Sound familiar? (DIMITAR DILKOFF/AFP via Getty Images)
Has Keir Starmer traded in his barrister’s wig for a hammer and sickle? He certainly seems keen for voters to think so, with his repeated pledges to smash “the class ceiling”. The “project” of Labour, Comrade Starmer believes, is to return the party “to the service of working people and working-class communities”, seemingly blind to the fact that Labour has travelled so far from its working-class roots that there is no going back.
We have good reason to be sceptical of Starmer’s attempts to wave the red flag. The thinness of his commitment to working-class interests is demonstrated by his record. It was Starmer, after all, who played a key role in Labour’s disastrous attempt to please everyone and no one by courting supporters of a People’s Vote, ignoring the Red Wall’s steadfast desire to leave the European Union. It didn’t matter that, as an institution, one of the EU’s key purposes was to prevent member states from upturning their economies — precisely what Corbyn’s nationalisation plans, which Starmer signed up to, needed to do. Nor did it matter that the EU boasts a proud history of enforcing anti-union legislation.
Since then, like a good lawyer rather than a good working-class boy, Starmer has revelled in playing both sides — assuring businesses of his “economic competence” while also talking uncomfortably about the needs of the working class. This past weekend, his shadow chancellor, Rachel Reeves, promised that a Labour government would rule out increases in taxes on capital gains and top rates of income. The week before, Labour’s national policy forum attempted to win the hearts of corporate leaders by diluting pledges to strengthen workers’ rights.
This is the essence of Starmerism: a commitment to fiscal discipline that doesn’t scratch, let alone smash, his “class ceiling”. As Steve Hall and Simon Winlow argue in The Death of the Left, “Labour seems even more liberal and metrocentric than it was under Corbyn.” Just wave the flag, tell some anecdotes about your working-class father, and surely no one will notice.
Except that, when they look a bit closer, voters surely will. Consider Starmer’s much-vaunted “Five Missions”, the last of which — “break down the barriers to opportunity at every stage” — is little more than a rehashing of Blair’s behavioural managerialism. Teach people “resilience”, “emotional intelligence” and… “oracy”? That’ll do it. New Labour also demonstrated a strong commitment to reforming working-class behaviours. Regulate daily life, interfere with what people say, do and think, and, somehow, some way, that “class ceiling” will just melt away.
There used to be so much more to it than this. At the turn of the 20th century, the Labour Party emerged out of workers’ attempts to organise as a formidable political force. They weren’t constrained by condescending talk of a “class ceiling”, but saw an entire world for the taking. As Martin Hagglund puts it in This Life, in 1912, a 33-year-old German miner with eight children could describe his involvement in the labour movement thus: “[It] enriches me and all my friends through the glowing light of recognition. We understand that we are no longer the anvil but rather the hammer that forms the future of our children, and that feeling is worth more than gold.” It was this realisation that pushed workers’ parties across Europe towards political power — the recognition that their work built countries and made them run. Contained in this is the core of a working class constituted as a political subject. It is about more than money and “getting ahead”. It is about being a political subject capable of directing everything from the shipyard to the seeming arcane throws of the economy.
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SubscribeExcellent article, but there is another huge dimension to this. Invocations of British proletarian history will do nothing for voters whose ancestors lived abroad while Keir Hardie did his pioneering work. Nor will the alphabetists have much time for those traditional working communities who struggled to improve their conditions. But they are the people that the Labour Party has sold out to. It’s going to be a hard case for Starmer when he has to represent so many clients with competing interests, and I wish him every failure.
So you would prefer the corrupt Tories to be rewarded with another victory?
Certainly not!
They’ve had their chance and should by rights be arraigned on a capital charge for High Treason at the very least.
I agree. They have been lamentable and I expect the voters to crucify them next year
Presbyterian censorship.
This time the word dr*g!
In fact there are NO real Tories, just socialists ‘in dr*g’!
Sadly it has been like this way for over a generation, if not more.
