The last couple of days have been pretty hectic. The world noticed that Jeremy Corbyn was using my data on the tax gap and my ideas for what he has called People's Quantitative Easing, but which began life here as Green Infrastructure Quantitative Easing. Chris Leslie gave them the combined name of Corbynomics: I have to thank him for something.
I am, of course, not complaining. I have for more than a decade worked to develop new ideas on how to tackle poverty, develop the economy for the benefit of all people and not just a few and to reform the way in which the financing needed for essential investment can be provided. That the ideas have found a new home is, to me, very welcome and I am grateful to Jeremy Corbyn and his team for adopting them.
In saying that I want to make clear I am not the only person on whose ideas he has drawn. He has said publicly that he has also drawn on the ideas of Joe Stiglitz and I am aware that Ann Pettifor is also, very definitely, advising. I believe Prem Sikka might be too, and would rather hope he is. By no means all of them are Labour Party members. I am not. But we are drawn together by a shared concern and belief that Paul Krugman noted rather well in the New York Times this week:
[I]t's really important to understand that the austerity policies of the current government are not, as much of the British press portrays them, the only responsible answer to a fiscal crisis. There is no fiscal crisis, except in the imagination of Britain's Very Serious People; the policies had large costs; the economic upturn when the UK fiscal tightening was put on hold does not justify the previous costs. More than that, the whole austerian ideology is based on fantasy economics, while it's actually the anti-austerians who are basing their views on the best evidence from modern macroeconomic theory and evidence.
Hardly surprisingly I am inclined to agree, as I am also with this that he added:
Nonetheless, all the contenders for Labour leadership other than Mr. Corbyn have chosen to accept the austerian ideology in full, including accepting false claims that Labour was fiscally irresponsible and that this irresponsibility caused the crisis. As Simon Wren-Lewis says, when Labour supporters reject this move, they aren't “moving left”, they're refusing to follow a party elite that has decided to move sharply to the right.
I am quite sure that is true. I have already been asked by journalists a number of times this week where my political views are located on the left / right spectrum. Having made clear that I am not a party politician and endorse and only comment on the use of ideas and not parties I then do suggest that I have views that might suggest I am left of centre when it comes to inequality and the means of tackling it whilst remaining firmly committed to the merits of the mixed economy, which I outlined in The Courageous State. So I put myself in the middle. at most, on the left, being well aware that there are those far to the left of me whose ideas are far removed from my own and those that, for the record, I hear from Jeremy Corbyn and his team.
Despite this the media is in a frenzy, as is much of the Labour Party, about the 'hard left' and such terms. I am genuinely bemused by that. Not believing in the fantasy economics of austerity does not make a person hard left. Nor does believing that the state has a role in the economy make one hard left. And the IMF and OECD have both highlighted the harm caused by inequality and the role progressive taxation has to take in tackling it (although it cannot solve the problem without further action, on things like the minimum wage). In addition, how believing that the state should be responsible for providing the infrastructure that underpins a thriving mixed economy is 'hard left' baffles me: it is simply what has been shown to be as necessary as a well trained and healthy workforce who can live without fear of old age are to market prosperity.
So on the left, I agree.
Hard left? That's a joke. Middling, at most.
And of free and open mind to endorse at will? Most definitely.
But in that context it is quite clear that Paul Krugman is right: of all the Labour leadership candidates Jeremy Corbyn is the only one offering a credible economic policy right now, even if I accept I am a little biased on the issue.
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Well-your time has definitely come Richard and well deserved.
What is needed now is to educate the public and remove the (as Blake put it) ‘mind forged manacles.’
nearly 40 years of dumbed-downess-is this the beginning of the end ofr the ‘sleeping sickness’ or a false dawn? Let’s hope the former!
“I have for more than a decade worked to develop new ideas…and to reform the way in which the financing needed for essential investment can be provided”
Oh come on, printing money to finance government expenditure (which is what PQE is) is one of the oldest tricks in the book.
Your achievement, if any, is convincing people that this absurd policy is new.
So you have seen PQE before?
Where?
Although I am in favour of green/people’s QE I am concerned that it is going to get seriously attacked as a proposal from all sides and won’t win wide popular support, even more so than traditional borrowing to invest (though politicians currently don’t think they can suggest that either). But I’m thinking that might be an easier argument to win.
Jon Cruddas has been doing some polling:The polling shows that 56% of those surveyed agree, and just 16% disagree, with the statement: “We must live within our means, so cutting the deficit is the top priority.” (online Guardian article)
Talk about a leading question though! Who wants to say no, we shouldn’t live with in our means? The statement accepts an erroneous framing of the debate. I do think we need to argue against the current austerity narrative. Just think borrowing to invest might be easier to win than printing money to invest.
I have to disagree
And the Labour question is daft
It assumes that the narrative is unalterable
That is the core of its problem
Of course Crudas (aka ‘Crud-arse’) presumably hasn’t bothered to define what means actually are and as you say, the question simply perpetuates a myth about a sovereign currency being in short supply. re-education is needed here and I doubt Mr. ‘Vox populi’ Cruddas is the man to do it.
What is your take on the HMRC’s response to your use of tax debt as a part of the huge £120BN tax gap? They have said that that most of the tax debt is paid within a few days, and that over 90% of it is paid eventually.
Of course, you are an independent economist and accountant and the tax gap you calculate is perfectly representative of the tax gap on any one day, but do you think that Mr. Corbyn’s use of the 120 billion figure in order to finance expenditure/end austerity is based on the faulty understanding that most of the third component of that figure (tax debt) is in fact not truly part of a wider tax gap at all?
First, like most HMRC stats that one is mis-stated
Second, when they explain why they right off so much debt before it even reaches the point of collection I will believe their claims
The “hard left” thing seems to be more of an internal Labour issue in that there has been a socialist activist rump in the party since New Labour who have always been regarded as a pain. That these people support Corbyn is what leads him and the ideas he promotes to be “hard left”, when it could be argued that in fact this faction, in supporting Corbyn are moving to a more moderate position. The agenda Corbyn is working on is not an outright attack on neoliberalism so much as an alternative to the current advancement of that agenda. In political terms the danger to his leadership comes from the right of his party, who, if they fail to support him, could push him into a permanent position of dependence on people who do want a more hard left agenda. If on the other hand they embrace his public investment position they can influence a slower approach on issues that could be electoral suicide in the current climate.
You say that you are not backing any party and you are not backing any candidate in the Labour leadership election. Your preference for whoever is Prime Minister in 2020 is that they move away from neoliberalism and implement PQE. Given that as PM Kendall / Burnham / Cooper / Osborne / Johnson / May wouldn’t implement these things and the only person who would is Corbyn, surely this means you are backing Corbyn by default?
While in abstraction you can say you don’t back him, in reality I don’t see how you can say you back these ideas but you don’t back the only way they are realistically going to be implemented (Corbyn as PM). You can’t have one without the other. The theoretical capability of Prime Minister Osborne to implement PQE is meaningless in reality.
Are you saying that you would be no more or less happy with Corbyn as PM in 2020 than any of the other Labour or Tory candidates, because it’s ideas and not people you’re concerned with?
Of course it is the ideas I am concerned with
I am not suggesting there is merit in Jeremy Corbyn’s beard
I am suggesting his approach accords with my ideas