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To reinvent our economy we need to reframe the debate

How we can make our economy deliverThe left needs to reframe the debate by imagining a different way of running our economy.

In his Guardian column last week, Oliver Burkeman commented on the reclining airline seats ‘war’ by saying, “Stop arguing. Capitalism already won this stupid war“. It’s not the fairness of reclining or not, it’s because airlines cram so many people into planes to maximise profits. Essentially he was saying, the moment you agree to the terms of the argument, you’ve lost.

For a generation the right has dominated the terms of debate on the economy. Privatisation, free market economics, the primacy of business and financial interests have all been key markers for the hegemony of elite vested interests over that of the common good. If we are to make the case for reinventing the economy, as this week’s conference in Glasgow did, we need to reframe the debate.

One approach is set out in a research paper written by an international group of academics. They found that public policies that attempt to insulate citizens from the ups and downs of the market economy appear to promote greater human happiness for all citizens in society. They stepped back from simply looking at narrow economic indicators. Their statistical analysis reveals a consistent result across four measures of state intervention, that citizens are more satisfied with their lives in countries where the government more actively intervenes into the market economy. The difference between countries isn’t marginal either. It’s as big as the difference between someone who is married compared to unmarried and someone who is employed compared to unemployed (two of the most common predictors of subjective well-being).

This also reflects the work done by Oxfam in their Humankind index and Wilkinson and Pickett in The Spirit Level. Their international comparators showed that more equal countries do better on almost every measure. More equal countries are also more likely to use the state to intervene to a greater degree and rely on public services, rather than the market, to tackle inequality. Even OECD data supports this conclusion.

If happiness is a bit esoteric and you like your economics more hard edged, then as I wrote last week, the negative consequences of inequality has other unlikely adherents, including the Governor of the Bank of England.

One of the keynote speakers at this week’s conference was Professor Andy Cumbers from the University of Glasgow. He argues that new ideas are emerging about how we can develop more democratic, egalitarian and environmentally sustainable forms of economy as an alternative to the current political economy of neoliberalism. He has written a report for the think tank CLASS that argues for a range of hybrid forms of collective ownership geared to social and environmental ends rather than private profit. The report draws from a range of examples around the world to advocate a diversified mixed economy geared towards democratic, participatory and decentralised public ownership rather than either state centralisation or the growing corporatisation and financialisation of the economy.

Interventions in the form of greater public ownership is also popular, an important factor for credible mainstream politicians. A poll for CLASS found a lack of faith in private sector control of public services, with 12 to 1 people against the NHS being run by the private sector. 67% in favour of Royal Mail being run in the public sector, 66% want railway companies to be nationalised, and 68% are in favour of nationalised energy companies. The poll also suggested support for Labour’s policy to freeze energy bills for 20 months, with 74% of people in favour of governments having the power to control energy prices. But the poll also suggested the public would like Labour to go further – nearly three quarters of people think the government should also control transport costs.

New forms of public ownership and other forms of state intervention are one of the ways to ensure our economy is designed to serve social needs and environmental concerns over the rapacious demands of private gain. The evidence shows that this creates a better, happier society as well. It’s also popular, not unimportant when we are seeking political change. Most importantly, like the airline seats, we need to reframe the debate away from neoliberalism.

This article first appeared on Dave’s blog where a full report of the conference also appears

Image credit: Reinvent our economy

One Comment

  1. PoundInYourPocket says:

    Excellent article, the present Labour party need to disinfect their blood-stained hands and get fully behind this as a major policy drive (2020 election) showing people that there is a far better way to deliver services and that the country can be run in the interests of the people rather than the profiteers.

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