Quite. Ironically given that the article is complaining that Labour isn’t really focused on looking after workers any more, I’d say the biggest problem we have in the UK is that the conservatives seem to adhere to the same bloated state eco-lunacy that ought properly to be sitting on the opposite benches.
The Tories have always marketed themselves as being able to do socialism better than the socialists. And they’ve come unstuck. Arguably, we have had socialism since 1945 it’s structural inadequacies and contradictions being masked by various other failures – money for instance – and now the piper needs paying. Well, actually it needed paying in 2008.
Over the corrupt Labour Party? Marginally, yes.
Labour didn’t give several billion pounds of public money in fast lane contracts for POP to their people. You are a corruption apologist and part of the problem
No, I’m not apologising for anything, nor even using my vote to pass judgement. I would just prefer the Conservatives, as the damage Labour would do is slightly more irreparable.
Then by continuing to support the Conservatives you send the message to them that corruption is OK. Its people like you tgat will drive me to vote Labour in my Tory held London marginal and for Khan too
Sadly, it’s a Hobson’s Choice.
Yes. I think we need a change as the Tories are intellectually exhausted and morally lost, but I don’t think Labour will do much better. For example, how will they respond to nurses asking for 35% pay increases again? There’s no obvious improvements they can deliver to allow them wriggle room.
Hmm, who gets my vote? Spivs or stuck up charlatans? I’ve joined the SDP, which is more traditional Labour than Labour and more Tory than the Tories.
Yes, me to.
That’s an absolutely wonderful film about a shoemaker. Thoroughly recommended.
‘Fraid so.
That would be marginally less harmful than another term or 2 of Labour.
The Tories were handed a s#it sandwich: 2008 crash and Labour’s money printing. Then Covid. Then Ukraine.
They haven’t done well. But think how disastrous Labour would have been.
And will be… if we seek to punish a party that hasn’t bombed the country during this most challenging of times.
But… Tories need to lose their Woke.
Labour’s core constituency is graduate professionals working in the public and corporate sectors. As the social divide has widened as a result of mass immigration and QE, so it has become harder for Labour to reconcile their interests with those of the non-graduate class.
In effect we now have two parties for the property-owning elites and none for small business or the self-employed and semi-skilled. A reform of the voting system is urgently needed to remedy this.
This is not a uniquely British phenomenon by any means. Ever since the Clintons realised you could raise more money from Wall Street (and Riyadh) than from labour unions, the US Democrats have gone the same way.
Agreed. But the Tories offer no solutions. It’s time we had a new party, call it populist if you like, but one that represents the average voter instead of vested interests or special interest groups.And no. Not Reform! https://open.substack.com/pub/lowstatus/p/in-praise-of-populism?r=evzeq&utm_medium=ios&utm_campaign=post
Uptick for recommending the ever excellent Low Status Opinions Substack!
The “average voter”! Really think that is a myth if ever there was one. Unfortunately Labour just seem scared to death of the Daily Mail so they’ll end up being the party of the house owning retired baby boomers. In others words not much will change since this group (because they vote) have held the whip hand in this country for a some time.
Who does the new Labour Party stand for? Its very clear. It is the Party of the Blob and the State. It seeks to sustain the huge tax sucking neo Keynsian public sector & new Technocracy which is the key employer of women and the graduate army it engineered in the 90s. The fact that this Zil Lane governing ‘class’ includes the very richest in our society – the ghastly entitled 150k/ pension super rich striking consultants, 3 Day 100k GPs and numerous 150k regulators and council leaders – is of course easily forgotten. It has no overt ideology beyond the faddish groupthinking DEI obsession and Net Zero. Our State, its laws and media are all hardwired to sustain the 30 Year Progressive State plus its ongoing Brownite welfarism (a sudden 8m with anxiety is all ok,). But otherwise it will just accept – like the inept Fake Tories – the Blairite technocratic Way and New Order. It has the angry young thanks to the Raynerite Tory Scum brainwashing of two generations of leftie teachers. And Labour remains the home of the home owning London/SE New Rich propetocracy, as their 3million house wealth post the Heist is immune to any class war action. It turned its back on the culled male mass working classes of miners and shipbuilders as they went under in the 80s. The disaster is that Statist Labour and its supporters are – despite Rachels sandwich offensive – totally detached from and hostile to the real productive economy and enterprise that it was once embedded in. And therein lies the reason for accelerating decline and fall if they replace the unfit unconservative unworthy of power Blairite Tories.
