Yvette Cooper addresses supporters. Photo:Getty Images
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Labour must abandon the dangerous language of "wealth creators"

The reality is that everyone, not just business owners, create wealth.

Yvette Cooper’s attempt to position herself as the pro-business candidate for the Labour Party’s leadership – and perhaps stem the tide of Andy Burnham’s gathering momentumyesterday saw her embrace one of the most perniciously used terms in contemporary political discourse: the “wealth creators”. Explaining that “our rhetoric can’t be set against the wealth creators and drivers of our future economic growth”, Ms Cooper has adopted a label dear to Labour’s Blairite wing – and their Conservative rivals – as totemic of their support for private enterprise. Chuka Umunna’s abortive candidacy had done the same last week, and it is a term we are sure to hear again as the party tries to recapture the electoral success of Blair-era centrism by shedding its anti-business image.

The creation of wealth for both Britain and Britons is unambiguously A Good Thing. A move to the right by Labour is probably also both morally just and electorally necessary. But the rhetorical purpose of the “wealth creators” label, as it is used politically today, is both insidious and divisive. The closest antonyms of “creation” are “destruction”, “consumption”, or “absorption” – thus the antonyms of “creators” are “destroyers”, “consumers”, or “absorbers”. In pointing to those (and implicitly only those) who create jobs as “wealth creators”, therefore, anyone who invokes that label risks juxtaposing business-owners in a position to hire against the implied “wealth destroyers”, “absorbers”, and “consumers” who work for them (and elsewhere in the economy).

Such juxtaposition neglects the fact, however, that the total wealth generated by any business is a product of all of the capital, both financial and human, that has been invested in it. The business owner’s personal labour is part of this, but it is not all. The midwives who bring a company’s workers (including its owners) into the world, the teachers who give its workers (including its owners) their literacy and numeracy, the university academics who refine its high-skilled workers’ (including its owners’) analytical skills and conduct productivity-boosting foundational research, the construction workers providing the infrastructure for business and wider daily life, the doctors who preserve the workers’ (including the owners’) economic effectiveness both prior to and whilst working for the business, the police and military personnel who create a secure environment for all past and present economic activity, and indeed, the company’s own payroll employees are all intrinsic parts of the wealth creation process. 

All are therefore “wealth creators”, not just those in a position to make hiring decisions. The difference is that the business owner has concentrated property rights, since he/she is present at the point of sale, whilst all of those prior contributors have only diffuse property rights, leaving the former in a better position to claim a disproportionate share of the returns on total invested human capital than the latter. Whereas a management consultant can sell her intellectual property directly to a business for its full market value, because she has clearly-defined and -protected property rights, a primary school teacher hands his over thirty years in advance for a price that under-reflects his total economic contribution.

To be clear, this is not some anti-business rant: businesses do create wealth, as part of a wider wealth-creating economy. Much of that added value, moreover, owes to effective management. The point, however, is that simply owning and running a business – even if doing so very well – is not the same as individually creating all of the wealth that it generates. Likewise, being present at the point of hiring – making the job creation decision, in effect – does not mean that a business owner personally created all of the wealth that enabled the new hire.

The purpose of “wealth creator” as a rhetorical label, of course, is that it engenders a more positive emotional response than “wealth holders”. When used by the worst on the right – in the same way that right-of-the-party Labour leadership contenders now risk doing – it provides cover for the divisive juxtaposition of wealth holders against those who work for them. This is not to say that wealth holders and workers are distinct, non-overlapping camps, of course. On the contrary, one of the tragedies of using the “wealth creator” label to mean business owners is that it creates an unnecessary dichotomy, and thus nurtures class antagonism. To profess One Nation politics whilst implying two different tiers of citizenry – the “wealth creators”, and the mere consumers – is a contradiction in terms.

