Ten Lessons of Corbynism

The achievements were real. So were the mistakes

As Keir Starmer wins the Labour leadership election emphatically, the left loses control of the NEC and Jeremy Corbyn stands down, here is a (not exhaustive) list of lessons we can take away from 2015–2020.

1. Corbynism wasn’t an accident

Yes the Labour bureaucracy made a huge mistake letting new members sign up for £3 and decide the leader in 2015; and yes John McDonnell only got Jeremy on the ballot paper by saying he couldn’t win. But the absolute dearth of radicalism among the other candidates is what opened the door to Jeremy — at a time when Syriza’s victory had energised the entire western left.

Corbyn’s victories in two leadership contests (2015/16) were themselves radicalising moments — with the “chicken coup” and the ridiculous attempt to exclude tens of thousands of members from voting (plus McNichol’s purge) actually mobilising even deeper layers of support.

This was part of a wider international phenomenon, combining the entry of the Occupy/anti-capitalist activists and radical environmentalists into party politics with the pent up energy of the survivors of the defeats of 1979–97.

But as a “moment” it was five years ago, and there are new enemies, new dynamics and new alliances now to be made. That’s what lay behind my decision to back, and campaign for Starmer, as part of a very diverse team including people from the centre and the soft-left.

2. The transformation of Labour was real

Jeremy opened the door to mass political involvement for a new generation, and gave my generation, which had been excluded or disillusioned since the purge of Militant and Blair’s rewrite of Clause IV, the chance to re-enter social-democratic politics. The lasting legacy of mass involvement is a 500k+ membership, branches bigger than entire CLPs were 5 years ago, the establishment of Momentum, the Community Organising Unit and The World Transformed — of which the latter proved the least controllable by the bureaucratic forces that eroded Corbynism’s effectiveness.

Specific moments that stand out for me were: the Camden rally on the night we defeated McNichol/ Watson’s attempt to keep Jeremy off the ballot paper; the Liverpool and Gateshead rallies in the 2017 election; and the 2018 conference, where — despite burying the Brexit debate — real and radical policy formation took place because the left temporarily controlled all the party’s levers of power. This is what we have to defend.

3. Corbyn triggered an intellectual revival

… though his inner team were never completely engaged in it. Today there are key left voices writing in the Guardian, New York Times, LRB and New Statesman and who occupy a broad, diverse and distinctive space in British public life. To the chagrin of the clueless pundit class, we also hegemonised the TV debate and discussion shows. It wasn’t because we are slicker than the centrists: it was because we had something to say other than “the middle way is best” and “there is no alternative”.

Meanwhile left think-tank world has moved left: we’ve got Autonomy and Common Wealth, Labour for a Green New Deak, Platform etc — plus the IPPR and NEF both moved left during Jeremy’s leadership, and NEON has been a brilliant offshoot. We also saw, with Real Change Labs, what could have been achieved if there’d been more interest in US-style campaign techniques.

Though this broad new ideascape ranges between the triangle of autonomism, orthodox Marxism and eco-activism, somewhere in the middle is a series of generally accepted principles of action, policy and narrative that’s been absorbed by literally millions of people. Though we lost the 2019 election, 32% of the electorate was still prepared to vote for a programme that would have ended neoliberalism, and rapidly decarbonised Britain.

4. Trade unionism has a new and militant edge

The left-led unions played a historic role ending Blairism, and in the move to the left after Miliband. But in turn, the entry of numerous social movement activists into the movement has revived the effectiveness of unions. Look at the victories won by the IWGB, or the GMB with Uber as well as, for example, the huge ballot turnout in the CWU dispute, or the UCU strikes. This is wholly different to the period between crushing of the print strike of 1986 and the left’s initial victories in Aslef, the TGWU and RMT in the early 2000s.

What’s different? The militants I worked with in the late-70s/80s were effectively syndicalists: “The NUM is my party”, miners used to say. Between 1997 and 2015 unions were forced to be the critical clients of a top-down Labour Party. After 2015 the emerging union radicalism was heavily inter-penetrated with developments in the party, though the bureaucracy remains wary of projects like #TWT and still determined to teach quite functionalist left politics in their political education schools.

