predators vs producers

I refer the Right Honourable Gentleman to the answer I gave a few months ago:

A critical question for Ed Miliband is how far he is willing to propose and celebrate transformations in Britain’s private sector. This is tricky political territory, at a time of minimal growth, a shrinking public sector and high unemployment. The last time the social democratic left seriously considered the need to reform Britain’s model of capitalism (and not merely its models of public service delivery, as preoccupied Tony Blair) was around the time of Will Hutton’s State We’re In in 1995. This was swiftly dropped.

But Hutton’s argument has not become any less pertinent in the year’s hence: quite the opposite. The dominance of the financial sector in the UK economy and the dominance of finance over UK firms is a pressing problem. Cases such as the Cadbury takeover capture the public imagination, while assetstripping by private equity companies hollows out hundreds of lesser known British firms. If Miliband were aggressive enough, and were willing to repeat the message enough, the electorate might be successfully reminded that our economic woes originated with a series of one-way bets made by a few thousand millionaires living in London...

Discussing private sector reform is difficult for politicians, which partly explains why public service reform has preoccupied policymaking for the past fifteen years. To do so successfully, they need allies in business and civil society, who are able to speak out when governments cannot.

This was from a report I wrote for Policy Network about mutualism at the end of last year.

I would never (ever) position myself as a political strategist, but surely Miliband's team slightly under-estimated the difficulty of discussing private sector reform, and the importance of being able to follow up his distinction between 'predatory' and 'producer' capitalists with substance, examples and - most importantly - a chorus of coordinated agreement from prepped business leaders, to outflank the CBI who react like wounded animals on these occasions. The more cut-throat and rich the better: if Jack Welch or Terry Leahy had been persuaded to take to the airwaves, and say that, yes, there is a distinction between businesses which extract and exploit, and those which invest and grow (which of course there is), this would have defused the situation. One of them (and certainly a Warren Buffett or a George Soros, should they be in Ed Miliband's contact book) might have been prepared to even name some of the predators, in a way that every Shadow Cabinet Minister was unable to and made to look somewhat ridiculous as a result.

Comments

[Dick Pountain]

If Miliband were aggressive enough, and were willing to repeat the message enough, the electorate might be successfully reminded that our economic woes originated with a series of one-way bets made by a few thousand millionaires living in London...

So the problem is in fact politics, not economics. The problem with Labour "social democrats", even perhaps Will Hutton, is that they still believed that a social democratic consensus prevailed in the UK and so they could just tinker with the economy till it came right. The notion of real contest between, er, how can I say it, classes with incompatible interests had just faded away.

Of all the dozens of books on the current crisis, by far the most impressive is still James K Galbraith's "The Predator State" (actually written just before the crisis), which spells out just how far predation has reached, and accepts that halting it requires, if not a revolution, a great upheaval on the scale of the New Deal. Which requires a level of proselytising and organising that Labour has just forgotten how to do.

Sorry that was so long a little venting of suppressed rage that happened to explode in your excellent blog, which refreshes the parts that Guardian CiF cannot reach.