Labour is probably correct to move to the right: electorally, because only then can they hope to again form a government, and morally, because the “squeezed middle” – high-skilled salaried labour and even small business owners – are also, like those at the very bottom, on the negative receiving end of rising inequality. Yet moving to the right need not mean an unreflective embrace of the worst of right-wing rhetoric. Even if the “wealth creator” label must be invoked for ultimately well-intentioned electoral purposes – as Ms Cooper and Mr Umunna have evidently calculated that it must – we should not lose sight of its insidious rhetorical effect. 

Picture: ANDRÉ CARRILHO
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Leader: Boris Johnson, a liar and a charlatan

The Foreign Secretary demeans a great office of state with his carelessness and posturing. 

Boris Johnson is a liar, a charlatan and a narcissist. In 1988, when he was a reporter at the Times, he fabricated a quotation from his godfather, an eminent historian, which duly appeared in a news story on the front page. He was sacked. (We might pause here to acknowledge the advantage to a young journalist of having a godfather whose opinions were deemed worthy of appearing in a national newspaper.) Three decades later, his character has not improved.

On 17 September, Mr Johnson wrote a lengthy, hyperbolic article for the Daily Telegraph laying out his “vision” for Brexit – in terms calculated to provoke and undermine the Prime Minister (who was scheduled to give a speech on Brexit in Florence, Italy, as we went to press). Extracts of his “article”, which reads more like a speech, appeared while a terror suspect was on the loose and the country’s threat level was at “critical”, leading the Scottish Conservative leader, Ruth Davidson, to remark: “On the day of a terror attack where Britons were maimed, just hours after the threat level is raised, our only thoughts should be on service.”

Three other facets of this story are noteworthy. First, the article was published alongside other pieces echoing and praising its conclusions, indicating that the Telegraph is now operating as a subsidiary of the Johnson for PM campaign. Second, Theresa May did not respond by immediately sacking her disloyal Foreign Secretary – a measure of how much the botched election campaign has weakened her authority. Finally, it is remarkable that Mr Johnson’s article repeated the most egregious – and most effective – lie of the EU referendum campaign. “Once we have settled our accounts, we will take back control of roughly £350m per week,” the Foreign Secretary claimed. “It would be a fine thing, as many of us have pointed out, if a lot of that money went on the NHS.”

This was the promise of Brexit laid out by the official Vote Leave team: we send £350m to Brussels, and after leaving the EU, that money can be spent on public services. Yet the £350m figure includes the rebate secured by Margaret Thatcher – so just under a third of the sum never leaves the country. Also, any plausible deal will involve paying significant amounts to the EU budget in return for continued participation in science and security agreements. To continue to invoke this figure is shameless. That is not a partisan sentiment: the head of the UK Statistics Authority, Sir David Norgrove, denounced Mr Johnson’s “clear misuse of official statistics”.

In the days that followed, the chief strategist of Vote Leave, Dominic Cummings – who, as Simon Heffer writes in this week's New Statesman, is widely suspected of involvement in Mr Johnson’s article – added his voice. Brexit was a “shambles” so far, he claimed, because of the ineptitude of the civil service and the government’s decision to invoke Article 50 before outlining its own detailed demands.

There is a fine Yiddish word to describe this – chutzpah. Mr Johnson, like all the other senior members of Vote Leave in parliament, voted to trigger Article 50 in March. If he and his allies had concerns about this process, the time to speak up was then.

It has been clear for some time that Mr Johnson has no ideological attachment to Brexit. (During the referendum campaign, he wrote articles arguing both the Leave and Remain case, before deciding which one to publish – in the Telegraph, naturally.) However, every day brings fresh evidence that he and his allies are not interested in the tough, detailed negotiations required for such an epic undertaking. They will brush aside any concerns about our readiness for such a huge challenge by insisting that Brexit would be a success if only they were in charge of it.

This is unlikely. Constant reports emerge of how lightly Mr Johnson treats his current role. At a summit aiming to tackle the grotesque humanitarian crisis in Yemen, he is said to have astounded diplomats by joking: “With friends like these, who needs Yemenis?” The Foreign Secretary demeans a great office of state with his carelessness and posturing. By extension, he demeans our politics. 

This article first appeared in the 21 September 2017 issue of the New Statesman, The revenge of the left