Once the Coronavirus crisis is over, I expect a new wave of militancy, both over wages/safety and austerity, if they dare to try it. The irony for Neil Kinnock was that, even if he’d wanted to (and he didn’t want to) he couldn’t have “led” the solidarity movement with the miners. Keir Starmer is in a position to front up the grassroots struggles that breakout once the lockdown is over, though we’ll have to resist the Labour right’s attempt to stop this happening (see eg Lisa Nandy’s “don’t pick sides in strikes” comments).

5. The left’s basic programme is clear

Both in the 2017 and and 2019 manifestos, we produced a body of policy work that should stand the test of time and, by and large, be defended and built on. I am a bigger fan of the 2017 manifesto because it was the product of hard choices: above all between welfare and student loans (I was in the room when that discussion was had). The 2019 manifesto, while it lacked a coherent narrative, must stand as the first viable programme of government, in any developed country, which put decarbonisation at its heart.

The point now is not to treat these as dead documents to be defended against the centrist pushback, but exactly as Sidney Webb envisaged Labour’s programme in the Clause IV discussions in 1918: a menu to be ordered from in specific circumstances (via the Clause V process). Given the bond market, the railways and possibly the banks and energy companies will end up nationalised, and debt will go above 100% of GDP, the next manifesto will probably have to be even more statist than the last. I’ll write about this elsewhere. But now to the downsides…

6. The British left has no effective critique of Stalinism

First let me define what I mean. Of course there are a few self-proclaimed Stalinists who wear badges at conference depicting the murder of Trotsky, or run Facebook pages where the Holodomor and the Gulag are treated as a joke, and Syrian first responders slandered. But the wider problem is the influence of an bureaucratic left ideology that emerged out of the orthodox communist tradition after the fall of the USSR.

The first thing to note is that its supporters, originating from the Straight Left group and the CPB, never had an a adequate theory of their own failure. The failure of the USSR was the fault of external forces, above all US imperialism.

The sci-fi writer Ken MacLeod always predicted that Stalinism would simply become fashionable again, once people forgot how terrible it had been. It is easy to see what made it fashionable among a specific section of the post-Occupy youth.

For some, their leftism was deeply imbued with academic post-structuralism, anti-humanism and determinism. Given most of the former Trotskyist groups went the same way, a new generation of activists found almost everything that described itself as “Marxist” carrying around the anti-humanist baggage of the late Engels, Althusser, Butler, Negri and (for the really niche) the NRM movement in political economy.

What Jeremy Gilbert describes as the “radical left” tradition was, by contrast, weak. It had virtually no allies in the unions, could never organise itself, and remains even now a motley collection of intellectuals, MPs, blogs and networks that — when the big split over Europe came — had to rely on the soft left and the extra-party social movements to achieve stuff (see for example the Left Bloc on the PV demos, AEIP, the #StopTheCoup movement).

Sourced from Gramsci, Eurocommunism, intersectionality, altermondialism, left Trotskyism, postcapitalism and autonomism, it has a good grasp of practice and social movements, but no commonly held theory, and no organisational capacity.

Unlike the Labour right and the pro-imperialists, I believe the orthodox communist tradition does have a place inside the Labour movement and I will defend them against any purge. But the price is being able to critique their ideas, and my central critique is functional, and quite similar to that of Serge, Benjamin, Mattick, Andreu Nin etc: bureaucratic, anti-humanist Leninism destroys everything it takes control of.

7. The class dynamics are crucial

There are three implicit sociologies at war with each other inside the British left, overlaying the left-right split but shaping positions over Brexit.

For the first position, the ex-industrial working class of small towns (and traditional city communities) is the core of the proletariat, while precarious workers, white collar workers are the periphery, and social movements of the oppressed are seen as allies. This is as true for the orthodox Marxist left as it is for Lisa Nandy and even Yvette Cooper, who has re-emerged as an outright communitarian.

