{"id":136309,"date":"2019-07-01T12:00:21","date_gmt":"2019-07-01T11:00:21","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=136309"},"modified":"2019-07-08T12:06:57","modified_gmt":"2019-07-08T11:06:57","slug":"the-new-left-economics-how-a-network-of-thinkers-is-transforming-capitalism","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2019\/07\/the-new-left-economics-how-a-network-of-thinkers-is-transforming-capitalism\/","title":{"rendered":"The New Left Economics: How a Network of Thinkers Is Transforming Capitalism"},"content":{"rendered":"
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Illustration: Nathalie Lees\/The Guardian<\/p><\/div>\n

After decades of rightwing dominance, a transatlantic movement of leftwing economists is building a practical alternative to neoliberalism. <\/em><\/p><\/blockquote>\n

25 Jun 2019 – <\/em>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\u2019s 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 \u2013 or even provide a compelling vision of how that might be done. The left, in short, has not had an economic policy.<\/p>\n

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 \u2013 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.<\/p>\n

In this increasingly hostile environment, the left\u2019s economic approach has been reactive \u2013 resisting these huge changes, often in vain \u2013 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\u2019s 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 \u2013 let alone reshaped or replaced \u2013 as wanting to take the world \u201cback to the 70s\u201d. Altering our economic system has been presented as a fantasy \u2013 no more practical than time travel.<\/p>\n

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\u2019s Conservative conference, the chancellor, Philip Hammond, admitted that \u201ca gap has opened up\u201d in the west \u201cbetween the theory of how a market economy delivers \u2026 and the reality\u201d. He went on: \u201cToo many people feel that \u2026 the system is not working for them.\u201d<\/p>\n

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. \u201cWe\u2019re in a time when people are much more open to radical economic ideas,\u201d says Michael Jacobs, a former prime ministerial adviser to Gordon Brown. \u201cThe voters have revolted against neoliberalism. The international economic institutions \u2013 the World Bank, the International Monetary Fund \u2013 are recognising its downsides.\u201d 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.<\/p>\n

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.<\/p>\n

Christine Berry, a young British freelance academic, is one of the network\u2019s central figures. \u201cWe\u2019re stripping economics back to basics,\u201d she says. \u201cWe want economics to ask: \u2018Who owns these resources? Who has power in this company?\u2019 Conventional economic discourse obfuscates these questions, to the benefit of those with power.\u201d<\/p>\n

The new leftwing economics wants to see the redistribution of economic power, so that it is held by everyone \u2013 just as political power is held by everyone in a healthy democracy. This redistribution of power could involve employees taking ownership of part of every company; or local politicians reshaping their city\u2019s economy to favour local, ethical businesses over large corporations; or national politicians making co-operatives a capitalist norm.<\/p>\n

This \u201cdemocratic economy\u201d is not some idealistic fantasy: bits of it are already being constructed in Britain and the US. And without this transformation, the new economists argue, the increasing inequality of economic power will soon make democracy itself unworkable. \u201cIf we want to live in democratic societies, then we need to \u2026 allow communities to shape their local economies,\u201d write Joe Guinan and Martin O\u2019Neill, both prolific advocates of the new economics, in a recent article<\/a> for the Institute for Public Policy Research (IPPR) \u2013 a thinktank previously associated with New Labour. \u201cIt is no longer good enough to see the economy as some kind of separate technocratic domain in which the central values of a democratic society somehow do not apply.\u201d Moreover, Guinan and O\u2019Neill argue, making the economy more democratic will actually help to revitalise democracy: voters are less likely to feel angry, or apathetic, if they are included in economic decisions that fundamentally affect their lives.<\/p>\n

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Alexandria Ocasio-Cortez at a Green New Deal event in Washington DC, May 2019. Photograph: Cliff Owen\/AP<\/p><\/div>\n

The new economists\u2019 enormously ambitious project means transforming the relationship between capitalism and the state; between workers and employers; between the local and global economy; and between those with economic assets and those without. \u201cEconomic power and control must rest more equally,\u201d declared a report last year by the New Economics<\/a> Foundation (NEF), a radical London thinktank that has acted as an incubator for many of the new movement\u2019s members and ideas.<\/p>\n

