Economic pipedreams for the politically timid

Economics for the Many

Economics for the Many

Edited John McDonnell

Verso 2018 229pp £12.99

Many books have already been published on Jeremy Corbyn’s election to the Labour Party leadership. Several of them have addressed what has been labelled Corbynomics, a set of economic ideas which, it is claimed, would rebalance the British economy to meet the needs of the many, rather than the few, to use an oft-repeated Corbynist mantra. Economics for the Many pulls together the opinions of 16 contributors, including no fewer than six professors, as well as sundry lecturers and research fellows and directors. Its significance is that it is edited by Shadow Chancellor John McDonnell, and that must give the ideas set out in the book some official status as far as the Labour leadership is concerned.

In his introduction McDonnell says ‘We are seeking nothing less than to build a society that is radically fairer, more democratic, and more sustainable, in which the wealth of society is shared by all.’ Yet what is striking about the book as a whole is its political timidity even compared to left Labour Party thinking of the 1970s: no ringing calls for nationalisation of the banks, or the 50, 100 or 250 largest monopolies, demands that underpinned the Alternative Economic Strategy of the Tribune left which mustered up to 80 Labour MPs at the time. Economics lecturer and Labour Party adviser Rob Calver Jump, for instance, is far more coy than his predecessors, counselling that ‘the major difficulty with national ownership is the cost associated with nationalisation’ (p93); this means that in the case of the railways, nationalisation would take the form of taking back franchises into public ownership as they expire. Hardly the sort of bold plan that we were told to expect from a Corbyn-led Labour Party: no challenge to the rule of capital here. It tells us that those who have hitched themselves to the Corbyn bandwagon are content with a very thin brew indeed: expectations are set at a very low level.

Is Calver Jump the exception among these 16 academics? Far from it. In their essay, Guinan and Hanna mention Marx, saying that ‘if we are serious about addressing real economic challenges then we need a different set of institutions and arrangements capable of producing sustainable, lasting and more democratic outcomes – an economy for the many, not the few’ (p108). Citing McDonnell’s concept of ‘modern alternative public, cooperative, worker controlled and genuinely mutual form of ownership, they conclude that ‘Instead of the extractive and concentrating forces of corporate capitalism, the new economics would be circulatory and place-based, decentralising economic power, rebuilding and stabilising regions and local communities...’ (pp109-110).

And so they blather on about plural forms of democratised and decentralised common ownership, and radical political decentralisation, workers’ cooperatives, where sweet reason prevails with a ‘new notion of collective agency and democratic economic citizenship’ (p124). Class struggle is conjured out of existence; Guinan and Hanna have no notion that the British ruling class always has been, is, and forever will be absolutely ruthless in defence of its interests. They cannot even begin to learn lessons from contemporary Venezuela where there has been a huge development of different forms of ownership and democratic participation – but where the ruling class is using terror and every form of economic sabotage to destroy the gains of the last 20 years. The British ruling class will be far worse.

Another professor, Guy Standing, writes and publishes extensively about what he calls the ‘precariat’. This, along with the term ‘financialisation’ has become very fashionable amongst left academics: however, these phrases obscure rather than illuminate the underlying processes involved in the deepening crisis of imperialism – and their use has an opportunist political purpose. Take ‘precariat’, on which Standing has published extensively. What is it? It does not seem to be part of what we regard as the working class. Standing separates it from what he sees as a shrinking industrial working class and an equally shrinking ‘salariat’. In defining it, he feels the need to ‘plead with those clinging to dualistic perspectives drawn from a reading of the nineteenth-century Marx to understand that these groups have distinctive relations of production (work patterns), relations of distribution (sources of income) and relations to the state that make it desirable to identify with the precariat. We must craft a vision and an agenda for it.’ (p197)

Reducing relations of production to work patterns is of course nonsense, but the question is why nineteenth-century Marx is not an adequate guide to the emergence of this ‘precariat’ and why such a term is necessary. In Marx’s time the overwhelming majority of the working class in Britain experienced casualised working conditions: temporary unskilled employment, frequent periods of unemployment. Dockers had to fight physically in the pens for a day’s work each day – there was no contract, let alone one on zero hours. Standing continues ‘the precariat has a distinctive social income. They rely on money wages or earning. They do not obtain the non-wage benefits that the proletariat obtained, such as paid holidays, medical leave and the prospect of a meaningful pension’ (p198). But in fact, all we are seeing is a return to those conditions before the mass of the working class had tenured employment that it enjoyed in the exceptional period of the post-war boom.