A second group, best exemplified by Claire Ainsley (currently at JRF but tipped in the media to become Keir Starmer’s head of policy) in her book The New Working Class. Ainsley argues, correctly, that the neoliberal era has created “a new working class, which is multi-ethnic, comprised of people living off low to middle incomes, and likely to be occupied in service sector jobs like catering, social care or retail. The new working class is more disparate, more atomised, and occupies multiple social identities, which makes collective identity less possible you add to this the work of writers like Keir Milburn on inter-generational dynamics, Calum Cant and Guy Standing on the precariat, there’s a fairly wide current that accepts the new class dynamics — though their solutions for the problem of alienating the “traditional” working class differ.

A third view, originating out of Italian autonomism, argues that the emergence of financialisation, data-extractivism and networked individualism diminishes work as the primary site of exploitation: for this current (myself included), the whole of society is the new factory floor, as the authors of The Coming Insurrection wrote in 2007. Multiple forms of exploitation trigger multiple forms of resistance, each of which can lead to the limitation or shut-down of exploitation. For us, the cultural dichotomy between the old and new working class can be overcome by understanding that they both inhabit these new sites of struggle — over housing, healthcare, cultural rights, data rights etc to precarious work and democracy, even if their exeperience of work and cultural life is different.

Once the cultural divide opened up over Brexit, between the new and old working class, two rival logics kicked in: “we can’t abandon the working class” means something very different whether you live in Kennington or Leigh — and the party’s attempt to paper over the cracks using pure economic slogans didn’t work.

Going forward, whichever of these analyses you hold, the undeniable fact is that Labour is now primarily a party of young, urban, diverse and educated working people, with the BAME communities of big cities as its irreducible heartland.

A second undeniable fact is that this sociological group has no intrinsic loyalty to Labour. It has switched en masse to the SNP in Scotland and went heavily to the Greens and Libdems in England in 2019. While it took the ex-industrial working class more than a decade to drift away from Labour, the new working class are prepared to switch allegiance at will, if they see Labour failing to represent their cultural and political values.

Meanwhile large parts of the ex-industrial small town working class have also lost their intrinsic loyalty to Labour: 900,000 switched to the Tories over Brexit and a staggering 300,000 pro-Remainers in this group did likewise.

The fundamental problem for Corbynism was that it never developed a narrative or tactics that could overcome this sociological divergence. As soon as its social base divided over migration and Brexit, Corbynism became less than the sum of its parts. Starmer’s leadership will fail or succeed according to whether it can reunite them.

8. Bureacratism sucked the energy from the left

Because the Labour right were so determined to sabotage Corbyn — both in 2016 and after — it became necessary to rely on the union bureaucracy and the networks of the orthodox left. But that came at a price. The diversity of the advisers around Corbyn and McDonnell dwindled; rebel voices like Clive Lewis and the LSHB group were sidelined; talented organisers and parliamentary candidates were blocked in favour of nominees who would toe the line, and ultimately we ended up back in the world of loyalty rallies, midnight purges and the imposition of candidates.

The energy built up by #TWT was left to sporadic moments, while the party instead mobilised around preach-to-the-faithful events like Labour Live and Labour Roots. Meanwhile — and this was a big theme of an internal session at Momentum’s event in Durham in 2018 — activists began to warn that “fake left” people were rebranding themselves as Momentum and Corbynites, just to secure jobs and nominations. Hopefully that problem will now evaporate.

The party cannot be a social movement, but it could have learned from social movements and interacted with them. In the end, between 2017 and 2019, those in charge showed little interest in developing what the US left calls directed networked campaigning. The Community Organising Unit was one bright spot, which according to the internal NEC report in January may have made 2–3 percentage points difference in the place where it mobilised. But it was never a substitute for the kind of hegemonic and pervasive narrative presence which, at their most successful, Syriza, Sinn Fein, the Sanders movement and Podemos were able to achieve.

9. The leadership became dysfunctional

Between 2015 and the chicken coup, Corbyn was hostage to a soft-left PLP and a hostile HQ. Then, right through to the 2017 snap election, the HQ remained stubbornly un-co-operative. Only in 2018 did the left gain simultaneous control over the NEC and the HQ, but from September 2018 onwards, the arguments over Brexit began to stifle our effectiveness as a force capable of running the party.