In the past, left-of-centre British governments have attempted to reshape the economy by taxation \u2013 usually focused on income rather than other forms of economic power \u2013 and by nationalisation, which usually meant replacing a private-sector management elite with a state-appointed one. Instead of such limited, patchily successful interventions, the new economists want to see much more systemic and permanent change. They want \u2013 at the least \u2013 to change how capitalism works. But, crucially, they want this change to be only partially initiated and overseen by the state, not controlled by it. They envisage a transformation that happens almost organically, driven by employees and consumers \u2013 a sort of non-violent revolution in slow motion.<\/p>\n

The result, the new economists claim, will be an economy that suits society, rather than \u2013 as we have at present \u2013 a society subordinated to the economy. The new economics, suggests Berry, isn\u2019t really economics at all. It\u2019s \u201ca new view of the world\u201d.<\/p>\n

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Illustration: Nathalie Lees\/The Guardian<\/p><\/div>\n

In the excitable but often intellectually becalmed world of British politics, the arrival of a significant new set of ideas tends to generate certain responses. Events about it are packed out. Ambitious young researchers gravitate towards it. Adventurous older thinkers are intrigued by it. New intellectual institutions are created around it. Mainstream journalists initially dismiss it.<\/p>\n

Over the past year, the left\u2019s new economics has acquired this status. Jacobs, who is nearing 60, spent the New Labour<\/a> era trying, and largely failing, to persuade centrist politicians that the economy needed drastically reshaping. \u201cBut nowadays,\u201d he told me, \u201cI\u2019m thinking: \u2018Oh God, we finally might be able to do it.\u2019\u201d<\/p>\n

Like all the new economists I met, he talks very fast, cutting short sentences as if there is too much to explain in the time available. A longstanding environmentalist, he describes the emerging network of new economists as \u201can ecosystem\u201d. Like the one that produced Thatcherism in the 70s, this network may involve only a few dozen people, whose polemics and talks and policy papers are being followed by an audience in the hundreds, but there is an intoxicating sense of political and economic taboos being broken, and of a potential new consensus being born.<\/p>\n

\u201cThere are British and American websites that publish a lot of our stuff, like openDemocracy, Jacobin and Novara. There are people producing stuff while freelancing for thinktanks \u2013 or setting up new thinktanks. And social media means the ideas spread, and collaborations happen, much faster than when leftwing economics was just about meetings and pamphlets,\u201d Jacobs says. \u201cIt\u2019s slightly incestuous, but it\u2019s rather thrilling.\u201d<\/p>\n

This ferment is beginning to solidify into a movement. The New Economy Organisers Network (Neon), a NEF spin-off based in London, runs workshops for leftwing activists, to learn how \u201cto build support for a new economy\u201d \u2013 for example, by telling effective \u201cstories\u201d about it in the mainstream media. Stir to Action<\/a>, an activist organisation based in Bridport in Dorset, publishes a quarterly \u201cmagazine for the new economy\u201d, and organises advice sessions in left-leaning cities such as Bristol and Oxford: Worker Co-ops: How to Get Started, Community Ownership: What If We Ran It Ourselves?<\/p>\n

\u201cThere\u2019s a totally new impulse to activism about the economy now,\u201d says the magazine\u2019s editor, Jonny Gordon-Farleigh, who was previously involved in anticapitalist and environmental protests. \u201cThe movement has gone from oppose to propose.\u201d<\/p>\n

Looming over this activity is the possibility, for the first time in decades, of a Labour government receptive to new leftwing economic ideas. \u201c[The shadow chancellor] John McDonnell<\/a> seems to get it,\u201d says Gordon-Farleigh, guardedly. \u201cHe has some shared history with some of our movements. He has made interesting comments \u2026 about introducing co-operative ownership of the railways, for example.\u201d<\/p>\n

Others in the movement are more bullish. Last autumn, a widely<\/a> circulated article<\/a> by Guinan and O\u2019Neill in the leftwing journal Renewal claimed that McDonnell could be planning nothing less than a \u201ctransformation of the British economy \u2026 a radical programme for dismantling and displacing corporate and financial power in Britain\u201d, in favour of the less privileged. Guinan told me: \u201cJohn McDonnell is extremely intellectually curious. I haven\u2019t seen another political figure at that level of seniority whose doors are so open to new thinking.\u201d<\/p>\n

