[mrjonathanr]

I'm actually blindsided that you all view Starmer as being sort of along the same lines as he portrayed himself as being in 2020.

I don’t. I always thought he was firmly centrist and was mildly surprised by how far he went to woo the left in the party. Rather like how far he’s going to woo the right in the country. We’ll see where in practical terms he settles, if given the key to number 10.

Given the deepening slide to the (far) right and omni-incompetence of the Tories, anything vaguely centrist would mark a massive lurch to the left in uk government.

[petejh]

I presume this is in relation to the Iraq invasion (as, for most, the period of their tenure looks significantly better than what has followed) so I’m wondering if there is a universe B where the UK didn’t follow the US as the Tories were much more hawkish than the PLP?

Completely missing my point.

Which is: yes everyone in mainstream UK gov was hawkish - tories/Labour - and eager to align with the US. But that does not justify using a a massive and (to me) blatant lie to create fear and justify invading another country. And then modern-day literally crucifying a public servant to divert attention from the doctoring of intelligence. 
If a UK government is hawkish to invade a country that poses zero immediate threat to the UK because ‘US foreign policy alignment is important’ then make that case to invade on that basis. And face the fucking music of a public that elected you, saying this is not what it wants and face the consequences if and when it goes wrong. Rather than creating make-believe threats to fear-monger and hoodwink the public into being scared of a threat that isn’t real. Which corrupts everything government touches in terms of foreign policy thereafter.

[stone]

I'm not convinced by the argument that the problem with the Tories is a lack of competence.

My impression is that Sunak, Cleverly etc are clever, well intentioned and diligent.

I think the problem is down to fundamental flaws in the economic system they believe in and roll out. They believe that leaving investment decisions with wealth holders and allowing wealth to concentrate is the way to ensure that winners not wasters run the show, the economy thrives, and all is great.

My view is that can only last so long. Unless prosperity is broad based, firms won't have customers. Human resources need to be scarce and expensive to induce firms to invest and innovate in productivity gains. It's not just the "vile hard left cadres" who say this. Wealth managers such as James Montier have made the exact same argument to explain stagnating productivity.

Starmer's team seem to be doing everything to reassure everyone that they do not intend to change course from the Tories in terms of broad economic philosophy. So, no tax increases for the wealthiest and limited public sector investment. Trade union rights will merely get repealed to where they were in 2016 -so a far cry from Labour's 2017 proposals to adopt Nordic style sectorial collective bargaining systems.

The huge problem we face is that if Starmer gets in and his attempt at Tory style policies pan out no better than those policies have been under the Tories, then we are stuck. He has stitched up the Labour Party to ensure that it can never again offer the sort of policies it was founded to deliver. People here seem to be pinning their hopes on the idea that just as Starmer lied to members in the 2020 selection, he is now lying to woo swing voters. I don't understand that. Increasing taxes for highest earners is a vote winner. This looks to me like following right wing ideology despite not because of electoral consequences.

[petejh]

Much wrong with that view imo, but horses for political courses.

I don’t think this statement for e.g. holds much water:
Unless prosperity is broad based, firms won't have customers. Human resources need to be scarce and expensive to induce firms to invest and innovate in productivity gains.

Said no-one in SE Asia ever*. The reasons the west has so much of its consumer goods manufactured in SE Asia is that SE Asia has a plentiful supply of cheap labour, with relatively poor standards of labour protection, and power grids to power all that manufacturing that are heavily reliant on the cheap fossil fuels of gas, coal and oil.


Also, ‘prosperity broad based or there’ll be no customers’:

Aldi’s and Lidl’s annual profits are currently booming as people below income ‘x’ feel the pinch and divert from more expensive retailers. Business cycles offer opportunity for competitive companies at all stages of the cycle - troughs as well as peaks. We’re in a trough and it isn’t pleasant for a lot of people, but there are ‘essentials’ (which some can still barely or not afford..) and ‘desirables’ - this is the reason ‘consumer defensives’ as a sector tend to do well, relatively speaking, in recessions.


* OK Japan, S.Korea and Taiwan today are advanced economies based on high-tech industries, but 30 years ago they were today’s Vietnam, China and Indonesia of cheap basic manufacturing.
** The Balkan countries are destined to ‘flourish’ (if that’s the right word) in future decades as Europe’s next cheap manufacturing centre imo.

