Academic explains why Labour’s manifesto is just good economic sense
Cambridge economist Dr Ha-Joon Chang has given his take on Labour’s fully-costed 2019 manifesto. And speaking about the need for “a complete overhaul of the economy”, he explains why the manifesto “points to the right direction”.
1) No to a US-style health system
There are currently fears of further privatisation in the NHS if the Conservative Party keeps power on 12 December. In particular, there are concerns that a post-Brexit trade deal with the US would hand wads of public money over to US corporations. Labour, meanwhile, would stop this and invest significantly in the treasured public service. And Chang outlined why this is the preferable option, saying:
The Americans spend… 17% of national income on healthcare. So Americans are effectively spending sometimes twice more than European countries on healthcare, and they have the worst health statistics in the rich world.
2) Spend taxes properly
Chang then looked at tax policies, saying:
If we collect taxes to… bail out the banks which have got into trouble because they were too greedy… that’s money wasted.
If we spend the taxes to rebuild infrastructure, to strengthen the welfare state, I think that’s money well spent.
Labour is asking only the top 5% of UK earners to pay more tax. It will use this money to empower ordinary people after disastrous decades of increasing inequality.
Read on...
3) Public control
Labour’s promise of democratic public control of vital services – like healthcare, education, energy, and transport – is popular. And it makes economic sense.
Chang called the current state of privatised railways and water a “disgrace”, saying:
Railways are mostly owned by state-owned rail companies of Germany, France.
With this in mind, he told people opposing nationalisation that:
If you are against public ownership, you should be against state-owned companies of other countries that are buying up your own economy.
4) Vital climate action
Labour has also pledged a Green Industrial Revolution of massive public investment to tackle the global climate emergency. And Chang seemed to back this, stressing:
if you don’t do something radical, the country will be in deep trouble.
In particular, he said:
we need to revive the productive sector of the British economy
And to contrast Labour’s proposals on new green technologies with the Conservative Party’s record in government, he asked:
what has this country’s government done in terms of promoting these new sectors that are not only necessary but are potentially very, very good in generating productivity, growth, and jobs?
The answer, of course, is ‘next to nothing‘ and ‘little to come‘.
Leading economist Ha-Joon Chang explains why Labour's manifesto shows a vision that points to the right direction. pic.twitter.com/LHkw1Padk2
— John McDonnell MP (@johnmcdonnellMP) December 3, 2019
Voting Labour is just good economic sense
Countless other economists have also highlighted the Tories’ dismal economic record while backing Labour’s manifesto. Award-winning economist and Green New Deal pioneer [0:04] Ann Pettifor, for example, has called it “just common-sense economics”.
Economist @AnnPettifor correctly predicted the 2008 financial crash.
Now she has this warning for us all: pic.twitter.com/Bx6WTdBqFv
— Jeremy Corbyn (@jeremycorbyn) December 1, 2019
163 economists, meanwhile, proudly signed an open letter on 25 November saying the “UK economy needs reform” and that Labour “deserves to form the next government” because it has “serious proposals for dealing with” Britain’s “deep problems”.
In short, Labour is offering a vital plan for change that will benefit the many; and it has the backing of countless economists. The Tory manifesto, on the other hand, just offers more stagnation and policies that benefit the ultra-wealthy few. The choice on 12 December should be a no-brainer.
Featured image via John McDonnell and Channel 4 News
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Another good thing about socialism is fewer greedy people can extract vast sums of money to remove it from Britain whether into tax havens or investing in foreign sweatshops. They’ll still buy German car, French wines and Italian suits of course, but more money will stay here so more will be in circulation through better wages, lower prices, progressive taxation and lower inflation. This all leads to increased personal spending and the jobs and businesses it creates, by depriving the top 5% of billions they don’t even need.
Some people will still make big money, just not the untold riches they’re used to bilking.
The Corbyn-McDonnell manifesto is currently the world’s best blueprint for leading an economy back to dynamism and productivity. It’s only approached by Elizabeth Warren’s “economic patriotism” platform for the US. (Bernie Sanders is yet to lay out a focussed plan of his own.) *And plans like this are now urgently needed* since there’s nothing left in the social fabric to absorb yet more austerity and corruption.
All the leading indicators point to the 2020s bringing the worst economic crisis since the 1930s. World financial authorities have no new ideas to meet the crisis except for another round of finance-sector “quantitative easing”. Even if they “succeed” in staving off technical recession this way, “success” will still be experienced as deep stagnation in the real world.
There are only three key areas systemic economic investment that are capable of restoring productivity in the short and medium term, with high value for money from the investment, and the Labour manifesto puts all of them at its centre.
One is a renewed housing stock – affordable, healthy, and sustainable. The other is in building the infrastructure of the energy transition, and then starting to deploy the resulting abundant cheap energy in industrial innovation. The third is the investment in labour productivity and flexibility through universal basic services and (ultimately) the four-day week.
The astonishing thing that the work of both McDonnell and Warren has shown is just how massive the investments that can be made *are*, by simply restoring a portion of the progressive taxation that’s been lost from the system – and *without* needing the government to start borrowing!
The *full* scale of the labour reforms – universal security and four-day week – may need something like the “People’s Quantitative Easing” to carry out. But this will become a compelling option in the face of the likely combination of a private debt crisis with stagnation or recession.