It’s not hard to be pessimistic. No party in Britain has won the 125 seats necessary to form a government from such a base in modern times. The coalition of traditional working class and liberal middle class that has sustained the Labour Party for most of its history is coming apart.  Brexit has cemented the triumph of identity over class based politics. Across Europe, parties of the left are in retreat. Every non-Tory can list Johnson’s existential failings, but he – to a degree like both Thatcher and Blair – is a consummate politician. He has remade the political map. Who with similar élan and daring exists on the Labour side?

For my money, sustaining Labour’s position as a left party starts with a critique of capitalism, embeds a feasible programme to reform it that makes sense to mainstream lives and goes on to sell it to the electorate, building as wide as possible a coalition of support as possible. It is the same task in 2021 as it was in 1971, as it was in 1921. It can and must be done.

For it is mutating, dynamic, ever changing capitalism that shapes our economy, society and lives. Unless the party of the left has this phenomenon firmly in its sights and how changing it will improve the mass of lived lives for the better, it has lost the plot. It must possess a captivating vision of a better tomorrow. But today’s capitalism is a harder and more complex target than the capitalism that gave birth to the labour movement. It contains elements of good alongside bad: the left has to be more forensic in its analysis. Not every firm in private ownership is somehow the enemy to be distrusted for its very privateness. What it does mean is understanding the dynamics of what capital is doing and why, benchmarking it against what better could be happening, praising what is good, deploring what is bad and proposing everything possible to produce more good than bad.

Thus, today, many privately owned companies with quotations on public stock exchanges behave well. They curate, train and pay their people well; they can be held to account for their actions; they anchor the communities in which they trade; they innovate; they pay their taxes; they aim to be net zero emitters of carbon by 2050 if not sooner; they declare that their organisations put a purpose to promote societal benefit before profit. The men and women who lead them are by and large honourable, sometimes inspiring. In a series of interviews I undertook recently with leaders of purpose-driven organisations in the Purpose Tapes (www.thepurposefulcompany.org), I was often inspired by what I heard: they would not for a moment tolerate the incidences of bullying, racism, and misogyny in their organisations that have surfaced in our political parties for example – and the degree to which they looked out for their staff during the pandemic was extraordinary. 

But they are not the majority. Britain is in the midst of the euthanasia of such public companies: there are only 1000 quoted companies compared to 4000 thirty years ago. More and more economic activity is wholly private, going underground. Some companies are being extinguished by foreign takeover, but the most dynamic agent of change is private equity. When it falls to the Daily Mail to mount a vigorous campaign against the incursions of private equity into the warp and woof of our business life, supported by leading investment management groups like M and G who deplore how assets are being cheaply sold, be sure something has gone very seriously wrong. The party founded to critique capitalism has lost its voice.

More public companies have disappeared this year already than in fifteen years; more are set to follow them. The business model that devours them is not based on innovation, investment and creativity: it is pure financial engineering, supported by tax breaks, in which employees are work-horses to be paid as little as possible, and to be as disposable as possible in the service of making the firm’s partners as rich as possible. There is no career for a recently qualified apprentice or graduate in a company owned by private equity, nor any interest in schooling and developing them. They are disposable notations on a spread sheet.

At least we know who the private equity firms are. A new phenomenon, the Special Purpose Acquisition Company or SPAC, does the same but is anonymous: we don’t know who these monsters are, where their money comes from, who runs them or where they are domiciled. Armed with trillions, they roam the world’s stock exchanges looking to take-over public companies and treat their assets and workforces the same way. There is a vast asset management industry that manages our collective savings, yet little way of ensuring that it insists that the companies in which it invests behave in ways that the ultimate owners – you and me – want. One of. Its problem is that, as the number of public companies declines, it is forced to invest our collective savings in private equity groups or SPACs – only receiving morcels from the table.

The chance of pursuing a worthwhile career, of being paid reasonably for hard work, of bringing up your family well in a well-appointed house, of being able to offer your kids comparable chances to yourself, and of receiving a good pension in retirement are diminishing by the year – and all to create dynastic wealth for some thousands of individuals who glory in hiding as much as possible of it from legitimate taxation. There is a lot else to talk about it and campaign on – climate change, the constitution and enfranchising the local, re-joining the European fold in the EU, support for new technologies, a new social settlement, proper lifelong learning and so much more  – but the central proposition on which the left must build its case and hold its ground with both the traditional working class and liberal middle class is the reform of capitalism. After all, both are threatened. Without that anchor and that conviction, it is policy formation by focus group – and the public quickly see through its shallowness.

Will Hutton is a political economist, author and columnist. He writes for the Observer, is principal of Hertford College, Oxford, and is co-chair of the Purposeful Company.