UK election 2019 – why the left lost

The left was roundly defeated in Britain’s general election, the one that was supposed to settle the matter of Brexit. The first lesson is clear: Labour should have supported a soft Norway-style Brexit from the beginning. Having a vision for Brexit, and a better one than the Tories, would allow the left to gain the upper hand in the process and hopefully press a better outcome. Instead, a loud middle class refused to accept the result of the referendum and pursued various fantasies: an insulting second referendum, parliamentary obstruction, independent Scotland, and the like. Turns out, Brexit was the people’s mandate for whatever good or bad reasons. The middle class has been out of touch throughout the process and now finally lost.

As an aside, the reasons the middle class has been cheerleading for Europe are not particularly inspiring. Scotland sees the EU as an ally and a better master than England, and if events unfold in that direction Scotland may be disappointed. London is full of ambitious professionals for whom Europe is their oyster. These are selfish reasons that small-town England can’t identify with. If the story was that the EU is a bastion of democracy or inclusivity or the welfare state that would be something to believe in, but the EU has some time ago stopped being for these things. 

Second, the parties of the left should have formed alliances to win seats in the first past the post system. Elections are not opinion polls. They’re procedures to appoint candidates to positions. The right understands this, but on the left we have to thank the LibDems and the Greens for wasting people’s votes. The LibDems actively undermined Labour with their “anyone but Corbyn” campaign, all to facilitate a Tory win. I think the Greens are well-meaning idealists, but also damaging. If you add up the Labour, LibDem, Green, and SNP votes they’d be a majority. I’d like to check seat-by-seat what difference vote splitting made, but remarkably the UK doesn’t publish detailed election data until months later.

The narrative that Labour should have adopted an unambiguous remain stance doesn’t match the facts. Labour lost seats in traditional labour strongholds who voted Leave, while the LibDems and outspoken Remain politicians outside of Scotland did poorly. We can assume that among Labour’s 10 million vote share was a substantial fraction who wanted Leave but just couldn’t bring themselves to vote Tory. If Labour had taken the advice of Guardian columnists to turn Leave into Remain it would have been obliterated. In short Britain voted wrong today but not in the sense that some of us don’t like the outcome. Those who voted Conservative did it right by their choice. The left voted wrong because it doesn’t know how to use the electoral system to achieve collective decisions.

Third, the shift to the left was necessary but should have been done a different way. In the current media climate of sharp messages and limited attention the left ought to focus on 1-2 rallying policies and a unifying vision. Towards the end of the campaign Labour got it right with the message “save our NHS”, but in the run-up it seemed that they were promising more free stuff every week. That comes across as fake or clientelistic, not least in deprived areas where people voted Brexit out of conviction. A left alliance should have run with a clearer platform like “public health, public education, and no time for racism or prejudice of any sort” like the SNP’s successful messaging in Scotland.

The threat of economic intervention spooked people too. It’s necessary to make housing affordable, health and education once again free, and transport a public good. But how to turn these principles into policies in the era of hyper-capitalism? It’s a longer discussion but I think the left needs to focus less on redistribution or protecting things of the past, more on preventing rises of inequality, more investing in the long-term future. Instead of threatening landlords, tax touristification and AirBnB. Nationalizing rail isn’t a terrible idea but it may be more relevant today to electrify road transport and make it free. Scrap universal credit and tuition fees so people don’t start in debt. Offer education and quality of life, instead of undercut wages, as an attraction to businesses.

The last lesson is that the politics of outrage is a losing strategy. The trouble with declaring that things like Brexit or Trump are “unacceptable” is that they get accepted and then you have no leg to stand on. Time and again the left was sure that voters couldn’t possibly support a clown or a bigot, but it didn’t seem to stop them. The right understands, even celebrates, that real people have flaws and accepts them as leaders. Meanwhile the left is busy calling each other out for being behind on LGBT rights, or whatever is the identity issue of the day. The sad fact is elites don’t care. They care about the larger gender, race, and class divisions which affect the economic pie, and they oppress minorities as a form of hostage taking to exhaust and divide us. Don’t play that game. Fight for equal pay and minority rights will automatically follow.

The left will continue to lose elections until it faces up to electoral results it doesn’t like and offers a better alternative. As for the leadership of Jeremy Corbyn, I think he did as well as one could expect and that wasn’t good enough. Corbyn was head and shoulders above others in character and ethos, despite the slander against him, but he didn’t command attention or convince the electorate. I’m guessing the magic that Corbyn didn’t have is the backing of his party. Voters sensed he wasn’t in command of his organization and went for the strongman elsewhere. Too bad. We did not deserve Jeremy Corbyn I guess.