The anti-Semitism scandal — which even yet still inflict a severe crisis on the party via the EHRC report — was a symptom of a wider problem: LOTO as an institution (going back to Miliband), and the orthodox left as a culture, lacked any serious information-gathering and processing functions. In fact, if you consider all the other functions of leadership — decision making, execution and oversight — only execution ever happened properly.

The Shadow Cabinet was never a real decision making or debating body; LOTO didn’t like hearing information that conflicted with their worldview (eg the TSSA/HNH polling on Brexit of February 2019); many of the professional functions you observe in a Crosby-led campaign were absent, both from HQ and LOTO. John McDonnell’s team, which functioned much better, ended up increasingly detached from the main operation.

Corbyn often refused to make choices until pushed into crisis mode. Instead of building a network of influence and information-seeking, LOTO built a wall around itself.

In every successful boardroom, newsroom, research team or general staff there is always someone whose job it is to say: the entire plan is bullshit, the information is wrong and — least welcome of all — your favourite person can’t do the job and has to go. For obvious reasons, given we are a comradely movement, creating that function of “loyal critique” has proved impossible for successive Labour leaders (including Blair and Brown).

10. The situation is critical

The coronavirus will create a slump, and the debts incurred to deal with it will force neoliberalism to choose point blank between a new round of global austerity or a series of competitive exit routes, as per the 1931–34 period. It will also a big ideological crisis for liberalism and laissez faire economics.

This is not just about a virus: it’s a virus, plus a dysfunctional model of capitalism, plus climate chaos, plus ageing, plus a disintegrating geopolitical order and the revival of fascism. Phil Hearse and Neil Faulkner call it “the third major crisis of human civilisation in the last century” and it’s hard to disagree.

At the very least the strategic goals of smart reindustrialisation, state ownership, industrial planning, public health strategies focused on wellbeing, and rapid decarbonisation will find new supporters among the electorate and even parts of the elite.

The problem is all these things can be embraced without a significant redistribution of wealth and power, and some even without class struggle. And as the crisis deepens, with secondary financial chaos and on top of that geopolitical upheaval (wars, refugee flows, debt defaults and annexations) it will be open season for the alt-right and their supporters in the Trump-Salvini-Orban-Farage sphere.

I’ve supported Keir because, like him, I believe the left cannot run the party by acting as a faction in conflict with the rest. If we couldn’t win with the whole left running the party, it’s unlikely that we can do it with just the Lexiteers running it.

The results of the ballot confirm this: Rebecca Long-Bailey, despite running a good campaign and growing in stature and independence as a politician through the campaign, got less than half the votes Jeremy got in 2016, and actually came third among the union affiliates.

During the leadership campaign, and despite the efforts of RLB’s core team, the orthodox left compounded its mistakes on the class dynamics of Britain and Brexit — so that the mass of the membership who joined after 2010 are now being stigmatised as “self-satisfied, southern, middle class, timid and FBPE” (Owen Hatherley).

A positive way of looking at this is: Starmer can probably unite the party around a new narrative because the majority of members actually agree with his politics.

But the challenges are huge. Starmer’s politics, and the majority of his campaign team, straddle those of the radical left and the soft left. The soft-left, as many have pointed out, is intellectually ill defined. It’s still stuck in the world of minor technocratic good ideas, like an endless seminar at the Resolution Foundation — and without the pressure of a Corbyn/McDonnell we will see some MPs who’ve looked very left on the frontbench since 2015 revert to a default soft-leftism that is just not ambitious enought given the scale of the crisis.

The old Labour centre, figures around Labour First and the Fabians, want to purge the left — either literally, or out of positions of power. We need to resist that. But for some on the left it was always only about Corbyn, and the danger is they will either quit the party or seek to turn CLP meetings into the kind of small, fruitless factional bickering sessions we had in the 1980s. I would urge them to stay and help build the compromise and collaboration we need.

What next?