Standing sees his precariat as distinct from the working class when it is the working class. He is fearful of it: he calls it a ‘dangerous class’ and clearly regards it as responsible for Trump’s election victory, patronisingly saying that: ‘Insecure people tend to vote emotionally not rationally in defence of Enlightenment values.’ (p198) And if they are not openly reactionary, they remain withdrawn from politics, and, worse, sections ‘tend to see social democrats as “dead men walking” (p200). What are his conclusions apart from saying that there is a need to be bold? He says progress will come from ‘dismantling rentier capitalism’ (p201) – bold indeed, but essentially all he proposes are some land and wealth taxes, and granting the working class a basic income, ‘a modest(!) regular payment’ to every citizen. How this will dismantle rentier capitalism remains obscure; as with the other contributions, it certainly does not appear to involve any serious struggle. Critically, there is no suggestion that the ‘precariat’ will play any role in the expected transformation – it is too dangerous, clearly.

‘Financialisation’ is now a buzz word around which conferences can be organised, books written, careers made. Professor Costas Lapavitsas writes about it frequently; his shtick is to reconcile Marxism with Keynesianism – Marxism is fine (he thinks) for describing the ultimate aim, Keynesianism for short-term policy-making by practical socialists. His essay is remarkable in its failure to understand the crisis in any serious degree. ‘Financialisation’ becomes a term to describe, not analyse, the current stage of capitalism. Its principal features – the penetration of finance into every aspect of the economy and daily life – are utterly disconnected from the crisis of accumulation that asserted itself in the 1970s; it springs sui generis from unspecified structural crises at that time. The specific features of Britain’s ‘financialised’ character are not related in any way to its imperialist character, its colossal overseas assets, its looting and plunder of the rest of the world. Lapavitsas, a great Brexit fan, welcomes it as allowing ‘the possibility of intervening decisively to rebalance the finance sector, thus setting in train a process of “de-financialisation”’ (p81). His solution is ‘policy changes that placed the interests of working people at the forefront should seek to create public banks’ (p82). The notion that the City of London whatever its form post-Brexit is going to allow its role to be usurped by any public institution is a pipe-dream: if as Lapavitsas concedes ‘financialisation’ is completely woven into the structure of contemporary capitalism, how is the ruling class to be persuaded that for the good of all it has to be brought to an end?

It would be possible to go through each and every one of the remaining essays and discover the same illusions: that serious progress can be made without any reaction from the ruling class. Without this it would not be possible to advance a way forward for the working class through electoral politics. McDonnell himself subscribes to this idea: his notion of being ‘in and against the state’ is buttressed by his view that ‘I don’t think there’s any force out there that can in any way undermine or defeat us...Anything they throw against us we can overcome if we’re a mass movement which is aware of its own ideas, aware of its objectives and able to mobilise.’ Three years of Corbynism have seen no mass movement, and no end to Labour councils implementing savage cuts. Labour’s 2017 election manifesto was silent on the cuts to state working-age benefits that were central to the 2015 Tory budget. That McDonnell decided not to oppose the cuts in income tax included in the November budget was based on the sort of electoral calculations that are critical for parliamentary politics. Declaring that ‘we’re not going to take funding away from people...some of these are middle-earners, head teachers and people like that, who’ve had a rough time of it, as well as everyone else’, he was recognising the fact that Labour cannot win a general election without extensive support from the middle class and better-off sections of the working class. Such clarity contrasts with the fact that there is still no consistent Labour position calling for an end to the appalling Universal Credit. The dream world of Economics for the Many does not stand a chance against the realpolitik of electoralism.

Robert Clough