[stone]

Pete, I think this is worth a look https://www.ft.com/content/b7ad1c68-59fb-11e2-b728-00144feab49a

[stone]

Pete, I think this is worth a look https://www.ft.com/content/b7ad1c68-59fb-11e2-b728-00144feab49a

If that link is paywalled, then googling " FT what really powers innovation: high wages" provides free access.

[mrjonathanr]

I'm not convinced by the argument that the problem with the Tories is a lack of competence.

My impression is that Sunak, Cleverly etc are clever, well intentioned and diligent.

My impression is very different. Sunak’s immediate lurch to grant more North Sea drilling licences because he spotted a potential wedge issue in Ulez after the Uxbridge by-election does not seem well intentioned. Nor does the failure to appoint a minister for the disabled, this week.

As chancellor he couldn’t even get his wife to pay her fair share of tax. How diligent is that?

[Fultonius]

I met Sunak once, while Boris was recovering from Covid; I had to give him a site induction and a bit of chit chat about the R&D wind turbine I used to manage. He's an imbecilic chump that portrays an air of intellect.

Information seemed only to go one way with him - outwards. Nothing in, all out. He kept asking me leading questions which I didn't agree with and, when I carefully suggested he was off track he just kept megaphoning the message!

He's also very small 

[stone]

He's also very small 

So why should people vote Labour now they are aping Tory policies, well Starmer is 5'8'' whilst Sunak is 5'7".

As someone who is 5'6", I struggle to get enthused by that.

[Fultonius]

I should probably rephrase that to "he is also way smaller than I imagined". Not that height has any bearing on anything! I was just surprised.

[petejh]

Pete, I think this is worth a look https://www.ft.com/content/b7ad1c68-59fb-11e2-b728-00144feab49a

It's an interesting snippet of an article but it was written a decade ago and is talking about an industrial revolution that happened 200 years ago. A lot has changed in markets since the industrial revolution. We aren't even living in the world of 10 years ago, let alone 200 years ago.


edit: This seems to directly refute your suggestion that broad-based high wages are required to incentivise innovation, which in turn leads to productivity growth. Instead it suggests China's productivity growth in the main is a result of policy reforms beginning in 1978 which were aimed at creating the profit incentive for regional business owners. China kind of out-capitalism'd the west by being able to be both sides of the coin - firm control over its population due to its history as a communist autocracy, while using the profit motive - which is missing from communism - to incentivise the population to produce more.   https://www.imf.org/external/pubs/ft/issues8/index.htm

[mrjonathanr]

So why should people vote Labour now they are aping Tory policies,

Well, we'll see. You think Starmer will give us the same proto-far right policy as Sunak? That Reeves will give us the same pseudo austerity as Hunt; that Philipson will do the same  '**ing good job' as Gillian Keegan; that Angela Rayner's work will ape Grant Shapps'; that Wes Streeting will... oh, okay, you have me there. But the point is the difference is more significant than you suggest.

[stone]

Pete, if the starting point is everyone working on collective farms as in 1970s China, then I totally agree what is needed is allowing some opportunities for free enterprise. The 1970s Chinese economy was super-dire and was constrained by a zealous ideology. Simply loosening that constraint allowed things to improve massively.

Our starting point here and now in the UK isn't remotely like 1970s China.

I'm not arguing for collective farms and a prohibition of all private enterprise. What Starmer claimed to represent in 2020 (and Corbyn did) was a move towards what has worked very well in Nordic countries and I think would improve the UK.

[mrjonathanr]

I was pondering what you meant by your question which I quoted above, Stone. It seems so extraordinary I returned to this page to ask you.

Do you really not see significant differences between Labour’s plans and Tory policy? Or was that simply a rhetorical flourish to underline your view they have tacked too far to the right?

[andy popp]

I'm not arguing for collective farms and a prohibition of all private enterprise. What Starmer claimed to represent in 2020 (and Corbyn did) was a move towards what has worked very well in Nordic countries and I think would improve the UK.