Also, turnout was unremarkable. Slightly lower than the last election. So much for this being a last chance to stop Brexit, avert catastrophe, etc. Clearly despite what you and I might think lots of people simply didn’t care. That must be a good thing, because by definition non-voters are easy to please. If you don’t vote it means you’re content with either outcome.

 

UK election 2019

The election is under way and the UK press is moving earth and water to make sure Labour doesn’t win. That’s predictable. Outside of the Guardian, the press is owned by about three billionaires. Their agenda is 1. That there’s a real “risk” of Labour winning, and 2. That a Labour government would be bad for wealthy interests. I think this level of reaction validates Labour’s policies.

We have a focus on Corbyn, with the ridiculous accusation he’s an anti-Semite. This is either character slander targeted so it’s taboo to defend against; or it’s a statement that Corbyn, unlike previous US/UK leadership, is opposed to Israel’s ethnic cleansing actions in the Middle East. I think it’s the correct moral stance to oppose these actions, and if that makes you an anti-Semite then words have no meaning. There’s no evidence that Corbyn is racist in any way.

Then you have the tactic of vagueness. Johnson is portrayed as strong, clear, and direct. The headlines paint Corbyn as vague, faltering, or lacking a certain something that it takes to be Prime Minister. Notice the disparity of information here. Our side clear, other side bad for vague reasons that we’re not going to talk about. It’s the same tactic whereby the press erased London Mayor Ken Livingstone and Prime Minister Gordon Brown, two very capable leaders who dealt with difficult issues (like the 2008 financial crisis) in an exemplary way. But according to the press they were bad. Why? They were bad, dunno, they just didn’t have it. Not credible options. Look elsewhere.

The attack on people suggests that the policies are correct. The Tories are peddling Brexit as an issue of principle, because otherwise who would vote for less public services and privatising the NHS? Labour is calling for socialist reforms in the spirit of Atlee’s post-war government, which pretty much everyone in Britain views positively. Labour’s position is we’ve swung so far to the right that bringing back some of that socialist agenda is what we need. I agree. Even if Labour achieve 10% of their programme, which is about realistic, I think it’ll be a good thing. I say this as a privileged person who works in tech, never needs public services, and buys posh food from the farmer’s market.

You could quibble with the implementation of Labour’s policies. For example there’s an idea to force private landlords to accept bids by the tenants to buy the flat (disclosure: I’m a tenant, I considered making a bid already and decided against it). There’s a reasonable argument that such policies might take flats off the rental market or have other unintended consequences. Fair, but places like Germany manage to put a damper on the property market and their society is the better for it. The real threat to affordable housing is price speculation and AirBnB, which no-one seems to complain about.

Then there’s Brexit. I live in Scotland, and the answer to everything is independence. Never mind that the cause of Brexit, the condition that made is possible, is by and large social deprivation in England. The English are overcome by a Thatcherite psychosis, so the story goes, and it’s all “Me, me, me, my house, my career, my aspirations of upward mobility”. Are people thinking of London and the south coastal towns inhabited by stockbrokers? Because I don’t think Yorkshire is like that. If the problem is an angry and left-behind England surely the right thing is to fix it, as Labour intends to do, not to create private solutions and more borders. 

In terms of predictions, I think a Labour-SNP government is likely. By likely I mean in the 50% rather than the 25% bracket, I can’t make precise predictions. Whether it happens is largely down to the intentions of the so-called liberal left. If this group wants a return to social democracy then we’ll have one, and if liberals focus on identity issues or hair splitting EU stances then we won’t. I worry the liberal class is too in love with personal vanity, iPhones, Uber, Deliveroo, and other solipsistic utopias to bring out any social conscience. Yes, I think devices and consumerism matter. They isolate people. Steve Jobs was a villain. I should be the last person to be telling you this.

If the Tories win and Brexit concludes, first I think it’ll be mildly bad – about as bad as Cameron’s austerity. Then we’ll have more problems. I think Scottish independence is also likely but not a given, again in the 50% bracket. Independent Scotland applying to the EU with a border in Berwick I think will be bad for Scotland, and very bad for England. It’ll make everyone’s prospects smaller. Also Scotland won’t remain a rebellious province with a one-party socialist agenda. A conservative faction will form and soon we’ll have a microcosm of the same class divisions that we see in the south.