James Meadway, until recently one of McDonnell\u2019s key advisers, is now writing a book about \u201can economy for the many\u201d. Between 2010 and 2015, Meadway worked at NEF, where his reports and articles sketched out many of the new economists\u2019 arguments. Several NEF staffers told me that since McDonnell became shadow chancellor, the usual relationship between leftwing thinktanks and Labour had been reversed: instead of desperately trying to draw the party\u2019s attention to their proposals, they were struggling to keep up with Labour\u2019s appetite for them. \u201cThey\u2019re virtually asking, \u2018Have you got anything else at the back of your cupboard?\u2019\u201d says one delighted but slightly perplexed NEF veteran. \u201cWe scrabble around, and give them anything we can come up with, as quickly as we can.\u201d<\/p>\n

Last July, NEF published a report advocating a sharp increase in the number of British co-operatives. On one of its later pages, with almost no fanfare, the report also proposed that conventional companies be required to give their employees shares, to create what NEF called an \u201cinclusive ownership fund\u201d. In September, with a few modifications, the proposal became Labour party policy. \u201cI\u2019ve never seen anything like it, from thinktank idea to adoption as policy!\u201d says Mathew Lawrence, one of the report\u2019s authors. This month, a version of the policy was also adopted by the US presidential candidate Bernie Sanders.<\/p>\n

And yet, outside McDonnell\u2019s circle and the transatlantic radical left, the new economics has gone largely unnoticed \u2013 or been casually derided. The black holes of Brexit and the Tory leadership contest are partly responsible, sucking attention away from everything else. But so is the radical nature of the new economics itself. Transforming or ending capitalism as we know it \u2013 the new economists differ as to which is the goal \u2013 is a difficult idea for most British politicians and journalists to take on board. After half a century accepting the economic status quo, they associate any leftwing alternatives to it either with out-of-date postwar social democracy \u2013 aka \u201cthe 70s\u201d \u2013 or with leftwing authoritarianism, with present-day Venezuela or the Soviet Union.<\/p>\n

However often McDonnell says in interviews that he wants to see a democratic economy, the adjective most frequently applied to him is still \u201cMarxist\u201d. \u201cThe new economic thinking is almost like a frequency that can\u2019t be heard,\u201d says Guinan.<\/p>\n

But with neoliberalism ailing, and the right bereft<\/a> of other economic ideas, as the Conservative leadership contest is currently demonstrating, the left\u2019s new economics may have a long fut ure \u2013 whether or not McDonnell and Jeremy Corbyn\u2019s Labour party wins power. To borrow a line from Thatcher, there is now an alternative.<\/p>\n

The dream of a democratic economy has flickered on the margins of leftwing politics for at least a century. During the early 1920s, the British socialist theorists GDH Cole and RH Tawney both wrote fresh, provocative books arguing that workers should manage themselves, rather than submit to employers or shareholders \u2013 or to the state, as more orthodox Labour thinkers envisaged. In economic life, as in politics, Tawney argued in 1921, \u201cmen should not be ruled by an authority which they cannot control\u201d.<\/p>\n

This empowerment of the workers was intended to be the first step in a larger transformation. \u201cThe real aim,\u201d wrote Cole in 1920, should be \u201cwresting bit by bit from the hands of the possessing classes the economic power which they now exercise\u201d, in order to ultimately \u201cmake possible an equitable distribution of the national income and a reasonable reorganisation of Society as a whole\u201d.<\/p>\n

Yet Cole was vague about how this overturning of the traditional order would happen. He ruled out a revolution, and a general strike, on the grounds that workers did not have the necessary access to weapons, or the economic resources to beat their employers in a protracted industrial struggle. A bold Labour government could, in theory, pass the necessary legislation; but the Labour administrations of the 1920s and 30s were cautious, and did not last long.<\/p>\n