Marvellous reply Walter, summarised better than the article.
What about the neglect of working class women? Low paid cleaners, factory workers, shop workers, care workers, all of whom have lost jobs or have had their wages undercut , and nurses, who used to be trained for enrolment or registration by apprenticeship on the job and are now obliged to be graduates with a consequent loss of standards.
What exactly is ‘the real productive economy’? Although this might be an uncomfortable fact but think you’ll find that all those London/SE graduates are far more productive than red wall working class blokes. And when you say labour turned its back on the ‘male mass working class’, remember we live in a capitalist globalised economy, I rather think it is this which turned its back on that particular group – ship building and mining included. Statism is the only thing that would have keep these industries alive – but you’re clearly not a fan.
Give the guy a break. He’s got the EdStone pledges down from 6 to 5. And he’s reduced his original 10 pledges down to 5. And probably won’t carve it into a tablet (though I see that Lucy Powell who’s bright idea that was is still on the staff – what do you have to do to get fired in the Labour party ?). That’s got to be progress.
But why does a man who claims he wishes to smash the “class ceiling” have a title ?
“We have good reason to be sceptical of Starmer’s attempts to wave the red flag. The thinness of his commitment to working-class interests is belied by his record.”
Perhaps our sociology professor should look up the meaning of belie. The thinness of his commitment is fully demonstrated by his record.
Sociology, eh?
Good reading. The ‘working class’ has also changed don’t forget. Plumbers, bricklayers, carpenters who traditionally lived in council houses now own assets and holiday abroad. The working class is now the dispossessed minimum wage immigrant base of our society and they need support, not revolutionary politics.
That’s because the council houses were all sold off, no working family qualifies for one anymore. It’s also often cheaper to holiday abroad than domestically
Counter-intuitively, selling off council houses in effect increased the housing supply. This is because their tenants had a right to a lifetime tenancy and the right to pass the “family home” tenancy on to their children, however wealthy and not in need of state support they might become. Thus, the public investment in building a single council house in the 1950s might be entirely corralled by the same family for several decades, which is not what social housing is for.
By selling them off (not all of them, btw), at least many of these houses ended up on the open market as their occupants moved up the income scale.
Interesting perspective. I must admit that hadn’t occurred to me
The sell off has resulted in the terrible housing shortage we have today. Yes, longstanding tenants were able to buy their flat at a knock-down rate but once sold on, as so many have been, they fall into the hands of landlords renting them out at rip-off rents and/or nowadays as airbnb. These flats have not been returned to the housing stock available at council rents and further, the councils forced to sell them to their tenants were not even allowed to use the money to build more council housing. It has been a disaster!
“The sell off has resulted in the terrible housing shortage we have today.”
I genuinely don’t understand this logic. Sold council houses weren’t demolished, they just changed ownership. How did that result in a shortage?
So how has that increased the housing supply? Whether it’s a council house or on the open market is irrelevant to housing numbers, the only thing that increases housing supply is new builds and leaving this to the whims of the market has meant we haven’t built enough houses for decades. In fact it’s in developers interest to constrain supply as it means they can charge more per house
So no one is living in these council houses?
Minimum wage folk are very expensive. They use public services but dont pay tax to pay for them.
The Labour party core support is now Academia ands Islingtonia. Both fairly well paid , property owning , comfortable pensions etc
What prospects does Labour offer that they have not already got?
The key voices in the Starmer team are first R Reeves, who follows Hunt/Sunak in pursuing a fiscal and monetary policy designed for realignment with the EU and so ready for another go at joining the euro.
The second is Miliband, who will continue to back green corporatism as borrowed from Biden’s Democrats and which has also proved popular with the British Conservatives who back Net Zero economics to the hilt.
