Letter in response to the FT Series ‘The Corbyn Revolution’, Thursday 5th September 2019

Letter in response to the FT Series ‘The Corbyn Revolution’, Thursday 5th September 2019 This letter is from the Financial Times - link and text below: https://www.ft.com/content/6da72060-cfd2-11e9-99a4-b5ded7a7fe3f Your series of articles exploring the Labour Party’s economic agenda fails to appreciate the severity of the UK’s current economic condition, and reproduces a number of misconceptions.

There is growing political consensus that the UK’s economic model is failing. The economy has been performing badly for more than a decade. Household debt has fuelled the meagre recovery from the 2007/8 crash. Earnings have stagnated, with many families borrowing to cover basic expenses; an estimated 8.3 million people cannot keep up with debts or bills. The housing market is in crisis, with young people set to be poorer than their parents. Since the 1980s, the wealthiest have disproportionately benefited from growth, driving high levels of political disillusionment. Action to prevent climate and environmental breakdown, and prepare for their effects, is wholly inadequate.

All political parties are proposing increases in public spending to meet these challenges. Your headline “Cost of Labour’s economic overhaul soars” (September 3) implies that Labour’s proposals are unaffordable, but the Office of Budget Responsibility analysis cited ignores the impact of public spending on growth, and thus on tax receipts. As senior IMF economists have noted in their critique of austerity, this relationship is critical. Today the government can borrow at negative real interest rates: many pressing infrastructure, education and environment projects offer returns well above zero and can therefore generate higher future tax receipts, supporting not detracting from fiscal sustainability. Taxation levels in the UK remain lower than in most European countries. But reform of fiscal policy is not enough. Ownership of capital helps determine in whose interests the economy operates. It is a category error to suggest a mechanism such as an Inclusive Ownership Fund would “cost” companies or that the state will “seize” shares. The proposal neither reduces the book value of corporate entities, nor requires them to pay cash out. By requiring companies to issue new shares and give them to a mutual fund — mirroring the accepted practice of issuing shares for executive compensation — it ensures instead that workers share in the wealth they create.

The UK’s economic model has failed before. In both the 1940s and 1980s, major policy changes were made in response. At first seen as overly radical, they were later accepted across the political spectrum. Since 2008 the UK economy has again been failing, with today’s political crisis one of the consequences. This is precisely the time when bold ideas are needed from all political parties.

David Blanchflower Professor of Economics, Dartmouth University; former Monetary Policy Committee member

Victoria Chick Emeritus Professor of Economics, University College London

Stephany Griffith-Jones Financial Markets Director, Initiative for Policy Dialogue, Columbia University; Emeritus Professorial Fellow, Institute of Development Studies, University of Sussex

Susan Himmelweit Professor Emeritus of Economics, Open University

Sir Richard Jolly Professor, Institute of Development Studies, University of Sussex; former Deputy Director of UNICEF

Mariana Mazzucato Professor in the Economics of Innovation & Public Value; Director, UCL Institute for Innovation & Public Purpose

Thomas Piketty Professor, Paris School of Economics and EHESS

Dani Rodrik Professor of Economics, Harvard University

Patrick Allen Chair of the Progressive Economy Forum

Carolina Alves Joan Robinson Research Fellow in Heterodox Economics, University of Cambridge

Ole Bjerg Associate Professor, Copenhagen Business School

Mark Blyth Professor of International Political Economy, Brown University

Fran Boait Director, Positive Money

Ben Carpenter CEO, Social Value UK

Ha-Joon Chang Reader in the Political Economy of Development, University of Cambridge

John Christensen Director, Tax Justice Network

Jennifer Churchill Lecturer in Economics, Kingston University

Sarah-Jayne Clifton Director, Jubilee Debt Campaign

Christine Cooper Professor of Accounting, University of Edinburgh

Panicos Demetriades Professor of Financial Economics, University of Leicester

Danny Dorling Halford Mackinder Professor of Geography, University of Oxford

Trevor Evans Emeritus Professor of Economics, Berlin School of Economics and Law

Miatta Fahnbulleh Chief Executive, New Economics Foundation

Joshua Farley Professor, Gund Institute for Ecological Economics, University of Vermont

Lucy Findlay Managing Director, Social Enterprise Mark CIC

Felix FitzRoy Emeritus Professor of Economics, University of St Andrews

Daniela Gabor Professor of Economics and Macro-Finance, University of the West of England

