The difference between Blairites and the left isn't merely one of policy prescriptions. It's also about the diagnosis of capitalism. John Rentoul's response to my post yesterday alerts me to this fact.

Here's what I mean. To a large extent, New Labour's thinking was founded in large part upon a belief in the dynamism of capitalism. It thought that capitalism would increase investment and productivity if only governments could provide (pdf) the right policy framework, such as the macroeconomic stability required to give firms the confidence to invest. It thought capitalism could create good jobs; Blair's talk of "education, education, education" arose from the idea that skill-biased technical change would increase the demand for skill labour. And it thought it could improve the efficiency of public services by importing management practices from the more dynamic private sector.

However, many of us now doubt this premise. Investment has declined as a share of GDP as firms prefer to build up cash. Productivity growth has slumped. And job polarization, the degradation of erstwhile "middle class jobs" and migration of workers to insecure and poorly-paid self-employment all suggest that capitalism is no longer providing satisfying work.

Quite why all this has happened is a separate story. But you don't need to be a Marxist to believe it: those economists who are most vocal in discussing secular stagnation are leftist social democrats rather than Marxists.

This raises the question: how can Blairites deny the facts which seem to me to speak of a loss of capitalist dynamism?

There are low-level quibbles one can have with the data; maybe some business investment is counted now as consumer spending, such as spending on laptops. Maybe innovations have raised consumer surplus rather than measured output; the fact that books, music and journalism are now available for free does nothing for GDP. But I doubt these explain away all of the facts suggestive of stagnation.

It's also possible that what we're seeing is just a temporary malaise. Maybe a revival of animal spirits will raise investment and productivity. However, the fact that the future is unknowable means we shouldn't put much weight upon this possibility.

There is, though, a more promising way of denying that capitalism has lost its oomph. It could be that all the symptoms of a loss of dynamism are in fact the result not of a secular crisis of capitalism but of weak aggregate demand. Such weakness has depressed productivity (via Verdoorn's law), interest rates, employment and capital spending. If we had more expansionary fiscal policy - not just in the UK but around the world - what looks like secular stagnation would disappear.

This, though, leads me to a paradox. If this is the case - and I don't know whether it is or not - then it is Blairites who should be most hostile to austerity. They should be complaining not only that austerity is destroying jobs but that it is also undermining faith in capitalism by leading folk like me to mistakenly attribute to capitalism what are in fact the results of bad policy. By contrast, we lefties should be slightly less hostile to austerity. Sure, we agree that it is bad for workers. But we suspect that even if we had sensible macroeconomic policy, many of capitalism's faults would remain.

But of course, this is exactly not what we're seeing. The million mask march was not dominated by Blairites. In fact, it is they who have actually been accommodating of austerity, even to the extent to failing to oppose Osborne's imbecilic fiscal charter.

What explains this paradox? The most obvious possibility lies in a difference of priorities. I want to try to understand the economy whereas Blairism is essentially about trying to win elections - and these are two different and perhaps even irreconcilable objectives.

* That spike in my second chart in 2005 was because of a reclassification of investment in the nuclear power industry, which uglifies the chart but doesn't change the story.