There may be a third strain in Wes Streeting’s desire to remould the NHS along the lines of a Continental social insurance model, a mixed private-public funding systems.
Needless to say, all three strands add up to the neoliberalism of New Labour, with which progressive (woke) identity politics are entirely compatible.
Bear in mind 60% of adults in the UK do not pay tax. the top 10% of earners pay 60% of income tax. The top 1% of earners pay 28% of all income tax.
Be a good idea to take a hard look at the 40% who pay no tax but use services. And remember well paid folk can move if overtaxed.
So the UK tax system is very redistributive.
31.6 million pay tax. 5.3 million are on long term benefits or idle. I take your point but your numbers are well astray.
What percentage of the income do they earn to start with, and how much of the nations wealth do they hold? There are also many taxes beside income tax. Why not include VAT, petrol alcohol and tobacco duties, council tax etc in your calculations and all of a sudden those numbers change significantly.
If the wealthy are so hard done by why is inequality at record levels?
This is the second article today that includes a quote on something being “worth more than gold”. Giles Fraser uses it in his piece about declining Christianity. Here, it’s used in the context of a declining version of working class socialism.
To coin a phrase: “The Church of England; the Labour Party at prayer”.
I was just thinking the same; the CofE and the Labour Party are just hollowed out shells. Both tributes to the success of Thatcher in turning everything into a business where money is always the bottom line and managerialism reigns.
The electoral system destroyed Labour, not Thatcher. No-one can win without middle class votes – and middle class votes come with a price tag. Blair understood this, which is why he became the exact political re-incarnation of Ted Heath.
People tend to vote against alternatives rather than “for” a party. If Labour win it will not be because their offering is good- it will be that the others are worse.
This is a fair enough critique of “Starmerism” if we can call it thus, but it makes a bigger error than he does in assuming we can reverse course to the days when the working class was concentrated in major heavy industries. Much of it wasn’t in fact even at the time, but it was this fact that gave the organised Labour and trades union movements their power and indeed at their best, dignity. That world has changed enormously, and though in a Marxist sense we can meaningfully talk of a working class, it is often in a much more precarious position economically. Even call centres are now in decline because of chatbots.
We ought to be a lot more honest than the author, and many others, are about the consequences of this. Should we be forced for example to buy expensive, probably not as good British ships for example? Are we happy for taxes to rise hugely to pay for this economic autarky? I haven’t noticed British consumers being notably “patriotic” in their choices for decades – remember the British car industry? We have to tackle these issues honestly not just wish them away, or concede inflationary rises to those relatively few approved groups, such as railway workers, or, for goodness sake, doctors, who still do have some “industrial” muscle.
Surely the root cause of our failure to manage the transition to a knowledge economy in which everyone can participate lies within the state education system.
Compare the written work and arithmetic done by working class eleven year-olds in the charity schools of the 1890s with that of their counterparts now. It’s pretty shocking.
Why don’t you show examples of this “shocking” comparison?
Because you obviously didn’t just make that up, did you?!?!? LOL!
Because I was like er, um LOL!!!!
Which class are those who never vote? There are enough of them to elect another new Party with a landslide. 47 million electorate, around 30 million vote, a little under those who pay income tax. Starmer thinks those on long term benefits are the working class. They’re not, they’re the underclass. Starmer would be nowhere but for the dismal Tories’ record. He offers nothing more than more of the same. He can attract investment and build factories all day. No point if no one wants to work in them.
If Labour wish to facilitate redistribution then they should impose a land tax and an w tax on ownership of multiples and high value properties. They could then use the proceeds to increase the tax free allowance to £15,000 a year.
Increasing the tax free personal allowance was probably the Conservatives single best policy since they got back into government in 2010. But it wasn’t even their policy – they got it from the Lib Dems.
And then that fool George Osborne withdrew it for incomes over £100K with a taper from £100K to £150k. And in doing so created the stealth 60% marginal tax rate in this income band. And withdrew child benefit for single incomes over £60K, but not for lager dual incomes. Add in some insane tax limits on private pensions. How can a “personal allowance” not apply to everyone equally.
