Merryn's Blog

Jeremy Corbyn is what you get when you mess with capitalism

A delayed reaction to the bank bailouts is behind the surge in popular support for protest politicians such as Jeremy Corbyn, says Merryn Somerset Webb.

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We've been pointing out for some time now that the rise of extreme political parties and politicians across the West is a clear symptom of the discombobulation and betrayal felt by populations in the wake of the great financial crisis. My interview with Bernard Connolly effectively forecast it, I've mentioned it with reference to the rise of the SNP, and John Stepek summed it all up neatly in his Money Morning on Jeremy Corbyn. But the idea is now on the move.

A few days ago, Dan Hannan picked it up in a column in the Washington Examiner. Look at Jeremy Corbyn, he says. How can such a man be three weeks away from becoming the Leader of Her Majesty's Opposition?

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It isn't charisma: "he shuffles about like a scruffy geography teacher muttering hesitantly from the depths of an unkempt beard". And it isn't his sincerity he appears to genuinely believe his own nonsense, but sincerity alone is never enough. And it isn't Labour's new voting system. Instead, says Hannan, it is all "part of the same phenomenon that has seen Syriza become the dominant party in Greece, Podemos surge in Spain, the SNP win power in Scotland, and even old Bernie [Saunders] enjoy his moment in the US".

What we are witnessing is a "delayed response to the bank bailouts". Hannan's point here is that the bailouts undermined the legitimacy of capitalism, wiping away the broad support it had for decades on the basis that free markets are both "efficient and meritocratic". The crisis and the bailout made the whole thing look neither.

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The far left have always argued that capitalism is a "crook, a racket in which the rich rigged the rules in their own favour". The wealthy get the profits when things go well, and subsidies when they don't (quantitative easing being the greatest subsidy of all time).

You may point out and we constantly point out that the bailouts and the last six years of super-low interest rate policy and money printing have nothing to do with real capitalism or real free markets. They are symptomatic of the abandonment of the rigours of real capitalism. But that, clearly, isn't how much of the population sees it. And that's why we are where we are three weeks away from having Jeremy Corbyn as the Leader of Her Majesty's Opposition.

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