Political ideas shift slowly, until a tipping point sets off an avalanche. For years many of us have pointed to obscene top pay as the tip of an iceberg of corrupted capitalism: now even David Cameron sees something must be done. On Tuesday Ed Miliband addresses London Citizens, the community organisers for a living wage, promising a fairer capitalism.
That's the classical path of progress. The unthinkable is dismissed as blue-sky nonsense, but persistence moves the ice floes of public opinion. From factory acts and boys up chimneys, to income tax, pensions, NHS, abolition of the death penalty, human rights, divorce, abortion, anti-racism laws and the smoking ban, all were won against the odds. It took from 1909 to 1948 for Beatrice Webb's minority report to become the welfare state: against the drag-anchor of conservatism, campaigns for social justice usually win eventually. The broad sweep of history raises optimism. That's why the left is essentially optimistic, and the right better-yesterday pessimists, feeling that anchor dragged unwillingly towards progress.
But in recent decades Britain's story has not always read that way, under a more brutal brand of capitalism. For 100 years incomes grew more equal, but since the 1980s that has gone into reverse, often in leaps and bounds, as the big bang blew the lid off top pay, trade unions lost strength to prevent half the population's incomes stagnating, and unchecked property bubbles accelerated wealth difference. Economic fatalism was law: governments must never interfere, markets are sovereign and politics effectively dead. Cameron held that line: lay a finger on capitalism and the golden goose gets it. That makes this tipping point so important: now he admits the deformities of "crony capitalism" there's no going back. The question has changed to who can fix it, and how.
Miliband owns this turf: he earned it with his conference speech, considering the contempt from Cameron's press and Blairites fearing he'd fatally broken the New Labour formula. Now he says he is breaking with that Labour past, and Cameron's present. There is nothing anti-business about cleansing cheats, asset-strippers and vultures from honest savings and good business enterprise: Cameron has been forced to agree.
How has this change happened? UK Uncut's pithy demonstrations at TopShop and Vodafone graphically exposed tax avoidance. The Guardian's Tax Gap series on companies avoiding £25bn tax through havens and loopholes provided facts. Occupy captured a public anger that conventional politics ignored. The High Pay Commission, set up by the left-leaning thinktank Compass, proved hugely influential, as did Will Hutton's report on high pay in the public sector, blaming City contamination. London Citizens galvanised communities. Avaaz and 38 Degrees with their petitions raised the decibels. Drip, drip, drip, the ice thaws, and the outlandish becomes conventional when working with the grain of public opinion.
Miliband's message today is important. Social democratic values are more vital in hard times when there is no money. How you share diminished resources matters more than how you share a growing cake. Labour always said cuts were inevitable, and now there is less money since Osborne stifled growth and added to the deficit. Hard choices for how we tax and spend need social democratic priorities: we are not all in it together when I get un-means-tested winter fuel payments, free travel and heavy pension tax relief with no perceptible cuts.
Cynical political calculus says my generation votes most, so let families with children take the hardest knocks. In good times Labour accepted a corrupted capitalism that delivered taxes, focusing on redirecting proceeds to soften the impact of that unfairness. Now there is no growth, Miliband says those malfunctions need to be corrected at source.
HM Revenue and Customs is about to report that Labour's 50p tax rate – alas introduced too late in the day – is yielding rich returns: so much for the debunked Laffer curve theorists who said it wouldn't. But even so, more of the burden needs to be shouldered by the top 10% for as long as the other 90% are suffering most. Equality matters not just for fairness, but for higher growth and productivity. The Nordics and Germany flourish in contrast to the dysfunctional UK because our wealth distribution is among the most unjust: so finds the latest report from the OECD, the hard-boiled economic thinktank not known for leftist thinking. Here's fertile ground for Miliband's "responsible capitalism" that challenges "vested interests", such as the near-cartels of rail and energy industries. He plans early intervention to stop runaway theft by the few, shifting resources to home-building and growth creation. Will the other side mock as loudly now? Or will it recognise he was right in his conference speech, and he's right again now?
