Grace Blakeley: ‘Stolen: How to save the world from financialisation’

As part of this year’s [virtual] Festival of Debate, the largest annual politics festival in the UK, I had the pleasure of talking to Grace Blakeley about her recent book ‘Stolen: How to Save the World from Financialisation.’ Grace is a rising figure in the firmament of radical left-wing politics in the UK and in the Labour Party in particular. Having worked for the Institute for Public Policy Research and the New Statesman, she is a regular commentator on various broadcasting media. Her book is a thought-provoking read replete with big critiques of finance-led growth and innovative solutions for a new political economy. For those of us who either lived through the economic turmoil of the late 70s and early 80s or the Great Recession of 2007-2008 (or both!), it can make uncomfortable reading as Grace accessibly identifies the key individuals, decisions, and theories that she believes precipitated immense hardship for many and immense wealth for a few. 

‘Stolen’ is not, however, without its critics or without some questionable and normatively charged claims regarding both the blight of neoliberalism, the market, and even New Labour, and the unwavering promise of Marxist economics. Therefore, in the spirit of debate and acting as devil’s advocate, I was keen to put a number of questions to Grace about her book and the ideas therein. My thoughts were as follows:  

1. The main protagonist in ‘Stolen’ is financialisation, a process that denotes increased debt-to-equity ratios and a rising share of national income accounted for by financial services relative to other sectors. For Grace, the rise of financialisation represents a whole new and all-encompassing system of capitalism, so that all capitalists, industrial or not, have become rentiers. These truths are not, however, self-evident. Even prior to the financial crash, financial sector profits never accounted for a simple majority of all national corporate profits. Big multi-national corporations like Amazon, Google and Microsoft also continue to generate most of their income from the sales of commodities. In classic Marxist terms, they continue first and foremost to create and horde surplus value through the exploitation of labour and not, as Grace claims, through financialised ‘theft’ (what Marx referred to as the profit of alienation via transference of existing wealth). So is financialisation really as hegemonic as Grace claims and does it really represent such a departure from classic capitalism? And does Grace’s focus on finance as the enemy of the people distract the labour movement from more traditional and equally pertinent critiques of ‘productive’ capitalists, like Amazon and Google, who continue to exploit people through work? 

2. In Stolen, Grace argues that the financial crash of 2007-08 was a major critical juncture for modern political economy and the start of the ‘death throes’ of finance-led capitalism (even of capitalism itself). Again, the casual observer of the current economic modus operandi in countries like the UK (even at a time when the Government is responding to the Covid crisis with enormous structural investment), will find this hard to believe. There are perhaps three reasons for this that are worth considering. Firstly, more than a decade after the financial crash, income inequality is at record highs and profits as a proportion of national income are at record post-war highs. Trillions in corporate profit remain in offshore accounts. It is hard, then, to see an end to capital’s drive for accumulation. Secondly, crises of capitalism are arguably historical processes driven by legitimate social and political forces. Yet whilst populism in the West testifies to the dissatisfaction of many citizens, there does not appear to be a legitimate existential threat for the capitalist model. And thirdly, the global imperialism of capitalism as we know it makes it hard to believe that capital has run out of room to manoeuvre. In the context of global supply chains and a global class struggle, it seems possible (or sadly probable) that capital can restabilise its relationship with labour in the global North by further exploiting its relationship with labour in the global South. 

3. In looking backwards at the political actors or movements in the UK that have been complicit in finance-led growth and its myriad ills, Grace is scathing of the New Labour governments of the late 90s and early 00s. Yet her critique is not without its contradictions. At times, Grace argues that Tony Blair and Gordon Brown’s regulatory architecture for banks and financial services was too dense and complex; at other times, she argues that it was too light touch. It is hard, then, to swallow whole Grace’s claims that New Labour was a case of a Labour-run state allying with financiers to betray working people. On the other hand, there is no doubt that Blair and Brown pursued a neoliberal economic agenda in keeping with the legacy of previous Conservative governments. The crucial difference, however, was that New Labour strategically boosted tax revenues in order to allow record levels of structural investment in Britain’s public services and to greatly improve social and political equality. It is not clear from ‘Stolen’ that an alternative political agenda could have done any better at that time without engaging in quixotic counterfactuals.  

4. The answer to finance-led growth lies, for Grace, in a comprehensive system of democratic socialism. Grace distinguishes this from the Keynesian social democracy of the post-war consensus (familiar to any Politics undergraduate who’s sat through BritPol-101). Whereas the golden age of capitalism relied on a strong state to moderate the excesses of capital in order to provide economic stability and wealth redistribution, Grace’s democratic socialism entails democratising and socialising ownership of the most important assets in a country such as land, financial systems, corporations and public services. This is an admirable and compelling ideal, but ‘Stolen’ fails to provide the details of how exactly such a ‘revolution’ of sorts could take place peacefully with the intended consequences. Readers of the book who voted in the UK’s 2017 or 2019 elections will also notice that many of Grace’s policy solutions, including nationalisation of public services, a National Investment Bank, and a Green New Deal, were all part of the Corbyn project and featured in Labour Party manifestos. Although Grace published her book earlier in 2019 before the general election took place (a fateful night for Labour Party supporters everywhere), she does not give any consideration to the fact that (a) such a political project may not be electorally effective, or (b) whether the messy and contingent nature of democratic politics would allow for such wholesale change even if such pledges did win an election. The fact that successive Conservative governments, steeped in Hayekian economics, have now won four successive elections suggests that such questions deserve more attention.

As I stipulated at the start of this post, these arguments are designed to provoke and stimulate debate about what is otherwise a fine book and an extremely important topic (not least in light of capital-driven climate collapse). You can listen to Grace give an overview of her book and answer my questions (derived from above) here: https://www.youtube.com/watch?v=vq9g_MnJ7tQ&feature=youtu.be.