The Parliamentary Labour Party are currently very flustered by the possibility that their next leader could be militant hard-leftist Jeremy Corbyn, a man who saw the 1983 election manifesto as poorly presented but otherwise tremendous in every way. The Conservative Party are torn between those who see it as a guaranteed third term, and those who are concerned about the effect this will have upon the government.
I hold no position upon whether Corbyn being elected as the Labour leader would be good for the country. However, I feel that it is worth explaining precisely why I hold no position.
Like most observers, I think that Corbyn's election would be a disaster for the Labour party as it currently exists. Some have suggested that either he will get knifed by some upstart or there will be a schism with many members leaving to form a new party. I wouldn't count on this, largely because no-one ever looked at all like doing this to Ed Miliband despite him facing many of the same criticisms of being too left-wing and union-dominated. The Green Party will probably lose a lot of voters, given that Corbyn appeals to the same demographic that they rely on (i.e. white, public sector, high self-perception of intelligence).
But that's not something I especially care about. The Labour Party will fix itself or it won't, and if it doesn't then it will be shut out of power until the next major crisis. (By "major crisis" I mean something sufficient to render a government party unelectable, such as the Suez Crisis or one of those European-style debt crises).
The effect on the governing Conservative party is what worries me. I really don't know how they will behave, because I really lack a model for the behaviour of political parties.
As an analogy to my difficulty in modelling parties, let's go into how economists model firms. This is a field which was opened by the late Ronald Coase in a 1937 paper called "The Nature of the Firm". Coase assumed that, just as individuals were until recently taken to maximise their utility, firms would act so as to maximise their profit. It's a plausible assumption, clearly true to at least some extent (firms which fail to make profits will go out of business) and above all it makes models tractable.
But then William Baumol came along and pointed out that many firms are owned by shareholders but managed by people who may not themselves be shareholders. Under these conditions, especially in uncompetitive markets, firms may act so as to achieve other ends unless the shareholders can effectively exercise control over the managers' actions - and if they could, then what would be the point of having managers? Baumol suggested that firms act so as to raise the prestige of managers, which may be done less by maximising profit so much as maximising market share or sales.
Later, Oliver Williamson came along with yet another theory. He thought that managers face pressure to "satisfice" on profit - to acheive a certain minimum level of profitability for the firm. Beyond this, he thought, money can be frittered away in all kinds of ways, generally with minimal real effect upon the actual productivity of the firm (chauffeur-driven cars, fancy offices, charity programs, etc).
When modelling the behaviour of a firm, an economist must choose one of these models (or one of the presumably many others - there were only the ones covered in first-year microeconomics). Similarly, when modelling the actions of a government one needs a model for how it behaves.
One possibility is that parties act so as to maximise vote share. In a two-party system this leads to virtually indistinguishable parties; once you add in more parties it becomes more complicated, but I think that this is a plausible model for most actions. This would imply that in response to Labour unilaterally moving to the left, the Tories would also move left. I would view this as bad.
Alternatively, perhaps parties satisfice on votes and maximise ideological purity. This is another plausible theory, and suggests that the government may become more right-wing economically (maybe yay?) and/or more authoritarian (boo!). (This is of course assuming that politics follows the two-axis model of economic left-right and social liberal-authoritarian. I actually think that, in terms of practical politics, this does a reasonable job, even though in the world of ideas it is grossly inadequate).
Perhaps parties simply reflect the feelings of those in charge of determining policy. In which there is no particular reason to think that Corbyn's election would change the actions of the government, but would make a Tory third term more likely than a Labour takeover of government. This is maybe good?
If I put more thought in, I daresay I could come up with a whole bunch of other models and look at their implications. The problem is that I don't know which of them is most accurate (indeed, if Corbyn were actually elected and ran a far-left opposition then this would seem like a severe challenge to at least two of the models I have suggested, whereas rebellion against him would severely undermine the remaining one). So I really have no idea what the effects of Corbyn being elected would be.
All that said, it would be funny if he won.