sectors. For the most part, the individual competes with other individuals for employment and promotion.”
It follows that the consequences of this economic system that we are seeing unfold is not, as Moore believes, a “perversion” of self-seeking individuals competing with each other. But a logical and predictable result of very large organisations mercilessly pursuing their own interests, as they are legally charged to do. The outcomes for the rest of us are, quite literally, not their problem.
But it is also follows that you don’t change hierarchical organisations by merely switching their ownership to the state. A new Left should not become the old caricature that the Right is comfortable opposing.
The old social democratic compromise of a mixed economy and regulation and control of the private sector, won’t work in the future. The Left has to be about more meaningful forms of democracy, and taking democracy to places it hasn’t been before.
There’s a new interest in forms of economic democracy – Dan Hind, Richard Wolff, the Equality Trust, even Maurice Glasman of Blue Labour fame. There are limitations in this, which the economist Harry Shutt has outlined in previous comments, but it is, creditably, talking about remedies that don’t involve state ownership.
There is an ancient principle that ought to be revived here. In Ancient Athens you couldn’t be considered a citizen with a right to participate in decision-making if you were employed. In that instance, you were a client - what you said was thought to be coloured by the need to curry favour with the person on whom your livelihood depended. You weren’t independent.
Independence, in this view, depends on material independence. A basic income paid to everyone no matter what, would be one way to ensure this independence and freedom to think and participate, in a modern context. That way, the Left could be more than about regulation and control. It could also be about liberation.