The Meaning of Jeremy Corbyn

Jeremy Corbyn, the far-left MP for Islington North, appears set to become the next leader of Britain’s Labor party. Various commentators have predicted economic and political doom for Britain, citing his radical ideas as evidence.

It is not obvious that electing Corbyn is a bad thing. It is much healthier for democracy if the electorate is given a clear choice between two main parties, with a wide ideological divide between them.

The alternative consensus politics, with both parties’ leadership agreeing on the main issues, tends to disenfranchise the wider electorate. Moreover, it ensures that the political elite “consensus” is enacted almost without opposition.

It is also by no means certain that a Labor party led by Jeremy Corbin cannot win in 2020, even though that outcome may only have a 10% probability.

Rather than Corbyn winning the 2020 election outright, a more likely result could be this, assuming that the Tories are then unpopular, after years of budget cuts.

The possibilities

The vote could split among several opposition parties. The UK Independence Party is not likely to be a major factor by that time, three years after the 2017 referendum). Vote gainers could be the Green Party and the Liberal Democrats, with the Scottish Nationalists maintaining their current substantial representation.

Such an outcome could then lead to a coalition government, like that of 2010 between some combination of Labor, the Lib Dems, the Greens and the Scottish National Party.

If such a scenario becomes reality, it is also possible that Corbyn would be vetoed as prime minister by Labor’s coalition partners. That would undoubtedly produce a lousy government, but not a uniformly hard-left one.

However, Corbyn does not need to win in 2020 in order to have a substantial effect on British politics. For one thing, the fate of the EU Referendum in 2017 will be heavily influenced by the attitude of the Labor party.

David Cameron’s Conservatives will campaign for Britain to stay in the EU, although there may be some senior Conservative figures on the other side (if Cameron enforces party discipline, he may find himself without a third of his Cabinet.)

An anti-EU Labor party?

Under Blair – and, less emphatically, Gordon Brown – Labor was a pro-EU party. It found the EU bureaucracy to be a rather sympathetic partner.

Blair and Brown were paid up members of the British establishment, which runs the country under any kind of centrist government.

Corbyn is neither a centrist nor a member of the Establishment and he has refused to rule out campaigning for a “no” vote in the EU referendum.

A large segment of the electorate, those most impervious to arguments from Cameron, will be highly influenced by Corbyn.

If he does indeed campaign for a “no” vote, even while leaving it open to the Shadow Cabinet to go the other way (as he would have to do), then Britain is likely to vote to leave the EU.

That would be an historic and momentous decision, with massive implications for Britain’s future.

Fortunately, even if that happens, Cameron should have more than two years to arrange an amicable exit, without Corbyn’s eccentric economic ideas being allowed to determine anything important.

In any case, there is a chance that Labor will have second thoughts before 2020, as the Conservatives did in 2003, and replace Corbyn before the election – just as the Tories replaced Iain Duncan Smith.

What if Corbyn wins?

Suppose Corbyn does win a majority in 2020, or is able to govern with the help of Scottish Nationalists or Greens. The short-term effect of this would undoubtedly be damaging.

For example, Corbyn, attacking the rich in general, would intensify the growing attack on the “non-dom” foreigners who live in the U.K. tax-free.

They have already been hit hard by July’s Budget under Geoege Osborne’s stewardship, which abolished permanent “non-dom” status.

However, Corbyn’s general attacks on rich – probably to include a wealth tax and a 75% income tax like France’s, together with a further restrictions on non-dom tax benefits – could cause a massive exodus of the ultra-rich, “Russian mafia” and otherwise.

In the short term, this would cause a crash in the London housing market and a move of the less specialized sectors of finance to Frankfurt, Hong Kong and New York.

London beyond the ultra-rich

In the long run, the effect might not be so bad. A significant decline in London property prices would vastly reduce the additional costs of living and working in the city. Such a turn of events would actually make it finally affordable for Millennials.

Even the loss of the commoditized sectors of finance could be an advantage in the very long run. Without the overpaid trading jobs at Goldman Sachs and elsewehre in London, the best and brightest might find themselves drawn to smaller boutique houses specializing in higher-IQ bits of finance – in other words, replacements for the old merchant banks.

These would not flourish while Corbyn remained in power (for one thing, they would need a bonfire of the overbearing and excessively expensive City regulatory system), but his tenure in office is likely to be short.

Britain’s economy is very adaptable. Even if Corbyn is elected, he will fail to change it toward socialism. And if he tried, he would most likely be replaced rather quickly.

Editor’s note: A longer version of this article first appeared on the True Blue Will Never Stain blog