Labour’s leadership is at rock bottom – it won’t be forgiven for conniving in a rightwing Brexit

The majority who oppose leaving the EU need a new coalition to rescue us from disaster writes Will Hutton in The Guardian

 

 

The march through London for a People’s Vote in October. Photograph: Wiktor Szymanowicz/Barcroft Images


The Labour party is united: the vast majority of its MPs, its members and its voters – from all classes – want Britain to stay in the European Union. They recognise that Brexit is a project by the right for the right.

For the EU stands for openness, peace, tolerance and the best of the Enlightenment traditions. It is the most successful institutional architecture forging international collaboration yet known. Britain has benefited immeasurably from its membership. It is the European answer to the 21st-century question of how to manage interdependencies between countries – economic, trading, security, financial, scientific – in a world where necessarily they must grow.
Those who believe in it as a force for good do not want to go down without a struggle – to wimp out because to have another democratic encounter with the issue is said to be anti-democratic, arousing dark warnings of impending civic unrest from those asked to vote again. A one-off, never to be revisited referendum, as in totalitarian states in the 1930s, has become an irreversible building block for a rightwing world, with the connivance of parts of the old left that hold the same conception of imagined, untrammelled national autonomy as the extreme right. 

This brutal right, with its increasingly strident nationalist and racist overtones, is not going to go away after Brexit – it will raise the stakes still further, attempting to turn our beloved country into a venomous, intolerant cesspit. It has to be confronted sooner or later. Better sooner.

Yet Labour’s leadership refuses to speak for this powerful and growing conviction within its party – in the country, too, with opinion polls hardeningin favour of EU membership. As the government amazingly puts the country on to a war footing to manage the fallout of an impending hard Brexit, Labour’s voice is weak and temporising. In his interview with the Guardian Jeremy Corbyn says that even if Labour won a snap general election, it would lead the country out of the EU but with a “better deal” built around a permanent customs union. Ongoing EU membership threatens a socialist programme, he argues, because of state-aid rules. If Theresa May recasts her deal in softer terms, he will back it, he says.

His stance is wrong at every level. First, he has just reduced his electoral base to the shrinking Leave vote so that Labour will not and cannot win a general election. Remain voters, now the majority, must find another home. Worse, he is threatening the cohesion of his party by opposing its majority view and the values that support it, just as Brexit is threatening the cohesion of the Conservative party.

All members of the Labour party must now examine their conscience: is this what they stand for and believe? The Corbyn deal, which can only be incrementally different from the May deal, will suffer from all the same deficiencies. We are to be associated with our continent as a satellite but not to share in its governance or play a part in shaping its destiny.

It betrays a 19th-century view of socialism. What industries are going to be built by direct government subventions? The world of the future is not state-supported steel and cement companies. Britain has the third largest AI industry and could become the global hub for blockchain – all done inside the EU. The task for 21st-century socialism is not to bankroll directly such vigorous businesses. It is to build the architecture to generate more of them, enfranchise workforces, protect the backs of ordinary men and women, put environmental sustainability at the heart of our economy and continually to upgrade the social contract. In this, the EU is our ally, not our foe.

The case must be put to the people again, framed by what we now know. It must be allied to a passionate case for reform. The desperate poverty and extraordinary inequalities that disfigure our country and that properly persuaded millions they could not vote for the status quo have to be addressed. Our economy has to be reshaped by an imaginative state; our society recast; our political institutions reformed.

On top, we need two reciprocal commitments from Europe. Freedom of movement is a core freedom, but host societies must have the capacity to regulate inflows of people, otherwise intolerable strains are created. The multiple derogations from freedom of movement used by other EU states must be codified into a new deal that permits Britain, and of course other members, sufficient control of our borders.

Second, the EU itself needs a democratic and accountability reboot. We are not recommitting to the same old EU – but one committed to change.

This case would best be made by Labour as the centre of a cross-party coalition: it has credibility as a fighter against poverty and abusive capitalism and an advocate for internationalism. But the case for tolerance and openness cannot be made from a tribal silo. I admire Tories such as Phillip Lee, Jo Johnson and Sam Gyimah who have resigned on this issue, and others such as Anna Soubry, Justine Greening, Sarah Wollaston, Ken Clarke and Dominic Grieve. I would be proud to stand and campaign alongside them – and also Nicola Sturgeon, Caroline Lucas and Vince Cable. Any differences are secondary to what unites us. What does our country stand for, what is its future and who are our allies? Not Putin, Xi and Trump.

Such a declaration will write me off with Corbyn, his gatekeepers Seumas Milne and Karie Murphy, and his cheerleader in the union movement, Len McCluskey. Anyone not 100% loyal to their world view and tribe within a tribe is beyond the pale. Even in normal times, it is a disabling way to think and act in a democracy. Today, it is dangerous. The Labour party has hit bottom – conniving in antisemitism and now in the rightwing coup that is Brexit. Its break-up is no longer inconceivable, nor is the emergence of a left-of-centre alternative. Britain deserves better than this.

Why did Andrew Marr lose it with Shami Chakrabarti?

The establishment is throwing its toys out of the pram, with old-guard political broadcasters struggling to cope with change writes Faiza Shaheen in The Guardian 


BBC viewers used to the genteel, unflappable Andrew Marr might have had a shock on Sunday morning when the veteran broadcaster suddenly snapped. His guest, Shami Chakrabarti, explaining how Labour would follow through the Brexit referendum result, said: “I don’t know about you, Andrew, but I’m a democrat.” To which he barked, jabbing his crib notes in her face: “Don’t try and patronise me – I’m as much a democrat as you are!”

Change is hard to deal with – especially, it seems, for old-guard political broadcasters. Right now the number of women and people of colour coming forward and challenging the establishment is growing and the establishment is not taking it at all well. Yes, we can read their behaviour as bullying and obviously unacceptable, but Marr’s retort to Chakrabarti is just another sign that they have their knickers in a twist.

As well as Marr’s aggression, in recent weeks we’ve had Andrew Neil tweeting an outrageous insult about the award-winning journalist Carole Cadwalladr, Adam Boulton retweeting people who chastise me for sounding like I’m from east London, and Piers Morgan telling people of colour they should leave the country if they don’t take more pride in Britain.

The more I find myself in prestigious TV green rooms, traditionally not the spaces for women of colour from a working-class background, the more I see how establishment biases play out both on and off screen.

The first time I went on the Andrew Marr Show I was struck by the “in-crowd” cosiness of it all. In the green room the guests’ conversation consisted of showing off about who’d most recently had dinner with David Davis. On another occasion a Tory grandee completely ignored me. He said hello and goodbye to everyone else (all older, middle-class and white) on the panel and just looked straight past me as if I were invisible. This was particularly weird given that I directly addressed him while we were on air.


It’s no coincidence that before before last year’s election Diane Abbott, a black woman, received more online hate than any other politician

Sometimes the bias is more subtle. The organisation I run, Class, is often introduced on air as a leftwing or trade-union-supported thinktank. This doesn’t bother me – we’re transparent about where we get our money from and our political stance. However, it does irk me that my counterparts on the right are almost never introduced with their political bias upfront – and they are rarely transparent about where their funding comes from, which means that their vested interests are never called out.

And let’s consider why Marr might have had so much latent anger towards Chakrabarti: could it be that he no longer understands the world around him? He probably never imagined the rise of Jeremy Corbyn, whose shadow cabinet includes more working-class people, women and ethnic minorities than any before.

We cannot let the media dinosaurs – people who should be taking a long hard look at their prejudices – make us feel we’re the ones in the wrong. And this has real-world consequences: it’s no coincidence that before last year’s election Diane Abbott, a black woman, received more online hate than any other politician.

Nowadays I’ve taken to drawing satisfaction when seeing outbursts such as Marr’s: it’s the privileged white-male equivalent of throwing toys out of the pram, and shouting: “It isn’t fair!” We need to fight their attitudes and demand fairer representation, but we should also take pride in the fact that they’re finally being forced to acknowledge us.