You’re right. They deserve to lose. They lost the plot a long time ago.
This further illustrates the way the Non Nasty Non Tory Comservatives have totally embraced the fundamental credos of the Blair/Brown Revolution and New Order. Redistributive taxation to exclusively benefit the ‘poor’ is Brownism Rule 1. The reaction today/Truss Defenstration to the very idea of taxation to incentivise wealth creation is treated as a form of hate crime by the ultra progressive BBC. Their cultural offensive sees wealth disparity as ‘discriminatory’ and therefore a social evil. End result? Our crumbling disastrous public sector vampire gorges more and more on the blood of battered suffocated dying body of enterprise. Hunt pursues ‘unearned’ income with glee. It is a disaster. We are a proto GDR and there is no escape as the State, law media and the weedy inconsequential Uni-Party Politicos who faff about Westminster have ALL collectively bought into the Progressive/EU shaped State. Therevis no opposition.
As an American it’s striking how every point you make has an almost exact 1-to-1 corresponding equivalence over here. It’s either an inevitable, unavoidable result of modern urbanized secular societies over time and/or we’re being steered by malign elements from the spiritual level of existence. Neither of which bodes well for the future. Guess there’s some slight solace to know we’re not in it alone.
I would far rather see taxation on unearned income than earned income. As it stands, taxation on unearned income is lower than on earned income and that IMHO is fundamentally wrong both economically and for the country as a whole.
Having said all that, the overall tax burden is too high and I’m in principle against taxing people multiple times on the same income if it can be avoided.
Raising the tx free allowance was and is not a good idea
Why is that and how wealthy are you?
Please provide some reasons ! Deeply frustrating when people do this.
Would you eliminate this allowance completely and tax all income over £0 ?
Bluntly he’s bumped into a.class war, surrounded by Joshua/Jemima cultural activists. Can’t square that circle.
But I’d pick another aspect of the heading – that Starmer is a lawyer. As Peter Turchin recently reminded me, so were Robespierre and Lenin. I fear for the law and the constiution under Starmer’s Machiavelianism. Expecting the Biden democrat playbook and building plans accordngly. As Tom McTague and Helen Thompson reminded us on These Times this week, he’s no 3rd way advocate. Power first, “progressivism” second.
The real danger of a labour government lead by a lawyer is that it will legislate at a fanatical rate to control every aspect of our lives. The ghastly Blair 10 years produced in excess of 127,500 new pieces of legislation many by SI’s. It was reported that a judge at the time (2010) had commented that it would take years to understand and implement the consequences of those laws. It is not surprising that lawyers invent more laws for their profession to earn even more fees.
Suspect Owen Jones would say similar to this Author.
It’s not a new tension in Labour Party history. It was never as simple as perhaps implied, at least in order for Lab to get elected. All parties are coalitions of variable interest/priorities/emphasise. Holding sufficient together the art of politics.
Time will tell if Starmer judgment on how to balance all this correct. Country not in a great place is it with multiple constituencies unhappy about where we are. Not an easy task for even the best, most experienced politicians
What working class exactly?
Despite a pleasing turn of phrase at times (“Blair’s behavioural managerialism” is a beauty) the article’s yearning for class politics feels like sentimental 20th century Marxism lightly disguised. I thought the entire edifice of orthodox class war had been finally and irrevocably buried. But dinosaurs still lurk in the undergrowth of academia.
Probably not relevant, but all the people I know of my generation (born 1950s -60s) who can legitimately claim to having working-class backgrounds – they are now all Guardian readers and are happy to support Labour. Just sayin’.
For one horrible moment I thought I might be reading The New Statesman. Same old Lefties – fighting amongst themselves whilst continuing to advocate barmy politics and bad economics from the 19th Century with some 21st Century lunacy mixed in.
Labour used to represent the working classes. It now represents the chattering classes.
Keir Starmer. A man who stands for nothing. But will kneel for somethings.
