By BAGEHOT

SO FAR the Labour Party’s annual conference has very much been John McDonnell’s. The shadow chancellor not only delivered today’s keynote address in the main hall. He’s been ubiquitous in the media and on the fringe. This is as it should be. Mr McDonnell has provided the Labour Party with the closest thing that it has to a radical new idea: forcing companies to give their workers shares worth perhaps 10% of the total.

Mr McDonnell’s big speech was hardly a rhetorical triumph. His voice was beginning to fail (he’d repeated Theresa May’s mistake of giving too many interviews on his big day, but without such disastrous consequences). He engaged in a spell of Trump-style press bashing by praising Jeremy Corbyn for standing up to press “attacks” over anti-Semitism. He raised the issue of Brexit only to say nothing of any interest other than that Labour wants a general election (“bring it on” provoked predictable applause). He ran out of energy towards the end. But it did give us an insight into the way that a man who could easily be Britain’s next chancellor of the exchequer views the world.

And it was undoubtedly bold. At last year’s conference Mr McDonnell was in his responsible-bank-manager role: trust us to run the economy better than the other lot. This year he didn’t try to conceal the scale of his ambition to shift the balance of power from capitalists to workers. He insisted that “the bigger the mess we inherit the more radical we have to be”, and he provided a fairly comprehensive list of what might be done to clean up the mess. The Labour Party clearly not only believes that it might win the next election but that it might get a mandate for a far-reaching agenda.

The pillars of McDonnellism are “public ownership” and “democratisation”. Mr McDonnell pointed out that this year marks the hundredth anniversary of Labour’s adoption of Clause Four (which commits the party to the “public ownership of the means of production, distribution and exchange”). He declared to resounding public applause that the principle is more relevant than ever. He also asserted that “democracy” doesn’t stop at the factory gates or office door. He wants a full-scale adoption of industrial democracy (which in practice will mean activists boring everybody else into submission and then passing mysterious “composite motions”, just as happens in the Labour Party). He also wants workers to make up a third of company boards.

Mr McDonnell descended from these lofty heights to outline his policies for “reprogramming capitalism”. There were familiar blunt instruments: a £10 minimum wage; sectoral collective bargaining; the closing of the gender pay gap. But there were also some more subtle ideas. Mr McDonnell wants to rewire the Treasury to convert it from a block on “progressive reform” into an agent of regional regeneration and public investment. More dramatically still, he wants to “rewire” the public corporation to solve everything from Britain’s curse of short-termism to the perennial hostility between workers and managers. Mr McDonnell wants to force “big” companies to give 10% of their shares to their workers. These shares would be put into a collective fund that would do three things: pay a maximum £500 in dividends every year to workers; plough money back into the company; and plough any further money back to the taxman to pay for “social investment”.

It’s not clear whether this is a political winner. The generally rapturous audience treated Mr McDonnell’s ideas with boredom verging on indifference. A woman sitting in front of your correspondent who cheered wildly at every mention of a “composite motion” remained mercifully silent. The audience was much happier when Mr McDonnell talked about nationalising the utilities. The default mindset of Labour Party members is still very much what it was before Tony Blair: nationalise what you can and then champion “us” against “them” in the private sector. To this world view, worker share-ownership is a push-me-pull-you.

What about the practical merits of Mr McDonnell’s ideas? There is an interesting debate to be had about companies giving workers shares. The argument against is based on diversification: you don’t want to hold shares in the company that also pays your salary. Just ask Enron’s employees about their Enron stock. The argument in favour is about motivation: there is some academic evidence that people work harder and strike less if they have an ownership stake in their companies. The John Lewis Partnership has done well out of this model (though its recent performance has been disappointing).

But so far Mr McDonnell’s ideas are badly worked out to the point of irresponsibility. The shadow chancellor’s blueprint fails three basic tests. It fails to respect property rights—what he’s advocating is essentially the expropriation of a significant quantity of shareholder wealth (what Mr McDonnell’s guru, Karl Marx, called “the expropriation of the expropriators”). This would cause a huge capital flight which would severely damage the British economy (which is one of the most globalised in the world) while ensuring that the shares that the workers were given would be of declining value. It would give control of shares to an ownership fund rather than to the employees. Mr McDonnell’s plan would do little to change employee incentives since employees would get such a small pay-off (£500) with the rest going to the taxman. Mr McDonnell seems to be more interested in raising taxes on corporations (which can easily move abroad) than he is on changing the wiring of capitalism. It also raises the possibility that Mr McDonnell’s scheme would turn into a British version of “black empowerment” by which the state appoints well-connected people to control investment funds and run companies.

Mr McDonnell has also failed to provide answers to crucial questions. How would his ideas apply to foreign-owned firms? Would UK-based staff get a tenth of all the capital of a multinational? And if so wouldn’t sensible multinationals immediately close down their British operations? How would the idea apply to firms which only have a small proportion of their employees in the UK (such as Rio Tinto, BP and HSBC)? Wouldn’t they be gone in a jiffy? And how would Mr McDonnell’s idea apply to foreign firms with British subsidiaries? What makes Mr McDonnell’s blueprint even more annoying is that there is a much easier way to increase share ownership: creating tax breaks for share awards.

Mr McDonnell deserves praise for presenting the closest thing to an actual idea to the Labour Party Conference. It’s a pity it’s such a dud.