How would Corbynism work in government? Here’s a clue

Aditya Chakrabortty in The Guardian


What will a Corbyn government actually do? Brexit aside, British politics has no bigger known unknown. The prospect fills the rich with fear and the left with hope. Both sides assume that Prime Minister Jeremy Corbyn will be defined by his radicalism, yet in one corner of Britain an arm of the state is already ruling in his name. And the early results are sobering.

In the north London borough of Haringey, the Blairite council leadership was deposed by Labour members a few months ago and replaced with avowed leftwingers. Said the new council leader, Joe Ejiofor: “Over the next four years, it will be up to us to show everybody what this mythical beast the Corbyn council does.” The title may not have been of his making, but by God was he going to wear it. “It is for the many, not the few.”

Everybody cheering that May morning knew what he meant. No more slinging families out of their homes to clear way for multinational developers. No more machine politics and trampling over communities. No more of the politics of contempt.

It was the willingness of the previous leader, Claire Kober, to hand swaths of the borough over to giant building companies that forced her out of office. The Corbyn councillors know they’ll be judged on how far they protect locals from a predatory property industry, which is why they have cancelled the terrible Haringey Development Vehicle. But a real case study of the possibilities and pitfalls of Corbynism in government can be seen right now, in the battle over a small market in Tottenham.

Everyone’s first impressions of Seven Sisters market are terrible. No signs welcome passersby, and the front is almost truculent in its tattiness. But venture inside, and, as another Guardian contributor wrote of a visit: “Within a minute of arriving it was obvious to me that it is irreplaceable.” Because it is magic: a warren of stalls, customised with wooden balconies and eaves, where nearly all the shopkeepers are from Latin America. They sell Colombian coffee and Argentinian meat and films from back home. The soundtrack is a babble of Spanish and salsa. Latin Americans, among them Corbyn’s wife, Laura Alvarez, flock here from across the capital.

“Without this market, the community would have a mental breakdown,” says Vicky Alvarez, who runs a hairdresser’s. In a city that brags of its openness to the world, here’s a corner that bears that out. In a nation of shopkeepers, here are migrants grafting to realise their dreams. About 80 families rely on the so-called Latin Village for their living. Generations of kids have been raised here, playing in the plywood warren. Alvarez says, “We are like meerkats, watching over each other’s children.”

It may take a village to raise a child, but it has taken migrants to raise this village. I remember when this place was semi-derelict.

Anywhere else, the Latin Village would be a prize attraction – but Haringey has decided it should be knocked down and handed over to Britain’s biggest private residential landlord to redevelop. Grainger’s plans include nearly 200 homes, not one of which will be at council rent. The architects’ drawingsshow a Costa and a “Pasta Express”. It is BlandTown, and Labour signed off on the lot. The politician who has done most for the largely Corbyn-supporting traders is a Tory: Boris Johnson, as London mayor, decreed that the indoor market had to be protected.

‘Everyone’s first impressions of Seven Sisters market are terrible.’ Photograph: Alamy

Like many of the headaches that await Prime Minister Jez, this was one Ejiofor’s team inherited. The complication is that a key part of the land, which sits right above a tube line, is owned by Sadiq Khan’s Transport for London (TfL). Yet the Corbyn council has made the issue worse. It needed someone in charge of regeneration who was allergic to the charms of property developers, but the new leader has instead appointed Charles Adje. Just a few years ago Adje was suspended as a councillor for covering up an official note warning against giving a licence to an especially controversial developer. Asked about this, the council says Adje “made an error of judgment”.

Within weeks of becoming leader, Ejiofor received a lawyer’s letter from traders in part detailing their problems with the man who owns the lease to the market. Jonathan Owen was last year reprimanded by TfL for phrases such as “bloody illegal immigrants”, and declaring at a meeting that “if I wanted to, I could get rid of 90% of the traders here”. The official investigation I have seen notes that he has apologised for the behaviour. He remains in place, paying £60,000 a year for the lease while taking what stallholders conservatively estimate is £340,000 in rent from all of them. The traders have previously offered £100,000 to manage the lease themselves, but TfL took the lower bid.

Very little of that money seems to have been reinvested in the market: carpet tiles are broken and filthy and the electrics keep breaking, so the cafes and butchers’ foodstuffs rot. Questioned about this and other issues, Owen offered no comment. When traders asked last month whether the drains could be unblocked, Owen’s reply was: “When was the last time you cleared the drains in your house?”

This is the Corbyn council’s first big test, and handling it ought to be simple. They’re supposed to take the side of the people, not builders. Their manifesto promises: “Where we have to regenerate parts of the borough, we will bring residents with us.” At a meeting this summer opened by Corbyn ally Chris Williamson, Labour members across the borough voted to stop any demolition of Latin Village, and to save it as a “cultural asset”. Ejiofor’s team has a mandate; it’s just not upholding it. 

Rather than taking up the traders’ case, Ejiofor and Adje have fobbed them off. Instead of Haringey cracking down on the market manager, last month it sent an enforcement officer to hassle traders. A pregnant woman running a nail bar was found without a licence, and told to close the shop. In a complaint that I have seen, she said she had felt “embarrassed and humiliated” in front of customers and neighbours. Days later, she miscarried.

This small story carries big lessons for all those hoping for a radical alternative in national government. Ask Haringey cabinet members why they have handled this so badly, and they complain about having a plateful of poison pills left by the last lot. One says: “It’s so difficult to shift the bureaucracy.” Any Corbyn administration will face both of these problems, multiplied a hundredfold.

None of the above is intended to damn a council leadership that’s only five months old and which has some good ideas about cutting council tax for the working poor. Nor is it meant to put on the frighteners about a Corbyn government. But any new Labour administration will be judged on how much change it makes for the people it claims to represent, and how far it represents the social movements whose energy it draws upon. This is the age-old tension of Labour in government, and it will be felt especially keenly by a social-movement politician like Corbyn.

Locally or nationally, no radical government will have it easy. Money will be tight, and Britain has political and economic structural problems that will take decades to put right. Which is why the case of the Latin Village is so instructive. A council must be able to pick the right side in a fight as small as this. It ought to be able to follow some basic principles. Let traders run their own market, and invest in the Latin Village as a local gem. A bit of imagination, a dollop of willpower, lashings of principle. The Corbyn council should learn from this case. Its supporters expect better; the traders deserve better.

Trump has a point about globalisation

Larry Elliott in The Guardian

The president’s belief that the nation state can cure economic ills is not without merit


  

‘The stupendous growth posted by China over the past four decades has been the result of doing the opposite of what the globalisation textbooks recommend.’ Photograph: AFP/Getty Images


Once every three years the International Monetary Fund and the World Bank hold their annual meetings out of town. Instead of schlepping over to Washington, the gathering of finance ministers and central bank governors is hosted by a member state. Ever since the 2000 meeting in Prague was besieged by anti-globalisation rioters, the away fixtures have tended to be held in places that are hard to get to or where the regime tends to take a dim view of protest: Singapore, Turkey, Peru.

This year’s meeting will take place in a couple of weeks on the Indonesian island of Bali, where the IMF and the World Bank can be reasonably confident that the meetings will not be disrupted. At least not from the outside. The real threat no longer comes from balaclava-wearing anarchists throwing Molotov cocktails but from within. Donald Trump is now the one throwing the petrol bombs and for multilateral organisations like the IMF and World Bank, that poses a much bigger threat.

The US president put it this way in his speech to the United Nations on Tuesday: “We reject the ideology of globalism and we embrace the doctrine of patriotism.” For decades, the message from the IMF has been that breaking down the barriers to trade, allowing capital to move unhindered across borders and constraining the ability of governments to regulate multinational corporations was the way to prosperity. Now the most powerful man on the planet is saying something different: that the only way to remedy the economic and social ills caused by globalisation is through the nation state. Trump’s speech was mocked by fellow world leaders, but the truth is that he’s not a lone voice.

The world’s other big economic superpower – China – has never given up on the nation state. Xi Jinping likes to use the language of globalisation to make a contrast with Trump’s protectionism, but the stupendous growth posted by China over the past four decades has been the result of doing the opposite of what the globalisation textbooks recommend. The measures traditionally frowned upon by the IMF – state-run industries, subsidies, capital controls – have been central to Beijing’s managed capitalism. China has certainly not closed itself off from the global economy but has engaged on its own terms. When the communist regime wanted to move people out of the fields and into factories it did so through the mechanism of an undervalued currency, which made Chinese exports highly competitive. When the party decided that it wanted to move into more sophisticated, higher-tech manufacturing, it insisted that foreign companies wishing to invest in China share their intellectual property.