Cameron talks one way and walks the other – on greenery, poverty, social mobility. But this time, with a public searchlight on bank bonuses and boardroom pay, he will have to deliver. Too afraid of City power, Blair and Brown refused even to murmur words of disapproval at top pay. But threats, scrutiny and cajoling from a Conservative prime minister may just alter the boardroom climate: governments underestimate the cultural force of naming and shaming these panjandrums of greed.
If shame fails, then Cameron's proposed remedies are weak. As tax expert Richard Murphy says, shareholder power is a dead duck. Growing numbers of shares are foreign-owned, at 41%. Insurance companies hold 13%, pension funds 12% and individuals 10%. Most traders have zero interest in nurturing companies: some only own them for an electronic micro-second. Worthy, if mildly eccentric shareholders at AGMs are tolerated, given sandwiches, and then massively outvoted by unseen traders, cronies in the universe of greed.
Miliband is adopting all the High Pay Commission's proposals. If Cameron's plan fails to curb excess, Miliband must go further. He should certainly support those dangerous lefties, Merkel and Sarkozy, on the Robin Hood transaction tax: watching them go it alone shows how wrong Cameron was to claim this was an EU conspiracy against the City.
Hard times need create no "crisis of social democracy". In Attlee's postwar days of atrocious austerity, Labour produced its best policies – and so Miliband lays out reasons why fairness matters most when money is short. His "responsible capitalism" may look ever more essential by the end of this economically threatening year.
Twitter: @pollytoynbee
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9 January 2012 9:05PM
I just looked at the photo and laughed
9 January 2012 9:05PM
The proposals are a bit weak by any standard, but at least something's being done about stellar pay at last.
That said, I don't think there's anything "essential" to the economy about Miliband - or the Labour party, for that matter.
9 January 2012 9:11PM
"He should certainly support those dangerous lefties, Merkel and Sarkozy, on the Robin Hood transaction tax: watching them go it alone shows how wrong Cameron was to claim this was an EU conspiracy against the City."
As 80% of the relevant transactions take place in the UK, why might you think that the UK government (and the Labour party, Miliband has said so explicitly) oppose a Tobin tax ta EU level, when the transactions could so easily take place elsewhere?
[The OECD link doesn't work, and so i could not check the accuracy of the claim made. My understanding is that we already have the most progressive tax regime in the G20. If all you care about is relative inequality then a nice big depression will do wonders to level the playing field.]
9 January 2012 9:12PM
" Ed Miliband is right"
That's the problem, we need a left winger.
9 January 2012 9:12PM
ed is a dead duck, a dud root. he cannot save himself never mind the rest of us
if only yvette would get rid of her hideous other half i might be tempted to vote labour again
9 January 2012 9:14PM
Scion of a stockbroker Minority Dave's proposals for City excess this weekend were frankly feeble and cosmetic but at least it's a start;if Ed M is to seize the initiative,he should propose much more stringent legislation regarding the financal sector after being allowed carte blanche for far too long,while emphasising that responsible capitalism should be supported and encouraged,particularly in a ''rebalanced economy'' that all the political classes are now talking about
9 January 2012 9:14PM
Oh, those eyes!
9 January 2012 9:15PM
Dear Polly Toynbee,
You were quite right to bang on about obscene executive pay.
How ironical that it should be Cameron who has hoicked the ball out of the scrum and is apparently ready to run with it!
Horrible he may be, shrewd he most certainly is. And cunning.
Pity Labour spent so long dribbling round in circles.
One really does have to have a heart of stone not to laugh at Miliband.
9 January 2012 9:15PM
And there you have it Polly. Who holds the power, the real power? Certainly not those 'Here today, gone tomorrow' politicians - ask the Greeks and the Italians where there is no longer any pretence at democracy.
9 January 2012 9:16PM
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9 January 2012 9:17PM
On Tuesday Ed Miliband addresses London Citizens, the community organisers for a living wage, promising a fairer capitalism.
Easy to make promises things when you've little chance of having to make good on them.
9 January 2012 9:18PM
Look, Polly, I know your heart is in the right place, but you're (again) looking in the wrong place for a saviour. The Parliamentary Labour Party has few if any who've not to a great degree been drinking the big-Capital pleasing Kool-Aid, and none among its leading lights.
