Bad party conference for good capitalism

By Jack Peat, Editor of The London Economic

The London Economic

Labour’s jump to the left and the Tory’s lurch to the right abandons principles of good capitalism, with the Lib Dems powerless to plug the gaps.

The political vacuum created by the 2010 election has left UK parties reverting back to their traditional strongholds and abandoning the middle ground in search for a more solid voter base.

David Cameron today banged the drum for profit, wealth creation, tax cuts and enterprise as he tries to unite the divided right by lurching further away from central politics and towards his traditional voter base who are being lured towards fringe parties which could eat into voter numbers.

Ed Miliband has faced similarly strong calls to move away from the centre ground, having initially being elected as Labour leader thanks to a strong trade unionist vote and renowned (probably unfairly) for his Marxist routes. Supporting SMEs and attacking big business, he also had basic living standards at heart in a call to the leftist stalwarts.

In the midst of the political bickering, we’ve forgotten about what’s good for the basic economic structure of our country. Free market principles and ‘good’ capitalism are not achievable when strong ideological principles are in play, and the Liberal Democrats and Nick Clegg have missed a trick by not exploiting this oversight.

Legitimising elitism

The Tory Conference, dubbed “for the hardworking people”, used a lot of confused rhetoric to justify elitism. The hard-hitting, but misjudged political vocabulary on display in Manchester confused the already blurred lines between reality and ideology, in a conference reminiscent of far-right party appeals.

‘Hardworking’ is a term too often confused with ‘making money’. As foodbanks are erected throughout the country and inflation continues to rise as real wages remain stagnant, the poorer sections of our society face being punished because they are (incorrectly) labelled as ‘lazy’ or ‘dependent’, when they’re actually one of the most hardworking demographics in the country.

By being ‘competitive’ on tax and allowing big businesses a free reign on our economy, we will become a slave to free market economics which are actually manipulative and dangerous in principle. Cameron says “profit, wealth creation, tax cuts and enterprise are not dirty, elitist words”, but without proper management, they invariably become the disease rather than the antidote of good capitalism.

Underestimating big business

In the same breath, it’s important not to underestimate the role big business plays in the economy. SMEs makeup 99.9 per cent of the total number of businesses in the UK, but as Homer Simpson would say: “You can come up with statistics to prove anything; 40 per cent of all people know that.”

The problem is not so much that this impressive-sounding figure is wrong, more that it lacks context. Whilst the UK’s 6,700 large private sector employers with 250 or more employees make up only 0.2 per cent of the total stock of businesses, they manage to employ 50.4 per cent of all UK employees and account for 55.8 per cent of turnover.

What’s more, they provide the highways in which our cars (SMEs) can expand. Small businesses drive idea creation and push the UK forward as a global innovator, but without large corporates, ideas would remain precisely that.

“I am just dumbfounded that we have to remind people that the reason they enjoy first world living standards in the UK is because of profit” – Julie Mayer tweet.

Filling in the gaps

I was most impressed by Nick Clegg in the TV debates in the run up to the 2010 election. While Gordon Brown and David Cameron bickered, he took advantage of his ‘middle ground’ position by making them both look like petulant children.

This year’s party conference season offered him the opportunity to do the same thing, by positioning his party as champions of good capitalism and appeal to a larger chunk of the electorate by shepherding the middle ground toward the Lib Dems. However, for the most part Clegg lacked the panache and conviction to take that line, and left a lot of empty words hanging over Glasgow.

It’s hard to take many positives from the party conference season from an economic perspective. Good capitalism requires the interests of the economy to be placed at heart, rather than political ideologies which ultimately threaten to derail it. All parties displayed interesting values in Manchester, Brighton and Glasgow, but in doing so, they lost sight of what really matters.

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