This sort of approach isn’t new. It was the way most western countries operated in the decades after the second world war, when capital controls, managed immigration and a cautious approach to removing trade barriers were seen as necessary if governments were to meet public demands for full employment and rising living standards. The US and the EU now say that China is not playing fair because it has been prospering with an economic strategy that is supposed not to work. There is some irony in this.

The idea that the nation state would wither away was based on three separate arguments. The first was that the barriers to the global free movement of goods, services, people and money were economically inefficient and that removing them would lead to higher levels of growth. This has not been the case. Growth has been weaker and less evenly shared.

The second was that governments couldn’t resist globalisation even if they wanted to. This was broadly the view once adopted by Bill Clinton and Tony Blair, and now kept alive by Emmanuel Macron. The message to displaced workers was that the power of the market was – rather like a hurricane or a blizzard – an irresistible force of nature. This has always been a dubious argument because there is no such thing as a pure free market. Globalisation has been shaped by political decisions, which for the past four decades have favoured the interests of capital over labour.
Finally, it was argued that the trans-national nature of modern capitalism made the nation state obsolete. Put simply, if economics was increasingly global then politics had to go global, too. There is clearly something in this because financial markets impose constraints on individual governments and it would be preferable for there to be a form of global governance pushing for stability and prosperity for all. The problem is that to the extent such an institutional mechanism exists, it has been captured by the globalists. That is as true of the EU as it is of the IMF.

So while the nation state is far from perfect, it is where an alternative to the current failed model will inevitably begin. Increasingly, voters are looking to the one form of government where they do have a say to provide economic security. And if the mainstream parties are not prepared to offer what these voters want – a decently paid job, properly funded public services and controls on immigration – then they will look elsewhere for parties or movements that will. This has proved to be a particular problem for the parties of the centre left – the Democrats in the US, New Labour in Britain, the SDP in Germany – that signed up to the idea that globalisation was an unstoppable force.

Jeremy Corbyn certainly does not accept the idea that the state is obsolete as an economic actor. The plan is to build a different sort of economy from the bottom up – locally and nationally. That’s not going to be easy but beats the current, failed, top-down approach.

Rudd’s career lays bare the new rules of power: crash around and cash out

The ex-home secretary’s rise and fall is typical of an inexperienced elite that regards ordinary people with contempt writes Aditya Chakrabortty in The Guardian

At least one consolation remains for Amber Rudd. Drummed out of the Home Office, she can now spend more time in her constituency of Hastings: the same seaside resort she found irresistible because “I wanted to be within two hours of London, and I could see we were going to win it”. Yet Rudd loves her electorate, rhapsodising about some of them as people “who prefer to be on benefits by the seaside … they’re moving down here to have easier access to friends and drugs and drink”.

Relax. I come neither to praise nor to bury Rudd, but to analyse her. Or, rather, to place her in context. What stands out about this latest crash-and-burn is how well it represents the current Westminster elite, even down to the contempt for the poor sods who vote for them.

Rudd exemplifies a political class light on expertise and principle, yet heavy on careerism and happy to ruin lives. All the key traits are here. In a dizzying ascent, she went from rookie MP in 2010 to secretary of state for energy in 2015, before being put in charge of the Home Office the very next year. Lewis Hamilton would kill for such an accelerant, yet it leaves no time to master detail, such as your own department’s targets. Since 2014 Sajid Javid, Rudd’s replacement, has hopped from culture to business to local government, rarely staying in any post for more than a year. Margaret Thatcher kept her cabinet ministers at one department for most of a parliamentary term, but this stepping-stone culture turns urgent national problems – such as police funding and knife crime – into PR firefighting.
Another hallmark of this set is the disposability of its values. Cameron hugs Arctic huskies, then orders aides to “get rid of all the green crap”. As for Rudd, the May cabinet’s big liberal, she vowed to force companies to reveal the numbers of their foreign staff, stoking the embers of racism in a tawdry bid to boost her standing with Tory activists. Praised by Osborne for her “human” touch, she was revealed this week privately moaning about “bed-blocking” in British detention centres.

And when things get sticky, you put your officials in the line of fire. During the Brexit referendum, Osborne revved up the Treasury to generate apocalyptic scenarios about the cost of leaving. While doomsday never came, his tactic caused incalculable damage both to the standing of economists and to the civil service’s reputation for impartiality. Rudd settled for trashing her own officials for their “appalling” treatment of Windrush-era migrants.

None of these traits are entirely new, nor are they the sole preserve of the blue team. At the fag end of Gordon Brown’s government, the sociologist Aeron Davis studied the 49 politicians on both frontbenches. They split readily into two types. An older lot had spent an average of 15 years in business or law or campaigning before going into parliament – then debated and amended and sat on select committees for another nine years before reaching the cabinet.

The younger bunch had pre-Westminster careers that typically came to little more than seven years, often spent at thinktanks or as ministerial advisers. They took a mere three years to vault into cabinet ranks. This isn’t “professionalisation”. It is nothing less than the creation of a new Westminster caste: a group of self-styled leaders with no proof of prowess and nothing in common with their voters. May’s team is stuffed full of them. After conducting more than 350 interviews with frontbench politicians, civil servants, FTSE chief executives and top financiers, Davis has collected his insights in a book. The argument is summed up in its title: Reckless Opportunists.

Davis depicts a political and business elite that can’t be bothered about the collective good or even its own institutions – because it cannot see further than the next job opportunity. In this environment, you promise anything for poll ratings, even if it’s an impossible pledge to get net migration down to the tens of thousands.

Good coverage matters more than a track record – because at the top of modern Britain no one sticks around for too long. Of the 25 permanent secretaries in Whitehall, Davis finds that 11 have been in post less than two years. Company bosses now typically spend less than five years in the top job, down from eight years in 2010. Over that same period, their pay has shot up from 120 times the average salary to 160 times. Bish bash bosh!

There is one field that revels in such short-termism: the City. What emerges from Reckless Opportunists is the degree to which City values have infected the rest of the British elite. Chief executives are judged by how much cash they return to shareholders, even if that means slashing spending on research and investment. Ministers either come from finance (Rudd, Javid) or end up working for it (Osborne and his advisers).

Promise the earth and leave it to the next mug to deliver. Crash around, cash out and move on to the next job. State these new mantras, and you see how Jeremy Corbyn, whatever his other faults, can’t conform to them. You can also see how he poses such a threat to a political-business elite reared on them.

Soon after May moved into No 10, she famously declared: “If you believe you are a citizen of the world, you are a citizen of nowhere. You don’t understand what citizenship means.” The press wrote it up as her threat to migrants. Yet the more I think about it, the more accurately I believe it describes her own shiny-faced team, her own poisonous politics, her own self-serving elite.

Targeting Corbyn

Mahir Ali in The Dawn


LAST Sunday, many of the participants in the latest protest in London against the Labour Party’s allegedly inadequate response to anti-Semitism are likely to have been buoyed by a report in The Observer about a £50 million project to launch a centrist third force in British politics.

There is no guarantee that such a party will indeed take shape before the next general election, but it does not require much imagination to categorise it as part of the effort to ensure that Jeremy Corbyn never becomes prime minister. Whether many members of the Parliamentary Labour Party would be dumb enough to latch on to such an enterprise, given the dire fate of the last concerted effort to ‘break the mould’ back in the early 1980s, is an open question.

The majority of Labour parliamentarians were discombobulated by a dedicated socialist’s emergence as party leader three years ago, and moves to unseat him were launched almost immediately. The idea of a dedicated socialist leading a party that had once prided itself on its socialism, but had in the 1990s lapsed into a kind of neoliberalism that made it virtually indistinguishable from the Conservative Party, was anathema to the Blairite diehards.

