Reply To: City of London "the shocking study"
First thing, this is not cranky or conspiracy theory stuff but a genuine study (though the bit about the clerk from the City sitting at the table in the House of Commons is overdone; this is a historical leftover that shows that the merchants of the City did once have some special influence, but they don’t any more).
What goes on in the City of London (and other financial centres) is a redistribution of wealth (surplus value) produced elsewhere and so is a zero-sum game; no new wealth is produced so those capitalists and chancers who get wealthier do so at the expense of other capitalists and foolish workers who put some of their savings there who get poorer.
What I would challenge is the study’s view of the source of the wealth that is redistributed/gambled there. They suggest that it comes from the productive sector of the UK economy. Some will of course, but most comes from the surplus value part of wealth produced (mined or manufactured) in other parts of the world. The City is an international financial centre which attracts surplus value produced in all parts of the world and, in doing so, does contribute to increasing the UK’s GDP as a statistic.
The City has always done this but at one time UK capitalism also had a large manufacturing sector. This largely ran down in the 1980s when the then Tory government (under Thatcher) decided to give absolute priority to the City as a source of GDP income, mainly from abroad. This policy was continued by successive governments including that of Tony Blair and Gordon Brown (so the study is right to say Labour has been just as much responsible as the Tories for prioritising the City over manufacturing industry).
Corbyn and McDonnell are promising to reverse this. If they are assuming that they can simply divert to UK manufacturing industry the surplus-value sucked by the City from abroad they (and the authors of this study) are in for a shock. Capitalism doesn’t work that way and the money that now flows to the City will flow elsewhere, e.g. New York, Frankfurt or Amsterdam. If Labour gets elected and their policy fails (as it will) prepare for the blame to be put again on “the gnomes of Zurich” as Harold Wilson did for the failure of his Labour government in the 1960s. Unfortunately we’ve seen it all before.