Cooking the Books: Pleasing Business Leaders (2018)

The Cooking the Books column from the May 2018 issue of the Socialist Standard

Jeremy Corbyn and John McDonnell may well still want the Labour Party’s old Clause IV to be implemented and all industries to become state-owned, but they are well aware that, if Labour comes into office, it will have to govern in the context of virtually all industry being in the hands of profit-seeking private enterprises. In other words, that they will be presiding over the operation of a classic capitalist economy.

The representatives of business realise this too and that they would have to work with a future Labour government. Hence, the CBI’s invitation, on behalf of big business, to Corbyn to address their annual conference last November and the British Chambers of Commerce’s invitation, on behalf of smaller businesses, to McDonnell to address theirs in March. The Times (9 March) reported the latter under the headline ‘McDonnell wins applause from business leaders’.

So what did McDonnell say to win applause from a gathering of capitalists? The Times quoted him as promising:

  ‘A Labour government will champion business by ensuring small companies get the long-term investment and start-up risk capital they need.’
   ‘Good businesses don’t require no government, good businesses require good government … It means a government that pays a little less time to the rentiers and speculators and more time for those who work in and run our businesses. It means making finance the servant and not the master of the real economy.’

And, in the passage at which the applause was perhaps the loudest:

  ‘Mr McDonnell said that Labour would create “an environment where people feel if they invest they will get a secure return”.’

McDonnell is being realistic. He knows that a future Labour government will be governing in the context of capitalism and that, as capitalism runs on profits, it will have to let profits be made; not just that, but must encourage them to be made and create an environment in which they can be made. This is what being a ‘good government’ for business will involve.

Whether in fact a Corbyn/McDonnell Labour government will be able to redirect money from speculation in the City to small businesses remains to be seen. The attempt to do this might well lead to a run on sterling and force a U-turn with recriminations about ‘a bankers’ ramp’ and ‘gnomes of Zurich’. The current Labour leadership is apparently aware of this as, according to a front-page headline in the Times (27 September), ‘Labour preparing for a run on the pound, admits Corbyn’.

As a profit-making system capitalism can only run in the interest of the profit-takers. It cannot be run in the interest of the majority class of wage and salary workers. Profits must come before wages. Any government which takes on responsibility for presiding over the operation of capitalism is sooner or later forced to recognise this, as the experience of every single previous Labour government has shown. On the basis of this experience, as well as an understanding of how the capitalist economic system works, we can safely predict that a Corbyn Labour government will be no different. It, too, will fall flat on its face.