But Corbyn enjoyed mass support among the party membership, and an attempt to replace him led to his re-election with an even bigger majority. Never mind, the malcontents thought, the next general election will render his leadership untenable after Labour is decimated. But when Theresa May made the mistake of calling an early election last year, the opposition made substantial gains while the Tories lost their majority.

Corbyn’s critics were temporarily silenced. A few stepped back, and some opponents even recanted their scepticism about his leadership. The ideological divide remained unbridged, though, and the tendency to latch on to smear campaigns undiminished.

Not long ago, they were heartened by news reports suggesting Corbyn might have been a communist spy, based on the testimony of a delusional former Czechoslovak diplomat. That mud didn’t stick. Corbyn’s considered response to the poisoning of a Russian ex-spy and his daughter in Salisbury offered another opportunity to malign him, just because the Labour leader sensibly suggested that solid evidence of Russian state complicity in the outrage should precede any action against Moscow.

Reverting to the anti-Semitism trope emerged as the next best option for destabilisation, the latest hook being Corbyn’s sympathy eight years ago in a Facebook post for an artist deploring the erasure of an anti-capitalist mural he had pained on a wall. Corbyn has apologised for failing to notice the mural’s anti-Semitic implications at first glance — namely a couple of stereotypical Jewish faces among the bankers sitting around a table that is crushing the rest of humanity.

It has been claimed the depiction echoes Nazi propaganda, although the critics generally fail to mention that in Germany back then it was common for ‘Jewish financiers’ to be condemned specifically for bankrolling Russia’s Bolshevik revolution, many of whose stalwarts were in turn targeted by their foes on the basis of their Jewish origins.

There is a long history of virulent anti-Semitism across Europe, which contributed to the Holocaust but also survived the Second World War. Its European manifestations today are found mainly on the Continent rather than in Britain, largely on the far right of politics. They are dwarfed, though, by growing anti-Muslim prejudice.

It is perfectly appropriate that even the most passionate critics of the militant Islamic State group or Saudi Arabia, including Corbyn, are seldom branded as Islamophobes. By the same token, it is utterly ridiculous for all critics of Israel, including Jews, to be dubbed anti-Semitic. It is certainly wrong to conflate Jewishness with Israel or with Zionism. But this is a grave error that is routinely compounded by all too many Zionists and most representatives of the Israeli state.

It was in evidence last week when Corbyn was berated for attending a Passover Seder organised by a non-Zionist Jewish collective called Jewdas in his London constituency. To an extent, this particular smear backfired on the Jewish Board of Deputies and other critics. On the other hand, a poll published last Sunday found that half of the British electorate believes — contrary to the evidence, but in keeping with the malign diatribes echoed throughout the mainstream media, from The Guardian to the Daily Mail — that Labour has a bigger anti-Semitism problem than other parties, and that 34 per cent of voters believe Corbyn is among those who hold anti-Semitic views, notwithstanding his unrelenting opposition to all forms of racism.

The latest campaign may have been motivated in part by the May 3 local elections, and its efficacy should be visible in a couple of weeks. It is reassuring, though, that Corbyn has not been cowed into tempering his criticism of the latest atrocities in Gaza.

Elected representatives will do the right thing on Brexit

Nick Clegg in The Financial Times


Like the suspense in an old-fashioned cowboy film before the final gunfight, tension in Westminster is already rising as MPs prepare for the “meaningful” vote on Brexit towards the end of this year. The upcoming debates in the House of Commons will be the political equivalent of scuffles in a saloon, harbingers of the real showdown to come. 

Many MPs — the majority of whom would probably slip the noose of Brexit if only they knew how — are still waiting, hoping, that something might turn up. Perhaps public opinion will shift decisively against Brexit before the vote? Maybe the economic damage will suddenly become more obvious? Or could the gory details of the Brexit deal itself prompt people to think again? 

The truth, alas, is much harsher. Public opinion has shifted a little in favour of the Remain camp, and a lot towards wider concern about the impact of Brexit on the NHS and the economy. But it remains firmly enveloped in an indifference towards the details of the negotiations, and a sullen belief that politicians should just “get on with it”. Advertising campaigns by anti-Brexit groups will not, on their own, shift opinion in a big way. 

Equally, while there are abundant signs that Brexit has already had a chilling effect on economic growth, it has not (yet) done so in a dramatic enough fashion to force a rethink. And those who hope for a level of unforgiving detail in the Brexit deal will hope in vain: there is a shared interest between David Davis and Michel Barnier not to scare the horses, either in Westminster or the European Parliament, before the definitive votes this winter. They both want a deal, and both are happy to delay the really tricky choices about the future EU-UK relationship until after parliamentarians can do anything about it. 

So MPs will have nowhere to hide. They are unlikely to be rescued by last minute developments. They will be left alone with their own consciences. And this is exactly as it should be: the vote on the government’s Brexit deal will be like no other in recent history, touching on every vital economic, security and constitutional feature of our country. That is why John Major was right to call for a free vote for MPs, and to suggest that, in the absence of an unwhipped vote, MPs should put the final deal to another vote of the people instead. 

As MPs limber up to make their choice, they can at least be sure of one thing: all of the reasons which (they will be told) oblige them to support the deal will be false. Some newspapers will screech that a vote against the deal is a vote to put Jeremy Corbyn into Downing Street, when in truth the Fixed Term Parliament Act protects the government from an instant election. 

Commentators will opine that without a deal the UK will crash out of the EU on March 29 next year, when it is obvious that the EU27 would give the UK more time. And the repeated allegation that a vote to withhold parliamentary consent would “defy the will of the people” ignores the fact that the version of Brexit presented to MPs will be utterly different to the version promised to voters, and that the world has changed dramatically since 2016. 

The notion, for instance, that MPs should not be allowed to take into account America’s lurch to protectionism under President Donald Trump when assessing the best way forward is absurd. One of the greatest hallmarks of a healthy democracy, as opposed to rigid ideological regimes, is an ability to adapt in the face of changing circumstances. Democracies self-correct in a way which theocracies and authoritarian systems cannot. To deny MPs the right to make such judgments is an abrogation of democracy. 

In the end, it comes down to a judgment by our elected representatives to do what they believe to be best for those they serve. Given the universal cynicism with which politicians are viewed, my hunch is that this is one bit of the Brexit jigsaw which is too readily overlooked. In the end, most MPs, most of the time, want to do the right thing.

This is not a Corbynite coup, it’s a mandate for his radical agenda

Gary Younge in The Guardian

Kings were put to death long before 21 January 1793,” wrote Albert Camus, referring to Louis XVI’s execution after the French revolution. “But regicides of earlier times and their followers were interested in attacking the person, not the principle, of the king. They wanted another king, and that was all.”

One of the biggest mistakes the critics of Jeremy Corbyn, the Labour leader, made from the outset – and there are many to choose from – was that his victory was about him. They refer to “Corbynites” and “Corbynistas” as though there were some undying and uncritical devotion to a man and his singular philosophy, rather than broad support for an agenda and a trajectory. If they could get rid of the king, went the logic, they would reinherit the kingdom. With a new leader normal service could resume. Labour could resuscitate its programme of milquetoast managerialism, whereby it was indifferent to its members, ambivalent about austerity at home, and hawkish about wars abroad.

This week’s resounding victory of a slate of leftwing candidates to Labour’s national executive committee, the party’s ruling body, has put that assumption to rest for the moment. There is now a reliable majority on the NEC who back both democratising the party, to give members more control, and pursuing policies against austerity and war and for wealth redistribution.


Corbyn has been accused of tightening his grip on the party so that he may purge critics and promote cronies. The logic is perverse


That this should have happened in the week of Carillion’s collapse has a certain symmetry. Carillion took billions in public funds for public projects, paid its executives and shareholders handsomely, and has now left taxpayers to pick up the pieces in a system of private finance initiatives introduced by Conservatives but championed and vastly expanded by New Labour.

It was anger at this kind of rank unfairness, the inequalities it both illustrated and imposed after the economic crash, that explains not just Corbyn’s victory but the rise of the hard left across Europe and in the US.