When Labour did acquire the confidence and time to reconfigure the economy, during the premierships of Clement Attlee in the 40s and Harold Wilson in the 60s, the party chose to do so through Whitehall plans and bureaucracies, such as Wilson\u2019s Department of Economic Affairs (DEA), rather than by democratising the economy. The results were mixed: the DEA lasted only five years.<\/p>\n

It was not until the 70s that a powerful Labour politician became interested in democratising the economy. Unusually for a Westminster grandee, Tony Benn paid close attention to the decline of deference and growth of individualism during the decade. \u201cMore people want to do more for themselves,\u201d he wrote in 1970. \u201cTechnology releases forces that permit and encourage decentralisation \u2026 It must be a prime objective of socialists to work for the redistribution of power.\u201d<\/p>\n

In 1974, Wilson made Benn secretary of state for industry. The economy was struggling. Benn oversaw and subsidised worker-run cooperatives at three ailing large businesses: the Scottish Daily News, a Glasgow newspaper; Kirkby Manufacturing and Engineering, a Liverpool maker of radiators; and Meriden, a producer of motorcycles in the West Midlands. The challenges these co-operatives faced \u2013 a lack of previous investment, and strong foreign or domestic competitors \u2013 were made worse by unsympathetic, economically conservative civil servants in Benn\u2019s department. An even-handed 1981 report<\/a> on the cooperatives by the leftwing magazine New Internationalist described them as doomed from the start \u2013 they were \u201ccrippled giants\u201d.<\/p>\n

The Scottish Daily News cooperative lasted five months. The Kirby cooperative did better. Eric Heffer, a minister working for Benn, found trade union shop stewards there \u201ctransformed by their experiences\u201d of helping run the business. They became \u201creal worker-managers\u201d. The cooperative made it through the mid-70s recession. But soon after the 1979 election, Margaret Thatcher\u2019s incoming government terminated the experiment by cancelling Kirkby\u2019s subsidies. Meriden survived the change of government, and another recession in the early 80s. But it went bankrupt in 1983.<\/p>\n

Benn himself lasted only a year in the industry department, before he was removed by Wilson, who had never completely accepted his radicalism. Benn never held such a pivotal economic post again. Just as significantly, the saga \u201cundermined the co-operative option in Labour party policymaking circles for decades to come,\u201d says Gordon-Farleigh.<\/p>\n

From Benn\u2019s demotion in 1975 until Jeremy Corbyn\u2019s election as leader 40 years later, the Labour hierarchy broadly accepted that the economy should be based on profit, competition, and top-down management. The attempts by Benn and others on the British left during the 70s to establish what they sometimes provocatively called \u201cworkers\u2019 control\u201d were largely forgotten, or remembered as just another of a derided decade\u2019s failed utopias. The chance for a democratic economy seemed to have gone.<\/p>\n

Yet during the lean years that followed for the British left, another experiment in democratising the economy began \u2013 across the Atlantic, in a country less associated with revolts against capitalism. It was more local, but also more thorough than Benn\u2019s backing of a scattering of vulnerable co-operatives, and it sought to mobilise the power of consumers rather than producers.<\/p>\n

Gar Alperovitz is an 83-year-old American economist and activist. Since the 60s, he has doggedly promoted economic innovations that put social before commercial goals. Often, he has been a fringe figure, but intermittently he has attracted wide attention. In 1983, he featured heavily in a Time magazine cover story about the future of the economy. In 2000, at the University of Maryland, he co-founded the Democracy Collaborative, a centre for research about how to revive the political and economic life of declining parts of the US, which gradually expanded into an activist body as well.<\/p>\n

\u201cTroubled American cities are in a more advanced state of decay than their British equivalents,\u201d says Guinan, who has worked for the Democracy Collaborative for a decade. \u201cBut American local government also has greater powers. So you have the ability to create radical new models from the ground up.\u201d<\/p>\n

In 2008, the Democracy Collaborative began working in Cleveland, one of America\u2019s poorest big cities, which had been losing jobs and residents for decades. The activists followed an Alperovitz strategy called \u201ccommunity wealth-building\u201d. It aims to end struggling local economies\u2019 reliance on unequal relationships with distant, wealth-extracting corporations \u2013 such as chain retailers \u2013 and to base these economies around local, more socially conscious businesses instead.<\/p>\n

