For discussion, not for agreement ~ Fr Campion

From Philip Collins in THE TIMES, 27 July 2018:

The standard response to Jeremy Corbyn is to make him more interesting than he really is. To be sure, the Labour Party’s disgraceful licence to antisemites is, sadly, interesting. Yet on domestic policy the Labour leader speaks rarely and when he does he has nothing to say. That is the verdict that has to be entered on his economic policy, which he set out in a speech in Birmingham this week. This was not, in essence, a crazy left-wing fantasy which will bankrupt the nation. It was nowhere near that interesting.

The title of the speech, Build It In Britain, recalled George Osborne’s conference speech about the march of the makers. Mr Corbyn counterposed the bankers (boo!) to the manufacturers (hurrah!) and offered a perfunctory critique about a global free-for-all in which the rich get richer at the expense of the poor. He lamented the unbalanced economy, and implied that British manufacturing had been more or less deliberately run down and replaced by cheap imports, both of goods and of labour. It was a flat speech which incited two responses, both of which were right.

The first response was that Mr Corbyn’s stated desire to force more buying of British goods is impractical as well as foolish. If all nations adopted the same policy then British firms which sell abroad would lose good business. The policy would also mean that taxpayers paid more for goods than was necessary, just because they were made by a British company. Mr Corbyn’s failure to understand the benefits of trade, in a speech in which he sounded like imports were a conspiracy against the British worker, would be a disaster if he came to power. When he revelled in the fall in the value of sterling, he failed to mention that this meant lower living standards for most British workers. The whole speech had something of the spirit of President Trump’s protection of American interests.

The second response to the speech, from its boosters, was to say that much of Mr Corbyn’s suggestions were routine. The use of procurement to protect jobs was something David Cameron used to say. Mr Corbyn was clearly right about the need for more investment in infrastructure and in the skills of that half of the population which is not academic. His remarks on companies paying their due in taxation were unexceptional. It is not especially controversial, either, that in their infancy some industries might benefit from state subsidy. It would be lovely, too, if Mr Corbyn could conjure out of thin air the new customs union he says he wants.

There was nothing much here that Peter Mandelson couldn’t sign up to. The verdict on the speech should therefore be that where Mr Corbyn was slightly interesting he was wrong and where he was right he was dull. This is not the formula radical Labour is supposed to offer. If we are on the threshold of proper left-wing government then dreary centrism of this kind is most disappointing.

The answer should be taxation on wealth and property. Domestic residences attract no capital gains, so property becomes an investment as much as a home. Council tax is still based on 1991 house prices and every house valued at more than £320,000 pays the same amount. It is no wonder we have a housing crisis. This is an economic problem of the first order and Mr Corbyn could do something about it if only he were radical enough.

Even better than a tax on property would be a tax on land, a commodity which, as John Stuart Mill said, is “a monopoly not by the act of man but by nature”. There are windfall gains all over the 60 million acres of land in Britain that accrue because of public works; they should be taxed as such. The value of British land is in the order of £5 trillion. A tax of 2 per cent would raise £100 billion. Think of the nationalisation that would fund. Mr Corbyn could buy the Bank of England back.

The second radical omission from the Corbyn speech was any consideration of the power of large companies. Real corporate power today is wielded by technology companies not banks and the time will come, and soon, that it needs to be curtailed. If he wants guidance in economic radicalism Mr Corbyn should read Jesse Norman’s new biography of Adam Smith, which is good on the great economist’s observation that wherever businessmen gather they tend to practise a conspiracy against the public. The upshot of their conversations, said Smith, is that competition is reduced.

The most obviously consolidated markets are in technology. Google has more than a 90 per cent share of general search in most European countries. Amazon has a 95 per cent share of the UK market for ebooks. The legal environment has yet to catch up with this new form of power and a true radical would be looking to break it up, in the name of the public interest.

Mr Corbyn had nothing to say on technology companies and he had nothing to say on automation either. The real threat to the British worker is not the banker but the robot.

A report by Deloitte suggested that, within two decades, 60 per cent of jobs in retail could be automated. Almost three quarters of the jobs in transport could easily be done by robots or, for simple tasks, machines. The revolution will spread into any trade that involves a repeatable action. Robots never go on strike and they never fall ill. The rewards of this change will accrue to the owners of capital, not the bearers of labour. Mr Corbyn might have suggested that the way to beat the robots is to take the extra productivity they promise and distribute it fairly through a popular equity scheme, an employee ownership trust or some variant of a citizen’s income. If a citizen’s wealth fund had been created when North Sea oil was discovered it could be worth more than £500 billion today. Not that Mr Corbyn said anything so intriguing as that.

The Labour leader used to fancy himself a radical by offering praise for the economic miracle of Venezuela. In the week it was predicted that hyper-inflation would hit one million per cent in the socialist paradise by the end of 2018, that option was denied to him. He chose to be boring instead. Much more of this and we might have to conclude that, far from being a danger, Mr Corbyn has nothing much to say.