If we take Jeremy Gilbert’s typology — orthodox left, radical left, soft left — then it’s clear that those of us in the radical group need to get organised as critical supporters of the Starmer project, with red lines (no purge, no austerity, stick to the Green New Deal, democratise the party, support all class struggles) — and we need a distinct, vibrant policy and ideas forum.

Momentum, says it wants to support Starmer, hold him to account and defend the left policy agenda — while turning to the extra-parliamentary struggles. As a member of Momentum I think that’s right — because we need to prove to the soft-left skeptics, and Blairite opponents, that a grassroots organising movement of the left has its worth. Surprisingly, a lot of the digital functions we thought were unique to Momentum turned out to be easy to replicate in the Starmer campaign itself — so Momentum’s USP is not going to be doing the digital stuff right anymore.

I’ve supported Keir not just because he’s the kind of plausible guy in a suit who stands a good chance of winning back places like Leigh and Bury (though he is), but because he represents the possibility of going beyond the stark choices prescribed for us by the political science academics.

These are (cf Paula Surridge): an electoral alliance with the Greens/SNP/Libdems, aiming at PR and constitutional reform (as Clive Lewis has proposed); abandoning some of our social liberalism and economic radicalism to win back the small towns (implicily the Nandy programme); and continuity Corbynism with a different face, in the hope that the crisis will be big enough to bring us to power on the 2019 programme (again, implicitly, the RLB offer).

Starmer’s pitch is that, if every faction of the party agrees to work together, and we construct a narrative designed to win back the both the lost small towns, and the offensive target marginals — we dont have to abandon social liberalism or seek an electoral pact.

Implicitly, however, we then have to prepared for Labour to become the electoral pact (at least in England) — and that means creating a space in our voting coalition for working class people who vote Tory because of social conservatism, nationalism and economic centrism, and those who voted Libdem/Green/SNP/PC for the exactly opposite reasons.

I’m certain, just as with Corbyn, I’ll end up criticising Starmer, holding him to account, wrangling with a new set of party bureaucrats the conference floor etc. But then again I come from a working class syndicalist family who thought Tony Benn was “just another politician”, Wilson a con-man and that Nye Bevan too obsessed with parliamentary politics. It’s been weird to see so much of the left project loaded onto the shoulders of a politician, when for the first 20 years of my political activity it was widely seen as the working class itself that would do the work.

I’d like to finish by thanking Jeremy Corbyn for his courage, fortitude and good humour. I’m proud of the way he transformed Labour; inspired a new generation; fought May and Cameron to obliteration; practised solidarity and comradeship all his political life; and learned to command the House of Commons at PMQs.

To spend your entire life ostracised on the back benches, defending the human rights of the most vilified people on the planet, and then survive five years of co-ordinated attacks by the press, the Labour right and (latterly) the US State Department is a collossal achievement.

Jeremy is a figure of equal stature to Hardie, Lansbury, Bevan and Benn — but unlike any of them he actually came within an inch of being Prime Minster. As the meme says: it’s not him they’re frightened of, it’s you.

Fighting them on the beaches

Mass refusal of social distancing is the cost of social fragmentation

In every crisis there is the official story and there is reality. While the TV news remains mesmerised by the daily political theatre of Johnson's press conferences, the reality at micro-level is getting grimmer.

First, we've seen a mass refusal to obey the government's "suggestion" that people don't go out. And we've seen shoppers continue to panic-buy food, sometimes crushing through the doors of supermarkets in ways guaranteed to keep the virus exponential.

In response, politicians are railing at their own voters, calling them selfish, with "young men" (a fairly important group if given the amount of war rhetoric being thrown around) being especially stigmatised.

But the weekend’s mass influxes to beaches, street markets and public parks were a direct result of the UK government failing either to issue clear public health messaging, or to begin the kind of lockdowns that have become mandatory Italy, France and New Zealand.

Basically they expected a networked population, taught by 30+ years of neoliberalism to follow their individual self-interest, to start acting like the community-singing cockneys in Passport to Pimlico. The fact that they didn't was wholly predictable, because all many the old sources sources of peer pressure - solidarity, community and respect for expertise - have been blown away.

