- Larry Elliott writes that the public is rightly frustrated with an economic model designed to shift money to those who already have the most - and that progressive parties in particular need to offer a meaningful alternative:
The belief on the left was that 2008 sounded the death knell for the model of capitalism that dominated the last quarter of the 20th century and the first decade of the 21st; one based around privatisation, trickle-down economics, and a shift in the balance of power away from organised labour and towards international banks. Lehman’s bankruptcy would prove to be the equivalent of the Opec oil shock of 1973, the moment the pendulum swung, only this time from right to left.- Meanwhile, Nicolas Yan highlights the need to ensure that the gains from automation in particular don't get captured by a lucky few. And Mazzucato offers a list of suggestions as to how to put the power of the state to use in building shared wealth.
It didn’t work out like that. There was no social democratic moment because social democratic parties had largely bought into the idea that markets knew best. They had no critique of what had gone wrong so they lacked a strategy to put things right. What’s more, they still don’t, which is why challenges to Jeremy Corbyn from his Labour party rivals have been so feeble.
Hence the appetite among voters for controls. Ask them whether they support a financial transactions tax and they answer yes. Ask them whether they support curbs on the dumping of cheap Chinese steel that is threatening jobs in Port Talbot and they answer yes. Ask them if they want controls on immigration and they answer yes.
In this, the public shows more consistency than the politicians. Conservative Brexiters are in favour of free movement of capital and goods, but not of people. The Labour party is up for controls on money and goods but supports free movement of labour. The freedoms integral to globalisation are increasingly at odds with democracy. Something has to give.
In the introduction to a recently published book of essays*, Michael Jacobs and Mariana Mazzucato say that the state has a crucial role to play in making economies more prosperous and successful, not least through the role the state can play in nurturing and supporting innovation. This runs counter to the idea that governments should limit themselves to correcting occasional and short-lived market failure, but as Jacobs and Mazzucato rightly note markets are the result of political decisions.
- Lana Payne rightly argues that anybody wanting to see a progressive trade agenda should be fighting against the entrenchment of corporate power through the Trans-Pacific Partnership.
- George Wehby, Dhaval Dave and Robert Kaestner examine the effect of the minimum wage on infant health, and find a substantive improvement where wages are more livable. And Daniel Boffey points out that increased reliance on student loans rather than direct funding for post-secondary education results in worsened inequality.
- Finally, Aaron Wherry points out that Canada's federal government has long had estimates available as to the social cost of greenhouse gas emissions; it's just done nothing to ensure those costs are internalized. And Naomi Klein discusses how the "othering" of the people bearing the largest burden of climate change is producing disastrous environmental and social consequences.