Cooking the Books I: For the few not the many

In an article headed ‘Why is the City falling for Comrade McDonnell? (Times, 11 May) Sky News Economics Editor Ed Conway made a shrewd point:

Despite promising to govern for the many not the few, some senior Labour insiders have had an epiphany: unless they get the few on board they may struggle to govern at all.’

The Labour Party, under long-time left-wingers Corbyn and McDonnell, may employ the rhetoric of the many against the few, but it has no intention of abolishing the few. In fact, in the event of a Labour government, the few would continue to own and control the means of production in the form of profit-seeking private enterprises. There is not even any intention to turn them from shareholders into government bondholders by a state take-over of ‘the commanding heights of the economy’, as Labour left-wingers used to advocate. These will remain in private capitalist hands.

So, a future Labour government would be governing in the context of a capitalist economy dominated by private enterprises. This was Conway’s point. It means these can’t be ignored. They will continue to be those who decide what is produced, when and where. And their decisions will be motivated by the consideration of what is profitable or not.

Corbyn and McDonnell will have to take this into account. They will have to allow them to continue to make profits and avoid doing anything that might interfere too much with this. If they don’t avoid this, they will provoke an economic downturn as the private owners stage an investment strike, refusing to produce what can’t be sold profitably. That will provoke dissatisfaction amongst the electorate who will kick the government out, at least unless it changes its economic strategy and accepts that profit-making has to come first.

This has happened so often with Labour and similar left-wing governments in other countries that it can almost be said to be one of the economic laws of capitalism: that any government which disrupts profit-making will provoke an economic downturn. Unless Corbyn and McDonnell do what Neil Kinnock once cynically called getting their betrayal in first – by declaring that they won’t harm the profit-making of the few (which is what ‘Comrade McDonnell’ might be doing on his visits to the City) – this will be their fate. In government, it will just be a matter of time before they come to accept this or get booted out.

But this is to jump the gun. In the present state of politics, while Labour might emerge from an election as the largest party in the House of Commons, a Labour majority there seems much less likely. There is more chance of a Labour minority government propped up by the Liberals and/or the Scots Nats. This would mean that any pretence of adopting anti-capitalist measures will be dropped. The SNP want an independent Scottish capitalist state while Vince Cable, the outgoing leader of the Lib Dems, has made his support for capitalism explicit:

Capitalism is being questioned in Britain more intensely than for decades. Some want to destroy it. Others believe that it is the only economic system which works, but want to reform it. I am in the latter camp’ (City AM, 14 May).

Corbyn and McDonnell are too, even if they don’t admit it. Reforming capitalism to make it work for the many always fails for the simple reason that, as a profit-making system, it can only work for the few.