Second, we've seen the start of victimisations of health workers. Emergency care medics being evicted at 24 hours notice; nurses being insulted in the streets and told they are a health risk; meanwhile hospital managers are being forced to push medics and nurses into critical care without the vital personal protective equipment.

Third, we've seen an immediate surge in financial scams aimed at the elderly and the sick: fake cures sold online, testing kits that don't exist, price gauging by a few small shopkeepers. And in response, a justifiable anger.

Fragmentation

This snapshot should reveal, to anybody who has experienced a situation of social crisis or breakdown, the familiar emergence of numerous "them and us" narratives, which the UK political class need to a) recognise and b) learn how to mitigate.

Right now politicians on all sides are focused on two out-of-control crisies: the epidemic itself and the economic consequences. So in the next 24 hours we're likely to see Boris Johnson stop dithering and order an immediate lockdown, putting police and armed forces on the streets to enforce it.

Horrible though it will look, it is necessary. Because unlike in the Second World War, when Britain was never invaded, the enemy is already here: the virus has no hangups, no psychoses, no class contradictions, no bumbling politicians to hamper its own progress.

But there's a third front, beyond epidemiology and economics: it's civil society. And after 40 years of atomisation as part of the neoliberal project, UK society is not in great shape. This is the thing politicians recoil from saying, because it amounts to criticising the people who vote for you, but it needs saying.

I've heard people from the official world start worrying about "the underclass" during the last 48 hours. The subtext of a lot of their private criticism of those going to Skegness, Matlock or London's public parks is that they're low-educated hopeless people.

In my experience this is completely wrong. To ex-military and civil service types, what they mean by "the underclass" is actually a large part of the working class - both the old, small-town ex-industrial culture and the "new", younger city dwelling culture. The people who turned up at Matlock on Harley Davidsons were not members of an underclass. 

The great conceit of the British political elite is that, faced with wartime levels of risk, the modern population will somehow behave as their grandparents did in the 1940s.

To understand why they won't just watch any movie from that era: Passport to Pimlico, The Way Ahead or In Which We Serve. The micro-behaviours and levels of class deference and collective action exhibited quite naturally in those films would be seen as deviant by many people on the beaches today. 

In the 1940s - and in fact right through to the 1970s - peer pressure was exerted by working class people on each through figures of authority, through a shared humour, and through face to face conversations. And above all a shared culture.

It's not that these things have disappeared during the neoliberal era, but they have become fragmented: people in my south-London community exert peer pressure on each other; so do people in my hometown in Lancashire. But not in the same way, or with the same values.

Solidarity

In the crisis that's about to unfold, someone has to "own" this problem. I am told it is pre-occupuing senior law-enforcement and security people - but it needs to be front of mind for people in politics. 

They need to stop saying to each other that "the underclass is undermining our efforts against the coronavirus” and understand that perfectly decent and ordinary people are reacting to a crisis in ways shaped by decades of social atomisation and commercialisation.

What they need is a clear public information campaign and a compulsory lockdown, with mass testing, tracing and the planned delivery of food, medicines etc to those in need.

In the end the people who have to sort this out is us: the 99%. In my local area we're already seeing spontaneous acts of solidarity and adaptation: one local pub is to reopen as a "community kitchen and food store"; numerous handwritten signs on closed shops explain how they'll adapt to delivery-only or online operations. Signs pasted to lampposts invite people to join local self-help groups on Facebook. People are learning how to queue in two metre intervals.

The labour movement has already played a sterling role in the fight for an 80% wage subsidy. With 7 million union members and 600,000 Labour Party members we could be doing a lot more at community level.

But the most important thing is to argue, unashamedly, for a society based on mutual aid and co-operation. And to back today's expected enforced lockdown, while using social media and our windows and balconies to spread a message of solidarity with each other - and resistance to the profiteers, rogue landlords and xenophobes.

Lock. Down. Now.

