There is a lot of fear-mongering in the British press about the disastrous consequences if the Labour Party won a British General Election and Jeremy Corbyn became Prime Minister.
One approach to see how disastrous this would be is to compare it to what happened when the last left-wing government was in power. The closest analogue is the Labour government from 1945 to 1951 under Clement Attlee.
The current Labour Party manifesto has a number of proposals (for a detailed list, click here). It includes nationalisations, increased taxes, increased minimum wage and free day care.
There are also proposals to introduce worker representative on the boards of major companies, confiscate shares in companies and give them to the workers. There is also a push within the party to abolish private schools.
The Attlee government put in place reforms which created the modern “welfare state” in Britain, looking after people “from cradle to grave”.
The aim was to reduce “the Five Giants”: Disease, Want, Squalor, Ignorance and Idleness.These were addressed a number of Acts of Parliament (for a full list, click here).
The welfare state is still intact and no longer considered controversial.
In addition, the Attlee Government nationalised railways, iron and steel, coal mines, gas distribution and water supply. These were largely undone by the Conservative Government under Margaret Thatcher.
The similarity between the Attlee government and the current Labour Party manifesto is startling. Of course, the usual criticisms of the programs revolve around how will these initiatives be paid for. However, the Attlee experiment shows that it can be done and there was no economic collapse. However, Britain’s economic growth from 1945 to the Thatcher years was lower than that of France or Germany, which may have been caused by Attlee’s government.
However, they differ in two major areas:
- Foreign affairs
- Compensation for nationalisation.
In foreign affairs, the Attlee government sided strongly with the West, including developing an independent nuclear weapon capability. It strongly opposed the expansion of the Soviet Empire.
In contrast, Jeremy Corbyn has supported every anti-Western Government or movement. He has sided with dictators such as Castro, Maduro and Mugabe. He supports Hamas and Hezbollah against Israel. He has not condemned Putin’s military adventures in Georgia, Azerbaijan or Ukraine.
On the Issue of compensation, the current Labour Party is unclear. The Attlee government paid compensation for the nationalisations at full market value.
The current Labour Party has said that a future Labour Government will pay shareholders less the market value. The Labour Shadow Chancellor of the Exchequer, John McDonnell argues that the price will be decided by parliament. There will be legal complications to this approach, but it is consistent with Marxist thought that the value of an asset is determined by its cost. The capitalist approach is that the value of an asset is based on its future cash flow.