I couldn't resist the title: it was too obvious not to use. And it has resonance. After two months during which the term Corbynomics has come to be very closely associated with me, (whether I wished that to be the case or not for reasons, long explained) I am rather looking forward to life post-Corbynomics. The close of the Labour Party conference provides that chance.
The summer has been a fun experience. I have seen some of my ideas adopted and promoted more heavily than before (although it is not, by a long way, a new experience). There is no person who spends much of their time, as I do, looking out of the window thinking about how a better world might be structured who would or could complain about that. If my job is to influence the political process (and like all tax justice and anti-poverty campaigners that has, necessarily, to be the case) then this summer has been a success.
I leave aside the political outcome apart from saying it has been fun to get to know Jeremy Corbyn and his family (who are a really delightful bunch of people) better. At a purely personal level I wish him well but my job is not to promote party politics. That job is to create ideas that others might use in the course of their own campaigning on the subject areas in which I work. Because I work on my own, in the main, my funders have always tasked me with reaching out to others to seek implementation of my work. At a purely pragmatic level I think I can say the last two months have achieved that goal.
More importantly three particular areas of work have advanced, maybe significantly.
The first is work on the tax gap. This has been subject to a high level of exposure and discussion. I am well aware that not everyone agrees with my estimates. But the very fact that the issue has been discussed and will, as a result, attract more research attention is, I hope, one welcome outcome of the debate. If action — from whoever is in power — were to follow that would be more welcome still.
Then there is the need to review the structure of HMRC. This idea, along with similar reviews of the Treasury and Bank of England, seemed to grow in Corbyn team thinking over the summer and I am surprised at the prominence it has now been given. I also welcome it. I argue in The Joy of Tax that we need a Ministry of Taxation as well as a minister dedicated to the task of being accountable for tax, both supported by an Office for Tax Responsibility. I hope to see progress with these ideas.
And then there is People's Quantitative Easing. I think my funders thought there was little chance that this idea would ever get much public debate, but now it has. I again welcome that, and do not shy from the controversy the idea has caused. I believe that if we have another economic downturn (and I think that incredibly likely) then this policy tool will be high in the armoury of central banks around the world. Those dismissing it now are simply in denial about the state of the world we live in, in my opinion.
So, do I regret Jeremy Corbyn's team borrowing my ideas in July and giving me credit for them? Of course I don't.
But equally, I am keen to move on with what I might consider more ‘normal' work. Doing five broadcast interviews in a day or so to explain my ideas is fun (I admit). But it's wholly destructive of that quiet time looking out of the window and thinking ‘what's next'? A little more balance would be quite welcome again.
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A further achievement is that your ideas have also reached a far wider audience, if my personal experience is anything to go by. I came to this site to listen and learn, and I hope my very elementary understanding of the politics of economics has improved. I talk about your ideas with many friends and colleagues inside the labour party, and outside. So thank you Richard, for sharing your thoughts, and for your clarity of purpose, and good luck with your quieter future. I shall continue to visit your site, and follow the intelligent conversations with great interest.
Thanks Helen
I can’t see the peace lasting long
There are always silver linings but I for one, am profoundly disappointed by a return to ‘tax and borrow’ stays quo when there are so many better solutions like PQE and OMF. Undoubtably, there will be internal political considerations for the shadow chancellor, and we shouldn’t forget how much can/will change over the next 4.5y.
However, no-one can doubt that PQE has arrived, as an alternative to TINA, and that is down to your energy and skill at handling the commentariat. Well done 🙂
I will be a critical friend from outside Labour
I agree that the agenda being offered is not as good as it could be
People have to realise that our deficit obsession is, like almosty all obsessions, misplaced and unhealthy
I was fairly dismayed that PQE seems to have been put on the back-burner. Personally, if they borrow by conventional means (now cheaper than in any time in history) I would have little problem with that, but why give interest to bondholders when there is an effectively costless way of doing it that can technically add nothing to the deficit?
I dearly hope this opportunity is not going to be lost.
Me too!
My bet is that given the chance they would use it. The idea is established and it is here to stay. The idiotic charges that were levelled during the leadership contest have already become passe.
Time and persistence will reveal that a proposed PQE program can be as large or small, risky or cautious as you’d like it to be. There is no unavoidable risk and no real case against it. Especially not in a ZLB, zero-inflation world.
Richard’s contribution has been timely and it will become historic.
I am not letting go of it, of that you can be sure
From being totally naive about economics earlier in the summer I have yourself and the other bloggers on the econosphere to thank (blame!) for my current slightly expanded understanding of the subject, and I thank you for that.
On the PQE front wasn’t the way QE was actually implemented only a “hairs breath” away from what we actually need .i.e.
BoE prints 375 Billion between March 2009 and July 2012
Government sells over 375 Billion of bonds between March 2009 and July 2012
BoE buys 375 Billion Government bonds between March 2009 and July 2012 (from the secondary market)
Government spends on infrastructure between March 2009 and July 2012 – just not enough
BoE has IUO from Gov for 375 billion (market value 407,281 at 31 March 2015)
The main problem was we didn’t spend enough on infrastructure and related stuff.
