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Corbyn Wants to Destroy the Current Economic System

2017 October 15
by Ian Welsh

Take it right to them:

Responding to Hammond’s warning in his speech at this month’s Conservative conference, Corbyn will say the chancellor is “absolutely right” to say that Labour is threatening to destroy the current economic model, adding that the current system “allows homelessness to double, 4 million children to live in poverty and over a million older people not getting the care they need”.

Picture of Jeremy Corbyn

Jeremy Corbyn

The reason the establishment hates him is that he threatens them. He will re-nationalize power and railways, institute rent controls and ownership limits on multiple homes and overseas owners, and build new council housing.

And there’s this:

Corbyn will say Labour is not opposed to technological advancement, but digital giants such as Uber and Deliveroo have built their success not on their technological advantage, but by “establishing a monopoly in their marketplaces and using that to drive wages and conditions down.”

“Imagine an Uber run co-operatively by their drivers, collectively controlling their futures, agreeing their own pay and conditions, with profits shared or re-invested,” he will say.

“The biggest obstacle to this is not technological, but a rigged economic system that favours wealth extractors, not wealth creators.”

This, by the way, is basic economic theory. Markets work for the benefit of most when they are competitive, and bounded by safety nets and regulations. They do not work for the benefit of all when they form monopolies or oligopolies. The latter have to be regulated to the max, broken up, or turned into public utilities.


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Or, perhaps, to change who owns them.

The current economic system is not good capitalism: It is not competitive or regulated or bounded by proper safety nets and guaranteed minimums, let alone proper high-end taxation.

To make capitalism, or rather, markets, work, requires strong government intervention and always has. Thatcher and Reagan were just wrong, and it shows up in virtually all the numbers.

Corbyn is the actual realist here, not those who celebrate the current mode of “capitalism.”

And this is going to be fun to watch.


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10 Responses
  1. nihil obstet permalink
    October 15, 2017

    Corbyn’s response is so good. I wonder what would happen in the U.S. if any politician said something similar. My guess is that the entire corporate media would go batshit with misleading paraphrases of the “Al Gore said he invented the internet” variety. I know all the British media have worked against Corbyn up to now, but I don’t get the sense that there’s the kind of feeding frenzy that overwhelms the information that most people have the time and energy to access as here.

  2. Tom permalink
    October 15, 2017

    Well, now he needs to make his case to the voters and not fuck it up. He better have a good media strategy and be able to deal with the traitors within his own party. Otherwise he will choke before the finish line.

    That said, https://www.theguardian.com/world/2017/oct/16/iraqi-army-advances-kirkuk-kurds

    Abadi ordered the ISF to engage the Peshmerga. Still no reports of clashes yet except on twitter.

  3. someofparts permalink
    October 16, 2017

    One of the folks on chapo trap house make a crack about nationalizing Amazon.

    http://www.chapotraphouse.com/

    It will be interesting to watch.

  4. October 16, 2017

    As you noted recently, “Only fools let capitalists actually control anything in their society that really matters.”

    Lambert Strether had a post up yesterday on nakedcapitalism about PG&Ε’s possible complicity in the 2017 fires as a result of deliberate deferral of maintenance (tree-cutting along power lines, specifically) to increase shareholder profits.

    No privately-held, publicly-trade utility would put regular maintenance/infrastructure upgrades over profits–it wouldn’t make sense, frankly, within the capitalist framework. Regulations, yes – but regulatory capture, even more yes.

    Corbyn is of course right; I’m not sure I’d say it’s going to be fun, but it’s certainly going to be compelling to see how this plays out.

  5. Steeleweed permalink
    October 16, 2017

    The most efficient & ‘public useful’ companies are monopolies which are afraid of being broken up. They have the money & people to do most anything but have to be very careful not to give the ‘trust busters’ any excuse to break them up. Ma Bell gave better service than the post-breakup companies but sometimes misused their dominance (and thus got broken up). IBM bent over backward to avoid unfair competition, to the point of selling to their competitors equipment IBM had designed and built (because the competitors’ equipment could not meet user specs). They estimated a market for 3000 1401s and priced it accordingly. They sold 9000 of them. Since the design and tooling cost had been recovered in the first 3000, they could have dropped the price significantly and blown Honeywell & NCR out of the water, but they were afraid it would damage their pending consent decree. It’s not bigness per se which is bad – it’s unregulated bigness.

  6. James Wheeler permalink
    October 16, 2017

    Interesting analysis.

    The WSWS provides a useful counter view to the view that Corbyn represents a mortal threat to the current status quo, which is worth reading.

    http://www.wsws.org/en/articles/2017/10/05/mcdo-o05.html

    “When McDonnell speaks of reassuring the “outside world,” he means big business. And his reassurances are that Labour has surrendered before it even takes office—and will do what is asked of it.

    “I’ve been sitting down with asset managers in the City [of London] for the last two years,” McDonnell explained. “I’ve been talking to them about our investment plans. We’re putting aside £250 billion [US$331 billion] for investment and infrastructure. Where did I get that figure from? I got it from the CBI [Confederation of British industry].””

    My own view is that it is too early to say for certain if Corbyn and his inner circle will capitulate to the City of London if he gets into power. One key test will be the issue of membership of the single market.

    Many within the Labour party and the shadow cabinet, in hock to Big Business, wish to remain members of the single market after Brexit is completed. This will hobble any radical policies by a future post-Brexit Corbyn government.

    If Corbyn capitulates on this issue it suggests that contrary to Ian’s hopes, Corbyn offers no realistic alternative to the status quo.

    I would add that regarding Uber, most of my London based Corbyn voting friends were outraged by the ban. Ian – you may find that many of the young don’t actually care much about workers rights as they were moaning en masse on Facebook about how they would have to pay a few more quid to get from a to b in London in future if Uber is banned.

    The young are fundamentally self-centred and care about getting things for free or as cheap as possible. They are certainly not, in general, socialists.

  7. Ian Welsh permalink*
    October 16, 2017

    They’re not socialists, but they are willing to be socialists, and that’s what matters. As for consumer whining about prices, most of it goes away if wages are high enough.

    The bottom line for the young is the current system doesn’t work for them, so they’ll try something else.

  8. Jay permalink
    October 16, 2017

    If he wins, I just hope he’s smart enough not to screw it all up. I don’t know about you, but the current economic system provides all my food (also, medicines).

  9. Ian Welsh permalink*
    October 16, 2017

    Every economic system provides everyone’sfood and medicine. Problem is the Conservatives are doing a bad job at both.

    Be more concerned that the Conservatives don’t leave a smoking ruin for him to deal with with their mismanagement and bungling of Brexit.

  10. marku52 permalink
    October 17, 2017

    Yes Brexit. It is looking more and more like a catastrophic hard Brexit is what is going to happen. The tories are sleepwalking into a disaster. May’s Hail Mary visit to Merkel didn’t go too well (as if there was any reason to believe that it would).

    And so, with the pound predictably crashing after a hard exit, Britain may be a very affordable place to visit, and the IMF may have to make one of their austerity loans.

    I just hope Labour is wise enough not to have the disaster hung on their necks.

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