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Monday, 17 August 2015

Social Entrepreneurs

As the likelihood of Jeremy Corbyn being elected leader of the Labour Party has increased, the parallels with former leaders have come thick and fast, with Michael Foot being the default option. The message of doom is unmistakable but misleading, not least because there is no alternative contender of the calibre of Denis Healey today and because everyone seems to have forgotten that Foot was the compromise candidate between the Bennite left and the right. What Foot offered was clumsy unity, exemplified by the decision that the 1983 manifesto (immortalised as "the longest suicide note in history" by Gerald Kaufman) would reflect all conference resolutions, no matter how aspirational or gestural. Corbyn is no less of a party man than Foot, but has already shown himself more pragmatic by focusing his campaign on policies that capture the imagination of both party members and different segments of the wider electorate, from anti-austerity through public ownership of the railways to scrapping Trident. Ironically, the New Labour evisceration of conference has allowed him to be both more specific than the other contenders and less hobbled by unpopular policies, such as Harriet Harman's misjudgement over the Benefits Bill.

Some commentators have shown a little more historical awareness by referencing George Lansbury, who led the party between 1932 and 1935. "Good old George" was a hugely popular figure, which reflected his humble background and personal integrity as much as his politics. He was a Christian pacifist, a longstanding supporter of women's suffrage and largely devoid of personal ambition, though his saintliness irritated some. Official history has cast him as a romantic naif because of his pacifism in the 30s and the revelations of covert Bolshevik funding for the Daily Herald, the newspaper he had helped establish in 1912 (it was reinvented in the 1960s as the Sun, before being bought by Rupert Murdoch). He was famously accused by Ernest Bevin (then TGWU General Secretary) at the 1935 annual conference, when his pacifist principles were in conflict with the party's demand for economic sanctions against Italy over Abyssinia, of "hawking your conscience round from body to body asking to be told what to do with it". He resigned shortly afterwards and was succeeded by Clement Attlee, another product of East End local government.


What this legacy has obscured was Lansbury's crucial role in rebuilding the party after the MacDonald split in 1931, which required a none-too-common mix of organisational talent and motivation, not to mention his achievements in local government, notably the Poplar Rates Rebellion of 1921, his visionary contribution to Poor Law reform, and the role of the Daily Herald both in the wider advance of the labour movement and as a critic of official propaganda during WW1 and after. He was also a highly effective Parliamentarian, both as a backbencher in the 1920s and as leader of the opposition to the National government of MacDonald. Though he died in 1940, he helped lay the foundations for the victory of 1945. This is no mean record, and is perhaps an unflattering contrast to Jeremy Corbyn, who for all his integrity and decency has had little tangible impact during his political career either at a London or a national level. Where the parallel is stronger is in the desire of the media to use foreign policy and security (Hamas, NATO etc) as a wedge between Corbyn and Labour supporters; and in the chuntering about a possible coup, though this time emanating from the PLP rather than the trade unions.

The contemporary parallels with the Islington North MP have tended to frame Lansbury as an "admirable but unworldly pacifist" (Michael White in the Guardian) and "the most left-wing leader Labour has ever had" (Andy McSmith in the Independent). It's worth noting that Lansbury's left-wing policies included old-age pensions and a national minimum wage, and that his pacifism was instrumental, focused on multilateral agreement (notably via the League of Nations), rather than merely expressive. During the Ed Miliband era, Jon Cruddas (one of Corbyn's nominators) sought to rehabilitate Lansbury as a leading light of the One Nation/Blue Labour/English tradition of the party, emphasising his virtue and inspiration in a direct appeal to the heart: "Politics is always first and foremost poetic because if it lacks the spirit to transform people and give them hope for a better life then it will fail to tackle the fundamental power relations that keep them in their place, however many policies it has lined up". Cruddas continues to push his radical/conservative schtick ("the electorate in England and Wales is both economically radical and fiscally conservative"), some of which can be seen reflected in Corbyn's policies. For example, the call for a "people's QE" is clever politics but incoherent economics, which marginalises genuinely radical alternatives like "helicopter money".

If Cruddas remains in a bind over the correct combination of heart and head, the Labour party establishment has no doubts that pragmatism is the supreme virtue, exemplified by Gordon Brown's insistence on "power for a purpose". The problem is that the New Labour record suggests that Brown failed to understand the true purpose of some of his cherished policies, from light-touch financial regulation to the capital-subsidies of tax credits, while the suspicion is that Blair was only too well aware of the real agenda, from Iraq to the indulgence of the rich. In a contest with the bland and the compromised, a candidate who appears "genuine" and "principled" inevitably looks attractive. As Obama proved in 2008, a "cleanskin" offering vague hope is a perfectly conventional neoliberal platform, as indeed was Blair in 1997, so it is amusing to see critics of Corbyn denigrate choosing the expressive over the instrumental. Campaigns based on hope tend to attract the previously marginalised, or re-attract the previously disillusioned. That Corbyn may be tapping into the mass of the disenchanted and disenfranchised is bewildering to candidates committed to a transactional model that welcomes the alienation of the electorate from an increasingly professionalised and arcane politics. Paradoxically, Labour needs to get over government if it is to become a government again, and Corbyn may offer the quickest route to that eventual outcome even if, like Lansbury, he won't be along for much of the ride.