A man who accepts a knighthood but proposed abolishing the Royal family.
Is this really the best that Labour can do?!
Time for party political squabbling to catch up with reality:
There is no working class anymore. Hence no need for a labour party.Which is why, for 25 years, so-called Labour has been a party of socially-liberal Tories.And so-called Conservatives are now an English nationalist party, albeit one that keeps lurching back towards a centrism they don’t believe in in an attempt to stay in power.
What would you call a paramedic or a fork lift driver?
Yes. Starmer sees the working class as an identity, hence his continual references to his father’s occupation, rather than as a history making subject. And in trying to please everyone he fools no-one except perhaps himself.
Starmer and Labour fail to acknowledge and respect the aspiration that exists in much of the ‘working class’.
No wealth tax from Keir Starmer and Rachel Reeves, but an extra nine per cent for graduates who earned £25,000 per annum. I do not usually do the middle-class whinging around student finance, but this time the whiners have a point.
Since the announcement of no wealth tax, and what a thing it is to have witnessed the announcement of nothing, a number of possible forms of it have been doing the rounds. In every case, they would raise eye-popping sums of money by making a negligible difference to the lives of an infinitesimal number of people who would not get a better deal anywhere else that they might ever want to live.
Reeves would not even tax dividends, inheritance and capital gains at the same rate as earnings, which Margaret Thatcher, Geoffrey Howe and Nigel Lawson did. If Starmer and Reeves have no spending plans beyond those of the present Government, then why would they wish to be the First and Second Lords of the Treasury instead of Rishi Sunak and Jeremy Hunt? Why do they want the jobs? What for?
Not that they would be foregoing any wars, since the money can always, always, always be found for those. Of course it can. The issuing of currency is an act of the State, which is literally the creator of all money. A sovereign state with its own free floating, fiat currency has as much of that currency as it chooses to issue to itself. All wars are fought on this understanding, but the principle applies universally.
The State also has the fiscal and monetary means to control inflation, means that therefore need to be under democratic political control in both cases. That is what both fiscal policy and monetary policy are for: to give the currency its value by controlling inflation to a politically chosen extent while encouraging certain politically chosen forms of behaviour, and while discouraging others, including the encouragement of economic equality, which is fundamental to social cohesion and thus to patriotism. Taxation is not where the State’s money comes from. Nothing is “unaffordable”, every recession is discretionary on the part of the Government, and there is no such thing as “taxpayers’ money”.
It follows that, at 100 per cent of GDP or otherwise, there is no debt. It is an accounting trick. The Treasury, which is the State, has issued bonds to the Bank of England, which is the State. Even if those bonds were held by anyone else, then the State could simply issue itself with enough of its own free floating, fiat currency to redeem them. There is no debt. There is no debt. There is no debt.
If Starmer does not know all of this, then he is unqualified to be Prime Minister. Reeves certainly does know it. She just chooses to lie about it.
Much as I agree with you that Labour should have different fundamental policies from those of the Conservatives, I can’t help but think that the belief that government debt does not exist, provided you can print money, is dangerous.
If the state decided to issue a vast amount of currency without any concomitant production, it would essentially be taking purchasing power away from those who currently had money by virtue of producing and selling things of value, through inflation.
In their loss of actual wealth, existing holders of this now-debased currency would most certainly feel that sudden lack of spending power that comes with paying back a debt.
Quite apart from the ethics of it., given that government bonds are held by pension funds at home and abroad, banks, and a variety of other bodies in which people have shares, interests, jobs and careers, the practical consequences of repudiating ( = saying ‘there is no’) debt would be serious indeed. Even without the economic disruption, it would be a monumental transfer of wealth from the productive to the non-productive.
You might argue the tax system does that anyway. At least it is subject to democratic norms. I can vote for a low tax party, or a high tax one.
The national debt is basically the (accrued) gap between what politicians can persuade people to contribute to the public good (tax), and what politicians promise people they will give to them in order to get elected (spending). I would suggest taxation is exactly where the State’s money legitimately comes from. It’s the amount the citizens of that state indicate through electoral preferences that they are prepared to let the state spend. Borrowing/QE/printing fiat money is that bit that flies under the radar of most people, and I’d question even how legitimate it ought to be for the organs of a supposedly democratic State to do so without some form of explicit referendum.
