Leftwing economic platforms need not be stupid, but proponents must understand their strengths and limitations.
There is no left-right dividing line in sensible economic policymaking. Everyone needs to define their ambitions, understand how policy might achieve goals and recognise constraints. Mr Corbyn’s ambition is clear: he wants a more equal and a more prosperous society.
Since this desire is shared across the political spectrum, the radical left must demonstrate its ability to act where other, more conservative forces, are constrained. The left’s important freedom is its ability to worry less about preserving individual property rights than others. Such rights are never absolute — any form of taxation is lawful extortion — and if they stand in the way of growth and greater equality, a leftwing government can remove them. This surely should be the guiding theme of any practical economics of the hard left.
The constraints are sadly real, however. You can tax the rich until the pips squeak, but if the pips are mobile, you will find the fruit you are squeezing is seedless. Governments can also fail more regularly than markets.
With this in mind, an economically coherent leftwing platform would weaken the property rights that most impede prosperity, allowing these gains to offset damage from likely government failures and weaker incentives to work and to innovate.
Abundant land is disastrously used in Britain, constrained by arbitrary planning constraints and not-in-my-back-yard attitudes of small “c” conservative residents. Greenbelt restrictions protect wasteland around cities, preventing both growth and more affordable housing and ensuring older and richer people, especially around London, entrench their privileges.
Regulations could be substantially loosened, with the state appropriating most of the increase in land value of areas that currently cannot be developed. Many parts of inner cities, often freehold land owned by the public sector, could be rebuilt at higher densities with widespread compulsory purchase. A third runway at Heathrow — a pro-growth measure opposed by local property owners — should go ahead.
other forms of overt redistribution should include heavier inheritance taxes. These are justified on the twin principles that bequests damage beneficiaries’ work incentives and the dead find the taxman more difficult to avoid than the living.
It is Mr Corbyn’s populism, not his being hard left, that destroys his economic credibility. A smart hard-left stance could claim to boost both prosperity and equality. It would be radical and coherent, but in undermining property rights, possibly not all that popular — one of the reasons why the hard left rarely wins office.
You do not buy Tesla because you think you know what profits it will make. You buy the stock because you think some new technology such as Tesla’s will change the world in ways that invalidate any such estimate. This is a play on the looming changes in the car and energy industries. To profit from the electric car race, you have to back the winner. Missing out is costlier than backing a few losers along the way.
Hedge funds love the stock because it is so volatile. No one can make up their mind whether it is for real.
Mr Musk stands at a crossroads of three industries that have always been rich in swashbucklers and hype: energy, cars and technology.
Energy has its wildcatters, oil and gas men who build great fortunes starting with nothing but a wide-brimmed hat and a hole in the ground.
The car industry has long attracted adventurers. William Durant sold cigars and carriages before founding General Motors and hiring Alfred Sloan to run it. During the 1920s, he became a major player on Wall Street. But he was ruined in the crash of 1929 and ended his life invalided by a stroke and managing a bowling alley in Flint, Michigan. In the late 1970s, John DeLorean, a GM executive who made his name building muscle cars, raised money from his celebrity friends and a British government desperate for an industrial manufacturing success to build the DMC-12, an all-steel, rustproof sports car with gull-wing doors. The venture imploded in 1982 when DeLorean was arrested with 55 pounds of cocaine and charged with trying to sell it to finance his flailing company. His car may have been a clunker, but it was immortalised as a time travel machine in the 1985 movie Back to the Future.
Then there is the technology industry, which rewards absurdly big thinking. You do not get to a Tesla-sized valuation by playing coy. Investors, employees and customers all want to hear you say you are going to be massive. Facebook, Google, Apple massive. That is what attracts the talent and the money.
if you try to be rational, you are missing a big point in Mr Musk’s favour. Silicon Valley is currently obsessed with cars. More than that, those who mutter about the lessons of the last dotcom crash could be missing out on the next Amazon. If you had written off Jeff Bezos’ hubris, you would have missed one of the great investments of our age. You buy Tesla today so that in years to come, you can say you were there.
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