It might appear odd at this point to put Lansbury aside and compare Corbyn with a media creation such as Michelle Mone, the "lingerie mogul" who has been appointed the government's "entrepreneurship tsar", however there are two interesting parallels. The first is the emphasis on embodiment: the qualities of the person rather than the institution. The popularity of Corbyn does not reflect an expectation that Labour will form the next government, while the choice of Mone does not suggest confidence that government of any stripe can summon up a wave of entrepreneurship. Her brief is a "review of obstacles faced by people in disadvantaged areas when it comes to setting up their own businesses". The exercise has been commissioned by Iain Duncan Smith, the Work and Pensions Secretary, rather than by the Chancellor or the Business Secretary, which suggests a rather narrow definition of entrepreneurship. According to a government spokesbot, the review "will have a particular focus on disadvantaged groups including benefit claimants, women, young and disabled people and ex-offenders". In other words, this has nothing to do with incubating disruptive startups, negotiating the hurdles of international trade, or networking with venture capitalists. This is clearly an exercise aimed at encouraging more JSA claimants into subsidised self-employment.

There is scepticism about the choice of Michelle Mone for the job, which is inevitably tinged with sexism (she "pulled herself up by her bra-straps") and not a little jealousy: "Because she is flogging bras and knickers she gets models, and she gets PR way ahead of anything she should get". This rather misses the point that a government "tsar" is by definition a PR role. The question is: what is signified by the choice of the signifier? Mone's backstory is straight out of Samuel Smiles - overcoming humble origins and tragedy through sheer will and effort - but with the modern addition of success defined as a life of glamour rather than probity and charity. She is exemplary. In the same way that George Lansbury and Jeremy Corbyn are taken to embody integrity and decency, she is taken to embody the spirit of enterprise and personal empowerment. Whereas some previous tsars (like Mary Portas) thought their advice was actually being sought, and were miffed when it was ignored, I suspect Michelle Mone knows her job is simply to be. Where she and Corbyn differ is that he is a vessel for varied and even inchoate hopes, many of which he is fated to disappoint, whereas she is a role-model for "right behaviour": not relying on the state for support, seeing the market as a solution to all ills, and constant personal striving.

Most politicians, including Corbyn, think we should encourage small businesses and entrepreneurship. The harsh facts are that SMEs don't usually create jobs beyond the founders, and few will produce any significant levels of turnover. Most are distributive rather than productive, which means little gain to national GDP and thus average wages. Though startups can force older and less efficient businesses out of the market, thus raising aggregate productivity, they can also simply depress revenue levels and thus inhibit necessary investment. This is particularly the case with lifestyle businesses where incumbents may be prepared to accept a fall in income to preserve their independence. Most startups are shops or marginal service providers whose relative success depends on the carrying capacity of their local market rather than their innate talent. As FlipChartRick notes, "Encouraging people in poor areas to set up new businesses will simply shift them from one form of poverty to another and may well shunt some of their neighbours who are currently running businesses back into unemployment".


As an industrial or employment strategy, investing en masse in individually under-capitalised startups is daft. You'd get a far better return investing in infrastructure, encouraging foreign direct investment, or simply "picking winners" in key industries, which is closer to Corbyn's traditionalist strategy. The mundane reality of his soundbite about a "people's QE" would probably be a sensible increase in government debt (at historically low interest rates) to fund investment. This would undoubtedly benefit many more UK citizens than the Bank of England's QE exercise, which boosted share prices to the advantage of the rich, but it is hard to characterise this as "empowering" unless you cleave to the traditional social democratic view that the state is the people. The second parallel with Michelle Mone then is the assumption that the state, whether in the form of the DWP or a national investment bank, should intervene. Where they differ is that Mone seeks to discipline labour, fragmenting solidarity through ceaseless competition and recasting precarious self-employment as success, while Corbyn seeks to discipline capital, directing it to pro-social ends.

What's missing from Corbyn's politics (like Gordon Brown's) is an understanding that the nature of capital has changed since he entered Parliament in 1983, and that the future need is for its democratic distribution, not its further concentration, no matter how estimable the purpose to which the state puts it. This requires a radical programme beyond a more progressive tax system. Entrepreneurship needs to be recast as giving people the power to create their own meaningful purpose rather than vainly emulating a narrow model of glamourous success that is unachievable for the vast majority. Small businesses need to be seen as the consequence of a healthy economy, not its spluttering engine or a form of outdoor relief. Capital needs to be seen as today's productive opportunity, not tomorrow's exclusionary inheritance. A modern-day George Lansbury might be advocating withdrawal from NATO and unilateral nuclear disarmament, but he might also be advocating a citizens' basic income.

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