John Grahl Professor Emeritus in Economics, Middlesex University

Joe Guinan Executive Director, The Next Systems Project; Senior Fellow, Democracy Collaborative

Barbara Harriss-White FAcSS Emeritus Professor of Development Studies, University of Oxford

Philip Haynes Professor of Public Policy, University of Brighton

Jerome de Henau Senior Lecturer in Economics, Open University

David Hillman Director, Stamp Out Poverty

Joseph Huber Professor of Economic Sociology, Martin Luther University of Halle-Wittenberg

Will Hutton Principal, Hertford College Oxford

Michael Jacobs Professorial Fellow, Sheffield Political Economy Research Institute (SPERI)

Laurence Jones-Williams Interim Director, Rethinking Economics

Steve Keen Professor, Distinguished Research Fellow, University College London

Tom Kibasi Director, Institute for Public Policy Research; Chair, IPPR Commission on Economic Justice

Sue Konzelmann Reader in Management, Birkbeck University of London

Neil Lancastle Senior Lecturer, Department of Accounting and Finance, De Montfort University

Stewart Lansley Visiting Fellow, University of Bristol

Mathew Lawrence Founder and Director, Common Wealth

Henry Leveson-Gower Founder and CEO, Promoting Economic Pluralism

Eric Lonergan Economist

Laurie Macfarlane Head of Patient Finance, UCL Institute for Innovation and Public Purpose; Economics Editor, OpenDemocracy

Sara Maioli Senior Lecturer in Economics at Newcastle University

Terrence McDonough Emeritus Professor of Economics, National University of Ireland, Galway

James Meadway Economist

Jean-Luc de Meulemeester Professor, ULB Brussels

Jo Michell Associate Professor of Economics, University of the West of England

Simon Mohun Emeritus Professor of Political Economy, Queen Mary University of London

Johnna Montgomerie Head of Department for European & International Studies, King’s College London

Mick Moore CEO, International Centre for Tax and Development

Richard Murphy FCA FAIA Professor of Practice in International Political Economy, City University of London

Natalya Naqvi Assistant Professor in International Political Economy, London School of Economics

Martin O'Neill Senior Lecturer in Political Philosophy, University of York

Robert Palmer Executive Director, Tax Justice UK

Avinash D. Persaud Emeritus Professor; Chairman, CARICOM Commission on the Economy

Kate Pickett Professor and University Research Champion for Justice & Equality, University of York

Jonathan Portes Professor of Economics and Public Policy, King’s College London

Kate Raworth Senior Associate, Environmental Change Institute, University of Oxford

Howard Reed Director, Landman Economics

Asad Rehman Executive Director, War on Want

Carys Roberts Chief Economist, Institute for Public Policy Research

Sergio Rossi Professor of Economics, University of Fribourg

Josh Ryan-Collins Head of Research, UCL Institute for Innovation and Public Purpose

Emmanuel Saez Professor of Economics, University of California, Berkeley

John Sauven CEO, Greenpeace

Malcolm Sawyer Emeritus Professor of Economics, University of Leeds

Vivien Schmidt Professor of International Relations and Political Science, Boston University

Marianne Sensier Research Fellow, University of Manchester

Prem Sikka Professor of Accounting and Finance, University of Sheffield

Robert Skidelsky Emeritus Professor of Political Economy, University of Warwick

Guy Standing FAcSS Professorial Research Associate, SOAS University of London

Frances Stewart Professor Emeritus of Development Economics, University of Oxford

Jan Toporowski Professor of Economics and Finance, SOAS University of London

Yanis Varoufakis Professor of Economics, University of Athens; Leader of MeRA25

Roberto Veneziani Reader in Economics, Queen Mary University of London

Elisa Van Waeyenberge Senior Lecturer in Economics, SOAS University of London

Stewart Wallis Chair, Wellbeing Economy Alliance (WEAll)

John Weeks Professor Emeritus of Development Economics, SOAS University of London

Richard Wilkinson Emeritus Professor of Social Epidemiology, University of Nottingham

Simon Wren-Lewis Emeritus Professor of Economics and Fellow of Merton College, University of Oxford

Adrian Wood Emeritus Professor of International Development, University of Oxford

Dimitri Zenghelis Project Leader, The Wealth Economy, Bennett Institute, University of Cambridge; Senior Visiting Fellow, Grantham Research Institute, London School of Economics

Gabriel Zucman Professor of Economics, University of California, Berkeley