In January, in Washington, the Center for American Progress held a seminar, launching a “major new report, aimed at establishing sustainable and inclusive prosperity over the long-term in developed economies”. The Inclusive Prosperity Commission (IPC) – a transatlantic board convened by the centre – promised to table “innovative policy ideas” that will “spur middle-class growth”.
The IPC board is headed up by Lawrence Summers (Secretary to the Treasury under Bill Clinton, & cited as one of the architects of the banking deregulation that led to the 2008 crash), Steve Rattner (who manages Michael Bloomberg’s investments), Lord Sainsbury, and Judith Rodin (who works for The Rockefeller Foundation). What’s that smell? Oh yes, big business.
Also involved is a certain Ed Balls (Shadow Chancellor of the Exchequer). Balls and Summers have been working on this report for 18 months as joint Chairs of the commission, and also developing the Labour Party’s economic (and in some respects ideological) policy for 2015, using the same mantra as the IPC.
In a speech by Balls in June last year, he broke the Labour vision of a “new inclusive prosperity for the 21st Century” into three sections: Hard-headed Internationalism, Work and Skills, and Industrial Policy. These three sections covered more than just economics – they touched on fiscal reform, education, welfare, immigration, foreign policy and BIS. It pretty much formed the basis for Ed Miliband’s speech to the party conference (excluding the deficit – always forgettable), and will most likely shape their manifesto.
What’s interesting about the new buzz phrase of “Inclusive Prosperity” is where and who its conception has come from.
It would appear Lawrence “Larry” Summers has been a rather busy man. As well as being instrumental in nurturing Labour’s new ideology of “Inclusive Prosperity”, he was, in 2012, sowing his conceptual seeds all over another notion – the creation of a joint project between McKinsey & Company and The Henry Jackson Society.
“Inclusive Capitalism” (look familiar?) is described as a “Long-Term” way of “maximizing the extent to which capitalism can heal its own ills”, in the hope that “the capitalist system that has made our societies great will continue to do so”.
The report, which Summers wrote along with Adam Posen (chum of Labour economist “Danny” Blanchflower), The Ontario Teachers’ Pension Plan, a couple of Tory Lords and a hedge fund manager, broke this vision of “the most powerful economic system we have for raising people out of poverty and building cohesive societies”, into three sections (ring any bells?): Reforming Management and Governance for the Long-Term, Education for Employment, and Nurturing Start-Ups and SMEs. These three sections covered more than just economics – they touched on fiscal reform, education – yes, you get the idea.
The report and its findings have been widely endorsed by the economic illuminati – most notably Christine Lagarde, High Priestess of the IMF (describing its need to “infuse the consciousness of all economic leaders”), and Mark Carney, Caretaker of the BoE (envisaging a glorious utopia “in which individual virtue and collective prosperity can flourish”)
But delve a little deeper into the muddied waters of “key party” boardrooms, and you’ll find that that two of “Inclusive Capitalisms” main proponents – Dominic Barton and The Ontario Teachers’ Pension Plan – also swing together on the advisory board of the FCLT Group – “Focusing Capital on the Long-Term” – a think-tank dedicated to “value creation” for investors & markets (no mention of raising people out of poverty, or collective prosperity, there).
Corporate leviathans also involved in the FCLT, and wanting a piece of the “value creation” on the back of “Inclusive Capitalism”, include Barclays, AXA and Unilever to name but three. Who wouldn’t? Dominic Barton recommends “paying directors more”. They break their vision of “rewiring the ways we invest, govern, manage”, to “lead to better focus on long-term outcomes” into three sections (seriously): Fight the Tyranny of Short-Termism, Serve Stakeholders, Enrich Shareholders and Act Like You Own the Place.
But crucially, the FCLT cites the “growing concern that if the fundamental issues revealed in the (financial) crisis remain unaddressed and the system fails again, the social contract between the capitalist system and the citizenry may truly rupture, with unpredictable but severely damaging results”. Translated? Both the FCLT and “Inclusive Capitalism” are merely PR firewalls – coercing the public into believing that Capitalism knows it’s been naughty, and will play nicely from now on – sharing a portion of its pie; the size of the portion? The same as it’s always been.