The contradictions inherent in Corbyn’s rise are finally ironing themselves out. In 2015 he won not the leadership but the title of leader. Unlike Podemos in Spain or Syriza in Greece, his ascent was not the product of a movement that could sustain his challenge from the margins; instead he emerged from a wider, inchoate sense of frustration and alienation that propelled him to the top within the mainstream. Without the consent of MPs he lacked the authority that would endow that title with power and meaning in parliament. Outside parliament he lacked the kind of organised support that could buttress his position against this hostility. This left him embattled, isolated and, to some extent, ineffective, since his primary task was not to exercise leadership but to cling on to it.

'I'm JC': Jeremy Corbyn on ageing, infighting and his Tory 'friends'



Last year’s general election changed all that. Labour’s gains, with its highest vote-share since 2001 leaving the Tories without a majority, proved that there was a broad electoral constituency for his redistributive, anti-austerity agenda. In so doing it showed that the membership was far more in touch with the needs and aspirations of the electorate than the parliamentarians.

Now, with the shadow cabinet no longer in open revolt, the parliamentary party quiescent, if not onside, and the party machine no longer obstructive, at almost every tier the party has either come around or made its peace with him. Meanwhile, outside parliament, Momentum – the leftwing caucus within the party that supports Corbyn’s agenda – has become more organised and less fractious, providing a more coherent plank of support beyond Westminster. Finally, Corbyn can do what he was elected to do – lead on the agenda he has laid out.

Leftwing control of the NEC was one of the last pieces to fall into place. Since the three candidates who won this week were backed by Momentum, and one – Jon Lansman – is its founder, this latest shift will inevitably provoke some bedwetting.

Those who have got everything wrong about Labour over the past two years will, of course, get this wrong too. We must once again brace ourselves for rhetorical hyperbole. Corbyn has been accused of tightening his grip on the party so that he may purge critics and promote cronies. The logic is perverse. The Stalinists, in the minds of his most feverish critics, are the ones who keep winning internal elections hands down; the democrats are those who launched a coup against the popular choice.

Jeremy Corbyn speaks to NHS staff at Park South community centre in Swindon. Photograph: Andrew Matthews/PA

The obsession, among parliamentarians and their courtiers, is that this latest development will lead to a wave of deselections (or purges) in which MPs hostile to this new orientation will be forced out. There is some irony in the notion that those who tried to depose an elected leader with a huge mandate might bristle at the prospect of being removed by an election.

For now, that fear seems unfounded. While Momentum certainly believes MPs should be more accountable to their local parties, there is little evidence that this is a strategic priority (which doesn’t mean some local chapters might not pursue it). Corbyn’s team is not keen either, believing the pain rarely justifies the gain.

This is a relief. Another election could be upon us at any moment. The party does not need more trauma. Moreover, the gains are likely to be minimal. Corbyn is not king; his word is not law. The moment has tipped in his favour, not swung to him completely. And while the party may have made its peace with him, Momentum still sits outside its comfort zone. According to the website Labourlist, of the 24 key marginals to be contested so far, Momentum candidates have won in just five, while a further six have gone to candidates from the “wider Labour left”. The rest have been taken by “trade unionists, longstanding local campaigners and former [candidates]”.

Momentum’s focus is instead on funding organisers to transform the party into a social movement by connecting it with local campaigns – be they over caretakers’ pay, or cuts to schools and hospitals. For those whose understanding of politics and power is limited to elections and parliament, this will seem at best a waste of time. But anything that engages members, be they new or longstanding, in activities that make Labour more dynamic and receptive to the outside world should be welcomed.

This would fulfil one of three central challenges for Momentum in the foreseeable future. The second is to deploy all its resources – digital, human, organisational – to help Labour win at the next election. The third is to establish some independence from the Labour leadership, so that it can continue to advocate for a left agenda, should the party come to power. However confused the left might be about where power resides, the right understands that a range of vested interests, from big business to hot money, can force parliament’s hand and thwart the popular will.

Like most radical governments, Labour will have to negotiate between the powers that be and the forces that made them possible. Corbyn is not king. It was pressure from below that made him possible. It will be pressure from below that keeps him viable.

My predictions for 2018

1. Britain will do well in the negotiations this year. The final agreement will be a soft Brexit which the Remainers desire. There will be some restrictions on the free movement of people, something which the EU could have given to David Cameron to avoid all these complications.

2. Vijay Mallya will be extradited to India, he will remain unconvicted,  yet he will have to cool his heels at Tihar Hotel for some time to show that the government will take action against powerful businessmen.

3. Like Anil Ambani, the A listers with huge Non Performing Assets will carry out some debt restructuring. However they will not be named and shamed nor will they be rid of their business ownership.

4. England will win the Football World Cup.

5. Corbyn will not become Prime Minister as the Tory Party will do enough to stay together.

6. China's CPEC will run into bigger problems.

7. The Pakistan military will initiate peace proceedings with India.

How British politics rediscovered Tony Benn and Enoch Powell

John McTernan in the Financial Times

All political lives . . . end in failure”. Enoch Powell’s memorable line resonates 40 years on not only because it seems so true, but because it was underscored by his own career. A brilliant academic, a decorated soldier and a reforming health minister, Powell was set for the highest office until the racist “Rivers of Blood” speech exiled him to the Commons backbenches and eventually to Northern Ireland as an Ulster Unionist MP. 

Yet despite the well-known arc of triumph to tragedy, the time has surely come to revisit his dictum — for Powell is the politician who dominates our age as no other does. The arguments that he articulated in the 1960s and 1970s resonate across the world. On the one hand, the seemingly unstoppable rise of the populist right, from France’s Marine Le Pen to Hungary’s Viktor Orban. On the other, the abiding split on Europe within the Conservative party that no leader has ever healed. The age of Brexit is the age of Powell. 

Why? First, British politics is dominated by immigration, a discussion conducted in terms that could have been drawn straight from the book of Powell. His infamous 1968 speech is still deeply disturbing to read but its tropes are all too recognisable. 

There is the obsession with numbers. Powell asks that since “it be not wholly preventable, can it be limited?” — a view that has its echo in the current Tory government’s fixation on cutting net migration to tens of thousands. There is the argument, too, of the pressure on public services. And there is the acceptance that UK residents are the victims of immigration: “The . . . sense of alarm and resentment lies not with the immigrant population but with those among whom they have come and are still coming.” The eugenicist strand is all that is missing from contemporary politics. 

Arguments which were so repellent and unacceptable that Powell was sacked from the Tory shadow cabinet have become mainstream. Paradoxically, it was the migration of white Christians from eastern Europe after 2004 that proved the political tipping point in the UK, legitimising a discourse about immigration that claimed to be about culture rather than race, but had clear roots in Powell’s racism. All this despite the fact that the apocalyptic visions of Powell were refuted by the reality of modern Britain. When Prince Harry marries Meghan Markle next year, the Royal Family will, like so many families, have a mixed race member. That success is a measure of just how wrong Powell got his predictions. 

Yet, arguments are one of the great political legacies — and while Powell lost in fact, he has won in rhetoric. The Brexit Leave vote was not just due to his argument but also to the cowardice of leaders of both main political parties in not challenging outright untruths about migration. Powellite arguments were marshalled against one of the institutions he most strongly opposed, the EU. It was Enoch wot won it. 

Finally, Powell would appreciate the irony that his once mighty Conservative party is being propped up in power by the Ulster Unionist’s usurpers, the Democratic Unionist party. The narrow views of a political party from Northern Ireland hold the whip hand in the most important peace time negotiations ever undertaken by the UK. 

The observation that all political careers do not end in failure is not restricted to the right of British politics. It is not merely that Jeremy Corbyn spent decades in the wilderness before increasing votes for the Labour party in this year’s snap election, depriving Theresa May of both a majority and a mandate. Take a look at his policies and his politics. They are routinely assaulted as coming from the 1970s. Nationalisation, council house building and government-planned industrial strategy. 

But they come from a very specific source in the 1970s: Tony Benn, another grand politician whose career ended in apparent failure. A successful technocratic minister in Harold Wilson’s government in the 1960s, after Labour’s surprise defeat in the 1970 general election Benn turned sharply to the left. He shaped the Labour governments of the 1970s, with their increase in nationalisation and state investment in industry. He was the architect of Labour’s 1983 manifesto — the so-called “longest suicide note in history” — which led the party to a historic defeat. Benn’s state-sponsored companies collapsed, his bid for deputy leader of the Labour party failed, the Alternative Economic Strategy — the siege economy which was his great ideological project — abandoned. 

