Twenty years ago, the Labour Party agreed on a new version of Clause IV of its constitution which removed the reference to the ‘common ownership of the means of production, distribution, and exchange’ (see this issue, page ten). This was hailed as the moment when the Labour Party abandoned its commitment to ‘socialism’, or rather to wholesale nationalisation. This decision was arrived at after suffering four electoral defeats at the hands of the Conservatives, who had successfully pursued free market policies. Thus the Labour Government from 1997 to 2010, introduced policies which were not radically different from those of the Tories.

Yet the unexpected front runner for the current Labour leadership contest is Jeremy Corbyn, Labour MP for Islington North, who calls himself a socialist and pledges to end austerity by measures such as raising taxes for the rich, including corporation tax, tackling tax avoidance and tax evasion and introducing a ‘People’s Quantitative Easing’, where electronic money would be created by the Bank of England to be invested in ‘new large scale housing, energy, transport and digital projects’. He would also bring the railways and the energy companies back into State ownership.

How did he get to this position? Aside from some Trotskyists and Conservatives who have exploited a new rule that entitles non-Party members to vote in the Leadership election provided they register as supporters of Labour, most of his support comes from grass roots Labour supporters and others, many of them young people, who have had enough of the effects of austerity, the decline in the standard of living for many workers, the proliferation of food banks, while on the other hand, the rich continue to enjoy rising prosperity. Moreover, Corbyn is seen as being honest and principled, whereas the other three candidates come across as supine mouthpieces of a Labour establishment that supports the current consensus on austerity.

In a BBC news article (bbc.co.uk/news/uk-politics-33772024), Corbyn says, in response to accusations that he wants to take the Party back to the 1980s, that he’d go back to the 1970s Labour government. In 1974 the new Labour Government declared that they wish to ‘bring about a fundamental and irreversible shift in the balance of wealth and power in favour of working people and their families.’ This was to be achieved by increasing spending on pensions and other benefits, extending state ownership and tax rises on the better off. However, capitalism was hit by a recession which resulted in a sharp rise of unemployment. Inflation was rising rapidly. The government had to borrow money from the International Monetary Fund, and was compelled to implement a programme of spending cuts. James Callaghan, the Prime Minister at the time, came to this conclusion at the Labour Party Annual Conference in 1976:

‘We used to think that you could spend your way out of a recession, and increase employment by cutting taxes and boosting Government spending. I tell you in all candour that that option no longer exists, and that in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step.’

Jeremy Corbyn will have no more success in trying to reform capitalism in the interests of the working class. Production under capitalism is geared towards profits, not human need. Corbyn’s proposed tax rises would cut into profits and discourage investment. Even his proposed people’s quantitative easing is likely to fuel inflation, which would put pressure on interest rates to rise.

While we welcome that more people are becoming politically engaged and are looking for alternatives, it would be a mistake to follow Jeremy Corbyn’s leadership, otherwise we may well end up back in the 1970s, rather than moving forward to abolish capitalism and establish real socialism.