The greatest threat to capitalism? Inequality

I want to save capitalism, not smash it.And so we must remember that it for us – elected representatives of the people in democratic parliaments – to set the rules of the game.

NS

Sign Up

Get the New Statesman's Morning Call email.

Last week, saw the world’s richest and most powerful people gather in Davos. And we’ve had Oxfam tell us that 42 people have the same wealth as 3.7 billion people around the world. We should take both opportunities to pause and think.

Because for two years now the Prime Minister has stood up at Davos and said that free trade and globalisation are key. And that it’s the job of business and government to work together to show people why. For two years now the Prime Minister has forgotten one key group of people: workers.

The future of work and workers rights is central to this whole debate. Yet once again, representation of workers is not mentioned once. How we secure wage growth and proper investment in public services, how we protect those in the gig economy, how we tax and support the self-employed, how we ensure equal pay and gender balance, and how we regulate disruptive technologies that claim not to be employers are all significant issues on which the government has zero to say.

The level of pay as a percentage of GDP is the lowest it has ever been. And those at the top increase their wealth at a speed of knots because they own assets: shares, stocks, property and land. The generational divide is even more stark: with young people burdened with debt from getting educated, and unable to even get on the housing ladder because of a market that is failing to serve the people it profits from.

Now I agree with the Prime Minister that the rise of the far left and the far right is a concern. I want to save capitalism, not smash it. We’ve got to make the system work. And so we must remember that it for us – elected representatives of the people in democratic parliaments – to set the rules of the game.

Trade unions must also reform too. Many have done great work on representing gig economy workers who don’t find themselves on the traditional factory based shop floor. And others are investing in the research required to understand the needs of the future of work. But for workers to have a balance of power with business and with government, we need modernised trade unions too.

As we reflect on the fall in the value of wages and the imbalance of power between business and workers, we should remember that the new oil is data. The opportunity is enormous. You don’t need to own an oil field anymore, each of us produce our own personal data every single day. The concept of data as an asset is one which needs urgent attention. We give data to Facebook and Google – who quickly became monopoly holders of banks of personal data which they profit from by providing access to it – but also to our doctors and teachers and councils. A public debate is needed that agrees who gets access to our data and why. And if we grant access, we need to make sure that citizens and the state share in the profits made off the back of our richest asset.

On the science and technology select committee, on which I sit, we’re currently undertaking inquiries into the regulation of algorithms (which drive Artificial Intelligence systems) and the use of DNA data in the NHS. This week I asked the minister for digital, Margot James, whether the government has taken a view on how to deal with the issue of data value. The fact is that it hasn’t.

But our NHS, for example, is the most valuable and largest big data asset of health data in the world. If companies from the United States come in and train their Artificial Intelligence systems using our data, and then profit around the world off the back of that, then the NHS must share in that return. And where companies make billions of dollars off the back of our personal data through advertising, surely it’s right that the state shares in that new form of wealth creation on behalf of citizens? And where our public services require significant investment into digital infrastructure to reduce costs and improve service quality and efficiency, surely government can redistribute private sector profit from data monetisation into investment into public services too.

But this isn’t all about money. It’s about ethics too. It’s about how we apply traditional civil liberties in a modern setting. With our iPhones and Alexa speakers constantly collecting data, with criminals and terrorists using sophisticated online techniques, with our children getting depressed or sleepless using social media and tablets, with the circulation of misinformation and prejudice online, and with so much more. Where is the debate? What does a modern Britain look like? The fact is, no one in government knows.

And so I wait with baited breath for real leadership from the government. Because for years, the Prime Minister has made speeches with nice words but no action.

In 2017, the Prime Minister told the audience at Davos that she was going to reform the way businesses operate through changes to corporate governance. Yet she u-turned on workers on boards and presented a green paper of ideas that never turned into a white paper or bill of new rules.

And on another key issue – energy generation and distribution – the Prime Minister said nice words today but provides little evidence of action. I welcome the Clean Growth Strategy and its prominence in the Industrial Strategy, but the reality is that we continue to block on shore wind, we fail to invest in the new technologies needed to harbor tidal energy and we continue to promote nuclear power and fracking. All of this alongside a distribution network that is crumbling at its Victorian roots, with no national leadership on developing a proper smart grid – vital in our ability to adopt consumer products such as electric vehicles and smart appliances.

The Prime Minister was right to focus on technology – it will define the future of our world, and Britain is currently a world leader in it. But the so called Fourth Industrial Revolution is already starting to change every aspect of our lives without a regulatory framework that is fit for the future.  And the technology giants are the new multi-nationals who base themselves in favourable tax jurisdictions whilst making enormous profits from the British people. Saying that it’s too hard to fix globalisation and capitalism is not good enough. And in the context of Brexit, we must recognise that it is and continues to be a disaster for Britain. Because creating a fairer economy in an age of globalisation requires us to work internationally, and to have clout when we do.

To be a Global Britain, as the Prime Minster often refers to, we must have the humility to recognise that we need to work with our friends across the world. A Global Britain is much more likely to achieve global change as a leading Member State of the European Union, when around the table with the likes of the United States, China, India and so on. Just ask any other small country that tries to do this alone. And reliance on our positions on the UN, NATO, IMF and the World Bank relies on our past, not on our future. As we have seen with the International Court of Justice, where Britain lost her seat for the first time in its history, our position in the world can’t be taken for granted based on historic triumphs. So as we continue to understand the real impact of Brexit, and reflect on the type of country that we wish to build, we must also constantly remind ourselves that the British people have the right to change their mind on Brexit if they want to.

I’m a modernising, progressive, centre ground politician who wants the United Kingdom to remain in and reform the EU, whilst re-setting the rules of the game to make globalisation and capitalism work for the many and not the few. By being so, in a world currently managing a polarisation of politics, I’m left with no choice but to have faith.

But when the Prime Minister says she wants the United Kingdom to be the most forceful advocate for free trade and free markets in the world, I’m crystal clear that I want the United Kingdom to be the most forceful advocate for fair trade and fair markets, with a focus not just on business but on people too. As a Member of Parliament, I now find myself as part of the “system”. I deeply hope that the Parliament I’m now a part of can find its way to becoming the solution too.

Darren Jones is the Labour Member of Parliament for Bristol North West.