This amount of political strife and isolation is emotionally exhausting. Back in the day we had socially liberal ideas and our incomes were very far from established. It was easy to find issues to be on the right side of, LGBT for instance. I’m sorry to say these issues are free. They have no cost. Gender, race, and class equality has costs, achieving it is a real inconvenience for the elite. Our present politics tends to ignore large divisions and focus on smaller groups, whether to take the virtuous side or to scapegoat. I think this shift of attention from the broad to the narrow is a shift to the right. Even if you’re on the good side, like a company supporting Pride for genuine reasons, identity politics is too convenient for the establishment.

At least I feel that politics is emotionally isolating and exhausting. I’m too old to calibrate my opinions for the approval of anyone else, not that I ever did. I take in new information and my opinions change, of course, but now I feel I can express them like an old curmudgeonly person. “Curmudgeonly…” I like that word.

Income from capital is where the fun is

I’m half way through Piketty’s book but have a methodological criticism.In keeping with convention, Piketty classifies the income of top professionals such as managers as “income from labour” if it’s paid as salary. He classifies as “income form capital” only overtly financial income such as rents, dividends, capital gains on shares, etc. I agree in accounting terms but not in economic terms, and as such I feel Piketty’s conventional approach paints a more optimistic picture of the ratio of income from capital vs. income from labour than is actually pertinent.

Arguably it’s more correct in terms of economic analysis to treat upper middle class incomes, especially the incomes of managers and professionals in tech, pharma, banking, and other sectors with highly concentrated capital structures as deriving from capital, even if these people receive their income through salaries. The justification is twofold:

Firstly, if we also assume the conventional notion that salary for labour is compensation for one’s time, that implies the intrinsic worth of a top professional’s time is several times higher than that of an ordinary worker. That reveals an extremely discriminatory conception of human worth, which is also implausible. Much more likely, top professionals are highly compensated for something that they have, human capital, and not for yielding their Marxian capacity for labour. Arguments about diligence or laziness are about yielding a different capacity for labour, say 90 vs. 30 hours a week, and they may have some truth but however generously they don’t account for more than a 2x or 3x pay difference.

So the high pay of top managers and professionals must derive from a kind of human capital. What kind of capital would that be? I speculate it’s a mixture of skill and trust, with the major difference deriving from trust. Skill is things like being a good lawyer or a fabulous programmer, largely the result of practice and education. Trust is who you know and how you are perceived, and in particular the perception as to how faithfully you’ll serve the interests of capital. Trust, not skill, in my view is what distinguishes CEOs and VPs from mere mortals and what gets them invited and placed into these roles in the first place. But it is a resource. Trust is something that an elite enjoys and the multitude doesn’t automatically have, so it’s capital, not labour in the sense of capacity to do work.

The second justification is considering where the efforts of different kinds of waged employees go. The daily efforts of an ordinary worker, such a delivery driver, industrial worker, sales clerk, customer service attendant, and so on unequivocally go into production. That accords to the familiar production function of a firm, combining labour, capital, and other factors to achieve production. But crucially, the efforts of ordinary workers do not change the capital stock of the firm or the coefficients of the production function. In that sense labour is a dispensable commodity and its return scales linearly with the turnover of the firm all other things being equal. This activity, I argue, is correctly captured by the classical term “labour”.

The efforts of highly paid managers and professionals, in contrast, overwhelmingly go into capital formation. A Google employee who creates the company’s next innovation, a pharmaceutical researcher, or a financial deal maker are not contributing labour as an input into production. They work to increase the capital stock of the firm, and they do so qualitatively, so that the increase in the coefficients of the firm’s production function compounds exponentially. Top professionals are directly rewarded for their multiplicative effect on the production function, which arguably means their income should be properly classified as income from capital however the money is actually paid.

If we account for top professional incomes as incomes from capital as opposed to labour we will arrive, I think, at an even more alarming picture concerning the yield of capital vs. the yield of labour than Piketty already paints. And I think that truly reflects reality as we observe the relative bargaining powerlessness of capital (who cares if your strike if capacity to do work vastly outstrips demand) compared to the leverage enjoyed by the class of people who work in capital formation.

Beyond the economics, metaphysically it’s worth noting that all the good jobs, in the sense of initiative, sense of achievement, intrinsically rewarding activity, and so on today are in capital formation. Tech workers tend to have an optimistic view of the state of the world because, by and large, we work in capital formation, an experience that even at the lowest level is qualitatively different from those who truly work in production. All the fun jobs are in capital formation and that is a very serious problem in many dimensions.