New Economic Thinking - part V of this series

Let me return to the list of books I suggested last week were key reading for anyone wanting ideas with which the socio-economic systems which rule us might be more effectively challenged and changed.   

I realise that it will strike many as an odd collection – some are descriptive; others prescriptive. Some (Bregman, Collier, Mander) are easy to read; others (Arrighi, Gibson-Graham) much more demanding. Some go into great depths on the source of powerful economic ideas (Blyth, Davey, Mason) whereas others explore the practicality of economic alternatives (Cumbers, Labour party, Laloux, Mazucatto, Restakis, Tirole). Some focus on political institutions (Dorling, Wainwright); others (Kennedy, Srnkek, Streeck) take a much wider sociological perspective. And I don’t necessarily agree with them all – eg Mulgan

So why are they on the list? Simply that they illustrate the variety of ways in which the search for a better way can be approached and of which we need to be aware. The diagram in this post makes the point, as always, much better graphically. It is the same one which heads this post - but much easier to read

I was heartened by this article in June about the support developing in Britain amongst younger leftist thinkers for a new economic model… It starts with a bold assertion -

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.

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. 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.

“New Thinking” about the economy has been going on since at least the new millennium see, for example the New Economics Foundation which some, however, have seen as a bit too close to corporate power. But, from my position outside the UK, it was the Labour Party manifesto of 2017 that gave the first real sense that things were definitely changing. And last year's Open Democracy’s 190 page New Thinking for the British economy was clear confirmation.

Explaining the genesis of the new collection an excerpt from which was published on CommonSpace yesterday), Macfarlane says: “What we were trying to do with this book is synthesise some of the best thinking out there, across a host of important policy areas. Crucially, we weren’t just looking at the traditional levers of economic policy – trade, finance, industrial policy, although we do look at all those as well. We [also] took a broader approach and asked what are the forces that shape the power dynamics and political economy of the UK today. So, we looked at things like racial inequality, media reform, constitutional issues, our care systems… A broader look than what you might typically get.

“We were asking what is the emerging consensus on what a post-neoliberal economy looks like – a diagnosis of what the problems are today, what the vision for change is, what policies we need to get there, and crucially, some strategic thinking about how we get from here to there. What are the critical paths for the first 100 days of an incoming government? We all know neoliberalism is bust, but then how do we move the conversation forward?”

To the staid Brits, many of the ideas in these texts will be almost revolutionary but are in fact commonplace in France and Germany.
Michael Albert is a name I came across in the 1990s as a celebrant of a “Rhenish capitalism” and reflects in this 2009 piece on post-capitalist alternatives. I’ve just noticed his latest book Practical Utopias – strategies for creating a desirable society; M Albert (2017) which looks to be an update of 3 volumes he wrote a few years back of which this is the first Fanfare for the Future vol 1 (2012)

And this was a useful German briefing from 2010 discussing the “solidarity economy” in Europe as a whole with a rather softer left update more recently

And the Americans are also leaving the Brits behind…The Brookings Institute is a very staid American Foundation but has just produced a fascinating analysis (of 23 pages) challenging the "market paradigm" and suggesting that the country has a choice between 3 models “all of which reject the primacy of the markets” – what the author calls first “Social democracy (or democratic socialism)”; then “democratic liberalism” (a curious term for a slightly more relaxed version of the mixed economy than social democracy; and, finally, “social capitalism”. You can read “Capitalism and the future of democracy” here.

And a few years earlier, The Next System project ran A New Cooperative Economy written by someone I remember from the UK Guy Dauncey

Looking again at the 20 odd titles in last week's table, I notice that the most insightful and best written are those outside what we've learned to call "bubbles" - whether those are academic, political, media or whatever.
Quite frequently in the blog I have emphasised how much I’ve learned from the painful process of straddling boundaries

The lesson seems to be that those who "trespass" (like AO Hirschman) over several borders can definitely see further!

Further reading

https://jacobinmag.com/2019/06/jeremy-corbyn-labour-party-city-of-london

People get ready – preparing for a Corbyn Government; C Berry and J Guinan (2018)

https://newleftreview.org/issues/II90/articles/bhaskar-sunkara-project-jacobin.pdf 2014

http://renewal.org.uk/files/Ren26.2_01GuiganandONeill.pdf

https://www.academia.edu/38315422/Joe_Guinan_and_Martin_ONeill_2019_-_From_Community_Wealth_Building_to_System_Change_Local_Roots_for_Economic_Transformation_--_forthcoming_in_IPPR_Progressive_Review_Spring_2019_pre-publication_version_