It would be good if people could say what they think has worked very well in Nordic countries (allowing for the fact these countries also show significant differences). Denmark, a country without significant natural resources, is rich because of a remarkable track record in generating highly successful private enterprises. It is a highly capitalistic country. A country of 5.8m has world or near world leading companies in a whole range of industries large and niche: shipping (Maersk), brewing (Carlsberg), Pharma (Novo Nordisk) toys/entertainment (Lego), engineering (Grundfos, Danfoss), renewable energy (Ørsted, Vestas), biosciences (CHR Hansen), building supplies and components (Rockwool, Velux). Even the world's largest commercial sperm bank is Danish (Cryos). It is also important to understand ownership/governance structures. These companies are overwhelmingly owned by foundations that are in turn controlled by founding families. These structures protect control, and the foundations typically do significant philanthropic work, but they are also highly effective in protecting private wealth. Income inequality is relatively low in Denmark, but wealth inequality is pretty high. Corporation tax is, I believe, lower than the UK. State ownership of industry is not significant (no equivalent of Statoil/Equinor in Norway), though cooperative ownership structures are significant in some sectors (e.g. food retailing).

It's true that unions remain strong and collective bargaining is at the core of labour markets across Scandinavia (as Musk is currently finding out) and that helps explain relative income equality. But collective bargaining has to be understood as part of a wider model of the economy thoroughly rooted in private ownership. It also has to be understood in terms of history and culture.

The welfare state remains pretty robust, though not without stresses and critics. Societal trust and what we might call social solidarity remain quite strong. But these countries do elect right wing governments. Sweden, for example, experienced significant neoliberalism/marketization in the late C20th.

This isn't meant to be a dig at you Stone, it's just that I see a lot of idealisation of Scandinavian models (looking at you, my progressive American friends). If people are going to refer to what has worked well in these countries they need to be specific.

[Teaboy]

If people are going to refer to what has worked well in these countries they need to be specific.

Do they? If Scandinavian countries aren’t doing better than us from an equality and social welfare perspective then that should be challenged but if they are (and your posts didn’t not seem to say they aren’t) then just saying ‘I’d like our country to be more like that one’ seems reasonable. Telling people they can’t aspire to better govt because they can’t articulate all the nuances of that system is a good way to keep the serfs in check! (I know that’s not what you were doing btw)

[andy popp]

No, that was definitely not what I was trying to do! Yes, I do think outcomes are generally better here and of course I want the UK to aspire to better - both my adult children still live there. But at some point aspiration has to be translated into policy and that requires both realism and specifics.

[Oldmanmatt]

I'm not convinced by the argument that the problem with the Tories is a lack of competence.

My impression is that Sunak, Cleverly etc are clever, well intentioned and diligent.

I think the problem is down to fundamental flaws in the economic system they believe in and roll out. They believe that leaving investment decisions with wealth holders and allowing wealth to concentrate is the way to ensure that winners not wasters run the show, the economy thrives, and all is great.

My view is that can only last so long. Unless prosperity is broad based, firms won't have customers. Human resources need to be scarce and expensive to induce firms to invest and innovate in productivity gains. It's not just the "vile hard left cadres" who say this. Wealth managers such as James Montier have made the exact same argument to explain stagnating productivity.

Starmer's team seem to be doing everything to reassure everyone that they do not intend to change course from the Tories in terms of broad economic philosophy. So, no tax increases for the wealthiest and limited public sector investment. Trade union rights will merely get repealed to where they were in 2016 -so a far cry from Labour's 2017 proposals to adopt Nordic style sectorial collective bargaining systems.

The huge problem we face is that if Starmer gets in and his attempt at Tory style policies pan out no better than those policies have been under the Tories, then we are stuck. He has stitched up the Labour Party to ensure that it can never again offer the sort of policies it was founded to deliver. People here seem to be pinning their hopes on the idea that just as Starmer lied to members in the 2020 selection, he is now lying to woo swing voters. I don't understand that. Increasing taxes for highest earners is a vote winner. This looks to me like following right wing ideology despite not because of electoral consequences.