The Labour party needs to work out who and what it is for. And with one of the worst, most destructive Governments imaginable in the UK in power, it still seems paralysed, tinkering at the margins, not even doing the simple job of Opposition (y'know, opposing) adequately.
And it may well,sadly (if the prominence of sh*ts like Liam Byrne continues, and/or the torture-approving Miliband D. comes to the fore), choose to continue chasing the Mail readers, and wallow in Westminster bubble issues, surrounded by PPE-d up wonks, lobbyists and sundry think-tankers, but if it does so it will be no f*cking use to anyone.
There are clear lines of principle here, moral imperatives, which shouldn't be clouded by West-Wing obsessed Special Advisers who wouldn't know integrity if it slapped them in the face.If Miliband and Labour can’t just stand with the workers and speak up for the poorest and most vulnerable in society then they are just Tories in red rosettes (like New Labour was in essence). There would be no point to a party which pursued Balls-ian sucking up to the city still, even now, and to have any hope at all of retaining 'core' voters, never mind your swing ones, Miliband needs to think what Labour, a once noble party is for. If it's not for the masses, for fairness, and for the most vulnerable, then they should all bugger off home.
Personally, I fear he will continue with his PPE mates and SpAds to triangulate the party away into nothing.
9 January 2012 9:23PM
milliband is not the leader of the opposition
http://www.guardian.co.uk/commentisfree/2012/jan/02/ed-miliband-dead-economic-ideas
9 January 2012 9:24PM
but neither of those directly address the issues that caused the credit crisis, it wasn't caused by executives having too much pay or by people buying and sell things. It was caused by banks issuing credit in a far too free and easy manner in the knowledge that the state would pick up the bill if it all went wrong. Until Ed has a plan for banking reform he's just whistling in the wind, constantly waffling on about caring isn't going to solve anything.
9 January 2012 9:25PM
The trouble is all this has happened without Ed's input. Despite the hype, Ed's speech at conference was timid and full of pious platitudes. There was nothing in there that couldn't have come out of the mouth of Brown or Blair - or even Cameron for that matter.
9 January 2012 9:25PM
The subtext, of course, is that without its cheats, asset-strippers and vultures - its bubbles and booms and busts - capitalism doesn't work. By all means let us be fair and challenge it to produce one iota of responsibility or fairness - and then when it fails let us get on with total automation, a conscripted workforce sharing the ever-diminishing workload and a citizen's income.
9 January 2012 9:26PM
The blindness you seem to have for rich Labour leaders is astounding ... Tony Blair, your heretofore incarnation of God on Earth, has left his "personally risky" (your word, Polly) pledge of halving child poverty to work on creating a personal corporate enterprise with an £8 million "black hole" ....
But that's okay, because you're now singing the praises of Ed Milliband, who knows all about "capitalism" -after all, he's held many, many "real world" jobs in his many years, such as speechwriting, teaching economics in the US, and ... standing for election in the very, very very marginal seat of Doncaster North (inset sarcasm here).
Don't worry, Britain, he'll save us.
9 January 2012 9:27PM
Oh, those eyes!
it's pure adrian mole aged 41 - the annus horribilis
9 January 2012 9:27PM
Perfect.
The problem is you've got Toynbee and lesser hacks at this paper desperately trying to make a case for Milliband but it's not working because he's such a weak, empty shell who represents the same interests as Cameron and frankly, the 'he's not as evil as Cameron' argument from Labour supporters isn't going to get us out of this mess.
We need proper policies that will genuinely make things better for everyone, not just a few. Milliband doesn't stand for that which means he's not the leader Labour need right now.
9 January 2012 9:28PM
Responsible capitalism? OK. But what has Ed Miliband got to do with this?
He was a robotic energy secretary who sat on his behind for some time on office, as a result people find their heating bills are higher because he couldn't take a lead on modest policy areas like this. If he couldn't get a grip of gas production or nuclear energy, what hope is there for loftier aims of reforming capitalism?
