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“MARKETS warm to idea of a Labour government” is the headline to a story in the Financial Times earlier this week.
The FT is where the business elite and its media outriders and business insiders compare ideas and do some thinking out loud.
For the thinking person with an interest in the world as it is, and as it changes, the FT is the indispensable adjunct to a daily reading of the Morning Star.
But yesterday a very impressive list of economists — 82 of them, headed by professor Danny Blanchflower — formerly of the Bank of England’s monetary policy committee — wrote to the paper to argue against the its judgement that Labour’s economic proposals are “unaffordable.”
Is the FT undergoing an identity crisis?
It is instructive to recount the basis of our economists’ analysis. They argue that the FT fails to appreciate the severity of Britain’s economic condition.
They spell out that the economy has been performing badly for more than a decade, household debt has fuelled the meagre recovery from the crash of 2007-8.
Pay is stagnant, millions cannot pay their bills, housing is in crisis and young people are set to be poorer than their parents. The rich are richer.
The basis of their challenge to the orthodoxy that the FT promotes on behalf of the corporate capitalist class is that public expenditure on infrastructure, education and environment generates tax receipts and supports fiscal sustainability.
They then break out into the Morning Star’s territory in arguing that “ownership of capital helps determine in whose interests the economy operates.”
Their distinctive argument is that issuing shares in enterprises to a mutual fund ensures that workers share in the wealth they create.
This is not the first time that a periodic crisis of capitalism has engendered schemes to give workers a stake in capitalism beyond the opportunity to sell their labour power to whoever is willing and able to buy it.
To follow Bertolt Brecht, what questions might a worker who reads ask of these proposals?
First, why only a portion of the shares? If the workers create the wealth in its totality, why should those whose living resides in ownership, and thus need not work, appropriate a portion?
Second, which workers should benefit? The wealth our collective labour produces cannot be realised in the marketplace without the efforts of a vast assembly of labourers — in education, NHS, transport and the administration of society.
Should a mutual fund be available only for the privileged section of workers in enterprises where profit is directly realised?
These questions are important because the acquisition of shares by workers, either individually or collectively, does not transform the already existing capitalist marketplace where investments are made according to the market potential for further exploiting the labour power of other workers.
Another aspect of this mechanism, which has the effect of securing the practical consent of workers for the way society is currently organised, lies in the entirely negative effect in giving worker shareholders (and worker directors) a material interest in the anarchy of capitalism in which the profitability of “their” enterprise becomes paramount.
A socialist economy resting on power exercised by the working class as a whole seems altogether much simpler.
The case, in the here and now, for policies which improve public services, raise working family incomes and stimulate the economy is well made.
Incidentally, the FT quotes a market insider: “The pound would benefit if a no-deal Brexit is removed and a closer UK-EU relationship looks more likely.”
No identity crisis then or the Financial Times. Business as usual.
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