It is some comfort to me that even the likes of Starmer and Reeves are not about to print the State’s debts away. There’s been enough unorthodox monetary shenanigans since 2008 without resort to Zimbabwean-style debt reduction.
Weimar, here we come!
And who will be our saviour?
Our saviour will be somebody who makes paper bags to carry the money – not plastic of course.
Or maybe Nigel Farage?
They’d kill him if necessary.
Pavlovian response. This is what happens every day. What do you think that money is?
Excellent! That stuff I send to HMRC twice every year doesn’t really exist, then. That’s cheered me up.
Not so long ago (around 2011 I think) a senior Treasury official floated the idea that all individual wages be paid directly to government. In this streamlined and efficient system Tax and NI would be extracted and the government would pass the remainder on to the lucky wage earner. All money would first be the government’s money.
Educate mandarins at Marxist universities, and what do we expect? I suspect that might have been just floating the idea, and there is more to come…
Apparently 60% of the current senior mandarins are Oxbridge and large proportion of those privately schooled too. Of course back in the 30s Cambridge had it’s communist cell so certainly a lesson.
However suspect some would suggest Ox and Camb, when the senior mandarins were there – c 20-30 yrs prior, were not quite beacons of Marxist theory you may be implying.
All money is “first the Government’s money”. Currency is issued by the State. It says so on the banknotes. That is what money is.
Pretty much what happens with a PAYE system. The ultimate trickle-down, where your wages and the goods and services your taxes pay for are all filtered through a thousand bureaucrat kidneys until you get the end product.
It is just making its way back to where it came from. Currency is issued by the State, and nine out of every 10 pounds (or whatever currency) issued will always end up there. It just will. The political question, and that is what it is, is how many links there are in the chain.
This sounds like economic La La land to me, wishful thinking on stilts! If it were so easy, why hasn’t 95% of the population voted for permanent social democratic government throughout the developed world for decades? Of course there is government debt, and indeed it is regularly paid back! I’m pretty glad people with your wacky theories aren’t in government – we could no doubt rapidly converge on Venezuela’s stellar record!
You might also have noticed that we have already been printing money on a vast scale since 2008. Of course this was always going to have inflationary consequences, firstly bidding up asset prices and then affecting the wider economy (no, inflation isn’t predominantly due to the Ukraine war and it’s rise well preceded that event). The problem with arbitrary wealth taxes is government credibility – Ireland seems to have had quite a successful policy of attracting large US multi nationals through a policy of low taxation. We can criticise this, but a sudden about turn isn’t going to do much for the credibility of the Irish government.
I’ve just visited Norway. The state has its sovereign wealth fund, and it has very visibly spent billions on transport infrastructure and no doubt much else – it is very impressive. But it is obvious that consumption (and other) taxes are even higher than ours now are and these affect ordinary people, not just the super wealthy. The economy though is also, unlike the British one, very productive. So those are the sorts of realistic choices a left if centre government could make, rather than as you imply you can just tax a few corporations more.
This is what happens every day. You just do not know what you are talking about. You are ignorant of the basic facts.
I work in Norway frequently and have been working or otherwise visiting there since 1979. The sovereign wealth fund did not start until 20 years after first production. Even then Norway had the advantage of not having UK’s enormous level of debt, or post-industrial malaise. The only real productive industries there are oil & gas extraction production, fishing and hydroelectricity production. The quasi-government behemoth, Equinor (formerly Statoil) , is slow and inefficient compared to its more nimble private counterparts.
If that is so, how do you account for the fact ‘we’ had to grovel before Herbert Hoover & Co in 1932/3 to alleviate our Great War debt repayments, and again under Churchill for ‘Lend Lease’ etc and yet again under Stafford Cripps and Attlee for even more US largesse?