9 January 2012 9:29PM
We have had free enterprise rubbish rammed down our throats ever since Thatchers days, we were also told that we had to accept a lower standard of living whilst the Captains of industry grew ever richer. This was essential the establishment said to attract the right caliber of managers.
Whilst we contemplate our navels they are running off with the silver, only when we decide to take control of our own destinies and tell the self serving to take a run and jump will we ever see change of any substance. Tinkering was no solution under Blair and Brown and left Labour exposed and blamed for the failings of Capitalism.
9 January 2012 9:30PM
I wish that it were true that civilisation makes slow gradual progress towards an ever more benign future. Somethings, sometimes do work in this way, for a while, which is why we can sometimes convince ourselves that it is an iron law of human society. On the other hand, things can change rapidly and very quickly in all sorts of directions, such as war, terror,environmental disaster and financial collapse etc.
As far as I can see, we are getting a lot more of the lattter than the former, and have been ever since I've been around. So I don't agree with the underlying premise of this article.
I don't agree with the politics either. Frankly, it is fanciful to portray Ed Miliband as a modern day Robin Hood figure, though Cameron could pass for the Sheriff of Nottingham. The most that this deeply compromised group of leaders can do - all more or less in hoc to big business, hence their total agreement on the "capitalism" part of the debate - is throw a sop to the masses, generate a few cute sound bites and buff up their tarnished images for the cameras and, occasionally, the voters.
9 January 2012 9:30PM
Owns it? Is there no limit to the degree to which you are willing to dissemble to make a point?
The coalition (that's the one you told us all to vote for, remember?) appointed your fellow columnist Will Hutton to look at high pay - in the public sector - within 10 days of being elected, and fully six months before Labour had even got round to choosing a new leader.
Cameron gets it, OK? It doesn't really matter whose "turf" it is, save that Cameron has quite adroitly pulled the rug from under Milband's feet because, as usual, Miliband has spent too much time saying nothing at all, rather than risk alienating anyone by opening his mouth, pusillanimous vacillating ineffectual wimp that he is.
Can we at least have a discussion based on facts?
9 January 2012 9:30PM
Really? I think he's looking rather hot there.
Mind you I have had a drink.
9 January 2012 9:30PM
Ed must given the full support of all the membership. Blairite rumblings are not helping the party- these people must be told to get behind Ed. No more briefing, no more grumbling.
Ed is the only figure on the front bench truly capable of leading Labour to its inevitable destiny.
9 January 2012 9:30PM
Social democracy is only ever a partial solution to a long-term problem. As the final vestiges of the welfare state are undone by the present government, it’s clear that ‘reforms’ under capitalism can only be temporary, as they leave in place the system of class division that allows a minority interest to cast them by the wayside when their system hits crisis. However, this is somewhat beside the point.
Ed’s Labour party is not offering a social democratic programme – he’s rehashing the same old Blairite deal of plagiarising the Tories’ policies. Whether it’s Liam Byrne’s attacks on single mums claiming child benefit, Jim Murphy calling on Labour to accept all the cuts, or James Purnell praising the government for its ‘courage’ in privatizing the NHS, There is very little difference betwewen Ed’s Labour and Cameron’s Tories.
There is a neo-liberal consensus in parliament and local government, promoted by the media - and practiced by parties of every hue. Until that is broken down, don’t get too excited about talk of ‘reforms’, ‘regulation’ or ‘responsibility’, because that’s all it is – talk.
Parliament cannot deliver the changes that society desperately requires, and for which the causes are numerous – ideological, corporate capture, self-interest and just pure selfish careerism.
9 January 2012 9:33PM
hot? david
are you in a methadone programme!!! stick to the g&t's.
x
9 January 2012 9:33PM
This is the link to the OECD report
http://www.oecd.org/document/51/0,3746,en_2649_33933_49147827_1_1_1_1,00.html
Authors are responsible for links and should get them right.
9 January 2012 9:33PM
Ed talks of the other way then stands still.
9 January 2012 9:34PM
Labour need to stop looking Tory lite or they may as well give up as the mess they may inherit in three years time could be far worse than any of us could ever imagine.
