I 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.
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.
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: ReutersTagged in: capitalism
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