And finally, under Tony Blair the party became New Labour, accepting much of the Thatcherite settlement. It embraced the market, celebrated business and was an unprecedented success electorally. Benn and Bennism was over. 

Or so it was thought. Now Benn and Powell — whose careers ended so badly in the 1970s — dominate the ideas of British politics. The Tory party is riven by a divide over Europe deeper than it has been at any time since Powell and Benn led the campaign against common market membership in the 1975 referendum. With the migration target, and a majority sustained only by DUP MPs, Mrs May’s government cannot escape Powell’s long shadow. Meanwhile, in Mr Corbyn’s Labour party, state planning is back. With promises of tax rises targeted on corporations and the wealthy, this is the return of Old Labour with a vengeance. In British politics there has rarely been such successful second acts.

Signs that Britain may not Brexit after all the fuss

Sean O'Grady in The Independent

Is this it? The moment when the May premiership is over? Could Corbyn end up taking power in a matter of weeks? It’s at least possible, though I concede it sounds far-fetched at first.

In history, some British Prime Ministers have had their premierships wrecked by the “Irish Question”. Others, in more recent times, have been destroyed by Europe. Theresa May is unique in managing to combine both famously intractable and insoluble issues into one lethal cocktail.

And so, it seems she is about to swallow the poison. Her premiership may be even shorter than many anticipated, and a Jeremy Corbyn-led government could be a fact of British life by the time the snows melt next year. Here’s how.

From what we can discern, the Government is perfectly happy to concede “special status” for Northern Ireland / Ireland in the Brexit talks – anathema to the Ulster Unionists. This is because the Government desperately needs to get onto the second phase of the process – the trade talks for the whole UK – and MPs, without being too crude about it, are happy to sign whatever the EU sticks under their nose and worry about the consequences later.

In the end, they will risk their support from the DUP to get moving on Brexit. Jobs (Tory MPs’ included) are at stake. After all, ministers such as David Davis always say that “nothing’s agreed until everything’s agreed”, so having now ratted on the Democratic Unionists, they can, in due course, re-rat on the Irish and the EU, after a trade deal is sorted out. 

With a bit of luck, some creative ambiguity and some more bribes and false promises for the DUP, Theresa May might just pull it off. Perfidious Albion would have foxed the Unionists in the wider national (i.e. Tory) interest.
For such an unlucky Prime Minister, it would be a bit of a turnaround – but, as in horse-racing and football, the form book does count for something; the litany of May’s calamities suggest she won’t, in fact, get away with it.

The DUP could quite conceivably get so angry that they’d scrap their agreement with the Tory-minority Government and resolve to get rid of them. Then May would have to appeal to the Opposition parties, especially Labour, to rescue her in the Commons.

Fat chance. If Corbyn wants, he could find any number of grounds for voting May out of office, but failure of Brexit is a pretty good one. He could then either cobble together a new Frankenstein coalition or, more realistically, follow the provisions of the Fixed Term Parliament Act to secure a fresh general election. With an eight-point poll lead over the Conservatives, wouldn’t you?

Of course that would mean the DUP would let in the “Sinn Fein-loving Corbyn” (as they might see it), so they’d have a tough choice, but they might have sufficient fear about what their constituents in Ulster would do to them if they kept the treacherous Tories in power that they’d feel they have nothing to lose.

In which case we’d have an election in, say, February, and perhaps another hung Parliament – but this time with Labour as the largest party, able to govern in its own right, though constrained by parliamentary arithmetic. 

The incoming government would ask, if it was sensible, to put Brexit on pause while it changes policy, and the EU would happily oblige if there was a chance of reversing Brexit – via, say, a second referendum. Or Corbyn and Keir Starmer could just agree to stay in the single market and some version of the customs union. Arlene Foster might in fact be able to live with that.

In which case, by spring, it would all be over for May, Boris, Gove and the old gang, and they could get on with their civil war in earnest.

Not for the first time, the ball is in Jeremy Corbyn’s court, both in terms of unseating Theresa May and stopping Brexit, or at least a hard Brexit. The Irish Question and the European issue will, not for the first time, have altered the course of British history, and end prematurely some once-glittering political careers.

The magic money tree does exist, according to modern monetary theory

Youssef El-Gingihy in The Independent


After seven years of austerity, we are accustomed to thinking of the economy as a household with the nation’s credit card maxed out, to paraphrase David Cameron. The fetishisation of debt translated into massive cuts to UK spending on public services. At the same time, there remains widespread public anger that the big banks continued to make record profits and bonuses in spite of George Osborne’s assurances that we would all be in it together.

That was then though. Both Cameron and Osborne have since departed. This year, the political climate turned on its axis. The Conservative majority of 2015 gave way to a hung parliament with 40 per cent of voters opting for Corbyn’s Labour. The electorate’s acceptance of austerity mantras had evidently reached its limit.

Against this backdrop, the publication of Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal Worldcould not be more timely. It is written by 65-year-old Australian heterodox economist William Mitchell and the journalist and author Thomas Fazi. The book’s introduction is topically titled “Make the Left Great Again”; a sentiment that will no doubt chime with many progressives.

It diagnoses that neoliberalism was not just a right-wing Thatcherite-Reaganite prospectus. The centre-left, as embodied by Mitterrand’s socialists in France, Blair’s New Labour and the Democratic Party in the US, was complicit in its imposition. This consensus culminated in the decimation of manufacturing, decline of union membership, the expansion of financial services, wage flattening, falling living standards and the privatisation of public services. At the heart of neoliberalism was the assertion that the free market is the supreme arbiter with the economy managed by technocratic expertise. The flip side of this depoliticisation resulted in ordinary people becoming alienated and disillusioned with the social democratic parties that formerly represented them. Instead they turned to anti-establishment (usually hard right) parties.

Margaret Thatcher and Tony Blair both knelt at the altar of neoliberalism (AFP/Getty)

Furthermore, Mitchell and Fazi point out that the notion that neoliberalism is anti-state is a misconception. In fact, the state has been essential to the neoliberal project as became evident in the aftermath of the 2008 financial crisis. The state is not only required to bail out corporations and banks but to create new markets and in an authoritarian mould to police its citizens. However, Mitchell and Fazi intend to reclaim national sovereignty as part of a 21st century progressive vision. This is where modern monetary theory (MMT) comes in.

Bill Mitchell is one of its key proponents. MMT is one of those Alice in Wonderland, down the wormhole kind of concepts that neutralises every received wisdom – from that childhood conversation when your father sat you down to explain banks using saving deposits to invest in other businesses right up to politicians telling us that the UK is broke. In other words, prepare to be blown away and forget what you think you knew about money.

MMT essentially proposes that money is created ex nihilo or out of nothing. Whether it is private banks, central banks or governments, money is an abstract concept of ones and zeros. Thus, when your bank lends you a mortgage, it essentially creates money by typing it up on a computer. Similarly, the government has the power to create “fiat money” – that is money established by government regulation or law as opposed to currencies with intrinsic value, such as gold.

In effect, the usual dictum of “tax and spend” is inverted to “spend and tax” with spending stimulating jobs and growth, which can later be taxed. Taxation is not therefore a way of raising revenue but a tool for either controlling the money supply or shaping policy through incentives. Of course, it is much more complicated than that as certain conditions must be met. Public spending cannot be unlimited and must be commensurate to the capacity of the economy amongst other things in order to avoid hyper-inflation.

Ecomomist William Mitchell argues that the notion that neoliberalism is anti-state is a misconception

Both authors have been on a global book tour taking in the US and Europe. In London, Mitchell and Fazi gave their talk at the Newington Green Unitarian Church – one of Britain’s oldest nonconformist churches. Mary Wollstonecraft was the most famous member of its congregation and was inspired by the sermons of the radical minister Dr Richard Price in her thinking on the new French republic and the rights of women.

The setting is certainly suitable for the preaching of a heretical doctrine. In fact, I am reminded that it is the 500th anniversary of Martin Luther pinning his 95 theses to the door of a Wittgenstein church. The parallels are hard to overlook; then as now Europe was in crisis with Britain exiting the established order.

