Blog post

The Old is Dying

The next Labour government will face the immediate challenge of undoing the damage of austerity. But the economic difficulties we now face run much deeper.

James Meadway 7 November 2019

The Old is Dying

Neoliberalism is dying. That much is clear. But its replacement is not yet born: we are still, a decade after the seismic shock of the financial crisis, picking through its rubble. And there is no guarantee, looking at the governments of either Donald Trump or Boris Johnson, that what emerges in its place will be in any sense an improvement. Those of us on the left have a huge fight on our hands: not only to win a Labour government committed to transformational change, but to win the battle of ideas over how that transformation should take place. Shadow Chancellor John McDonnell and his team have quite deliberately sought to create a space in which alternatives can be raised, from the regular “State of the Economy” conferences, to the new economics roadshow, to the publication last year of a collection of essays, Economics for the Many. The effect has been to help make the left, rather than the right (and still less the centre) the place where new economic thinking is taking place.

And despite the yawnsome clichés about returning the 1970s, or the Venezuela vuvuzela – a long, droning whine to be found below the line on any comment piece about Labour’s economic policy – the mainstream press is now catching up with the reality that it is Labour’s programme that offers a convincing and radical alternative. Strikingly, the Financial Times devoted an entire mini-series to explaining, for the benefit of its business-minded readers, Labour’s thinking on economic policy. There has been a flurry of media interest in what Labour and the new left might actually stand for in its economic programme – beyond the assumption that it is only tax-and-spend.

Because the truth is that, whilst the next Labour government will face the immediate challenge of undoing the damage of austerity, the economic difficulties we now face run much deeper. There is the slide in living standards, and the rise in inequality; relatedly, there are the challenges of the slump in productivity and the growing impacts of Big Data and automation; and, of course, there is the overwhelming catastrophe of climate change. Spending more on our public services is essential. But we will have no choice but look beyond ending austerity.

Three strands have fed into the left’s new economic thinking, as the articles in this short booklet show. First, there has been the development of Labour’s “ownership agenda”: beyond neoliberalism’s fixation with private ownership, Labour and the left more generally has drawn on the intellectual traditions represented by the likes of GDH Cole, RH Tawney, and the Institute for Workers’ Control to develop models of decentralised and collective ownership for society’s productive assets. From locally-owned renewable generation, to the flagship Inclusive Ownership Funds to transfer major companies into collective ownership, this strand of thinking has posed new solutions to pressing economic concerns: the slump in wages, the necessity of decarbonisation and the need to distribute power more widely. Labour’s “Alternative Models of Ownership” document, produced just ahead of the 2017 election, is a succinct summary of the challenges that changing models of ownership seek to address, but the next frontiers of the discussion are likely to settle on the important issues raised by Big Data and technology. It’s not just a question who owns the robots, but who owns the data they run off?

The second strand, coming to prominence over the last year with the work of new thinktanks like Autonomy, but building on the research of thinkers like Andre Gorz, is what gets labelled as “post-work”. This poses a simple question, but one with extraordinarily rich consequences: what if work, instead of being a fixed and essential part of our lives, was becoming obsolete? The CWU is amongst the trade unions actively pushing for a shorter working week, whilst a number of CLPs have raised the prospect of a four day working week. Official figures show nearly 11m people report being “overemployed”: they would seek shorter hours, if they could. One obvious – and popular – answer to the problem of automation is to look at ways to reduce hours spent at work, without loss of pay, giving people perhaps the most precious thing they possess: their time. But more than this, research shows that shorter working hours can be an important part of reducing the environmental harm caused by our economy.

This is the third, critical strand: a left environmentalism, centred not on the conservationist and small-scale measures favoured by the Tories, but on systemic change. Labour for a Green New Deal have done a brilliant job in winning support for a radical programme of decarbonisation, and Labour’s Shadow Business team are putting in the spadework needed to turn it into jobs and investment across the whole country. There will continue to be debates and discussion around what an environmental transformation of the economy should look like – what jobs will we have? what technologies should we prioritise? – as we draw up a plan for the next government.

It is here, perhaps more than any other part of the programme, that the need for radical action is most pressing. We have known for decades about the risks of climate change; those risks are now manifesting themselves as clear, undeniable evidence of environmental breakdown. Time is not on our side; the social, economic, and environmental challenges we face can seem overwhelming. But as the following entries show, it is the left that should have the confidence about facing up to them – and creating a world that works for the many, not the few.

– James Meadway is former economic advisor to John McDonnell. He is currently writing a book on transforming the economy. The essay above is taken from The New Economy Starter Pack: a FREE ebook, developed in conjunction with Autonomy, outlining the new and transformative economic agenda of the left. Read by clicking below or here

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The New Economy Starter Pack
Neoliberalism is dying, but its replacement is not yet born. The direction of politics over the coming years is not certain, and the left will have to win not only the political fight, but also the...