Happy clapitalism

John Rentoul

3leaders 300x187 Happy clapitalismI have written about the convergence of the party leaders on “happy clapitalism” in The Independent on Sunday today. I have tried to restrain my impatience with the Labour leader’s reform-capitalism rhetoric, partly because of a salutary exchange I had last week.

I was horrified by Ed Miliband’s article in the Financial Times (registration may be required), which provided some policy substance to what I regarded as his preposterous posturing on so-called short-termism:

The rules need to change to help companies take decisions that drive long-term value creation. We are looking at a proposal to require a threshold of two-thirds rather than a simple majority of shareholders before a takeover can succeed. Another option under consideration is to limit voting rights to those holding shares before the offer period opens.

What bone-headed, over-regulating, anti-competitive, economically illiterate nonsense that would distort efficient markets: I boggled at its stupidity. Until I was brought up short by Tom Powdrill, who pointed out that this is existing Labour policy and was, indeed, in Labour’s 2010 manifesto (pdf), which promised to:

Encourage a culture of long-term commitment to sustainable company growth, requiring a super-majority of two-thirds of shareholders in corporate takeovers.

It elaborated:

Too many takeovers turn out to be neither good for the acquiring company or the firm being bought. The system needs reform. Companies should be more transparent about their long-term plans for the business they want to acquire. There needs to be more disclosure of who owns shares, a requirement for bidders to set out how they will finance their bids and greater transparency on advisers’ fees.

There should be a higher threshold of support – two-thirds of shareholders – for securing a change of ownership and the case for limiting votes to those on the register before the bid should be examined.

Chastened, I muttered to myself that such statist corporatism would never have found its way into a Labour manifesto if Tony Blair had been leader, but I cannot be sure about that. Certainly in his early years, he was not above a bit of economic populism himself.

That is why in The Independent on Sunday today I quote without disapproval Tristram Hunt’s Guardian article, in which he traces the

powerfully British strand of social criticism [which] continued into the 19th century with the Owenites, the co-operative movement and Joseph Chamberlain’s new liberalism. All of this before we even think about Marx, Engels and the Labour party. For socialism was only ever one part of a broader tradition of British distaste for free-market fundamentalism.

Which is why Nick Clegg’s speech on employee ownership and Ed Miliband’s criticisms of short-termism and predatory capitalism seem far more in tune with the British psyche.

He has a point, even if I am wholeheartedly with Dominic Lawson in today’s Sunday Times (pay wall), who argues that our problem today is not too much capitalism but too little of it:

For Marx, it was the owners of capital who were the villains of the piece, taking from the labourers the wealth that was properly attributable to their efforts: this was the “surplus value” well in excess of the wages paid to the individual workers. Yet what is now described as an “excess of capitalism” is the opposite: it is the employees seizing the value from the owners of capital and at times taking vastly more than the “surplus” (in the Marxist sense) attributable to their labours.

However, a bit of illiterate economic populism never did a politician much harm. Note how protection often rears its head in Democratic primaries in the US (one advantage of not having any this year). That makes matters worse for Labour, though, as it suggests that it does not have a policy problem so much as that the voters simply do not take to its present leader, as our ComRes poll and YouGov in The Sunday Times confirm.

Photograph: Reuters

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  • takeoman

    Rentoul J., who poses as a political commentator and historian is now revealed to not  know what was in Labours 2010 election manifesto and continues to be it’s official policy. Perhaps in future he will remember to do his homework before launching into one of his diatribes  

  • greggf

    Tristram Hunt’s article appears to confuse the 19th century co-operative movement with the socialism of today. It is likely that Robert Owen and his contemporaries would have totally rejected the socialist dogmas that Hunt’s researches into Engels and Marx seems to have led him to believe in.
    The co-operative movement embraces those traditional values of enterprise, competition and mutualism; possibly rendered into English folklore through Dickens’ character Mr Micawber and his advice:- “annual
    income £20, annual expenditure £19/6, result happiness; annual
    income £20, annual expenditure £20/0/6, result misery.”
    Perhaps that is the British strand of capitalism he, and you, are searching for.

  • JohnFairness

    It’s a big stretch, JR, to argue as you did in the IoS that Ed Miliband is essentially anti-capitalist in contrast to Cameron’s pro-capitalist approach. Ed’s speech focussed on irresponsible capitalism and on ways to make it more responsible. The fact that he was proposing greater government intervention to achieve this does not automatically put him in the “down with capitalism” camp. Indeed it can be argued that Miliband’s  more statist approach to the flaws in the capitalist system is about saving it from itself  i.e.that greater government regulation and support is the only way of making capitalism work effectively.  To that extent less pure capitalism may turn out to be more supportive of capitalism than anything that Dominic Lawson and David Cameron are advocating

    This was the message of Will Hutton’s excellent article in yesterday’s Observer (google Words won’t change capitalism).

    “Great news. All three party leaders are now talking about responsible capitalism. But we need much more than invocations to John Lewis (Nick Clegg), a boost to the Co-operative movement (David Cameron) or a redress against predatory pricing (Ed Miliband) – welcome though these words are.Central should be the question of how capitalism deals with unknowable risk; this gets to the heart of why the system is so seriously malfunctioning. The Conservative, free-market view is that capitalism can deal with unknowable risk all by itself and that rewards will always be proportional to risks. But if this is not true, as even David Cameron began to recognise in last week’s speech, though he quailed before the full logic of his new position, then everything changes. .For the big point that Cameron still cannot acknowledge is that if capitalism is to deliver the high levels of innovation and investment that propel wealth generation, it cannot deal with unknowable risk by itself . It needs government to share the risk; this is precisely where a debate about responsible capitalism must begin.”

    PS This is JohnJustice posting as JohnFairness to get round the block that seems to have been imposed on my usual account.

  • AlanGiles

    This article of Rentoul’s is merely his daily excuse to bitch against the Labour leader because the leader is Ed, not David.

    I doubt that David would have time to be Labour leader. Like their joint hero Blair, DM has accepted a job with a Pakistan based investment company which pays £50,000 for “a few days work each month”, and – like his mentor- he has the money ;paid in to a seperate company to avoid paying 50% tax on earnings over £150,000.

  • Guest

    Someone wrote an article about “evidence based policy is wrong”, but they closed the messageboard so I couldn’t post a comment so I’m posting it here.

    Everything we do is based on evidence or we would never have left the sea…QED

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