In Cleveland, the Democracy Collaborative helped set up a solar power company, an industrial laundry, and a city-centre hydroponic farm growing lettuces and basil. All three enterprises were owned by their employees, and some of their profits went to a holding company tasked with establishing more cooperatives in the city. All three enterprises have succeeded, so far. The goal of the project was summed up in blunt, almost populist terms by one of the Democracy Collaborative\u2019s co-founders, Ted Howard, in 2017: \u201cStop the leakage of money out of our community.\u201d Yet \u201ccommunity wealth building\u201d also has a more subtle purpose: it is a concrete demonstration that economic decisions can be based on more than neoliberalism\u2019s narrow criteria.<\/p>\n

Howard was speaking at a new economics conference in England, which had been organised by McDonnell. The two men are on first-name terms. Last year, McDonnell introduced Howard at another Labour event, in Preston: \u201cWe bring him across on a regular basis now, to explain the work that he\u2019s done.\u201d<\/p>\n

McDonnell has long been interested in decentralising and democratising the economy. He frequently cites Tawney, Cole and Benn in speeches. During the 80s, McDonnell was deputy leader and effectively the chancellor of the Greater London Council (GLC), which pursued Benn-style experiments with state-backed co-operatives, with similarly mixed results, until it was abolished by Thatcher in 1986.<\/p>\n

Contrary to his usual portrayal as a statist ogre, McDonnell believes there are limits to how far the left can increase taxes and government spending. In his view, many voters are unwilling, or simply unable, to pay much more tax \u2013 especially when living standards are squeezed, as now. He also believes that central government has lost authority: it is seen as simultaneously too weak, short of money thanks to austerity; and too strong \u2013 too intrusive and domineering towards citizens. Instead of relying on the state to create a better society, one of McDonnell\u2019s close allies argues, leftwing governments, at both the municipal and national level, \u201chave to get into changing how capitalism works\u201d.<\/p>\n

In recent years, with McDonnell and Corbyn\u2019s encouragement, and guidance from the Democracy Collaborative, many of the principles of \u201cthe Cleveland model\u201d, as it is reverently known in transatlantic leftwing circles, have been adopted by the Labour-run council in the small, ex-industrial city of Preston in Lancashire<\/a>. The regeneration has been promoted as a foretaste of Britain under a Corbyn government.<\/p>\n

Preston\u2019s hilltop city centre, which had been fading for decades, now has a refurbished and busy covered market, new artists\u2019 studios in former council offices, and coffee and craft beer being sold from converted shipping containers right behind the town hall. All these enterprises have been facilitated by the council. Less visibly, but probably more importantly, the city\u2019s large concentration of other public sector bodies \u2013 a hospital, a university, a police headquarters \u2013 have been persuaded by the council to procure goods and services locally whenever possible, becoming what the Democracy Collaborative calls \u201canchor institutions\u201d. They now spend almost four times as much of their budgets in Preston as they did in 2013.<\/p>\n

The council leader is Matthew Brown, an intense, angular 46-year-old who was partly inspired to enter politics by seeing Benn on television as a teenager. \u201cWhat we\u2019re doing in Preston is common sense, but it\u2019s also ideological,\u201d Brown told me, when we met in his sparse office. \u201cWe\u2019re living through a systemic crisis of capitalism, and we\u2019ve got to create alternatives.\u201d By doing so \u2013 especially at a time when local councils are supposed to have been hugely weakened by government cuts \u2013 Preston is in small but visible ways undermining the authority of neoliberalism, dependent as it is on the insistence that no other economic options are possible.<\/p>\n

The council, Brown continued proudly, was \u201csupporting local small businesses rather than big capitalists\u201d. It was using its \u201cleverage\u201d as a procurer to make businesses behave more ethically: pay the living wage, recruit more diverse staff. And it was aiming to make the city a place where cooperatives were mainstream rather than niche: \u201cMy intention is to get them to 30%, 40% of our economy.\u201d<\/p>\n

I asked whether he had any doubts about a city with a population of less than 150,000 acting as a model for reshaping the whole British economy \u2013 and by implication, economies beyond. \u201cNo,\u201d he said. \u201cI\u2019m quite strong-minded.\u201d<\/p>\n

