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Over recent weeks, Britain’s mass media claim to have discovered “Corbynomics.”
Labour Party leadership contender Jeremy Corbyn is apparently threatening to throw a potent Molotov cocktail of untried economic ideas and policies into the calm waters of Britain’s economic recovery.
Alarm at such a lethal prospect has swept across the worlds of business and media and is now provoking cries of distress from rival contenders as well as assorted Labour “grandees.”
And yet, Corbynomics is a myth.
As 42 economists pointed out at the weekend, what Corbyn proposes is a modest programme of state intervention to boost, rebalance and modernise Britain’s sluggish, unbalanced and creaking economy.
Instead of slashing welfare spending by an extra £12 billion over the next five years, he proposes to reverse the tax cuts for the rich and big business and reduce Britain’s budget deficit through economic growth rather than austerity.
As the 42 point out, this is an approach favoured by powerful figures within the International Monetary Fund, which is hardly a hotbed of Marxist political economy.
He proposes selective nationalisation in the transport and energy sectors to secure the planned and sustainable development of key strategic industries.
Public-sector financial mechanisms, including nationalised banks such as RBS, would be deployed to promote infrastructure investment, technological innovation, green industries and council housing.
In particular, Corbyn advocates a form of “quantitative easing” for the people instead of for the City of London and its financial institutions.
Under such a scheme, the Bank of England would create money to buy bonds issued by a National Investment Bank to fund specific projects.
Over the past six years, Labour and Tory-led governments have handed £375bn to banks, insurance companies and pension funds to redeem mostly state-issue bonds, in the mistaken belief that the money would be used to stimulate economic demand, investment and the housing market.
All we have seen in return are fatter corporate bank balances and an inflating property price bubble.
Why should it be regarded as “extreme” to ensure that future QE actually benefits the economy, as intended under Labour and pretended under the Tories?
Why should extensive public ownership of the railways, electricity, gas and water be regarded as so outlandish when it remains the norm in Germany, France and other advanced capitalist economies?
To listen to Andy Burnham, Yvette Cooper and Liz Kendall, a bevy of privatised Labour ex-ministers and all their Tory backers, it might be thought that anyone who upholds the value of selective state intervention — from Angela Merkel and François Hollande to Harold Macmillan and Clement Attlee — are disciples of Stalin, five-year plans and monopoly state ownership.
The proposed National Investment Bank is reminiscent of Labour’s National Enterprise Board in the 1970s, championed by arch-Bolsheviks Harold Wilson and James Callaghan, which — for all its weaknesses — rescued British Leyland, Rolls-Royce, Ferranti and BTG (now a world leader in MRI technology) from private-sector ruin.
Furthermore, Corbyn includes measures in his manifesto to assist small businesses, co-operative enterprise and private-sector investment in new technology.
Yet such is the domination of economic neoliberalism today over Britain’s mass media, academia and the political establishment — including its tame parrots inside the Labour Party — that he and his policies are condemned as reckless.
Over recent weeks, Britain’s mass media claim to have discovered “Corbynomics.”
Labour Party leadership contender Jeremy Corbyn is apparently threatening to throw a potent Molotov cocktail of untried economic ideas and policies into the calm waters of Britain’s economic recovery.
Alarm at such a lethal prospect has swept across the worlds of business and media and is now provoking cries of distress from rival contenders as well as assorted Labour “grandees.”
And yet, Corbynomics is a myth.
As 42 economists pointed out at the weekend, what Corbyn proposes is a modest programme of state intervention to boost, rebalance and modernise Britain’s sluggish, unbalanced and creaking economy.
Instead of slashing welfare spending by an extra £12 billion over the next five years, he proposes to reverse the tax cuts for the rich and big business and reduce Britain’s budget deficit through economic growth rather than austerity.
As the 42 point out, this is an approach favoured by powerful figures within the International Monetary Fund, which is hardly a hotbed of Marxist political economy.
He proposes selective nationalisation in the transport and energy sectors to secure the planned and sustainable development of key strategic industries.
Public-sector financial mechanisms, including nationalised banks such as RBS, would be deployed to promote infrastructure investment, technological innovation, green industries and council housing.
In particular, Corbyn advocates a form of “quantitative easing” for the people instead of for the City of London and its financial institutions.
Under such a scheme, the Bank of England would create money to buy bonds issued by a National Investment Bank to fund specific projects.
Over the past six years, Labour and Tory-led governments have handed £375bn to banks, insurance companies and pension funds to redeem mostly state-issue bonds, in the mistaken belief that the money would be used to stimulate economic demand, investment and the housing market.
All we have seen in return are fatter corporate bank balances and an inflating property price bubble.
Why should it be regarded as “extreme” to ensure that future QE actually benefits the economy, as intended under Labour and pretended under the Tories?
Why should extensive public ownership of the railways, electricity, gas and water be regarded as so outlandish when it remains the norm in Germany, France and other advanced capitalist economies?
To listen to Andy Burnham, Yvette Cooper and Liz Kendall, a bevy of privatised Labour ex-ministers and all their Tory backers, it might be thought that anyone who upholds the value of selective state intervention — from Angela Merkel and François Hollande to Harold Macmillan and Clement Attlee — are disciples of Stalin, five-year plans and monopoly state ownership.
The proposed National Investment Bank is reminiscent of Labour’s National Enterprise Board in the 1970s, championed by arch-Bolsheviks Harold Wilson and James Callaghan, which — for all its weaknesses — rescued British Leyland, Rolls-Royce, Ferranti and BTG (now a world leader in MRI technology) from private-sector ruin.
Furthermore, Corbyn includes measures in his manifesto to assist small businesses, co-operative enterprise and private-sector investment in new technology.
Yet such is the domination of economic neoliberalism today over Britain’s mass media, academia and the political establishment — including its tame parrots inside the Labour Party — that he and his policies are condemned as reckless.
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