This
is my attempt to tackle a difficult and
abstract question which I have avoided, until now. Having spent most of my
life in the upper echelons of the corporate sector (and now a main Board
member of a company quoted on the Stock Exchange), I am aware of an
uncritical adulation for Directors and entrepreneurs, coming from the
Government.
Let's clear the ground.
This approbation
does not come from the Labour Party itself.
Party
members are still overwhelmingly suspicious of businessmen, mistrusting their
motives and suspecting their intentions. The approbation comes from the New
Labour cadre, and is central to New Labour's change of perspective. I
believe it to be a unifying perception, as between the Blairites and the
Brownites.
I approve of that change of perspective.
Let me pin my colours firmly to that mast. Old Labour's tribalism had become
blinkered, and needed to change. Furthermore, the change has not yet gone
far enough: the current TU campaign against the PFI draws heavily on those
atavistic attitudes, and to that extent is arid and unconstructive.
The problem is
that the approbation is ill-informed and
uncritical, bordering on the naive. Those are flaws, and as they have
become more apparent, the Government has become less sure-footed in its
relationships with the corporate sector.
The central flaw
is the idea that "wealth
is created" by the business sector. Adam Smith started it ("The wealth
of nations lies in trade" 1776) and it was Margaret Thatcher's
Big Idea easily set against Labour tribalism in the 1980s. And
Tony Blair adopted it, hook, line and sinker.
It is a deeply flawed proposition. Let's
deconstruct it. Because the flaw lies not with Adam Smith, but with the
political gloss placed upon his words.
First The key drivers of the good
society are not economic, in spite of current preoccupations with economics and
the accumulation of material wealth. Societies need economic success,
certainly - but that is not enough - examples abound. Nor would Adam Smith have claimed such
priority for material success: he was a Professor of Moral Philosophy at the
University of Edinburgh, and the study of "economics" (no such
separate term then existed) was for him just an academic sideline, a
diversion, an
excursion into current affairs.
Second The trading process, as
identified by Adam Smith, involved the general principle of labour
specialisation and exchange throughout society - doctors and teachers and
street-cleaners were all part of the essential process of "trade". If
whole communities could arrange to trade between each other (principally
trading cities, in his world of 18th century provincial Scotland) he
observed that standards of living improved. Edinburgh and Aberdeen were
"wealthier" than the surrounding countryside. It was a seminal
observation.
Third While the organisers of the
actual trading process were important (i.e. the businessmen) they were
simply part of a much wider process. Indeed, Adam Smith was very sceptical
about businessmen, whom he accused of perpetually conspiring against the
interests of the public, their customers, fixing prices, arranging cartels.
It was Margaret Thatcher
who put the political gloss on this admirable theory, and
her distortions served the Tories well. And it must have been tempting for
the New Labour cadre, in seeking an alternative to Old Labour attitudes,
simply to adopt her successful position. But Blair was wrong to adopt the
Thatcher business model so uncritically - I mention Tony Blair deliberately,
because he seems peculiarly susceptible to the fallacy, and has adopted it
enthusiastically. Even PM Edward Heath (remember his famous phrase,
"the unacceptable face of capitalism"?) was more critical of the corporate
sector than New Labour has been, under Tony Blair.
Taming the Corporations >> My
Welsh socialism >>