Huddled on a church pew for the interview, I ask Mitchell what exactly is MMT? He answers that it is “a lens through which we can understand the monetary system”. Remarkably, the elemental question – where does money come from? – does not have a settled answer amongst economists, experts and policy makers. Organisations such as Positive Money have already embarked on the process of demystifying money creation. I am reminded of the chapter “The Great Money Trick” in Robert Tressell’s The Ragged-Trousered Philanthropists in which loaves of bread are used to illustrate how the concept of money and surplus value (profit) guarantees perpetual penury for the working class and concentration of wealth for the ruling class.

So how might all of this play out post-Brexit? Mitchell and Fazi seem to be making the progressive argument for Brexit (nicknamed Lexit). This is in keeping with the old-left position that the EU does not represent genuine international solidarity. They acknowledge that it is difficult to make progressive arguments for sovereignty as nationalism has been condemned to a default reactionary position.

John McDonnell and Jeremy Corbyn have pledged to take private finance initiative contracts back into public hands, but how would financing of infrastructure work under a Corbyn government? (Getty)

Yet polling demonstrates that sovereignty was the most common reason for people voting Brexit. Mitchell and Fazi reformulate a progressive definition of sovereignty as having democratic control over the economy rather than simply within ethno-nationalist parameters. According to Mitchell, sovereignty is absolutely fundamental in order for countries to exercise power over their money creation. As long as a country has its own central bank and currency then it is free to spend. While Greece, bound by the constraints of the European Central Bank and the euro, does not have this freedom. After the talk, Mitchell tells me that sovereignty entails having a currency issuing monopoly: “The reality is that national governments are the monopoly issuers of their own currency.”

Mitchell also debunks the idea that governments borrow money from international markets and with it the notion that they are hostage to the market. He has recently written a blog on how Corbyn should not be afraid of global markets. Mitchell cites the 2001 Argentinian debt default as demonstrating that a country can get away with it and recover. Similarly, Iceland imposed capital controls (measures to regulate capital flows in and out of a country) in order to steer the economy through rough waters after its banking system crashed.

In the same vein, Mitchell proposes that governments do not use bonds and gilts to raise revenue. He cites a previous Australian Conservative administration issuing debt when they were running surpluses as an example of the use of bonds as corporate welfare thus “exposing the game”.

At the recent Labour conference, Shadow Chancellor John McDonnell stated that Labour would take private finance initiative (PFI) contracts back into public hands. So how would financing of infrastructure work under a Corbyn government? At the start of the year, this question might have appeared absurd yet only this month The New York Times published an op-ed piece titled “Get ready for Prime Minister Corbyn”.

Milton Friedman said money supply must be controlled in order to limit inflation, so government debt must be prioritised

Here is where quantitative easing (QE) comes in. QE was intended to stimulate bank lending in the aftermath of the financial crisis. However, growth levels have remained stagnant in Britain and Europe. In reality, the banks simply said thank you for the free lunch and used QE to restore their balance sheets. Studies have shown that much of QE ended up contributing to stock market and property bubbles.

Economist Richard Murphy – whose work has focused on tax avoidance and the offshore world – proposed what came to be termed “people’s QE”. For a while, this was a central tenet of the Corbynomics programme. Murphy’s basic idea was that if QE could be used for the banking system, then why not use it to build new homes or create climate jobs? As long as sufficient value was created then the nemesis of hyper-inflation could be avoided.

It therefore appears that Theresa May’s oft-repeated refrain attacking Corbyn on the grounds that there is no such thing as a magic money tree is not exactly true. So if money can basically be created with the press of a button, then suddenly our world appears to be (pacePanglossian disciples) the craziest of all possible worlds.

At this point, you might understandably be asking why on earth we do not just spend our way out of the current mess. And while we are it – give the NHS more money, shelter the homeless and feed the poor of the world. This is where we come up against the ideological edifice of neoliberalism.

Monetarist doctrine states – as per the Chicago School’s Milton Friedman – that the money supply must be controlled in order to limit inflation. Thus, government debt must be prioritised. The Maastricht treaty, which founded the EU, stipulated limits on public spending. Greece is the textbook example of austerity in which debt repayments are prioritised in order to appease creditors (mainly banking institutions).

Banks used quantitative easing to restore their balance sheets (Getty)

However, even mainstream economists feel that the logic of austerity is somewhat fallacious. Keynesian economics posits that public spending stimulates growth with debt as a secondary consideration. As the New Economics Foundation think tank points out, Britain has historically seen much higher levels of public debt. The debt/GDP ratio was higher during a whole century between 1750 and 1850 (at the time of the Napoleonic wars and the height of Britain’s imperial glory) as well as in the aftermath of the Second World War when the welfare state was created.

While a landmark 2014 study demonstrated that the UK coalition government’s welfare changes enabled tax cuts for the wealthiest thus cancelling out any impact on the deficit. Former Greek finance minister Yanis Varoufakis has also argued that the austerity strategy applied to Greek debt has been extremely counterproductive. The combination of bailouts with cuts has depressed the economy resulting in an increase of the debt (as a percentage of GDP).

The ascendancy of neoliberalism was such that its ideology became an all-pervasive atmosphere. During the event, Mitchell asks how many in the audience have heard of the Powell memorandum. Only a couple of hands go up. Lewis Powell was an American lawyer – later appointed as a Supreme Court justice by Richard Nixon – now indelibly associated with his eponymous 1971 memorandum. This outlined a blueprint for the American conservative movement and the network of think tanks funded by business interests. It recommended that the business class should close ranks in order to present a united front. It also stipulated that lobbyists would be needed to influence policy makers and legislators. And it suggested that infiltration of the media and academia would be necessary in order to achieve the goals of unshackling free enterprise from government interference.

So what would happen if governments followed through on the logic of MMT? Well for a start the Goldman Sachs, JPMorgans and HSBCs of this world would not be as rich or powerful and in the worst-case scenario they might even cease to have any purpose. A recent comprehensive survey from the pro-market Legatum Institute confirms that significant majorities of the British public are in favour of renationalisation of utilities and railways. The public is equally split on nationalisation of the banks with 50 per cent in favour. Corbyn and McDonnell have proposed a national investment bank with a network of regional banks in order to help rebalance the economy and encourage lending.

Whether or not one accepts MMT, it is increasingly apparent that public and democratic oversight of finance and money is becoming a central pillar of progressive postcapitalism alongside public control of public services, a green economy, full automation and the four-day week.

My fantasy Corbyn speech: ‘I can no longer go along with a ruinous Brexit’

Alastair Campbell in The Guardian


Last week I wrote a speech for Theresa May, which concluded with an announcement that she had decided Brexit was impossible to deliver. Sadly she didn’t listen, and so onwards she leads us towards the cliff edge. I am hoping for better luck with Jeremy Corbyn, fantasising that he delivers this speech to a rally of his faithful Momentum followers …

“Thank you for that wonderful reception. Yes, yes, I know my name. ‘Oh Jeremy Corbyn’. Yes, that’s me. Now please stop singing and sit down. Please.

“I will be honest with you. I didn’t want the job. I didn’t think I would get the job. I wasn’t sure I could do the job. But thanks to you I got it. Thanks to you I now have the confidence to do it. I approach the challenge of being prime minister not with fear or trepidation but with confidence that our time is coming. That it is our duty now to serve. Protest is one thing. Government is another. And we must now prepare, genuinely prepare, as a government in waiting.

“If I become prime minister it is Brexit that will define my leadership. As a result of what happened on 23 June 2016 I have no choice in the matter. The people’s choice dictates that it is so.


I have concluded that rejecting this vision of Brexit is the only route to the vision of the world that drives us

“It is clear to me the constructive ambiguity of our position on Brexit is no longer tenable. It is fine for a party of protest. It is not good enough for a party one step away from government.

“Let’s imagine this entirely credible scenario. As the current chaos inside the government continues, Mrs May falls. The Tories try to foist another prime minister on us, chosen by their ageing membership. But we and the public won’t wear it. We force an election. We win an election. I am prime minister. Now the hard part begins.

