Taking the economic fight to the Tories at last

Today’s Guardian reports that shadow chancellor John McDonnell intends to hold a series of free public seminars to inform public debate on economic issues.  According to the report they will be supported by members of Labour’s Economic Advisory panel, and will contribute towards a conference on economic policy in the Summer.

This is fantastic news.  Many of us have been arguing for a long time that Labour needs a more radical, grounded economic policy; it’s one of the reasons why I voted for Jeremy Corbyn, as the only leadership candidate who was prepared to ask the big economic questions.  Austerity economics is failing on its own terms and all the indications are that the circumstances leading to the 2007-8 crash are being repeated; the austerians have learned nothing.  And, between 2010 and 2015, the fact that austerity is a matter of political choice rather than economic inevitability appears largely to have been lost on large sections of the Labour Party, especially in Parliament.  Labour was always on the defensive because it was, by and large, responding to and seeking to work within the prevailing orthodoxy rather than challenging it.

Moreover, leaks of the Beckett Report on why Labour lost in 2015 suggest that the real reason was a lack of a coherent agenda, rather than the belief – widely-trumpted on the Labour Right – that Labour’s policies were too left-wing.  And it cites how the poisonous lie that Labour caused the crash stuck and caused enormous damage.  Mainstream Labour politicians simply didn’t tackle the lie head-on, largely (though not entirely) because, implicitly, they accepted the premises of that argument and continued to work within the framework of deficit reduction and cuts.  They failed to understand that the crash was a game-changer, a symptom that the economic consensus that New Labour had successfully ridden in the preceding years had collapsed.

As well as emphasising that Labour has a grounded and coherent economic policy – one that signals a return to the intellectually-supported economic mainstream following the failures of neoliberal economics – it sends a second, crucial message: that the public has the right to take part in economic policy-making.  Economics has increasingly been presented as an esoteric discipline that only the initiated can understand; but that is a deeply ideological position, because it sees economics as the developing of increasingly esoteric modelling based on a narrow set of behavioural assumptions.  But it isn’t like that; and at the macro level economic decisions are political ones, about the kind of society we want to achieve and how to get there.  It has long suited the technocrats of economic policy to  avoid that kind of discourse; John McDonnell’s initiative is a profoundly democractic one, and appropriately so.  Economics is not a complex discipline, there are alternatives, and it needs to be placed at the heart of democratic discourse.

In that context, it’s a huge pity that all the events are taking place in London or the South-East – especially since one of the crucial imbalances in the UK economy is the imbalance between the South-East and the rest, and there is a wider need to break the stranglehold that London and Westminster have on political debate.

However, an economic policy that is grounded, coherent, popular and above all democratic – one that really speaks to people at the sharp end of austerity, who have seen their living standards assaulted in an era of falling pay and soaring inequality – is the most powerful weapon Labour could have at the next election.  It’s often forgotten that one of New Labour’s most important strategic achievments before 1997 was to become the party of economic credibility; as austerity increasingly fails in its own terms, and with the likelihood of another crash growing almost daily, John McDonnell’s initiative looks increasingly like sound practical politics as well as the right thing to do.


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