Boris Johnon's complacency will cost 000s of lives

Let’s start with some pure mathematics, courtesy of Professor Julia Steinberger at Leeds University. The graph above shows that, until it imposed a compulsory lockdown — arresting people who needlessly left their homes — Italy’s coronavirus outbreak was growing exponentially.

Yesterday Italy saw 793 people die of the disease. Without the lockdown (see the light green line above) it would have been 4,000 — in a single day. That is where the UK is heading.

Fortunately, despite more than two weeks of dither and delay, there is still time to limit this catastrophe. That’s why, yesterday, some of the most eminent professors of epidemiology and public heath called on the government to impose an immediate Italian style lockdown, with movement restrictions within and between areas most severely affected.

Yet Boris Johnson is still prevaricating. And to their discredit no official opposition party has yet gone beyond calls for people to heed his advice.

In case it’s not obvious, people are not heeding the advice. They are going to the beach, or hanging out in parks, and of course standing in massive queues at supermarkets.

I have a hunch that the repeated opinion polls showing around half of Brits approve of the way Johnson is handling the crisis simply reflect the fact that he has not so far ordered them to do anything different.

When every NHS ventilator is occupied and medics are having to take life and death decisions over our loved ones — leaving the frail, and those with co-morbidities to die, as in Italy — we’ll see where the approval rating is then.

Revelations by Alex Wickham show there is deep disquiet even inside the cabinet at the complacent way politics have been “outsourced” to senior public health officials who may or may not know what they are doing. There will be the “mother of all public inquiries” after this, into Johnson’s refusal to get ahead of the crisis.

We need two decisions today: an immediate lockdown in the most affected areas— so everything closes and you only leave your house for essential things. And for the self-employed to be included in the £2,500 a month income scheme.

Self-employed hung out to dry

UK government’s workforce bailout shows why the precariat needs to get organised

The UK government’s employment protection scheme is a partial victory for crisis economics over the logic of capitalism. Late and inadequate though it is, it should be enough to stop an immediate slump in demand.

But it is teaching millions of people a brutal lesson about the logic of the neoliberal labour market. While up to 27 million people in permanent jobs can get a wage subsidy worth £20,000 a year, there are 5 million self-employed people who will get a quarter of that.

Though they will get a tax holiday, and if VAT registered a VAT holiday, most will be forced onto the wholly inadequate and punitive Universal Credit system. Welcome to the world of “I, Daniel Blake”.

It’s not simply unjust, it threatens to take down millions of small businesses — like hairdressing, corner shops — and decimate the construction workforce.

There are more self-employed people in Britain than ever before: a product of the casualisation of the workforce and a tax system that tacitly encouraged needless and even bogus self-employment. The two biggest groups are construction workers (921,000) and professional/scientific workers (609,000).

Many people working in barbers, hairdressers and for taxi companies are forced to be self-employed, though money is collected through a single till, by a company — with the tax authorities turning a blind eye. It’s a neat trade-off: one sixth of the workforce effectively has no employment rights, and in return they get to pay lower taxes and the businesses that employ them avoid paying national insurance.

But last night they paid the price. Because when it came to designing an unprecedented state bailout, neither the self-employed workers nor the small businesses who “employ” them had a seat at the table.

The unions, via the TUC, forced the government to deliver something fast and adequate for the employed workforce : a £2,500 per month wage subsidy scheme. But it’s created a sharp inequity that is being loudly denounced on phone-ins.

Equalise the benefits!

The answer is to allow self-employed people full access to both sick-pay and the employment support scheme — with HMRC acting as their virtual “employer”. If we are not going to enact an emergency universal basic income — and most unions are hostile to it — then we need to universalise what was won on Friday.

By the very nature of self-employment and temporary work, these workers are likely to be the first out of the door as the economy slows down. There is no sense and no economic justice in the move.

There are two lessons to be drawn: first, that unions work. Though they represent only 6.3 million of the 27 million employed workforce, they effectively represented everybody this week. There should be a mass recruitment drive now, by unions, pointing out that — if things get even tougher, being represented helps.