There is a confidence about the new economists, which comes as a surprise after all the left\u2019s defeats during the 80s and 90s. But with capitalism less effective and popular than it was then, the new economists believe they are now engaged in what the political theorist Antonio Gramsci \u2013 a big influence on them and McDonnell \u2013 called a \u201cwar of position\u201d: a steady accumulation of alliances, ideas and public credibility. Berry describes this process as a \u201ctransition\u201d that can lead to a different economy. McDonnell told me in 2017 that he wanted \u201ca staged transformation of our economic system\u201d. If enough other Labour councils copy Preston \u2013 and quite a few are interested \u2013 then even without a Corbyn government, let alone any kind of socialist revolution, the British economy will have moved leftwards, both in the priorities it chooses and the interests it favours.<\/p>\n

A few hours after meeting Brown in Preston, I spoke to McDonnell again about the left\u2019s new intellectual vibrancy. \u201cWe\u2019re beginning to reconstruct what we had with Tony Benn in the 70s,\u201d he said. \u201cA range of thinking groups \u2013 NEF and Class [another leftwing economic thinktank] have been revitalised. Michael Jacobs is buzzing with ideas. We\u2019re arguing effectively for a more democratic economy. Doubling the number of cooperatives in the UK\u201d \u2013 as NEF advocated last year \u2013 \u201cthat\u2019s relatively timid. We want to go further.\u201d<\/p>\n

He offered no more details. But the \u201cinclusive ownership fund<\/a>\u201d policy adopted by Labour shows the potential of the new economic ideas. The funds are intended to be Trojan horses: inserting into a company\u2019s ownership structure a group of shareholders \u2013 its employees \u2013 who are more likely to favour higher wages and long-term investment. \u201cThe funds are meant to tip the balance,\u201d says Lawrence, \u201ctowards a different kind of corporate culture.\u201d Or as the writer and activist Hilary Wainwright, one of the Labour left\u2019s shrewdest thinkers since the 70s, puts it: \u201cRadical change, when it destabilises the status quo in the right way, creates further opportunities for change.\u201d<\/p>\n

But turning the new economics into national policies will be hard, even if Labour wins power. Last summer, the head of NEF, Miatta Fahnbulleh, was invited to an awayday for Treasury civil servants to talk about the new economy. \u201cWhen I got there,\u201d she told me, \u201cI quickly realised that to the Treasury the new economy just means tech [companies]. When I started talking instead about how the economy could operate differently, they bought my premise that the status quo has problems \u2013 they\u2019re the Treasury, they\u2019ve got the data. They thought that the new economics was interesting \u2026 But only in a debating society sort of way.\u201d<\/p>\n

Before NEF, Fahnbulleh worked for the cabinet office and the 10 Downing Street strategy unit. She predicts there will be Whitehall resistance to the new economics: \u201cWhitehall hates big change \u2013 every time.\u201d Jacobs, who has longer experience of government, is slightly more optimistic. \u201cSome of the younger Treasury people will probably be quite excited by a new economic approach. Some of the older ones will think it\u2019s all wrong. And others will just implement whatever the government asks.\u201d<\/p>\n

He has helped run seminars for McDonnell and his team about what to expect from Whitehall, and how to respond. \u201cMy advice is, \u2018If you want to do something new, set up a new unit, and recruit. You\u2019ll get people joining who want to do new things.\u201d But Benn\u2019s experience at the department of industry suggest that outflanking Whitehall\u2019s conservatives may not be that simple.<\/p>\n

And then there is the business establishment. Since Thatcher, it has become accustomed to deferential governments, to getting its own way over other interest groups, and to profits and share prices trumping other measures of a company\u2019s economic or social value. The intention of the new economists to end these imbalances has not gone down well. \u201cThe Confederation of British Industry (CBI) really hates<\/em> inclusive ownership,\u201d says one McDonnell ally. \u201cYou can feel the chill whenever we bring it up.\u201d<\/p>\n

When I asked the CBI for their thoughts on the new economics, there was a week-long silence, and then, after I chased them, a terse statement: \u201cLabour seems determined to impose rules that display a wilful misunderstanding of business.\u201d<\/p>\n

