We are now a little over a week out from the general election in the UK. The smart money is still on a Tory victory and an outright majority with which Boris Johnson can pursue his hard Brexit agenda. But nothing is certain. The high levels of voter registration amongst young people raises the possibility that Jeremy Corbyn’s Labour party gets enough votes to gain power, perhaps relying on the support of the SNP. Indeed, it has been argued that some polls show that the UK is “a normal-sized polling error away from a Labour government”. Were that to happen subsequent events would amount to a real-life experiment in the extent to which a left-wing government could pursue a redistributive agenda in the context of a country that has, for decades, aggressively oriented its economic policies toward the accumulation of wealth into the hands of the few.
As such, the election represents a once-in-a-generation opportunity for the British people to choose the economic path they want their country to follow. For over forty years, the British political class embraced neoliberalism, a doctrine which holds that anything that stands in the way of the private accumulation of wealth must be destroyed. With the ascent to power of Margaret Thatcher, the British economy commenced its neoliberal transformation. National industries were placed in private hands, rules governing the operations of banks and financial markets were torn up, and trade unions were severely weakened. Greed became good. The speculative financial frenzies that neoliberalism unleashed did indeed result in the mass creation of wealth and caused several economic booms, financed in large part by the growing debt provided by the deregulated financial sector. It was, of course, those at the top of society who grabbed nearly all of the new wealth while ordinary people toiled to pursue a consumer lifestyle that was aggressively promoted to them by an expanding public relations industry and an all pervasive cultural zeitgeist that favoured consumption and individualism. Alongside all of this, deindustrialisation and unemployment wreaked havoc in peripheral regions, devastating once vibrant communities.
Even after the Conservative Party lost power in 1997, the free market remained upon its pedestal. In the aftermath of the collapse of the Soviet Union, state involvement in the economy had become largely discredited and, as such, Tony Blair’s Labour party had turned its back on traditional socialist values and embraced much of the Thatcherite agenda. Under Labour, the debt fuelled boom continued for another decade or so before eventually collapsing in a spectacular fashion with the crash of the global financial system in 2008. By then, British politics was totally in hock to the financial sector and the response to the crash was wholly predictable. First Labour, and then the Conservative/Liberal Democrats coalition, pursued a series of policies that transferred the losses of the financial sector onto the general public. The practical effects of this were years of austerity, resulting in the impoverishment of large swathes of society and the preventable deaths of well over a hundred thousand people.
Today, with the Labour party having some years ago returned to its socialistic roots, the British electorate has been given a chance to turn its back on neoliberalism. Labour is offering a radical agenda that aims to redistribute wealth back to the masses. Their manifesto promises increased public investment, pay rises, the renationalisation of strategic industries, the forced transfer of shares to workers, and a jobs-intensive Green New Deal to mitigate climate change. All of this is to be paid for by higher taxes on high earners, many of whom have been raking it in for decades.
Given the obscene fortunes that have been made and are still maintained by adherence to the principles of the free market, the prospect of a more humane approach to economic management is something that certain sections of the elite find extremely chilling. They have not yet become accustomed to mainstream politicians pursuing agendas that run contrary to the type of wealth creation they like to see (i.e. the type where the wealth ends up in their pockets). Martin Wolf, chief economics commentator for the pro-market Financial Times, summed up the attitude perfectly when he lamented that Labour’s manifesto “contains not a single favourable mention of the word ‘profit’”.
We can therefore expect significant pushback if Corbyn somehow manages to even come close to 10 Downing Street. And in globalised capitalist societies, those who possess capital have a number of weapons at their disposal. Wealthy investors could, for instance, attempt to take their money out of the country rather than see it taxed at a fair level. Already, there have been warnings that this will occur. Luckily for the elite, the neoliberal revolution has meant that money, unlike people, moves freely across international borders. It has been reported that “transfers of wealth are already arranged [and] in many cases, all that is missing is a signature on the contract”. Likewise, high net worth individuals may seek to leave the UK rather than have their incomes taxed by a Labour government. Again, prominent members of the elite have threatened this.
If enough money departs the UK following the election of Corbyn, the stability of the financial system would be undermined and sterling would weaken, making imports more expensive and the national debt harder to pay off. The Corbyn agenda would already be threatened and this could occur even before a government was formed. In the event of a hung parliament, one can well imagine the Liberal Democrat’s playing for time during negotiations, facilitating just enough capital flight to weaken Labour’s negotiating position. The billionaire press would go into propaganda overdrive, calling on Corbyn to resign to save the economy. Jo Swinson would demand the same, declaring her willingness to work with a moderate Labour leader but not with Corbyn. The Blairites still lurking in the Labour party would smell blood and might even seek to combine with the Tories and Lib Dems to create a government of national unity in order to stabilize the economy (and save neoliberalism).
