Could Corbyn’s Socialist Scheme Become Reality?

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In unsettled times, politics often lunges toward the fringes as faith in the status quo disintegrates. That’s where we are in America today. That’s where Britain is too, as that country struggles with the seemingly intractable conundrum of Brexit and other issues that impinge on the very definition of British society. Just how far toward the fringes Britain may go was laid out in stark detail recently by the London-based Financial Times, which explored the radical policy prescriptions of Jeremy Corbyn’s opposition Labour Party.

“At the heart of everything,” says the FT, in a piece by Jim Pickard and Robert Shrimsley, “is one word: redistribution.” The writers explain: “Redistribution of income, assets, ownership and power. The mission is to shift power from capital to labour, wresting control from shareholders, landlords and other vested interests and putting it in the hands of workers, consumers and tenants.” In a page one summary of the longer inside article, Pickard quotes a prominent London lawyer as saying, “There is no historical precedent for this. We are completely in uncharted territory.”

But it would be a mistake to think that uncharted territory can’t become a spawning ground for a radical new political hegemony. As the writers explain, the Brexit mess has scrambled UK politics into something hardly recognizable. “A Corbyn government,” they add, “is no longer a remote prospect.”

We are seeing something similar in America, as most of the Democratic presidential aspirants lurch to the left on issues like climate change, illegal immigration, transfer payments, and government control of the economy. But the American version seems rather haphazard and undisciplined in comparison with the Corbyn model. His is a coherent, all-encompassing blueprint designed to remake British society in a host of ways.

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“A Corbyn government promises a genuine revolution in the British economy,” write Pickard and Shrimsley. “Labour’s leadership intends to pursue not only a fundamental change in ownership and tax but a systemic effort to embed reform in a way that future parties will struggle to unpick.” They quote a Corbyn ally, Jon Lansman, as saying, ”We have to take decisive steps to both achieve a significant redistribution and create a constituency of an awful lot of people with an obvious stake in a continuing Labour government.” In other words, the aim is to buy votes with other people’s money.

Among other initiatives, Labour would force all companies with 250 employees or more to transfer 10 percent of their shares to employees. The FT, working with a prominent London law firm, calculated that this would amount to a transfer of £300 billion. Workers would manage the shares and receive dividends of up to £500 a year. Any income beyond that level would be redistributed to the government treasury—”representing,” as the authors write, “a stealth tax by the state.”

The Labour plan also includes the nationalization of rail, water, mail, and electricity distribution; various big tax increases on corporations and the rich; powerful new rights for tenants in any disputes with landlords; legislation to increase the power of labor unions; and pay caps for corporate executives. Under study are such “radical ideas,” as the FT labels them, as a four-day work week, a universal basic income, and government actions “to control the flow of capital.” And Labour officials have made clear that if the party ever is in position to nationalize various industries, there would be no effort to hit any market price for those companies. Thus the nationalization as conceived of by Labour would offer another wide avenue of redistribution.

Could such a program ever command a majority of British voters? In normal times, probably not, as Pickard and Shrimsley point out. But these aren’t normal times, in Britain or in America. The Great Recession of a decade or so ago generated a sense among many British that their economic system was rigged, “establishing a direct link between the excesses of the financial services industry and the economic travails of ordinary citizens,” as the FT writers put it. They add that Labour leaders believe the subsequent decade of low interest rates has generated a feeling among many that the great beneficiaries of British economic policies have been speculators rather than ordinary workers.

Further, the “existential shock of Brexit,” says the FT, “combined with Corbyn’s appeal to younger voters and families fatigued by nearly a decade of austerity, could still deliver the unexpected.”

All of this brings us back to the observation with which I began this article—that unsettled times often generate lunges toward the political fringes. We saw that in both Britain and America during the Great Depression, when socialism and even communism were in vogue and intellectuals of the Left railed against those who seemed to be privileged. The obvious answer was redistribution by gaining governmental control over the means of production.

In America, Franklin Roosevelt largely eschewed the nationalization of industry when he crafted his New Deal, opting instead for a regulatory regimen. Thus did he create a new elite of governmental mandarins—a managerial class—that captured vast amounts of economic and political power. The resistance to that managerial authority by small-government conservatives has been one of America’s most significant ongoing political fault lines ever since.

The high watermark for those conservatives came with the rise of Margaret Thatcher in Britain and, at roughly the same time, Ronald Reagan in America. Though neither really managed to dismantle that managerial power, both dominated the terms of debate in their respective nations until well after they’d left the scene. As Pickard and Shrimsley point out, when Labourite Tony Blair became British prime minister in 1997, he accepted the Thatcherite consensus on union reform, which held that before 1979, British trade unions had enjoyed a stranglehold on the economy that stifled growth and prosperity. Thatcher broke the unions and ushered in an era of growth that buoyed her popularity for nearly a decade. Corbyn would restore that union power.

Blair also crafted a governing philosophy that he called “New Labour,” based on an image and approach of moderation (a nod to the lingering Thatcherism). As a Corbyn ally told the FT, “Back then people wanted to be reassured about things not changing too much. This time people do want change.”

He’s right. Put another way, people are looking for viable alternatives to the status quo, which they know is in progressive decay. One alternative, gaining strength in both America and Europe, is anti-elite populism, seen widely by voters on both sides of the Atlantic as a salient against the remaking of their societies through mass immigration and identity politics. But another alternative is democratic socialism, also on the rise in these times of economic inequality.

In America, there is a tendency among some conservatives to respond to this emerging economic leftism by making fun of it, by suggesting that anyone is crazy who thinks the American people will ever buy these nostrums. That isn’t smart. Politics, like economics, always operates on the margin, and on the margin, economic leftism could emerge as a significant force, depending on how events unfold over the next few years.

In Britain, it’s true that Jeremy Corbyn isn’t particularly popular these days. But the Brexit issue has driven a wedge through the Conservative Party and raised questions among many British about its commitment to economic stability. And Labour remains the party best positioned to benefit from the Conservatives’ travails. Thus it is highly significant that it is lurching so far to the left, just as it is significant that in our country the Democrats are showing similar tendencies. The Thatcher-Reagan era is gone; new political sensibilities are emerging in the West and new battle lines are being formed. Those who would resist this leftward lurch can’t afford to be blithe about it.

Robert W. Merry, longtime Washington journalist and publishing executive, is the author most recently of President McKinley: Architect of the American Century.

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