A new package of ideas to take on rentier capitalism provides food for thought for Labour, writes James Coldwell
Labour’s great victories – 1945, 1964, 1997 – occurred when the party conveyed a confident vision of the future. Whether its relative success in 2017 followed this formula is open to question. On the one hand, the Labour offer inspired under-25s to vote on a scale most political analysts believed impossible. The election campaign drewin thousands of first-time activists, buoyed by a belief that Labour could bring about a more hopeful future. On the other, the most prominent policies in the manifesto could hardly be described as progressive, looking back, as they did, to a time when railways were state-owned and university education was free.
Though it is difficult to refute the appeal of the Labour manifesto, the reasons for its popularity remain contested. This helps to explain why assessments of Jeremy Corbyn continue to diverge so starkly. For some he is the model of a new-style leader, whose success rests partly on his understanding of modern political campaigning. For others he is a “regressive radical”, uninterested in developing new policy initiatives.
If he wishes to throw off this latter label, the Labour leader may want to consider some of the solutions proposed by Guy Standing in The Corruption of Capitalism. The corruption of the title refers to the way in which capitalism has tilted away from the production of useful goods and services, and come to be dominated by rent-seeking activities. Thus global elites achieve dominance not through pioneering entrepreneurialism, but by accumulating assets. Hoovering up housing, intellectual property rights and financial assets generates rental income for their owners without increasing productivity or benefiting wider society. At the same time, changing patterns of work and the rise of the on-demand economy lead to an increase in insecure and poorly paid work, with the result that inequality becomes further entrenched.
Standing’s description of the results of growing inequality is convincing. In the main, his analysis sits comfortably alongside other work likely to be known to his readership. That inequality has returned to pre-Second World War levels is widely acknowledged thanks to the success of Thomas Piketty’s Capital in the Twenty-First Century.
Less persuasive in Standing’s work is the way in which all major political and financial actors of the last 40 years are presented as conspiring to bring about the present situation. The least impressive chapter – entitled “The corruption of democracy” – recalls some of the zanier sections of Owen Jones’s The Establishment. British politicians of all stripes are lumped together as if no significant political battles have been fought since Margaret Thatcher was elected prime minister in 1979. Thus Gordon Brown’s tax credits become a continuation of Thatcher’s efforts to weaken workers’ bargaining strength. In the same vein, the unprecedented standards in healthcare achieved under the last Labour government are to be considered null and void since they were partly financed by PFI contracts.
Standing, an economist at SOAS, University of London and former director at the International Labour Organization, is best known for tracing the rise of the precariat. The latter consists of “millions of people obliged to accept a life of unstable labour and living, without an occupational identity or corporate narrative to give to their lives.” The Corruption of Capitalism is clear that this expanding class contains within it the capacity to upend the unjust and unsustainable form of rentier capitalism that has been in the ascendant since the 1980s. Whether such a revolt can be achieved by peaceful means is a question left unanswered.
Three solutions offered to bring about Keynes ’ hopedfor “euthanasia of the rentier” deserve serious consideration. First, modern tasking platforms like Uber and
TaskRabbit should be regulated and taxed. At the same time, ‘taskers’ who use these platforms to provide on-demand services should receive greater protections. Second,
countries should create sovereign wealth funds, financed by taxation on the various forms of rent described in the book, and aimed at ameliorating the economic insecurity of the precariat. Lastly, a universal basic income should be introduced to reduce inequality, incentivise those on low incomes to take paid work and allow others to dedicate more time to unpaid work, most notably care-giving.
It is frustrating that more space is not dedicated to an exploration of the likely ramifications of these policies. Each suggestion is fresh, radical and contains enormous potential for transformation: more commentary on trials, costings, implementation and influencing public perception would therefore be very welcome. Ultimately, however, Standing deserves huge credit for offering these ideas up for discussion. If Labour is to position itself as the party of progressive radicalism in Britain, this is a discussion it should seek to lead.