A scenario where capital flight results in short term economic instability would provide cover for the elite, both internationally and domestically, to deploy some of their other weapons. Global financial interests could orchestrate a run on the pound (i.e. a mass international sell-off of sterling with the result of significantly weakening sterling). Threats have already been issued to this effect. After all, it is not just the British elite who fear Corbyn. The global financial sector that neoliberalism has empowered fear equitable redistribution more than they do any single leader. The opportunity to make an example out of Corbyn may be too good to pass up on, especially given that Bernie Sanders threatens them with the same type of redistributive policies. A worst case (although unlikely) scenario would be a fully-fledged debt crisis; investors might en masse seek to offload UK bonds, possibly following a rating agencies downgrade of UK debt, making it impossible to borrow the money that Labour needs to pursue their radical polices.
Yes, global capitalism has in its arsenal some pretty serious political and economic weapons with which to attack Corbyn were he to be elected. The intent of this would be twofold; it would serve as an example to other countries/politicians that radicalism does not pay, and it would seek to force Corbyn to abandon much of his radical agenda and resign himself to a mere tinkering with the system. There are numerous examples in recent economic history of the market forcing politicians into pursuing market friendly policies. Governments the world over watch and fear global financial markets, for in the modern neoliberal world, the power of capitalism surpasses the power of the state.
It is not certain that any of this would happen. The one thing that might save a would-be Corbyn government is Brexit. Powerful interests would like to see Brexit cancelled (although the elite is split on this) and Labour’s Brexit policy is arguably the only credible way that this could be achieved. Nonetheless, the threat of capitalists seeking to damage the UK economy as a way to undermine Corbyn is very real. Labour themselves recognise this. In 2017, it was reported that Labour had been preparing for a “potential assault” by the financial sector in the event of their electoral success. They have reportedly made detailed plans for such eventualities. If Labour get elected, they know they’re likely in for a battle. It will be Corbyn Versus Capitalism, with the victor getting to determine the future nature of the UK’s economy.
The potential outcome of such a battle is very much similar to the choice the British electorate face. If Corbyn loses (either the election or a subsequent attack by capitalist interests) the free market reigns supreme: large parts of Britain stays impoverished, and power is maintained by the financial elite. History has shown that unregulated capitalism will inevitably lead to another catastrophic economic crash, although when this occurs is anyone’s guess. Perhaps climate change will destroy capitalism before its own inherent contradictions do.
If Corbyn and Co. manage to weather the economic storm that may come their way should they gain power, the UK could see era-defining change. The shift in society would be analogous to Thatcher’s neoliberal revolution in its transformative nature. It would also mark somewhat of a return to the capitalism of the decades that immediately followed the Second World War, when numerous welfare state policies (such as the NHS) were implemented. This was an era of compromise between the elite and ordinary people. The elite, having recognised that an unrestrained capitalism had contributed directly to the rise of the Nazis, accepted high taxes, regulation, and government involvement in the economy as the price to be paid for their profits and for social stability. Workers tacitly renounced revolution in exchange for good jobs, union membership and democracy. The result was a golden age of capitalist growth and a broad improvement in living standards.
The irony of Corbyn versus Capitalism (or Sanders versus Capitalism) is that a Corbyn victory may just be the only way in which capitalism is saved from its own rapaciousness. An elite that was not solely focused on pocketing the next buck, but which was cognisant of the broad historical trends at play throughout capitalisms history would understand that Corbyn’s policies are in fact capitalisms best hope. Such an elite would recognise that the price for economic, social and climatic stability is a new social contract that shares wealth a little more equitably.
Neoliberal capitalism has not provided us with such an enlightened elite. Instead, we have a ruling class that is hell-bent on squeezing every last drop out of an over-strained economic system and an over-plundered planet. It is for this reason that the propaganda campaign against Corbyn has been so extensive that it reaches levels that can only be described as absurd. If Labour gets anywhere near power following the election, expect the elite to commence battle.
If you enjoyed this article, you might like my new book, Donald Trump: Deadbeat Tyrant, published 13th January, 2021.