George Osborne says Karl Marx may have been right about globalisation

Written by David Singleton on 6 January 2017 in Diary

‘You’re getting all Karl Marx on me and it’s an interesting point.’

Last year George Osborne slammed Labour for taking advice from "the revolutionary Marxist broadcaster Paul Mason". A few years before that, he accused Ed Miliband of displaying Marxist tendancies.

"For him the global free market equates to a race to the bottom with the gains being shared among a smaller and smaller group of people," said Osborne in his 2013 Tory conference speech. "That is essentially the argument Karl Marx made in Das Kapital."

But now the former chancellor has suggested that the German philosopher, economist and revolutionary socialist may not have got everything wrong after all. Rather the argument set out by Marx in Das Kapital is arguably "something that you’re seeing in globalisation," he has told a former Treasury colleague.

But Osborne also stressed that: "The answer doesn’t have to be Marx’s answer."

The former chancellor’s unlikely economic intervention came during an interview with former Treasury minister Jim O’Neil for a new Radio 4 documentary exploring whether new challenges mean an end to the era of globalisation.

Theresa May suffered her first ministerial resignation when Lord O’Neil quit as commercial secretary to the Treasury in September 2016 after falling out with the new government over issues including the Northern Powerhouse. He was chief economist at Goldman Sachs before being made a life peer in 2015 and entering the government.

In the interview with Osborne, O’Neil observes a “seemingly never-ending rise in the share of big corporate profit and income”.

He asks: “In order to make sure that dissatisfied Western people feel that there’s something in it, do we have to go through a period where we deliberately give them more of the spoils”?

Osborne replies to his former Treasury colleague: “You’re getting all Karl Marx on me and it’s an interesting point.

“The famous book was called Das Kapital and his argument was that in a modern capitalist country, the people who own the money, the capital, would get more and more of the rewards and the people who provided the Labour would get less and less of a share.

“And you could argue that that is something that you’re seeing in globalisation. But the answer doesn’t have to be Marx’s answer, which is a perfect communist society.

“What you can do is make sure that people have more capital in capitalism. You can make sure that people have a bigger stake in society – more generous pensions, easier to get on the housing ladder, more access to shares and savings over their life, perhaps a stake in the company that they work for. So you can democratise capital if you like and I think we have to do something like that."

As chancellor, Osborne raised the minimum wage to £7.20. In the Radio 4 programme, he insists that such policies are also important, even if they are not “in the classic Conservative playbook”.

"I think you also have to make sure the returns on Labour are worth it," he says. "In other words it pays to work.”


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