Stumbling and Mumbling

Author: chris dillow   |   Latest post: Tue, 26 May 2020, 2:30 PM


Challenging rightist illiteracy

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Grace Blakeley raises an important issue, of how the Labour party can best answer the question: "how are you going to pay for it?" I fear that her answers, though, are a mix of the good and bad.

First, the bad. In saying that "the arbiters of economic credibility" claim that borrowing to invest doesn't work, Grace is constructing a straw man. All sensible economists know, as Simon has said for years, that fiscal austerity at zero interest rates is a terrible idea.

For this reason, I disagree with Grace's claim that mainstream economic theory "is designed to prop up the status quo." Yes, this is the case in some respects, one of which I'll come to. But not in others. You can argue for fiscal expansion, liberal immigration policy, progressive taxation and even worker ownership without deviating at all from mainstream theory. Grace is right to say that the case for austerity was always political not rational - but mainstream theory tells us this.

I also suspect that Grace underplays the importance of the need to challenge the idea that government finances are just like the household's, as Yanis Varoufakis tried to do here. The essence of politics is that there are failures of collective action. Sometimes, when each individual pursues her own interests, the outcome is bad for everyone; this is what happens when the government acts like a household. It's this that provides a place for government action. The left must always make this argument.

But, but, but. Grace is bang right to say:

Working people are the ones who create the wealth, and that wealth should be returned to them.

You don't need to believe the labour theory of value to believe this (though perhaps you should!) If working people don't create wealth, capitalists would love to see strikes as they could carry on creating wealth without having to pay pesky workers. But of course, they don't. Lincoln

Nor is this even a left-wing view: once upon a time, It was believed by mainstream politicians.

In this sense, the left must reverse the rhetorical trick that the right has played for decades, of pretending that only entrepreneurs and the rich are "wealth creators". They are not.

That said, I'm not sure that this leads only to a case for taxing the rich. The ONS estimates that the top 1% of the population get 7.1% of total household disposable income. Even if you could halve that - which is a big ask - you'd raise only £50bn. Instead, I suspect it's also a case for greater worker ownership and control.

The issue here is a bigger, more general one: how does the left remove from public opinion the influence of the right's economic illiteracy? Obviously, we cannot rely upon the mainstream media. And I doubt that hurried conversations on doorsteps with ill-tempered voters are sufficient.

It's here, though, that Corbyn's greatest achievement and legacy might lie. In motivating thousands of people to join Labour and become politically active, he has created the possibility of the left achieving hegemony via millions of everyday conversations in workplaces, pubs and cafes. Obviously, this hasn't yielded fruit yet. It might take decades, just as it took decades for neoliberalism to eclipse social democracy. But there is this hope. And this is why I can't regard Corbyn - for all his faults - with the disdain that so many others do.

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