Bootle’s Wand
From ‘Defending bank chiefs’
profligate pay will just add fuel to Corbyn’s ire,’ Daily Telegraph Business 4th
December 2017 let Roger Bootle, chairman of Capital Economics, start us off:
A note last
week from analysts at Morgan Stanley suggesting that the election of a Labour
government could be a bigger risk to the City than Brexit has prompted Jeremy
Corbyn to give a disarmingly direct response: “When they say we’re a threat
they’re right. We’re a threat to a damaging and failed system that’s rigged for
the few.”
Of
course, according to Mr Bootle, Jeremy’s occupation of No. 10 would be an
unmitigated disaster for all kinds of reasons, more especially that he ‘misses many crucial
points and pays scant regard to the consequences of proposed actions.’ Well, perhaps he has, perhaps he hasn’t. Mr
Bootle is never very clear or precise. It could be that Jeremy Corbyn has
indeed paid regard to ‘the consequences of proposed actions’ but they don’t weigh as heavily on him as
they might on Mr Bootle’s particular readers. But let that pass. For, stunningly, Mr Bootle concedes
that ‘Yet he does have a point.’ Jeremy
Corbyn has a point? What is going
on here?
It turns out to be a
politically-charged point, since Jeremy also mentioned that the chief executive
of Morgan Stanley, James Gorman, was paid (in sterling terms) £16.7 million in
salary last year, which Roger Bootle accepts as true. This is dangerous
territory we are getting into, and Mr Bootle is wary: ‘It may be difficult for
senior bankers to comprehend this,’ he writes, ‘but there is a widespread
feeling in society that they have not earned the huge sums of money that they
are paid.’
If you didn’t know this before, you
read it here.
What’s more, ‘Rage against bankers is
not just a UK phenomenon.’ It seems that if anything Americans are even more
splenetic over them. But there is an even wider problem: ‘The excesses of
capitalism are by no means confined to banking.’ Has Bootle borrowed from a
Morning Star editorial? (Our only Marxist daily here, for the uninitiated.)
Roger Bootle qualifies this by stating that ‘the privatisation of large swathes
of the British economy, first begun under Mrs Thatcher, and disparaged by Mr
Corbyn, was an enormous success.’ Some might differ. How ‘successful’, other
than in moneymaking terms, have the privatisations of electricity and gas,
water and railways, public housing (hence our present desperate housing
shortage) and schools actually been? Parents of schoolchildren, as well as probation
and prison officers, the homeless and Southern Rail commuters might demur. Not much
is left after all these. Bootle has the good sense to concede: ‘But not all
privatisations were equally successful. In some cases, what is essentially a
natural monopoly is now operated for the benefit of the senior executives and
shareholders…This is not proper capitalism, which thrives on competition. This is
the capitalism of the robber barons.’
Odd. I always thought the old robber
barons – Rockefeller, Carnegie, Vanderbilt et. al – were intensely competitive,
to the point of buying out or ruining all who stood in their way.
Be that as it may, apparently the only
proper capitalism is that which thrives on competition, including that of James
Dyson and – Bill Gates, whose Microsoft has thrived on competition, surely not
on acquired monopolistic patents. We admire them (and positively adore Rupert
Murdoch) but not the likes of bankers, who have simply been making money out of
money, not profiting productively. Though, Bootle says, a propos something-or-other,
it is not the market’s fault that public
bodies like the NHS and the BBC have been in effect hollowed out by capital. ‘This
is surely for the public sector to sort out.’ Mr Bootle cannot be blind to the
fact that such public bodies are publicly accountable, which means to whichever
government is in power at Westminster. Perhaps he did not notice, for example,
that it is the governments of New Labour and beyond that have forced PFI on
public organisations, and Health Ministers who have imposed the ruinous costs
on the NHS of internal private enterprise – meanwhile, of course, holding the
purse-strings of all these organisations. So a bit of sleight of hand here, as
we come to learn of Mr Bootle’s powers and pretentions as a magician.
So we shall get a Corbyn-led
administration, which will virtually destroy the economy. (It’s in great shape
now, of course.) but ‘If this happens, it will be largely the fault of the
Conservative Party.’
So far,
Jeremy Corbyn has been playing the best tunes. This Government needs to make
the case for capitalism, including banking, making clear how beneficial it is
for the living standards of ordinary people, while highlighting the disastrous
performance of most, if not all, socialist governments abroad and most Labour
governments here at home.
In other
words, better spin like Tony used to do.
I wish Bootle had been more specific. What
does he mean by saying that ‘most, if not all socialist governments abroad’
have performed disastrously? Are we supposed to conjure up Gerhard Schroeder,
Mao Zedong, Julius Nyerere, Hugo Chavez, Deng Xiaoping, Franklin Roosevelt,
Leonid Brezhnev or Francois Mitterand? Which of these and possibly other ‘not
alls’ were the successes? Can socialism in any
guise ever have been successful? Surely not in the Daily Telegraph! What,
according to Bootle is socialism? As for ‘most Labour governments’, which are
the ‘not alls’ that succeeded? Did the administrations of MacDonald, Attlee,
Wilson-Callaghan and Blair-Brown not all end in disaster? (For God’s sake don’t
mention Anthony Eden, Alec Douglas-Home, Ted Heath, John Major or David
Cameron!) If not which succeeded? We don’t know. Bootle won’t tell us.
What Bootle pleads for is making the
case for an enlightened capitalism which still allows decent, hardworking rich
people to make a lot of money provided ‘they obey the law and pay their taxes’.
(Though they can avoid doing the latter
if they choose to be non-domiciled, and if they wait around long enough the
highest tax-rates will continue to be lowered.) So here is the solution:
The promotion
of capitalism includes restructuring the system to minimise abuses and excesses.
Ensuring effective competition holds the key. Unless the Conservatives find a
way of pulling this off then we may be destined to appreciate the merits of
capitalism only by experiencing its demise.
And that’s
it. I can imagine an email winging its way to Roger Bootle from Downing Street:
‘Er, Rog, could you maybe give us some idea of how we could go about this? The
Party would be broke without donations from bankers and hedge funds, and from
your “robber barons”.’ For Mr Bootle has
provided no solution whatever except the magic wand that seems to be passed
about from one Telegraph columnist to another.
And so the best Roger Bootle can offer
is that the Conservatives ‘find a way of pulling this off.’ Thanks for nothing,
Tories might reply. In any case the government interference of ‘restructuring
the system’ sounds a bit socialist to me. What Mr Bootle proposes in
generalities looks much like the rather more detailed Labour Party programme
which has already been announced and publicised. Why not take this further?
Thus I can see now the Tory posters
for the next election: ‘Vote Labour, for strong and stable government!’
This isn’t so silly. During Jeremy
Corbyn’s first contest for the Labour Party leadership, the Daily Telegraph
mischievously advised Conservatives to sign up for Labour by paying the £3
entry fee in order to vote for Jeremy and so help install an unelectable Labour
leader. All they need do now is forget their worries, vote for Jeremy again and
then let a victorious Prime Minister Corbyn take the blame for everything that
happens subsequently. Much easier than rallying to a clapped-out ideology and
cheaper than trying to get the Tory Party elected in these increasingly
unelectable times for it. That’s how I would ‘pull this off’!
