Tagged with Keynesianism

Jeremy Corbyn is a common sense, mainstream Keynesian

Coprbyn and KeynesFormer UK Labour minister and  leadership candidate Bryan Gould has a long-distance view of the Labour leadership contest from the other side of the world, living in New Zealand

For New Zealand students of current affairs, the contest for the leadership of the UK Labour Party involves four names that will mean little – and, in that, they will not be too different from observers of the contest in the UK itself. Yet the emergence of one of the four candidates – Jeremy Corbyn – as the unexpected front-runner is worth a second look, not least for the lessons it might offer to left-of-centre parties around the globe.

Corbyn is a parliamentary veteran who has spent 32 relatively low-profile years on the backbenches – eleven of them, as it happens, while I was also in parliament. His reputation is that of an old-fashioned leftie – and he may have skeletons in his cupboard, especially involving his links with suspect overseas organisations. Continue reading →

A slow-burning revolution is starting to overturn neo-classical economic orthodoxy

KeynesAs the world struggles to deal with threatening outbreaks of violence – most dangerously, in the Middle East and the Ukraine – another less dramatic and slower-burning revolution is getting under way. This revolution does not threaten violence – but it does promise change, and almost certainly change for the better.

The revolution that is gathering pace is a shift in understanding and increasingly in policy. What we are now beginning to see is the painfully slow and invariably reluctant abandonment – in the face of evidence that is now impossible to ignore – of an economic orthodoxy that has dominated the global economy for nearly four decades. Continue reading →

Deficit rise this year destroys any purported case for austerity

Austerity is failingThe latest ONS Quarterly National Accounts tell a very significant story. For the media it was immediately a matter of Osborne likely not being able to provide a pre-election giveaway in a big new tax break to be announced in his Autumn Statement on 3 December. But that isn’t the real point at all. A far more significant issue is that it spells the end of Osborne’s case that austerity is necessary to cut the deficit. If the deficit starts to rise rather than fall, the case for continuing with austerity and perpetual spending cuts collapses. That is exactly where we now are, although no-one, including the Labour Party, is saying so. This is now the opportunity for Labour to say loud and clear that Osborne’s policy has hit the buffers and is now intellectually and politically bankrupt and that the alternative policy of expanding the economy, as opposed to endlessly contracting it, is now the only viable game in town. Continue reading →

Why trust Labour to implement austerity when Tories do it with more conviction?

BallsLabour leaders have often been eloquent in articulating a vision of the kind of society they want; it is explaining how that vision is to be realised that seems to be the problem.

We have seen a further demonstration of this sad truth at this year’s Labour conference. Ed Miliband had good things to say about Labour’s goals, but Ed Balls made it clear that those goals would have to be achieved within the constraints of the current neo-classical orthodoxy.

The subordination of lofty aspirations to the harsh and supposedly inexorable dictates of “free-market” economics has a long and sad history in Labour politics. Harold Wilson, for example, destroyed the chances of his 1960s government with his long and ultimately fruitless battle against devaluing the pound. Continue reading →

The economic contradictions of Mr Miliband

Two faces of MilibandThere is much to welcome in Ed Miliband’s address last Saturday to the Labour Party’s national policy forum. For example, his argument that Britain suffers from a low-pay economy. While the number of those in employment has grown, real pay has fallen dramatically over the lifetime of the present government.

At PRIME, we calculated the fall in real pay from May 2010 to May 2014 as 6.1%, using the CPI inflation and total pay stats from the Office for National Statistics. In his weekend column in The Independent on Sunday, David Blanchflower estimates the fall in real pay as 8% over the identical period, using the somewhat higher (but now less “official”) RPI inflation numbers. Continue reading →