The Labour party has a problem. We have a membership that is now overwhelmingly socialist in principle and a Parliamentary Labour Party that has a significant majority of MPs who support neo-liberal economic models and who were elected during, or shortly after the Blair and Brown years.
Up until the late 1970’s capitalism was constrained by heavy regulation of banking and a highly progressive tax system that recycled wealth back into the economy, raising the living standards of all and allowing for significant investment in public services.
Margaret Thatcher and Ronald Reagan adopted a monetarist policy based on the neo-liberal economic theory that the market was efficient and that by removing constraints on capitalism it would create more wealth and prosperity. This was combined with the implementation of an increasingly regressive tax system which rapidly increased inequality within society. The justification of this was what was called “trickle-down” economics whereby the increase in wealth by the richest in society would trickle down to stimulate the economy to create jobs and prosperity.
The problem with this model is that trickle-down economics does not work. Instead of wealth trickling down it flows up to the wealthiest who have systematically extracted it rather than investing it. This continued through the Blair and Brown years, both of whom had an unhealthily close relationship with the City of London. This allowed the continuing easing of regulation that allowed increasingly risky and speculative behaviour in the banking system which led to the spectacular financial collapse that began in 2007 and from which the country has never fully recovered. Since the 2007 the wealth of the top 0.1% of our society has doubled, as has the number of billionaires whilst wages have stagnated, public debt has doubled and private debt has grown to levels not seen since before the 2007 crash.
All around the world the wealth and prospect of the working and middle classes has been eroded by the slavish adherence to neo-liberalism and this has caused a rapid polarisation in politics. Many Labour MPs have pleaded for Jeremy Corbyn to adopt the middle ground but this middle ground no longer exists. It has been hollowed out by the ongoing failure of post 70s economic policy. Right across the world politics is polarising between increasingly right-wing politics exemplified by the likes of Marine Le Pen of the French National Front, Frauke Petry of the AfD in Germany and the rise of Donald Trump. Increasingly xenophobic right-wing politics in the UK was also seen emerging during the UK EU referendum.
On the other side of the political spectrum we have seen the rise of Podemos in Spain, Syriza in Greece, Bernie Sanders in the USA and of course the emergence of Jeremy Corbyn in the UK Labour Party.
For members like myself who joined the Labour Party because of the change in direction from neo-liberalism to socialism under Jeremy Corbyn this has nothing to do with personality cults. It is because we have to choose between growing inequality, greed, intolerance and hatred of the increasingly radical right wing of British politics or progressive, compassionate and inclusive politics of truly socialist agenda.
The Tory Party are bought and paid for by a wealthy elite and they will continue policies to enable their paymasters to continue to extract wealth at the expense of the many. Jeremy Corbyn and the socialists in the Labour Party were working towards developing policies to constrain greed and recycle wealth back into the communities that created it and supporting housing, the NHS, education and renewing public infrastructure. This project is now under imminent threat by the coup of the neo-liberalists in the Parliamentary Labour Party (PLP). There is no middle-ground, this has imploded with the abject failure of neo-liberalism, there is no fence left to sit on and now everyone needs to make a choice. For socialists like myself there is no choice to continue to support a Labour Party who continues to adopt the failed economic and social policies of the past. If the Party chooses to reject socialism, then we will need to find a new home for it under a new party whilst the rump of the old Labour party continues its long painful slide towards irrelevance.
Any readers who have done me the kindness of persevering through this article and have an appetite for more might also like to have a look at this extract from my novel Consciência.
“Most people believe that money in society is generated by central banks accountable to governments” http://bit.ly/1SPy3De