Osborne's comparison of Miliband to Marx shows how wrong-footed the Tories have been

If the Labour leader is a Marxist, so are most of the public. They recognise that the market isn't working for the majority.

After initially portraying Ed Miliband as a "weak" leader with no policies, the Tories have taken to casting him as a dangerous socialist. In his speech to the Conservative conference, George Osborne compared him to Karl Marx, who similarly warned of a "race to the bottom" in Das Kapital. The Chancellor said:

I share none of the pessimism I saw from the Leader of the Opposition last week.

For him the global free market equates to a race to the bottom with the gains being shared among a smaller and smaller group of people.

That is essentially the argument Karl Marx made in Das Kapital.

It is what socialists have always believed.

But the irony is this:

It is socialism that always brings it about.

And it is the historic work of this Party to put that right.

Osborne's argument might be appreciated in a seminar room but it's hard to see it winning over the voters. After being told that he's a Marxist, they're likely to be pleasantly surprised at Miliband's moderation. As I noted last week, if the Labour leader is a socialist, so are most of the public. Around two-thirds of voters support a 50p tax rate, a mansion tax, stronger workers’ rights, a living wage and the renationalisation of the railways and the privatised utilities (putting them to the left of Miliband).

The other main problem with Osborne's riposte is that, unlike in previous decades, capitalism isn't working for the majority - and one doesn't need to be a Marxist to recognise as much. The link between higher growth and higher wages has been severed. Since 2003, 11 million earners have seen no rise in their real incomes. Growth may now have returned (with output expected to reach around 1% this quarter) but real wages are not forecast to increase until 2015 at the earliest and will not return to their pre-crash levels until 2023. The minimum wage is now worth no more than it was in 2004 and 4.8 million workers are paid less than the living wage.

But in his speech Osborne disregarded all of this and in doing so revealed his failure to grasp the extent of the crisis. He derided Miliband for suggesting that "the cost of living was somehow detached from the performance of the economy". But while the problem is partly cyclical (although the Chancellor, who has presided over the biggest fall in living standards on record, is hardly fit to lecture others), it is also structural. Wages did not rise with growth before the crisis and they will not rise with growth after it. In response, the government could introduce above-inflation increases in the minimum wage, or spread use of the living wage by making its payment a condition of public sector contracts, or creating living wage zones. But Osborne had nothing to say about any of this.

"We understand that there can be no recovery for all – if there is no recovery at all", he said, setting the bar as low as possible after three years of stagnation. But to Miliband's question of how to create a recovery for the many, rather than few, he offered only a shrug.

George Osborne delivers his speech to the Conservative conference in Manchester. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Labour's establishment suspects a Momentum conspiracy - they're right

Bernie Sanders-style organisers are determined to rewire the party's machine.  

If you wanted to understand the basic dynamics of this year’s Labour leadership contest, Brighton and Hove District Labour Party is a good microcosm. On Saturday 9 July, a day before Angela Eagle was to announce her leadership bid, hundreds of members flooded into its AGM. Despite the room having a capacity of over 250, the meeting had to be held in three batches, with members forming an orderly queue. The result of the massive turnout was clear in political terms – pro-Corbyn candidates won every position on the local executive committee. 

Many in the room hailed the turnout and the result. But others claimed that some in the crowd had engaged in abuse and harassment.The national party decided that, rather than first investigate individuals, it would suspend Brighton and Hove. Add this to the national ban on local meetings and events during the leadership election, and it is easy to see why Labour seems to have an uneasy relationship with mass politics. To put it a less neutral way, the party machine is in a state of open warfare against Corbyn and his supporters.

Brighton and Hove illustrates how local activists have continued to organise – in an even more innovative and effective way than before. On Thursday 21 July, the week following the CLP’s suspension, the local Momentum group organised a mass meeting. More than 200 people showed up, with the mood defiant and pumped up.  Rather than listen to speeches, the room then became a road test for a new "campaign meetup", a more modestly titled version of the "barnstorms" used by the Bernie Sanders campaign. Activists broke up into small groups to discuss the strategy of the campaign and then even smaller groups to organise action on a very local level. By the end of the night, 20 phonebanking sessions had been planned at a branch level over the following week. 

In the past, organising inside the Labour Party was seen as a slightly cloak and dagger affair. When the Labour Party bureaucracy expelled leftwing activists in past decades, many on went further underground, organising in semi-secrecy. Now, Momentum is doing the exact opposite. 

The emphasis of the Corbyn campaign is on making its strategy, volunteer hubs and events listings as open and accessible as possible. Interactive maps will allow local activists to advertise hundreds of events, and then contact people in their area. When they gather to phonebank in they will be using a custom-built web app which will enable tens of thousands of callers to ring hundreds of thousands of numbers, from wherever they are.

As Momentum has learned to its cost, there is a trade-off between a campaign’s openness and its ability to stage manage events. But in the new politics of the Labour party, in which both the numbers of interested people and the capacity to connect with them directly are increasing exponentially, there is simply no contest. In order to win the next general election, Labour will have to master these tactics on a much bigger scale. The leadership election is the road test. 

Even many moderates seem to accept that the days of simply triangulating towards the centre and getting cozy with the Murdoch press are over. Labour needs to reach people and communities directly with an ambitious digital strategy and an army of self-organising activists. It is this kind of mass politics that delivered a "no" vote in Greece’s referendum on the terms of the Eurozone bailout last summer – defying pretty much the whole of the media, business and political establishment. 

The problem for Corbyn's challenger, Owen Smith, is that many of his backers have an open problem with this type of mass politics. Rather than investigate allegations of abuse, they have supported the suspension of CLPs. Rather than seeing the heightened emotions that come with mass mobilisations as side-effects which needs to be controlled, they have sought to joins unconnected acts of harassment, in order to smear Jeremy Corbyn. The MP Ben Bradshaw has even seemed to accuse Momentum of organising a conspiracy to physically attack Labour MPs.

The real conspiracy is much bigger than that. Hundreds of thousands of people are arriving, enthusiastic and determined, into the Labour party. These people, and their ability to convince the communities of which they are a part, threaten Britain’s political equilibrium, both the Conservatives and the Labour establishment. When the greatest hope for Labour becomes your greatest nightmare, you have good call to feel alarmed.