The truly radical elements of Labour’s economic agenda have little to do with tax and spendby Sam Moore / November 30, 2018 / Leave a comment
“For the many, not the few” means a lot of different things to a lot of different people. But the person for whom it has the clearest meaning is Corbyn himself.
A recent study commissioned by his Shadow Chancellor and political right hand John McDonnell serves as a reminder of where the truly radical elements of Labour’s economic agenda lie: redistributing power, rather than just money.
The latest plan to come from Corbyn’s camp, allowing consumers to vote on executive pay, is another step in this direction. The plan is for consumers—who would be identified through things like loyalty cards—to get a say on how much chief executives make.
So, for instance, anyone with a Tesco Clubcard gets a say on whether or not chief executive Dave Lewis really deserves to bring home £5 million a year. If the increasing discontent over income inequality is anything to go by, the answer to that question is almost certainly “no.”
These plans come off the back of a report by the International Labour Organisation that showed stagnant wage growth in the UK. This follows on from the Labour policy of putting workers onto boards, a direct expansion of the principle of the franchise when it comes to companies, as well as acting as a classically left-wing move when it comes to the power and importance of the worker.
With policies like this, tapping into anger over inequality, and expanding political power through the economy, Corbynism literally gives power to “the many” in a way that they haven’t had in the past; consumers and workers are given a say in arenas where they’ve historically been kept in the dark.
It isn’t just the economy that Corbyn is planning to democratise. The leader of a party that has often been critical of mainstream media—for good or for ill—has big plans on how to democratise that too. In August of this year, Labour proposed that those who pay licence fees should get a vote on who becomes a BBC executive.
The key difference between Corbyn’s plans to democratise the boardroom compared to his grand designs for media reform is that the latter are also informed by an element of tax-and-spend policy. Labour has proposed a “digital licence fee,” taxing firms like Facebook and Google as a way of subsiding the BBC, as well as a similar plan to set up an independent fund for public service journalism—once again, paid for via a subsidy from tech companies.
Corbyn’s economic agenda, on the other hand, is surprisingly light on wealth distribution through tax and spend. As much as these plans for empowering workers and consumers are radical and worth pursuing, to assume that these alone can help to lessen the effect of inequality is short-sighted at the best of times.
Both ideas have certain problems when it comes to implementation: what determines eligibility for who votes, and how does the process work? What will decide the amount of money that executives are potentially able to bring home? Will every eligible consumer simply write down a figure on a piece of paper, forever perverting the classic boardroom dynamic?
Yet the key question that these plans leave unanswered—more so than any about implementation or the radicalism of reform—is whether or not they will materially improve the lives of the people that they set out to help. Empowering workers and consumers is a good idea, especially in a climate of stagnant wages and rising inequality, but lowering the pay of executives will not automatically put more money into the pockets of the workers.
Although Corbyn’s plans also include fines on companies that don’t consistently pay the minimum wage, these punitive measures stop at the minimum wage. There is no incentive to pay workers more, and the lack of a tax-and-spend based redistribution means that—for all of the potential power that comes from democratising boardrooms—it is unlikely to make the lives of workers easier or better at the end of the day.
The radical nature of Corbyn’s platform makes perfect sense: he came to power through a widening of the electoral base, empowering people and giving them a voice. But the problem here is if that voice will be used. Will workers, consumers and license fee payers really care about board elections as much as Labour’s policy wonks do? Maybe it’s true that the trouble with socialism is that it takes too many evenings.