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”.
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’ “.