Tagged with Corbynomics

What level of investment should Corbyn & McDonnell aim for?

Corbynomics1-2The policies outlined by Jeremy Corbyn and John McDonnell have the capacity to transform the economic debate in Britain. More importantly, if the ideas outlined for an investment-led recovery are implemented then they could alter the trajectory of the British economy, from stagnation and rising inequality towards sustainable growth and a general rise in living standards.

Therefore it is important to examine thoroughly what is the scale of the investment needed, which areas will be prioritised, what will be the overall effects on the economy, how it will be funded, and a number of other questions. Here, only an outline of the first question is addressed, what is the scale of the investment needed? Continue reading →

Welcome to a constructive critique of Corbynomics from Liam Byrne

Liam Byrne 1Something more significant than the move against Andrew Fisher happened on the right of the Labour Party last week. It was Tuesday morning, in fact, and the occasion was Liam Byrne’s speech to the Policy Network.

Of course, MPs, particularly former ministers, give speeches to think tanks all the time and most float under the radar, noted only by the hardest of hardcore politics watchers and professional policy wonks. It’s just a shame this one hasn’t received wider coverage because in it, as one of its leading figures, Liam reads Blairism and New Labour the last rites.

In a nutshell, neoliberalism is dead. The unthinking application of its policies are undermining the health of capitalism, both in terms of destroying the social capital on which market economies depend and proliferating the short-termist culture that goes hand-in-hand with widening global inequality. Hence Labour has to move away from an unquestioning embrace of markets and start thinking another kind of capitalism, or what Liam refers to in his speech as ‘entrepreneurial socialism‘. Continue reading →

“Butskellism” versus Keynes and Marx

Corbynomics1The debate is continuing on the purpose of government borrowing and the role of ‘balanced budgets’ – which was started by John McDonnell’s position of balancing the budget on current expenditure but borrowing for investment. This is not surprising given that economic policy has to be the core of the programme for a Labour government.

A thoughtful addition to the debate is this piece by Jo Michell in the Guardian, who asks for a real alternative to Osborne, which SEB has provided in relation to the Fiscal Responsibility Act. But an important misunderstanding should be clarified. That article argues that advocacy of a balanced current budget over the business cycle would be to ’emulate Ed Balls and austerity lite.’ That is incorrect. It would only be the case if the level of government investment were maintained at current miserably low levels. Instead what is proposed here is a transformational increase in public investment, sufficient to foster a sustained recovery led by public investment. Far from this being ‘austerity lite’ it makes state driven investment a key to economic policy – entirely unlike the policy of Ed Balls.

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Austerity – It’s Not Working and it’s Not Popular!

laaa-tall-smallJeremy Corbyn’s landslide victory in the Labour leadership election was the clearest sign yet that not only is austerity not working, it’s increasingly not popular.

Before Jeremy’s entrance into the leadership race, on a clear anti-austerity platform that argued for a progressive alternative based on investment rather than cuts, the leadership campaign had begun with a gallop to the right to such a degree that the acid test seemed to have become whether you were willing to denounce New Labour’s spending as being too high! Continue reading →

Putting the Political back into Political Economy

Corbynomics1The reaction to John McDonnell’s announcement that he would aim for a balanced current account, whilst maintaining borrowing for capital investment, revealed a recurrent fault line within left-wing economic thought. At its most banal McDonnell was accused of signing up to George Osborne’s ‘austerity charter’, whilst more sophisticated critics argued such policies would weaken demand and harm economic growth. This article will not address the technicalities of figures and whether Labour should borrow limited amounts rather than aim for a balance (see a critical account here). Instead we will focus on the key political division the fallout from this announcement has revealed, and what it says about the character of ‘Corbynomics’, and the barriers it faces. Continue reading →