The new economists say they are not intimidated. \u201cWe in the movement need to be absolutely frank about this,\u201d says Guinan. \u201cA democratic and an exploitative economy are fundamentally incompatible. We should mount a straightforward, left-populist attack on these business interests. We should say to them: \u2018Off you go to Singapore!\u2019 The left shouldn\u2019t be afraid of a little creative destruction\u201d, he says, cheekily borrowing a phrase usually used by free-marketeers. Jacobs agrees: \u201cExploitative companies can go to the wall.\u201d<\/p>\n

That might sound like a reckless leftwing fantasy. But the new economists argue convincingly that hugely disruptive change is coming to the British economy, anyway \u2013 thanks to Brexit, automation and the climate emergency. \u201cBrexit alone will require a very interventionist state\u201d to help the economy adapt, says Lawrence. \u201cIt will make it much harder for a civil servant to say, \u2018You simply can\u2019t do that.\u2019\u201d<\/p>\n

But what do the new economists want to come after neoliberal capitalism? In Preston, after Brown had spoken evangelically to me about the virtues of \u201clocal businesses\u201d and \u201clocal jobs\u201d, I asked whether his council was actually saving capitalism in the city \u2013 by making it more socially sensitive \u2013 rather than supplanting it. For once, he paused. \u201cWe\u2019ve got to be pragmatic,\u201d he said. \u201cWe are still in a free-market environment. And I don\u2019t see local businesses as big capitalists, anyway. The vast majority only have one or two people working for them. There\u2019s almost no one to exploit. Shareholders are not involved.\u201d Not everyone on the left would see small businesses \u2013 often keen supporters of rightwing parties and austere social and economic policies \u2013 in such benign terms. But Brown went on: \u201cThe Labour party, nationally, is getting away from the old pro-business\/anti-business argument. Creating social value is what matters.\u201d<\/p>\n

Later I asked McDonnell, too, whether his approach risked saving rather than replacing capitalism. He smiled, and went into the gnomic mode he adopts when talking about tricky issues. \u201cWho incorporates who …\u201d he said. \u201cThat\u2019s the debate!\u201d Then his smile turned more mischievous. A Corbyn government, he said, would \u201cwelcome\u201d business \u201cinto our warm embrace\u201d.<\/p>\n

The McDonnell ally I spoke to said that whenever the question of the economy\u2019s long-term trajectory came up in Labour discussions, \u201cWe avoid that conversation. There is no consensus in the party.\u201d Then he added: \u201cPersonally, I\u2019d be quite happy if Britain ended up as Denmark.\u201d<\/p>\n

McDonnell often cites Germany as another country where capitalism is more benign. Wainwright, who has known McDonnell for decades, has a usefully flexible prediction about what might happen to Britain\u2019s economic culture if he becomes chancellor. \u201cEn route to a socialist society,\u201d she says, \u201cthere might be moments when a different capitalism emerges\u201d \u2013 ie, a more benign one.<\/p>\n

Yet the problem for the left with settling for \u201ca different capitalism\u201d, however temporarily, is that it may simply enable capitalism to regroup, and then resume its Darwinian progress. Arguably this is exactly what happened in Britain during the last century. After the politically explosive economic slump of the 1930s \u2013 the precursor to today\u2019s crisis of capitalism \u2013 during the postwar years many business leaders seemed to accept the need for a more egalitarian economy, and developed close relationships with Labour politicians. But once the economy and society had been stabilised, and rightwingers such as Thatcher started making a seductive case for a return to raw capitalism, the businessmen switched sides.<\/p>\n

Another difficulty for the new economists and their political allies is to persuade voters \u2013 brought up with the idea that profit and growth are the only economic outcomes that matter \u2013 that other values should matter more from now on. Even saving the environment is still a hard sell. \u201cThe effect of economic growth on the planet is not an issue that\u2019s talked about nearly enough on the left,\u201d admits Berry. \u201cAs for de-growth\u201d \u2013 the current green term for dropping growth as an economic objective \u2013 \u201cthe Labour party won\u2019t touch it with a bargepole.\u201d McDonnell\u2019s ally agreed. \u201cDe-growth,\u201d he said, \u201cis just appalling labelling.\u201d Guinan says the problem is not just presentational: \u201ca politics of de-growth has not yet been invented that will carry the public.\u201d<\/p>\n