So, as Richards pointed out earlier the deficit spending after March 2009 was funded by the BoE printing money in exchange for interest bearing IOU from Gov (via the smoke and mirrors of “asset swapping”), and wasn’t the asset swapping suppose to get Insurance companies and pension funds to switch from government bonds to shares?
Interesting enough before QE started (Q1 2009) Insurance companies and pension funds owned about 230bn of government bonds (http://www.dmo.gov.uk/documentview.aspx?docname=publications/quarterly/jul-sep09.pdf), but by the end of QE (Q3 2012) Insurance companies and pension funds owned over 330bn of government bonds (http://www.dmo.gov.uk/documentview.aspx?docname=publications/quarterly/jan-mar13.pdf).
So that worked well then!! – or have I missed something (which is quite possible).
The £375 bn was not spent on assets, unfortunately
It was largely current spending
That was the big difference
And the QE was used to suppiort asset prices, not real wagez
But close!
Many thanks Richard, for the invigorating and inspiring blogs from you. I am just a normal, retired person with an interest in politics and economics. You have provided a much needed intellectual structure to what I instinctively support. Enjoy some free time. I look forward to continueing to follow you on twitter
John
I might, if I am lucky, take this afternoon off
That’s it!
And I already have ideas for the next book
Richard
I can only say: well done. It has been a magnificent achivement getting so much in to the public domain and in to the public policy debate that the wealthy and powerful – and the armies of advisers, consultants, media operatives, tame academics and other lackeys they either retain or are happy to be camp-followers – would much prefer to conceal and suppress. It is becoming increasingly clear that those who cling to the mainstream neoclassical economics model – which was abused and manipulated to justify the policies and regulation (or non-regulation) that brought us the great recession in 2008 – are living in a parallel universe that is far removed from the economic realities confronted by the majority of ordinary citizens.
Unfortunately, the resulting unholy coalition between the wealthy and the powerful and the economic rent-capturing property-owning holders (or prospective holders) of well-rewarded occupations or generous pensions (reinforced by core tribal Tory support responding to the usual dog-whistles), while comprising less that 40% of those who vote, is able to produce a Commons majority under FPTP.
Labour’s strategy of pulling across some of these voters who were prepared to switch between Tory and Labour worked while Labour was able to keep its core tribal vote intact. But the more Labour focused on these potential switchers the more its core vote shrunk under assault from two strains of populist nationalism (SNP and UKIP), opportunist centrists (Lib Dems) and green fantasists. Jeremy Corbyn may be able to shore up the core vote – and might indeed increase it, but, unless the Tories tear themselves apart over Europe or they totally blow their entirely undeserved reputation for economic competence, the outcome of the next general election is a foregone conclusion.
However, the terms of the economic policy debate are beginning to shift and this justifies continuing effort to expose the fallacies of the mainstream neoclassical economics model and the damaging policies it facilitates. And one should never underestimate the Tories’ lack of scruples and willingness to pinch policies that they previously excoriated if the pilfering increased their chances of retaining their grip on power.
Keep up the good work.
Thanks
And please don’t forget the coming downturn….
Richard, it has been an unadulterated pleasure reading your blog over the past 3-4 months. I am sure that most here would agree. It would be great to see you join Corbyn’s superstar economic advisory team in the future (McDonnell hinted that there were others who were being consulted). In the meantime, please keep the ideas coming and I will be purchasing a copy of JoT & Courageous State this weekend!
Thanks Richard
Well done. It has been great to see your ideas get greater prominence and some discussion.
I’ll continue to follow this blog to educate myself and to see what you get up to next.
Have a well deserved rest Richard after an extended period of media glare and entering the professorial world -thanks for sharing the journey with us in the blogoshpere, I’ve found it enriching, rewarding and a daily learning companion.
Just finished reading a great biography of George Lansbury, that great Christian socialist-it’s amazing to hear similar rhetoric entering the political scene after so may years of drought-let’ hope the rhetoric is backed up by real change.
Good, isn’t it?
And there I was hoping that “the Richard Murphy show” would be coming to our screens soon. I guess I will have to just read The Joy of Tax for now.
I’m open to the Richard Murphy show
No way is this the end of Corbynomics.
Corbyn, but also McDonnell will be very keenly aware that the main difference between him and the other Labour candidates for leadership was Corbynomics. It was “let us reduce the deficit, but less slowly than the Tories” vs “let us do PQE”. And PQE won by a mile!
Now, if people think about what PQE can do, and they question why financial assets can be bought with QE (making banks and wealthy better off), but why hospitals and roads cannot be build by PQE, then we are getting somewhere.
What I would have liked to have seen, and maybe that can be done by the magnificent 7 economists, to assess what would happen if ALL government expenditure was done by PQE. And what would need to be in place, to avoid run-away inflation.
Now, I would not think much would happen, if 2% – 4% of GDP were spent as government spending into the economy, rather than financed by borrowing, and I have tried to make a case here:
https://radicaleconomicthought.wordpress.com/2015/09/24/pqe-how-to-cut-the-uks-debt-by-two-thirds/
I would hope someone starts that kind of open-minded thinking, moving the agenda on a bit, and reviews a lot of other “economic truths” which all need to be questioned in the next years of Tory government. The “corporate welfare” debate is another issue to be discussed.
