The moral tyranny of the free market

As the Labour Party battles out who will lead them into the next election defeat, it becomes clear that the dominant theme in the party is now one of 'nationalisation' of industries and services. Both candidates advocate taking the railways into national ownership, a call more easily made than done, as the recent Observer editorial argued.

Those were the times - Nationalisation in 1947

In a space best characterised as an echo-chamber, the rank and file of the Labour Party are competing for the most extremist positions, underpinned by what Hannah Arendt once called the 'emancipation from reality'.

However, the more interesting question is why leftists have such a visceral hatred for the market in the first place. Marx himself was by no means disinclined to let market forces do their work in the inevitable demise of the capitalist order. And Lenin himself used the free market in the brief New Economic Policy period to improve people's material lives following the deprivations of the Russian Civil War. So, why do socialists a la Corbyn have such as dislike for free markets?

Much of this appears to do less with where Corbyn and others want to take the country than with where they have been. Corbyn seems to cherish the old nationalised railways exactly because the image of British Railway branded carriages criss-crossing the country offers the certainties of old times. His and his supporters' desire to nationalise industries are motivated more by the past than any exciting vision of the country's future.

A second reason may however be a fundamental misunderstanding of the moral nature of the free market. When asked about the role of private providers in the NHS Corbyn reliably talks about profit in healthcare (conveniently denying the fact the GPs are running business as well which need to make a profit too). Corbyn does not seem to understand that profit is not the only, and often not the main motivator for people to set up businesses. The main reason why people become self-employed is because it gives them the opportunity to shape their own destiny and be in control of their lives.

Running a business is thus a fundamental manifestation of personal freedom. As people establish businesses they exercise a right which is tied up with personal responsibilities, such as making and keeping mutual promises and entering contracts. Running a business thus has a moral side as people operate in a contractual sphere which imposes civic obligations on them which in turn allows them to disclose their moral commitment to civil society. The recent focus on those who have tried to escape their contractual commitments (Philip Green e tutti quanti) only reinforces this point as they are the exception to the norm.

It is this moral aspect of economic activity that Corbyn and his left wing comrades refuse to acknowledge when they argue in favour of nationalising industries. Where such a policy would lead is clear for everyone with only a cursory knowledge of the sophisticated discussions amongst Marxists and Revisionists since the 1880s. Or, alternatively, if once prefers the Soviet Russian debate, one may look it up in Trotzky's critique of Stalinism. Nationalising an industry only achieves one thing. It puts the 'means of production' into the hands of a bureaucratic elite whilst removing the notion of personal responsibility for success and failure of economic activity from everyone. Where everyone owns everything, no one feels responsible, and the result is usually a steady but inevitable decline. Anyone remember British Leyland?