So, just how in tandem are the ideas of Big Businesses’ “Inclusive Capitalism”, the FCLT’s “Long-term value creation” and One Nation Labour’s “Inclusive Prosperity”? When you study them side-by-side, most of the ethos is cross-transferrable. “New principles on compensation”; fiscal policy to encourage “Long-Term Investment”; scrapping quarterly guidance to encourage “Long-Term planning”; it’s all very Long-Term, and could have been copied and pasted back and forth, albeit with the use of a thesaurus – maybe that’s what Ed did…
Herein lays the fundamental problem.
The basis of Labour’s campaign, so far, revolves around the fact that they are not “New Labour” – Ed Miliband declared, after his victory over his Brother, that “era was over”. He is famously quoted as saying “While there’s capitalism, there’ll be socialism, because there is always a response to injustice”. The party faithful still see him as “Red Ed”, bringing the Left home to Downing Street.
This is simply mythical. When you have party policy which is formed from the findings of big businesses own self-serving analysis, directly influenced by the agendas of some of the most powerful corporate leaders in the world, “socialism” doesn’t get a look in – and to think it does is delusional. Courting big business? Labour may as well employ a pimp.
So, is the Third Way still alive and kicking in Labour? When Ed Balls delivered the speech I referred to earlier, outlining his “Inclusive Prosperity” vision, he called it “Beyond the Third Way”. Beyond, by definition, means “at or to the further side of”. Based on the fundamental thrust of the Blair/Clinton triangulation of policy – the marriage of right-wing economics, with left-wing social values – I would concur that we haven’t gone beyond, merely turned around on the spot a few times. Yes, the Third Way IS alive and kicking, hidden with stealth behind a faux-socialist PR campaign.
Speaking of Blair, one can only surmise that his (swiftly denied) assertion that Labour would not win in 2015 was either a calculated PR stunt by David Axelrod, to affirm Miliband’s “socialist” credentials, or a sign Tony’s a bit pissed that the Two Ed’s are out-triangulating him.
I’d say it’s a big dollop of both.
UPDATE – Tuesday January 26th.
So, it looks like Labour’s incestuous relationship with big business also see’s it swinging with them on other matters, too.
After the Parlimentary vote on the amendments to the controversial “Infrastructure Bill”, there was general bemusement as to why Labour abstained on section NC9, calling for a complete moratorium on fracking. Over the weekend prior to the vote, there was a concerted effort by many in the party, to promote the fact they would be supporting this – Margaret Curran, for example, tweeted “No Fracking in Scotland Under Scottish Labour”.
When it came down to it, however, the majority of Labour MP’s abstained, and the motion was defeated 308 to 52 (whilst Labour’s own amendments, tabling “tougher regulations”, passed without a vote).
Delve a little deeper, and the possible reasons for Labour’s stance become, once again, explicitly clear. The original investigation into fracking (which Labour based these amendments on) was a project by The Royal Society, who “carried out a short review jointly with the Royal Academy of Engineering of the major risks associated with hydraulic fracturing”
Also authoring the findings of this review, was a Dr. John Roberts, who also is Chairman of not one, but two Asset Management Companies, who BOTH advise on investments in the US shale gas industry. He also happens to be Chair of the Royal Bank of Canada, who – yes, you guessed it – advise on the same as the other two companies.
On top of the Royal Society’s report, Labour also commissioned Sir John Armitt to do a complete review of their infrastructure policy, from airports, to the rail network, to energy (including fracking). This report has formed the basis for their overall policy for the 2015 General Election.
Also advising on this report, were Andrew Adonis (a usual suspect in any Labour policy-making), the founder of Barclays Infrastructure Funds Management, and notably Rachel Lomax, a non-executive Director at HSBC. Her involvement is “notable”, because HSBC provide banking services to Cuadrilla (the company who Labour granted the 1st ever explorative licence to), and also gave a £63m banking facility to Dart Energy – the company planning to go into Coal Bed Methane (CBM) production in Scotland.
Could any influence from the people mentioned above, have “persuaded” Labour not to back the full moratorium on fracking? Interestingly they chose to ignore advice from Freinds of the Earth, who urged them to support amendment NC9 (but yet happily adopted other recommendations of theirs).
“All In This Together”? Yes, they bloody well are.