The new left economics: how a network of thinkers is transforming capitalism

After decades of rightwing dominance, a transatlantic movement of leftwing economists is building a practical alternative to neoliberalism.

By Andy Beckett
25 June 2019

For almost half a century, something vital has been missing from leftwing politics in western countries. Since the 70s, the left has changed how many people think about prejudice, personal identity and freedom. It has exposed capitalism’s cruelties. It has sometimes won elections, and sometimes governed effectively afterwards. But it has not been able to change fundamentally how wealth and work function in society – or even provide a compelling vision of how that might be done. The left, in short, has not had an economic policy.

Instead, the right has had one. Privatisation, deregulation, lower taxes for business and the rich, more power for employers and shareholders, less power for workers – these interlocking policies have intensified capitalism, and made it ever more ubiquitous. There have been immense efforts to make capitalism appear inevitable; to depict any alternative as impossible.

In this increasingly hostile environment, the left’s economic approach has been reactive – resisting these huge changes, often in vain – and often backward-looking, even nostalgic. For many decades, the same two critical analysts of capitalism, Karl Marx and John Maynard Keynes, have continued to dominate the left’s economic imagination. Marx died in 1883, Keynes in 1946. The last time their ideas had a significant influence on western governments or voters was 40 years ago, during the turbulent final days of postwar social democracy. Ever since, rightwingers and centrists have caricatured anyone arguing that capitalism should be reined in – let alone reshaped or replaced – as wanting to take the world “back to the 70s”. Altering our economic system has been presented as a fantasy – no more practical than time travel.

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And yet, in recent years, that system has started to fail. Rather than sustainable and widely shared prosperity, it has produced wage stagnation, ever more workers in poverty, ever more inequality, banking crises, the convulsions of populism and the impending climate catastrophe. Even senior rightwing politicians sometimes concede the seriousness of the crisis. At last year’s Conservative conference, the chancellor, Philip Hammond, admitted that “a gap has opened up” in the west “between the theory of how a market economy delivers … and the reality”. He went on: “Too many people feel that … the system is not working for them.”

There is a dawning recognition that a new kind of economy is needed: fairer, more inclusive, less exploitative, less destructive of society and the planet. “We’re in a time when people are much more open to radical economic ideas,” says Michael Jacobs, a former prime ministerial adviser to Gordon Brown. “The voters have revolted against neoliberalism. The international economic institutions – the World Bank, the International Monetary Fund – are recognising its downsides.” Meanwhile, the 2008 financial crisis and the previously unthinkable government interventions that halted it have discredited two central neoliberal orthodoxies: that capitalism cannot fail, and that governments cannot step in to change how the economy works.

A huge political space has opened up. In Britain and the US, in many ways the most capitalist western countries, and the ones where its problems are starkest, an emerging network of thinkers, activists and politicians has begun to seize this opportunity. They are trying to construct a new kind of leftwing economics: one that addresses the flaws of the 21st-century economy, but which also explains, in practical ways, how future leftwing governments could create a better one.

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Read more at https://www.theguardian.com/news/2019/jun/25/the-new-left-economics-how-a-network-of-thinkers-is-transforming-capitalism