Instead, Labour have recently begun promoting a version of the Green New Deal: an enticing but still largely theoretical scheme advocated by steadily more leftists and environmentalists in Britain and the US over the past decade. It aims to address the climate emergency and some of capitalism\u2019s problems simultaneously, by a huge increase in government support for green technologies and the highly skilled, hopefully well-paid jobs needed to create them. In a speech this week, McDonnell said that this project needed to be Britain\u2019s biggest peacetime undertaking since the Attlee government\u2019s conversion of the economy from war to peace during the 40s. In April, the shadow business secretary Rebecca Long-Bailey, a McDonnell protege, wrote a Guardian article<\/a> advocating a \u201cgreen industrial revolution\u201d, including \u201cdeep-water turbines in the North Sea\u201d, which \u201ccould provide four times Europe\u2019s entire electricity demand\u201d and \u201ccould be built and delivered from the UK\u201d. It was quite a thrilling vision; but the turbines were the only potential new technology the article mentioned.<\/p>\n

Another enormous issue that the new economists often skirt is whether many of today\u2019s workers really want more of a voice in their workplaces. When \u201cindustrial democracy\u201d was last a popular idea on the left, in the 70s, work was arguably more fulfilling and central to people\u2019s lives than it had ever been before. Office jobs were replacing factory jobs, work was a strong engine of social mobility, and membership of powerful trade unions had accustomed the majority of British employees to being consulted, of having some agency in their working lives. But in 2019, empowering experiences at work are less common. For more and more people, however well-qualified, employment is short-term, low-status, unrewarding \u2013 barely part of their identity at all.<\/p>\n

Gordon-Farleigh has spent years trying to interest people in forming co-operatives, and not always succeeding. \u201cContemporary capitalism has produced a pacified, passive workforce,\u201d he says. \u201cA lot of people even like to feel a bit alienated by capitalism \u2013 to not really understand how it works. They need to be reskilled, politically. Then we have to look at what economic powers they actually want.\u201d<\/p>\n

In April, after waiting for a pause in the seemingly endless winter of Brexit arguments, Mathew Lawrence launched a new economics thinktank, Common Wealth, which aims to draw all the strands of the movement together, with an evening event in London. After an uplifting but slightly too slick film about Common Wealth\u2019s mission had been shown on a big screen \u2013 which was similar in tone and content to a recent Labour party political broadcast called Our Town<\/a> \u2013 Lawrence was introduced to the audience by Guinan. In the speech that followed, Lawrence covered so much ground that his voice became a mutter, too fast for anyone unfamiliar with the new economics to follow. During this formal bit of the evening, Common Wealth risked feeling like a project for insiders \u2013 just another London thinktank, with the former Labour leader Ed Miliband on its board.<\/p>\n

Yet the rest of the launch felt different. The hired room was in the East End, far from the usual thinktank belt around Westminster, and it was packed, and loud with earnest talk. Almost everyone was in their 20s or 30s, many of them with scuffed Dr Martens shoes and austere modern haircuts \u2013 the now-familiar sight of British millennials gathering to discuss changing the world. Two hours after the start of the event, people were still arriving, and hardly anyone had left. When I did, just before 11, the lights were still on in the nearby office towers of the City of London, which overshadows the East End, and the economy of the whole country beyond. But walking away from the buzzing room, especially after a bottle of the Common Wealth craft ale that had been made for the occasion, it was possible to believe that the bankers\u2019 best days might be numbered, and that the new economics would tell us how.<\/p>\n

______________________________________________________<\/p>\n

Andy Beckett is a feature writer for the<\/em> Guardian and author of<\/em>\u00a0Promised You a Miracle:\u00a0Why 1980-82 Made Modern Britain<\/a>\u00a0and<\/em>\u00a0Pinochet in Piccadilly: Britain and Chile’s Hidden History.<\/p>\n

Go to Original \u2013 theguardian.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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