He’s not lying to get swing voters though, is he. He is centrist, he is advocating compromise.
(I’ve never voted Labour).
It’s hard to not be scathing when I read such things from clearly, well meaning, kind, people (Stone) who want to see a better and more equitable society. I’d like that too.
Pretty sure, that’s what Starmer would like to see too.
If he was, in fact, the lying closet Tory, a lot of Labour voters believe him to be, he would not be a Labour politician. Simply because he could have done very well as a Tory, perhaps even already been PM, had he chosen to, yet he battles away for the losing team.
A very large number of swing voters are, actually, the more thoughtful voters. Ideologues (some of you posting here) think they are somehow stupid or simply indecisive, where in fact they are simply unaffected by extremism.

Because, as an analogy, if the car starts drifting to the right, the wise man realises that grabbing the wheel and yanking it hard to the left, will likely result in disaster.
To stretch that analogy, in this country, keeping to the left of the Center line is a happy circumstance and progress is made, veer onto the hard shoulder, or across the Center line and…

I kinda think Starmer might make a reasonable driver, for a while at least.

Also, just to beat that analogy to death, there’s always opportunity to widen the road to the left. Not easy and takes effort and planning. Sharply swerving onto an unprepared hard shoulder is a bad idea. However, swinging to the right will almost inevitably result in blood and tears.

Seasons Greetings, may you all proper and thrive.

[Offwidth]

* OK Japan, S.Korea and Taiwan today are advanced economies based on high-tech industries, but 30 years ago they were today’s Vietnam, China and Indonesia of cheap basic manufacturing.

Can’t let this pass. I always had an interest in Japan as I grew up (maybe triggered from Judo, which was such a big aspect in the lives of my family and friends). Japan became the world's second biggest free market economy in 1968. I finally managed to visit Japan in the late 80s for a multi week series of linked high tech conferences, the most impressive I ever saw (and the Yokohama expo). Over the years I had already consumed plenty about the country. I had known about the work of leading Japanese semiconductor scientists and engineers since 1980 (my semiconductor reserch journey started in a pre uni year). My overall impression by my visit (and the reality on the visit seemed better than my external impression) was they were already a significantly more advanced society than the UK (despite a lack of physical resources, so under greater stress during things like oil shocks). They seemed way more collective in national progress than the worsening divisions and some really serious poverty in the UK. Life there, despite some obvious imperfections and significant social differences, looked better and fairer in '89 (from the Japanese poor to the well educated) than we do in the UK even now.

[stone]

Thanks everyone, this thread has given me a lot to reflect on.

Andy:- When I was thinking of "Nordic" I took that to mean:
-Very strong trade union rights such as sectoral collective bargaining and consequentially ubiquitous high wages.
-Due to widespread high wages, the government gets high tax receipts and people can afford to pay those taxes. The taxes are high and aren't set especially progressively but don't need to be in the context of the overall economy being so progressive.
-Universal (ie not means tested) public services (much like our UK NHS, schools, police already are). Includes child care.
-Meaningful worker representation on company boards etc. That prevents stuff like the leveraged buyouts we get in the UK that often wreck what otherwise would be successful firms.

That is all entirely compatible with thriving private enterprise. That doesn't mean that it won't initially be fought tooth and nail by capitalist interests/ideologues. You say that it is a tradition of how things are done in Nordic countries. It is now but it wasn't always. At the beginning of the 20thC they were very unequal and impoverished and there was mass emigration. At around the time we had a general strike in the UK they had bitter labour disputes there. Strikers were shot. That was the origin of the system.

In the UK, once the Attlee gov set up the NHS, it became a set way things have been done since despite it being totally counter to the prevailing view of many in gov. Voters won't countenance anything else. In Nordic countries, the overall economic system has similarly survived despite elections of gov with right wing inclinations.

Regarding wealth inequality, my impression is that it often works better to make private wealth less consequential rather than necessarily directly redistributing wealth. I'm keen on wealth taxes etc but my observation is that isn't where focus most needs to be.  I saw something interesting noting that if various non-monetised rights of German people (such as tenants' rights, worker representation, state pensions etc) were given a monetary valuation, it would be equivalent to a huge amount of private wealth https://jwmason.org/slackwire/wealth-distribution-and-puzzle-of/ .

