What happened at John McDonnell’s first New Economics event?

27th January, 2016 1:04 pm

John McDonnell

The New Economics debate series, announced by John McDonnell earlier this month, formally launched on Tuesday with a powerhouse lecture by Mariana Mazzucato, a member of Labour’s star-studded Economic Advisory Committee.

The series promises to provide the raw materials with which Labour can build a new political economy, something sorely lacking since last May’s defeat- and, some would argue, since long before then.

Mazzucato is a fine standard-bearer for the initiative: fiercely intelligent, eloquent, and effortlessly charming, I doubt I was only one in the room who wished she could bat for Labour on the economy at every Question Time between now and May 2020.

Yet Labour doesn’t need another politician – it needs ideas, and it was Mazzucato’s that John McDonnell and Jeremy Corbyn, who were both in attendance, had come to plunder.

Mazzucato’s central contention is that the state has been badly miscast as the pantomime villain of capitalism by free market ideologues- so much so that public discourse has all but erased any mention of the essential role government plays in stimulating private enterprise.

Yet “if you look at the history of capitalism…It actually requires a lot of thinking outside the box- also from the public sector,” she said.

The beneficence of this ‘entrepreneurial state’, as she terms it, abounds at every turn. The iPhone, for example, owes many of its innovations to US-government investment in technologies originally destined for the military, which then percolated down to the private sector. Similarly, Google’s search algorithm was developed with funding from the US National Science Foundation.

This state activism, though, has not received the credit it deserves in a public conversation dominated by those who say government should only intervene in markets in the event of failure. The rest of the time, they say, it should stay the hell out of the way.

A key task of progressive parties, then, is to debunk this “cartoon image”, as Mazzucato called it, of a bumbling public sector fit only to administrate, rather than innovate.

Then, the real work can begin on forging a new narrative on wealth creation, one which places the public sector firmly at its heart- not as a dead hand stifling enterprise, but as an exciting partner of the private sector:  providing seed capital, research funding, and the sort of “patient, long-term, committed finance” early stage companies need in order to thrive.

This conception of the state is far removed from the old socialist dogma of nationalisation. In fact, Mazzucato did not mention full – scale nationalisation once as a tool to stimulate a new economy.

However, she did make the case for the state to develop a system for socialising the gains of its investments, rather than just the losses. After all, if taxpayers foot the bill for failed state-backed enterprises- like Concorde, for instance- they should reap the windfall of successful ones, like Tesla Motors in the US.

The entrepreneurial state must also be “mission-orientated” if it is to score more successes than failures in its investment portfolio. Mazzucato says the focus should therefore be on “growth that is “smart (innovation led), growth that is inclusive, (that produces less not more inequality) and growth that is sustainable.”

However, movers and shakers in government and business have not been prepared to talk about the “immense policy making” required to “tilt the playing field” towards this sort of growth, she says.

This must be Labour’s task: to start the conversation on a state that acts as an economic dynamo alongside the private sector, rather than as a cumbersome administrator or feckless CEO of nationalised entities.

It’s a tall order, and Mazzucato made no bones about the difficulties associated with making the case for the entrepreneurial state in these febrile political times.

John McDonnell, who sat rapt to attention throughout, has a lot of work to do.

To report anything from the comment section, please e-mail [email protected]

Latest

  • Comment Featured Uncategorized Britain seems to be fragmenting but English socialism is being reborne

    Britain seems to be fragmenting but English socialism is being reborne

      by Tom Kelsey and Jon Wilson The referendum brought to light deep fractures that risk destroying the left, and with the prospect of a bruising leadership election the divisions seem to be getting wider. Working class voters in once industrial towns and cities think their political leaders are out-of-touch with no understanding of life in a country many feel is rapidly changing for the worse. The idea of the nation, particularly of a resurgent England, has become a channel […]

    Read more →
  • Comment Featured Uncategorized As the dust settles on the vote for Brexit, it is time to reach out to our democracy’s missing millions

    As the dust settles on the vote for Brexit, it is time to reach out to our democracy’s missing millions

    At a critical point in the development of the Labour party leadership, this article offers a few thoughts on a future Labour agenda for democratic reform that transcends internal politicking. After four years of working at Bite The Ballot, a party-neutral youth democracy movement – and one that unites decision-makers of all persuasions in its work – I can say that British politics still has a long way to go on the road to democratic renewal. Though the pieces are still […]

    Read more →
  • Comment Featured We must bring politics back to our communities rather than leave people to rely on Westminster “elites”

    We must bring politics back to our communities rather than leave people to rely on Westminster “elites”

    All told, it’s not been a good few months for the standing of our politicians. Whether you think there was a good case to have a referendum on the UK’s membership of the EU or not, the reason we were all put through it was ultimately one of internal Conservative party management. A fundamental question about who we are as a nation and how to best represent our interests was embarked upon because David Cameron thought it was his best […]

    Read more →
  • News Kinnock: Labour must show that its socialism can “work in practice”

    Kinnock: Labour must show that its socialism can “work in practice”

    Neil Kinnock has criticised “ideological flights of fancy”, and said that Labour needs to show that socialism can “work in practice” before it can be successful. The former leader has said that winning parties have to be “professional” as well as having a “sense of belief”, and launched a strong attack on “career politicians”. “You can enchant people by ideological flights of fancy, but that’s not going to help them at all,” Lord Kinnock told BBC programme Conversations this week. He said […]

    Read more →
  • Comment Featured Wayne David: Top-down change no longer works – we must boost democracy from the ground up

    Wayne David: Top-down change no longer works – we must boost democracy from the ground up

    If we are serious about extending political engagement and closing the gap between people and politics, Labour needs to do two things. Firstly, we need to have a coherent and powerful narrative about bringing power closer to the people. And secondly, we need to have a series of practical proposals to make the political process more accessible and relevant to people. Even though Labour was the party which introduced devolution in Scotland, Wales and Northern Ireland, and recently favoured “permissive” […]

    Read more →
x

LabourList Daily Email

Everything Labour. Every weekday morning

Share with your friends










Submit