9 January 2012 9:36PM
Labour recently appointed Andrew Rosenfeld as fundraiser. He paid them £1million for this privilege. He'll be busy selling future influence among the super rich because labour don't want to depend on the unions for donations, after all they represent grubby workers. Of course, if they had people with a message, belief in something worthwhile and the passion and charisma to take action then they wouldn't need loads of money to win. (For example, socialism).
9 January 2012 9:36PM
Good old Polly.Yet another "Tories bad Labour good" article on the subject of politics.How boring and predictable.This from one of the biggest supporters of the Euro.No wonder The Guardian sells so few newspapers.
9 January 2012 9:36PM
Why didn't the last Labour Government's do something about this?
Perhaps banning foxhunting and legalising the buggering of 16 year old boys were more important?
9 January 2012 9:37PM
Looking at the OECD data carefully, they don't seem to be using any up to date figures at all. The UK data runs as far as 2008.
9 January 2012 9:39PM
Personally, I think it's time the membership took control of the agenda and started telling the leader what to do.
9 January 2012 9:39PM
I doubt that either Dave or Ed seriously want to change this. I would like to think Ed might want to, but I have yet to be convinced
9 January 2012 9:41PM
Ed should lead, that is what he was elected to do.
9 January 2012 9:42PM
I would wait for a year and see if anything has ACTUALLY been done about pay. Just look at the boss of RBS awarding himself a huge bonus on the back of poor business performance (According to that bastion of social fairness, The Times, today).
9 January 2012 9:43PM
David, totally agree - and the Tories in red rosettes ain't working. The Labour Party that I remember used to care about the most vulnerable and it needs to get back to those values.
9 January 2012 9:45PM
I mut say, hermione, i too was a bit taken aback by that one....
9 January 2012 9:47PM
I think this explains the problem.
9 January 2012 9:48PM
zap, on every single thread i go on on CiF, even new ones, i always find that you have already made half a dozen comments.
What do you do all day?!
9 January 2012 9:48PM
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9 January 2012 9:49PM
I'm with you there Zap. If they mis-triangulate the 2015 election they will deliver 'Tory heavy' - an unfettered Cameron with a majority administration and a Britain that won't be worth living in.
9 January 2012 9:52PM
He tells the truth half a dozen times per thread.
9 January 2012 9:56PM
Sadly Polly , however well-intentioned he is ,Ed is a nerdy twerp , he could say the most profound things since Plato and still the discourse in living rooms across Britain would be along the lines of.. "Hey , there's that weird Labour bloke on TV again, the one with the funny nasal voice ", .... *yawn*, "turn him off".
9 January 2012 9:57PM
Dear Polly, can you please stop attributing to an economic system that is driven by laws of competition which strictly demand that Capital must go where the conditions are better for Capital accumulation (lower wages, lower social wages, higher productivity - means lower wages per unti of output, more regulation for labour, less regulation for capital), please don't attribute to that system human characteristics like "responsible" or "irresponsible".
Responsibility and irresponsibility have little to do with the trajectory of the global economy. The laws of capital accumulation, and capital reproduction are ruthless. Those who handle increasing volumes of capital will demand higher wages, and higher bonuses. Those who own capital will encourage those who manage it (bankers) to take risks for quick accumulation, especially in conditions where productive investment does not seem a good option given the ailing demand for goods and services.
When will you and other social democrats stop the self-delusion? You simple cannot create good capitalism in the era of globalisation as you cannot walk on water. Unless you are Jesus (and still I will need to see the three volumes of “Das responsible Kapital” to be convinced).
9 January 2012 9:57PM
No Polly, Cameron 'says' something will be done, actually implementing any legislation to do so that, whilst not antagonising those who fund his party, is likely to prove too costly. At best expect a watered down version of the proposals made yesterday plus a significant amount of time wasting in debating the terms and conditions.
9 January 2012 9:57PM
And always with a sense of humour, i find.
9 January 2012 9:57PM
Well 18 months on, 18 months of him not leading, maybe his electorate should fire him?
Or do they too believe in crony capitalism, and rewarding failure?