From ‘New Labour’ to ‘New Capitalism’!

The contradictions of the Labour party?.

In this Guardian article by Labour shadow cabinet member Liam Byrne we see some of the contradictions of the Labour party. Liam Byrne seems to have vaguely noticed that capitalism is concerned about raising labour productivity so as to increase the profits of the capitalists. But he underestimates what this means in terms of social alienation and relative poverty. With a characteristic New Labour aplomb for the sound bite this is presented in terms of young people ‘working Friday for free’. He is quite naive about the solutions too. Raising productivity is at the heart of capitalism. You aren’t going to change this by ‘changing the rules for our budget watchdog’ and the handful of other regulatory changes he proposes.

This is consistent however with the new role that the Labour Party is carving out for itself. It is setting itself up as a sort of consumer affairs watchdog -Â representing not citizens as political agents but consumers. People are to be supported in ‘getting a better deal’ from the privatised utility companies etc. In practice they won’t even get that.

As for all that spending on schools and health under New Labour (and there was a large increase [1]) – Liam Byrne sort of sidles around the fact that despite all this social inequality did not improve under New Labour [2]. If they can’t be honest about past scams why should anyone believe them about the next one?

Its farcical. Though at the same time, that he expects to be believed gives some idea of how disconnected from reality these people can manage to be and still keep going. It is a triumph of something.

But Liam may be just bearing witness to the contradictions of the modern Labour party. In 1995Â they abolished a commitment to socialised ownership of the means of production. Since then the Labour Party has followed an unwavering commitment not to rock the capitalist boat. At the same time, in order to win electoral support they have been casting around for policies to make them look ‘socialist’. After all they can’t just throw in the towel and say ‘vote for the Tory party’ – who are unashamedly pro-capitalist – can they? Â The problem is socialism is not capitalism. This is why the ‘socialist’ policies of the modern Labour party are just window-dressing. Firstly there was a splurge in public spending on the health service and schools. It sounded socialist – and played well with certain interest groups. But nothing substantial changed – and then the money ran out. (In fact in a foolish piece of political showing off Liam Byrne left a note when he left office after Labour lost the 2010 election joking that ‘there is no money left‘). Now there seems to be a move towards ‘regulated capitalism’. But both of these are surface approaches. Neither addresses economic relations under capitalism. If you embrace capitalism but try to look socialist all you can do is tinker at the edges. Even if that tinkering is with vast amounts of public money it is still tinkering in that existing economic relations are not altered.

It is perhaps no surprise to discover that Liam Byrne is an ex-merchant banker who once wrote an obnoxious letter to his staff detailing both his personal and professional requirements. Such are the people who are keeping the Red Flag flying in 21st century Britain.


1. From 1996/1997 to 2010/11 spending on health and education went up from 14.8% to 25.3% of National Income. This was money taken from tax-payers and spent on the health and education systems.

2. Under New Labour up to 2010 there was very little change in income inequality. .

A more recent report from the Institute of Fiscal Studies shows that income inequality did not change very much in the period 2011/12 – 2012/13.

Thinking that you can improve social justice by spending on education is naive. Capitalists will welcome better trained workers (if that was indeed the result of the increase in education spending) but they welcome this because it increases productivity. The basic question of how the profits arising from better productivity are distributed – to labour or capital – is not addressed. In this article Liam Byrne tacitly admits that – but his solutions about a few more regulations are going to fix precisely nothing.

Author: justinwyllie

EFL Teacher and Photographer