Oldmanmatt and mrjohnathanr:- Like Andy said, what matters is specifics. I get exasperated when terms such as "hard left" and "centrist" get thrown around rather than the discussion being about the nuts and bolts of it all. My impression is that when people in the UK want to convert the underlying economy such as towards the "Nordic model" I described above, they get pejoratively slagged off as being "hard left". It is seen as a stepping stone towards 1970s Maoism. https://www.opendemocracy.net/en/can-europe-make-it/jeremy-corbyn-mainstream-scandinavian-social-democrat/
Obviously I think otherwise.

To get my head around what is meant by "centrism" I need to see what is on the other side of it away from "hard left". That would be the idea that if taxes are minimised and workers are only paid what one-to-one employee-employer negotiation sets, then everything is optimal. My understanding is that "centrism" accepts that basic economic premise but wants a trade off to soften the edges. It wants to maintain economic power structures so eg wants minimal wage legislation rather than strong collective bargaining rights. It considers public spending to be something to minimise and so sees a need to direct it carefully on a means tested basis rather than thinking universal benefits can just be netted out from the well-to-do via taxation.

My only objection to centrism is a practical one. My observation is that the Nordic model does work. It is easy to see how everything flows around in such an economy to keep it all going long term. By contrast I struggle to see that with a Blair-style economy. Wes Streeting gave an interesting interview this morning. He was asked how he would transform the NHS when he was ruling out raising taxes or borrowing. He said the usual stuff about him being a better manager than any Tory. He also said Blair had delivered growth and that had enabled the (undeniable) big NHS improvements under Blair. My problem with that comes from looking under the bonnet of that Blair growth. My impression is that it pretty much all stemmed from property price inflation and an unsustainable banking bubble. That originated from banking regulation changes made before Blair. Buy-to-let mortgages came from John Major in 1996. Perhaps the housing bubble inflated more because Labour was more generous with housing benefit (paid on to but-to-let landlords and their creditors) than the Tories would have been but it was basically just running along with what Major had set in place. Anyway, it was just a one-way stream of money that, whilst it funded a great NHS for a while, saddled the country with crippling housing costs. It isn't a system that works or can be re-enacted IMO.

[stone]

Of course Blair also did a lot of PFI https://www.theguardian.com/commentisfree/2015/aug/26/pfi-labour-nhs-health-service-private-finance-initiative

That's the sort of mess that comes from trying to dodge the need to realign the economy and yet being committed (as we should be) to ensuring people are provided for.

[Moo]

Some good reading here I’m enjoying the discussion.

Forgive my ignorance but I’ve always thought that the problem with comparing the UK to Norway etc is that they’ve had about the same amount of mineral wealth extraction over the same period of time but with a fraction of the population to divide it up over. Given that all of the Nordic countries have less than half the population of the uk it gives an even greater dispersal of the wealth across the region because their version of London couldn’t just hog it all.

[stone]

Some good reading here I’m enjoying the discussion.

Forgive my ignorance but I’ve always thought that the problem with comparing the UK to Norway etc is that they’ve had about the same amount of mineral wealth extraction over the same period of time but with a fraction of the population to divide it up over. Given that all of the Nordic countries have less than half the population of the uk it gives an even greater dispersal of the wealth across the region because their version of London couldn’t just hog it all.

It's only really Norway that has lots of oil etc. Denmark and Finland aren't natural resource economies.

[mrjonathanr]

In reply to Moo.

In the specific case of Norway, their side of the oil fields has been more abundant and the wealth extracted has been invested into the Norwegian Sovereign Wealth Fund.

Ours was largely spent on tax cuts and propping up the economy such that we have nothing to show for it now.

edit Norwegian fund value approx £1,208,359,883,639   The population is circa 5.5M

[stone]

One way of looking at it is that Norway's sovereign wealth fund sequesters away the oil proceeds and prevents them from distorting their economy and turning the country into a petro-state. They have all of that on-paper ownership of global stockmarkets etc, but they aren't living off the profits of those companies. They are just amassing it all.

edit: I just saw that they did withdrawn a bit from the fund during the COVID crisis (which also entailed record low oil prices) https://fortune.com/2020/05/12/norway-oil-sovereign-wealth-fund-coronavirus-bailout/

edit: but the general point is that natural resources really aren't at all what Nordic economies are about. The sovereign wealth fund is really an example of how even when they do have rich natural resources (ie Norway), they don't live off of that but rather squirrel that money away.