What does this mean for the people and the economy?
Will the rise of Jeremy Corbyn and popularity of his ideas at the just concluded general election give rise to socialism in Britain?
What does this mean for the people and the economy?
Socialism per the (English Oxford Dictionary) is a political and economic theory of social organisation which advocates that the means of production, distribution, and exchange should be owned or regulated by the community.
The 1945 surprising landslide Labour victory lead by Clement Attlee against wartime hero Winston Churchill gave birth to the NHS and welfare state.
The 1945 socialist agenda bore some similarities to Jeremy Corbyn’s dream of a nation, particularly the state or public ownership of industries and supervision or control of private “cartel”.
The modern-day similarities between 1945 and 2017 manifesto lies in the big welfare state proposed by Jeremy Corbyn such as free tuition, free school meal, maintaining pensioner’s benefits, look after the NHS and more and tightening the noose around the neck of “capitalist” by increasing corporation tax, increase tax for high income earners effectively dividing the nation into 95 and 5%, and further place extra tax burden on companies paying staff above £300k.
These undoubtedly resonate and roused people, not only winning over undecided voters, but swinging votes from other parties and conservative included.
Considering the turmoil in the conservative party, the immediate resignation of Nick Timothy and Fiona Hill for their contributions to the failed TORY election and revelations of a toxic atmosphere in Downing Street by the former director of communications, as well as the Prime Minister weakened position, without a doubt, another election is on the Horizon.
If Labour continues to push these agenda, it is not unthinkable that Jeremy Corbyn will make a break through next time. Landslide victory cannot also be ruled out.
Funding of this type of big state is a major issue, JR and John Mcdonnell declared preference for raising taxes for the rich and big corporation may not be sufficient both in the short and long term, thus when the realisation of not being able to implement these projects set in, they will need to raise borrowing level further to fund the state.
For the fiscal year ending in March 2017: The “current budget deficit*” is estimated to be £14.0 billion. The difference between spending (including capital expenditure) and revenue is estimated to be £53.9 billion. The increase in the UK “net debt” is estimated to be £123.5 billion. (The UK 2017 DEFICIT) , While the national debt is estimated to be £1.73 trillion. (UK 2017 Debt)
While deficit has gone down from its level since 2010, debt continue to rise, the fall in deficit may be attributed to austerity and running a leaner government, which can mean that If the Government continue on this path, they may be able to eliminate the deficit i.e. earning more than spending on a day to day basis, and begin to have surpluses, there would then be money to start reducing the debt and interest payment. Sounds simplistic, but that’s it really, in a nutshell. If you spend more than you make, and you do not make an active choice to address it, you would run into a financial ruin.
On the other hand, one can argue that the reduction in the deficit is coming at the expense of vital services like the NHS and police etc. So, there needs to be a balancing act, however, the rush to socialism, running a big government with its inevitable rise in both debts and deficits will not likely do the nation any good in the long term.
We think that the hardened socialists and leftists are convinced this is the way forward, the army of new converts to Corbynomics will even be more convinced. They will argue leaner government is a choice, that it does not have to be that way. They will argue that it is perfectly valid and sensible for the rich to pay more in taxes to fund the state, while this makes sense for those with money to pay more, indeed, they are already paying more both in a proportion of their income in percentage term and in absolute term.
The socialism part of the debate sounds nice and interesting, but how this would be achieved and paid for are not being talked about.
The complexity of BREXIT hangs over everything else, no one knows exactly what is happening and how the negotiation would go.
If we have another election in the next one year, and Labour hammered home these policies of 95% vs 5% economy, we think they may win by a landslide. One of the things that stood in front of Corbyn in the last election was his image and tag as security risk and terrorist sympathiser, but we think he has weather that storm and people now look beyond those issues, which means, next time around, he would only be judged on his argument, as the conservative seems to be in shambles, they may not have any credible person to fight for them, which means BOOM, we may have Prime Minister Corbyn!
I am indeed frightened as we think, whatever short term gains he may make, yes, there would be short-term gains, but if he runs the economy like money grows on the tree, the country may be looking down the barrels of economic disaster, and all the public services he wants to protect would have no money to run them.