Category Archives: Poverty

Reviews of John McDonnell’s ‘somewhat alarming publication’

Chris Giles, Economics Editor of the Financial Times, reviews Economics for the Many, a collection of essays by leftwing thinkers who support the Labour party leader Jeremy Corbyn, with an introduction by John McDonnell, the shadow chancellor.

Giles agrees that there is an urgent need for a galvanising economic manifesto for the new left in British politics, because the UK economy has performed poorly since the global financial crisis a decade ago, with stagnant real wages, feeble productivity growth, large cuts to vital public services and many households finding either good jobs or affordable housing out of reach.

“At the core of this programme is a new set of models, institutions and strategies that, if put in place, would in and of themselves produce vastly improved societal outcomes”. It includes:

  • a plan to build a radically fairer and more sustainable society, in which wealth is shared by all.
  • changing the ownership of companies,
  • ending short-termism in the financial sector,
  • a programme of green investment
  • and much greater regional devolution of state powers.

Giles notes some inconsistencies and omissions and complains that “precious little space is devoted to how Britain should deal with an ageing society, housing or how to manage the existing public sector responsibilities of health, education, police or the armed forces”.

He concludes: “If you want a new left coherent programme, this is not it . . . But for all its flaws, the book serves a useful guide to the thinking and language of the new left. Fellow travellers must oppose austerity, financialisation and neoliberalism, while rising to the challenge of radical democratic ownership of the means of production”.

The book will be available in paperback this month and its online blurb says: “With the election of Jeremy Corbyn as Labour leader, and the extraordinary turnaround in Labour’s fortunes in the 2017 election, we have a real opportunity to build an economy in Britain that is radically fairer, radically more democratic, and radically more sustainable”.

oOOo 

The Telegraph’s Liam Halligan writes in the Spectator: Those wanting an idea of how the world’s fifth biggest economy might look under Prime Minister Jeremy Corbyn should take a look at McDonnell’s speech. For more detail, you can read the book he edited – Economics for the Many – published just before the conference . . .

McDonnell (above) writes: ”Calls for the nationalisation of water, electricity and gas, the Royal Mail and trains, greeted with howls of outrage and press derision, are very popular with the public”.

Halligan comments. “To some extent, that’s true. A recent YouGov poll suggested around 60% of voters think the railways and Royal Mail should be back in public hands, with half wanting water and energy companies re-nationalised”.

He touches on some of the inconsistencies voiced by Giles but continues: “Having said that, this volume does pose some relevant and pressing questions – with McDonnell asking, for instance, if government should ‘deal with Big Data’ by creating ‘new digital rights’. He singles out:

  • a chapter by technology researcher Francesca Bria on ‘surveillance capitalism’, which raises similar key issues, ranging from ‘the monopoly power of the tech giants’ to ‘a new tax on digital platforms’;
  • an argument by Prem Sikka, the respected accountancy academic, that ‘tax revenues are under relentless attack from wealthy elites’ and ‘tackling tax avoidance and evasion is one of the major social and political issues of our time’. He’s not wrong;
  • Ann Pettifor’s call for investment into jobs relating to renewable energy – a policy we’re hearing much more of, after 28-year old Alexandria Ocasio-Cortez won the New York Democrat primary this summer, on a ‘Green New Deal’ ticket. Almost certain to enter Congress in November, her agenda will be catapulted into the political mainstream;’.
  • Christopher Proctor’s chapter about the need for academic economics to get beyond its ‘theoretical strait-jacket’, to become ‘more open, diverse and relevant to the real world’ and
  • McDonnell’s call for ‘a real devolution of powers and resources out from the centre’ of the UK -adding it is, indeed, disturbing Britain is ‘the most geographically unequal country in Europe’ – with ‘the richest single area – central London – but also nine of Northern Europe’s ten most deprived areas’.

Labour’s 2017 manifesto promise of a corporation tax rise from 19% to 26% (the Tories plan a cut to 17% by 2021) and the party’s proposal for public spending to increase by around £75bn, a 10% uplift, over the next three years, leads Halligan to warn, “Such measures could well result in a much weaker currency, higher interest rates and slower growth. Similarly, Labour’s share transfer plans may provoke capital flight, curtail investment and, in the words of the Confederation of British Industry, ‘crack the foundations’ of prosperity’ “. And Halligan ends:

Amid corporate scandals, a massive housing shortfall and polarising wealth inequality, UK capitalism faces a crisis of confidence. Senior Tories, if they fail adequately to respond, are fools. For, as McDonnell writes in this somewhat alarming publication, his ‘better world is in sight’ “.

 

 

0

Piloting Basic Income as Common Dividends: a report presented to the Shadow Chancellor of the Exchequer

Piloting Basic Income as Common Dividends may be downloaded here.

The Progressive Economy Forum was founded in May 2018 and brings together a Council of eminent economists and academics to develop a new macroeconomic programme for the UK. The dominant economic ideology, neoliberalism, has served to entrench inequalities, undermine public service provision, and accelerate the pace of environmental breakdown. The 2007-08 financial crisis should have been a watershed moment; instead, the same ideology prevailed unchanged, blighting our recovery and leaving us unprepared for the challenges of the 21st century.

Foreword Patrick Allen, Chair of the Progressive Economy Forum

I am delighted on behalf of the Progressive Economy Forum to have supported the preparation and launch of this report into piloting basic income for John McDonnell, the Shadow Chancellor of the Exchequer.

Our system of social security is in crisis and has moved far from the scheme devised by William Beveridge, which was intended to banish want forever and provide security from cradle to grave.

Since 2010, social security has been subjected to significant cuts and a massive redesign, of which Universal Credit is the latest example. Many benefit rates have been frozen while tax allowances are regularly uprated for inflation. Conditions and sanctions are imposed routinely on vulnerable people leaving them with no means of support or money to buy food and ineffective rights of appeal. These draconian and intrusive measures have led to stress, hunger, evictions and suicide. Food banks, which scarcely existed before 2010, are now to be found in every major town and city.

There has to be a better way and as the fifth largest economy in the world we can clearly afford to do better. No one in this country should be so poor that they cannot afford to buy food for themselves and their children. No one should be subjected to capricious sanctions that summarily take away all means of support for weeks or months at a time.

Guy Standing has promoted the concept of basic income for many years and is a world authority on the subject. Basic income has been the subject of much debate. This paper deals comprehensively with the common objections but importantly moves the debate on to the question of pilot schemes, how to design them and where they should be carried out.

An effective pilot has the ability to demonstrate the strengths or short comings of a basic income scheme. Pilots have been tried in many countries – recently Finland and the Netherlands. Now it is our turn and I hope that the next progressive government will make it a priority to design and implement a pilot.

Something must be done to reform our social security system to provide security to all our citizens and basic income could be the way to do it. If it helps to abolish sanctions and render food banks unnecessary that alone would a major achievement. But much more than this is at stake. By providing our citizens with security for their basic needs of a home, subsistence and health we lay the foundations for a prosperous and sustainable economy for the benefit of all. 

 

In 2018 this site reported the finding of  Populus research for the RSA  that the public as a whole is open to the idea of a Basic Income – a regular payment made by government to citizens – especially in the context of rising economic uncertainty. 40% would support local Basic Income experiments in their area, 15% would be opposed.

 

 

 

o