Meanwhile our overseas investment portfolio, built up over three centuries of happy plundering, was virtually destroyed, and the country reduced to the ‘welfare addicted’ dustbin we see today?
You’re mixing up the money tokens, with ‘money’. Money comes from an exchange of labour-value. I do something for you, you promise me something in return. We settle this debt with a promise to pay, or an item of value, or a further exchange of labour. Money-tokens are a convenient and fungible way of quantifying and settling the debt. But to be useful the money-tokens have to have trusted relationship with the size of the debts and contracts they cover.
If you change the value of the token, you rewrite the value of all the existing debts and contracts. Historically, we have chapter and verse on this. Time and time again, emperors and governments have tried debasing currency to make their ‘money’ go further, and the results are the same – inflation and currency collapse. It’s a chimera idea (and wars bankrupt governments – how does the king pay and feed his soldiers for their labour except from the booty and taxes on the vanquished? He has to take the food from the non-soldiers to give to the soldiers – stealing labour-value via tax burdens). The fiddling with the tokens means the debts and contracts are readjusted to account for the change in value – it’s like moving from centigrade to fahrenheit and claiming you have more degrees, yet you haven’t fundamentally changed the temperature.
The only way you get more is by making the labour-value more productive – so you get more out for the same effort. That creates abundance. And eventually abundance brings prices down, and raises living standards (scarcity does the opposite). Fiddling with tokens is just pretend arithmetic – you don’t get nowt for nowt.
The Centigrade-Fahrenheit analogy is an excellent one.
Rome’s debasement of her currency provides an excellent early example.
I have never understood this type of analysis – about labour being more productive.
If we in the UK were a huge manufacturer of goods, which we sold around the world to unlimited markets, then labour productivity would be very important. But now we have world saturation of standard goods and the UK is not a big manufacturer.
We have turned more to ‘service’ industries where the return is measured in customer satisfaction, not in measurable profits. The NHS is a good example of this. Waiting lists are long and a greater labour productivity would mean that they would reduce – greater customer satisfaction but not greater income. So, you could then cut employees to generate money but where would the staff work – in the absence of a manufacturing industry? Perhaps they could set up in business as internet influencers and attract advertisers?
It doesn’t really work for me.
Economies are all about people exchanging labour in different ways. The number of people required to work in agriculture to feed the population has dropped from around 80% in the middle ages to around 40% during the industrial revolution, to around 1-2% now. And yet we product much more food, in much more variety, to much higher qualities – that’s productivity. What happened to the workers? They didn’t stop exchanging labour, they exchanged different labour. Firstly factory work. Then service work. We look after each other more. We entertain each other more. A musician who in the 19th century would have scraped a living for pennies in pubs, started selling records in the 1930s, and is now flogging their wares to billions from their bedroom. That’s also productivity. We become more efficient, get more done and satisfy the needs and desires of more people – I help you, you help me. Abundance creates the modern standard of living – we just find different work to exchange.
Thanks for a solid explanation; not my forte so glad you boiled it down.
It occurs to me that ‘services’ can be far harder to optimise, hence productivity hits a roadblock – or at least in the way I’m thinking about it.
I work in software dev for large(ish) scale integration projects. Arguably a service.
But programming correctly is inherently fraught, and solving the right problem is critical. This needs chat and planning, and further chat, then decision etc.
Code has to work, and data has to remain intact and meaningful.
It’s not really possible to compress these activities very far unless you really work beautifully together, which isn’t always/often the case.
There is Debt. It’s drawing down your future income. The creditors expect to get paid. If you have got no future income, you can’t pay your debt. It’s a fools paradise. That is not to say that borrowing has no merit, the trouble is, successive governments of every colour have been borrowing for years, and have precious little to show for it. Poor NHS, poor Schools, poor Infrastructure, poor Defence. I don’t expect Mr Starmer to reverse that, just as I didn’t expect Mr Sunak to do so. There people want power, but not the responsibility to make the hard choices that come with that power. The managed decline of Britain, interrupted for 20 years from 1979 can continue apace. You could extend that epitaph to much of the west.