“What does our ‘jobs-first’ Brexit mean then, in power? What is a jobs-first Brexit if our leaving the single market hurts growth, as every analysis in the world says it will? What is a jobs-first Brexit dependent on trade if trade slows and even grinds to a halt with the absence of a proper customs infrastructure at our ports, the absence of good trade deals not just with the EU but with the 66 countries with whom we have deals as part of the EU? What is a jobs-first Brexit if firms decide that if the UK leaves the EU, they leave the UK, and take their jobs and their tax take with them? 

“And how can we fund all the things in our election manifesto that we need and want to fund in the future if our economy tanks?

“At Labour’s party conference, I said that our continued membership of the EU would prevent us from implementing many of the plans in our manifesto. I am grateful to the New European, which sought legal advice in Brussels and established this was not the case. So the question becomes, not ‘What do we lose by staying in?’, but ‘What do we lose by coming out?’

“The dominance of the hard right is clear in their pressing Mrs May to walk away from the negotiations, crash out of the EU, into the World Trade Organisation. I am of the internationalist left. We exist to fight the nationalist right, not to dance to its tune. We believe in support for the many, not the prosperity of the few. It is the nationalist right that is leading the Brexit Mrs May is pursuing, whatever the cost. It is their only route to the vision of the world that drives them. And, today I want to tell you – I have concluded that rejecting this vision of Brexit is the only route to the vision of the world that drives us. In this debate, they are the reactionaries, we and the Europeans the progressives.

“Take back control, they said. But what kind of control? Their control. Their right to dump decades of law with their ‘great repeal bill’, and bring about their vision of a low-tax, low-regulation economy, public services there for profit not public, employment and environmental rights shredded, one of the great powers of the world reduced to a gigantic Cayman Islands. That is their dream. And many of those who voted for Brexit, in the poorest areas, the places we represent, they will be the hardest hit. As the reality of power nears, I must tell you, candidly, that I can no longer go along with it. Not now. Not in two years. Not ever.

“No deal, I must warn you, would be a catastrophe. So if Mrs May is still prime minister, and presents the no-deal option to parliament, be in no doubt – we will vote against it. We will press for a deal with keeps us in the single market and the customs union, to protect trade and avoid chaos.

“But today I want to go further. The referendum was close. It was not, contrary to the claims of the Brextremists, ‘clear’, let alone ‘overwhelming’. Millions are deeply concerned about what is happening to our country. I believe people have a right to change their minds as this all unfolds. And politicians have a duty to reflect that, and to give proper vent to the debate it represents.

“Democracy is a process, not a moment in time. If the government falls, and we win an election, then we can put a different vision of Brexit to the country, and we will. If we can bring about a fresh election, this is the Brexit policy you will be voting for.

“We will take over the negotiations from Mrs May and her hapless, hopeless team. We will review what progress has been made and assess whether Brexit can be delivered on the timescale set out under the article 50 process she triggered.

“If we conclude, as on any current assessment seems likely, that Brexit cannot be delivered without real damage to our economy, that a jobs-first Brexit is impossible, that it will mean lower growth, higher prices, higher unemployment, more austerity, cuts to public services, customs chaos, the return of a hard border in Ireland and the potential undoing of the Good Friday agreement, the loss of security cooperation with our partners, then I will revoke article 50.
“I am clear that a referendum decision can only be overturned by another one, and so we will legislate for a new referendum, and the choice we will put before the British people is between staying in, or leaving on the terms then on offer.

“If, as I believe they will, the British people opt to reverse their decision of last June, that will put us in a strong position then to succeed where David Cameron failed, and win the argument for a reformed EU that works for all.

“Comrades, this has been a lot to take in. But I believe it is the right course for our party, for our movement, and most important of all, for the country.

“This is our country too. This is our time. Let’s take back control of our destiny, and build a country future generations will be proud to call home. Thank you.”

The pendulum swings against privatisation

Evidence suggests that ending state ownership works in some markets but not others


Tim Harford in The Financial Times


Political fashions can change quickly, as a glance at almost any western democracy will tell you. The pendulum of the politically possible swings back and forth. Nowhere is this more obvious than in the debates over privatisation and nationalisation. 

In the late 1940s, experts advocated nationalisation on a scale hard to imagine today. Arthur Lewis thought the government should run the phone system, insurance and the car industry. James Meade wanted to socialise iron, steel and chemicals; both men later won Nobel memorial prizes in economics. 

They were in tune with the times: the British government ended up owning not only utilities and heavy industry but airlines, travel agents and even the removal company, Pickfords. The pendulum swung back in the 1980s and early 1990s, as Margaret Thatcher and John Major began an ever more ambitious series of privatisations, concluding with water, electricity and the railways. The world watched, and often followed suit. 

Was it all worth it? The question arises because the pendulum is swinging back again: Jeremy Corbyn, the bookies’ favourite to be the next UK prime minister, wants to renationalise the railways, electricity, water and gas. (He has not yet mentioned Pickfords.) Furthermore, he cites these ambitions as a reason to withdraw from the European single market. 

Privatisation’s proponents mention the galvanising effect of the profit motive, or the entrepreneurial spirit of private enterprise. Opponents talk of fat cats and selling off the family silver 

That is odd, since there is nothing in single market rules to prevent state ownership of railways and utilities — the excuse seems to be yet another Eurosceptic myth, the leftwing reflection of rightwing tabloids moaning about banana regulation. Since the entire British political class has lost its mind over Brexit, it would be unfair to single out Mr Corbyn on those grounds. 

Still, he has reopened a debate that long seemed settled, and piqued my interest. Did privatisation work? Proponents sometimes mention the galvanising effect of the profit motive, or the entrepreneurial spirit of private enterprise. Opponents talk of fat cats and selling off the family silver. Realists might prefer to look at the evidence, and the ambitious UK programme has delivered plenty of that over the years. 

There is no reason for a government to own Pickfords, but the calculus of privatisation is more subtle when it comes to natural monopolies — markets that are broadly immune to competition. If I am not satisfied with what Pickford’s has to offer me when I move home, I am not short of options. But the same is not true of the Royal Mail: if I want to write to my MP then the big red pillar box at the end of the street is really the only game in town. 

Competition does sometimes emerge in unlikely seeming circumstances. British Telecom seemed to have an iron grip on telephone services in the UK — as did AT&T in the US. The grip melted away in the face of regulation and, more importantly, technological change. 

Railways seem like a natural monopoly, yet there are two separate railway lines from my home town of Oxford into London, and two separate railway companies will sell me tickets for the journey. They compete with two bus companies; competition can sometimes seem irrepressible. 

But the truth is that competition has often failed to bloom, even when one might have expected it. If I run a bus service at 20 and 50 minutes past the hour, then a competitor can grab my business without competing on price by running a service at 19 and 49 minutes past the hour. Customers will not be well served by that. 

Meanwhile electricity and phone companies offer bewildering tariffs, and it is hard to see how water companies will ever truly compete with each other; the logic of geography suggests otherwise. 

All this matters because the broad lesson of the great privatisation experiment is that it has worked well when competition has been unleashed, but less well when a government-run business has been replaced by a government-regulated monopoly. 

A few years ago, the economist David Parker assembled a survey of post-privatisation performance studies. The most striking thing is the diversity of results. Sometimes productivity soared. Sometimes investors and managers skimmed off all the cream. Revealingly, performance often leapt in the year or two before privatisation, suggesting that state-owned enterprises could be well-run when the political will existed — but that political will was often absent. 

My overall reading of the evidence is that privatisation tended to improve profitability, productivity and pricing — but the gains were neither vast nor guaranteed. Electricity privatisation was a success; water privatisation was a disappointment. Privatised railways now serve vastly more passengers than British Rail did. That is a success story but it looks like a failure every time your nose is crushed up against someone’s armpit on the 18:09 from London Victoria. 

The evidence suggests this conclusion: the picture is mixed, the details matter, and you can get results if you get the execution right. Our politicians offer a different conclusion: the picture is stark, the details are irrelevant, and we metaphorically execute not our policies but our opponents. The pendulum swings — but shows no sign of pausing in the centre.