I am sure you will continue to lead the way there, Richard.
I will be arguing my case, for sure
All I am saying is that how I will argue it might change
ANd I might even (shock) take tomorrow off…
Thanks Richard for your blog,especially for introducing me and many others to mmt. I feel there is need to expose some basics of the nature of money to those members of the public that accept the premise that the economy should be handled in the manner of a household budget.My first recollections of this concept were proposed by Mrs. Thatcher. Money saving was part of the prudent household budget.I would like to ask for advice from the advocates of this philosophy.
I have a £10 note in my wallet, which I could either save or spend.(iou/liability of boe/gov)
If I choose to spend and subseqent holders of the note also spend, eventually virtually all of
that £10 will be returned via hmrc to the boe/gov.(iou/liability is cancelled).
If I choose to save the £10 it would be taken out of circulation and therefore not returned
via hmrc to boe/gov.
I am now in a dilemma.If I decide to save the £10 note am I guilty of raising the government
budget deficit? If so should I then, spend and ignore the virtue of saving?
Richard, is anything here disputable or politically biassed? Is it not possible for someone with platform on tv to express such a simple notion?
You entirely miss the point
With respect Richard,I am only attempting to expose the contradiction inherent in advocating the virtue of private saving whilst denouncing the running of a public budget deficit.This has been espoused by neolibs and accepted by most of the public for many years. Surely short simple methods are essential, to ridicule, this analogy and others, to the general public.
Thanks
If so, sorry: I missed your point
First and foremost, I must congratulate you for capturing the zeigeist and playing a major role in what I believe may turn out to be a pivotal moment in our national politics; a victory not only for your ideas but also your persistence.
The almost total degradation of HMRC as a functioning body, one of the main reasons behind my recent decision to move into semi-retirement once January has passed, is an apt target for your skills and ideas, Richard. I’m just about to make two formal tier 1 complaints as a result of waiting for over a year for HMRC to respond to correspondence and then, when they have, to only one issue, make no discernible effort to advance the situation.
I hope you can be as succesful with HMRC as you have been with PQE Just don’t burn yourself out.
I admit I like hard work and stress
And would rather like to see HMRC under review
Thanks Nick
Richard.
Thanks for engaging with MMT which is where I believe the true nature of our monetary economy can be made transparent.
I have not always agreed with some of your views but I admire your willingness to take on new ideas and do believe you have made a significant contribution in getting some important insights out there. Good luck in your future endeavours.
The future will look in many ways like life was in June
It’s the bit in between that’s been odd
The one thing I do expect will never go away is the word Corbynomics: I sl, forever, be associated with it
Surely it doesn’t say much about your genuine involvement in Corbynomics if Corbyn hadn’t asked you to be part of the team to support his Corbynomics strategy?
Or is this decision more of a personality issue?
The team in question has been selected for particular skills
I think it fair to say I have others
And, as I have also made clear, I did decline a role because working at Westminster would really not suit me
I’ve had a couple of ‘run-ins’ with some very influential people in the social housing sector.
One of these was pedalling the same old tosh about the Government ‘not having any money’ which is why they are bringing RTB into the HA sector rather than building new homes. So I instantly unsubscribed from his blog and told him why – the content of my retort came from what I have learnt from this blog and of course triangulated elsewhere.
I tell you something – he still does not get it – AT ALL. And far too many of these ‘clever people’ who lead opinion do not understand what real macro economics is and the opportunities it presents to us now.
The other thing is that this fallacy that we were bankrupted by the Labour party is widely believed amongst the wider general public. In fact it is ingrained. Even those who want a more left wing Labour keep talking about this to me – they do not trust Labour anymore but would benefit from voting for them!!!!
If Corbyn is to get rid of anyone in his party, Liam Byrne must be cast out and made to apologise to the public for making a joke about something that has caused a lot of pain – that is where I would begin to set the record straight for Labour.
I’m sorry to say it but it has to be done – Byrne must atone.
I think he has already apologised
And it is not only the right wing of Labour who need to learn some monetary reality
A joke told by my friend George McCoy on the train to Manchester:
Richard Murphy had a disadvantaged childhood. The other kids had the usual dream of being able to fly like a bird. But the meister didn’t want to grow up able to sign books with his right wing.
Sad
I know that I am being hard on Byrne but I think that Labour needs to revisit this somehow and clarify the issue. The apology needs to be bigger and better, more high profile in my view.
The Tories have had a lot of mileage out of this.
Thanks.
Credit where credit is due, you have been a good innovator. But I hope you give credit to others especially on the tax side. My colleagues in the ICAEW Tax Faculty have been campaigning for a better tax system for years, most of them unpaid and giving up their own time. I do not wish to be over critical but lets just say you have picked one or two ideas from others.
With respect to the ICAEW Tax Faculty, and you, that’s a joke
I acknowledge that the Faculty does good work
But it’s not at the forefront of tax thinking, let alone tax innovation