The second lesson is: we need a different kind of labour market. The pubs, hairdressers, taxi firms and construction giants who’ve been exploiting their workforce through bogus or needless self-employment should be told that the price of the bailout is to start hiring people on the books.

There will of course always be temporary and self-employed people in the professional/managerial sectors, and in retail and culture but in a high welfare economy like Denmark they make up just 8% of the workforce, not 18% as here.

The labour movement has been talking for years about organising the precariat and the self-employed, and the reason most of it has been talk is that these workers need a different structure of dues payments and need representing in differnent ways.

Now we have to seize the opportunity. Five million people have been shafted — and if the labour movement does not fight for them, you can bet the populist right will.

Add some noughts, Mr Sunak

UK bond market turmoil signals need for urgent fiscal stimulus

In a crisis, the most important thing the authorities can do is get ahead of the chaos. Yesterday (Thursday) we saw the Bank of England scrambling to do just that - but in a way unprecedented even in the 2008 meltdown. And we still don't know if it will work.

Having cut interest rates to 0.25% last week, and launched a scheme to help banks lend to small and medium-sized businesses, the Bank then faced "deteriorating conditions" in the market for UK government debt.

Normally, in a crisis, investors move their money from risky assets to safe ones; shares are risky, government debt is safer, with the safest ones of all being those with the longest maturities. But in the past week, investors have been clamouring instead for government bonds with the shortest lifespan because these are a close substitute for cash.

So at an emergency meeting, the Monetary Policy Committee not only slashed interest rates again, to 0.1%, but restarted its quantitative easing programme (QE), to the tune of an extra £200bn. 

The normal aim of QE is to simulate the effect of cutting interest rates below zero - ie pump money into the banks - while forcing investors to move their money out of bonds and back into shares, property etc, where they can help fuel growth. 

Yesterday's move had a more urgent objective: to stop investors pulling their money out of the UK financial system altogether. In the past month the pound has fallen 13% against the dollar and 10% against the Euro, despite the fact that the Eurozone is more badly affected by the coronavirus, and that the USA has screwed up its own crisis response.

There is a global flight to safety and the UK, with its poor growth because of damaging austerity programmes, and with high uncertainty around Brexit, looks vulnerable.

The strategic question facing global investors is: which governments will do fiscal stimulus hardest, fastest and most successfully. Up to now the UK has done too little. Rishi Sunak's budget contained, effectively, just £12bn of extra spending for coronavirus. Today he needs to start adding some noughts to the amount spent.

The £330bn soft loan facility to firms, and the £190bn release of bank reserves for lending to small companies were welcome - but this is going to need borrowing and spending by government on a vast scale: to pay people’s wages, to bail out failing airlines, and to force-march the manufacturing sector into producing ventilators.

I have argued before that, like Japan, the Treasury should be prepared to issue debt that is bought direct by the central bank - so-called monetisation. The orthodox view is that this, itself, would undermine sterling and thus fuel inflation, but given we're about to experience the worst economic slump in history, deflation is the bigger danger.

If it won't allow the bank to buy its debts direct, the government in any case needs to borrow at scale: a full emergency basic income scheme for six months would cost around £300bn. That's a massive sum but would still leave UK debt below 90% of GDP (Japan's debt is 196% of GDP) .

As the Systemic Risk Council warns, the Treasury should be wary of relying on globalised financial markets for this newly issued debt, and instead "prioritize distribution to domestic long-term investors".

In practice, this means an element of what economists call "financial repression". You have to be able to prevent money flowing out of the country, and coerce domestic savers to lend to the government by giving them nowhere else to go. 

This is exactly what post-war governments did - and combined with sharp inflation in the 1940s and 50s it quickly eroded the debts they had piled up during the Second World War. But if Britain and other major states did this, the highly globalised financial market would - just as it did in the 1930s - retreat to a series of closed, regional and national markets.

Marx used to say that all economic crises are a memento mori for capitalism: this week's turmoil on the bond market is a memento mori for globalised finance.

Whatever happens in the long term, the growing turmoil must force Chancellor Sunak to take unleash a decisive fiscal stimulus - borrowing hundreds of billions - today. 


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