The Democracy Collaborative

Ahead of tomorrow’s British general election, Howard Reed and I look at Labour’s claim that there’s no money left to fix a broken economy, for Tribune Magazine: “Britain is the sixth richest country in the world today — and one of the wealthiest societies in all of human history. Despite the dire state of the country, the problem is not a shortage of resources, but rather that plentiful resources are hoarded at the top. After more than four decades of neoliberalism, the situation is one of vast private affluence amidst widespread public squalor. That Britain does not feel affluent is a result of the extremes of growing inequality and the diversion of wealth and productive capacity away from public goods and services to elite private accumulation and consumption. By way of comparison, in 1945 the postwar Labour government inherited a war-shattered economy laden with debt and had to literally rebuild amidst the ruins. But they managed to create the NHS, nationalised a fifth of the economy, and established the welfare state and the postwar settlement — a truly transformative programme that reshaped the political economy for decades to come. In real terms, Britain’s GDP in 1945 was £383 billion, compared to £2.3 trillion today; we are more than five times richer in real terms than Attlee’s Britain. But it’s even better than that. Britain today is not only richer than Attlee’s Britain, but is also richer in real terms than Truman’s United States — the colossus that bestrode the globe and helped reconstruct war-torn Europe and Japan through the Marshall Plan, establishing the terms for the international system. US GDP in 1945 was equivalent to £1.95 trillion today. The story that Britain lacks the resources to tackle child poverty or to invest in public services or to drive the green transition or rebuild the depleted public realm is exactly that — a story. There is greater wealth in Britain today than was available to the U.S. superpower constructing the postwar order. There is just an unwillingness to shift the resources of a rich system from private accumulation to public need. Even if had Labour maintained their now-abandoned £28 billion-per-year green investment pledge, that would have represented only 1.3 per cent of GDP, or — as has been pointed out — around half of the annual increase in wealth of the top 200 families in Britain since the start of COVID-19 pandemic.”

Martin O'Neill and I respond to Olufemi Taiwo in the latest Boston Review forum, arguing that there is no substitute for state power in decarbonizing the economy.

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I’m in Tribune Magazine on Tata’s shuttering of steel blast furnaces at Port Talbot in Wales and the need for an active community-sustaining industrial strategy for the British economy: “Tata’s decision in Port Talbot underscores the grotesque power that private corporations continue to wield over workers and communities through their locational decisions. Under neoliberalism, cities and regions are encouraged to compete fiercely with one another for jobs and investment in a context of corporate locational blackmail or extortion. Billions are wasted on this form of ‘smokestack chasing’ economic development through tax incentives, outsourcing, and public-private partnerships, which subsidise the extraction of profit by footloose multinational corporations that have no loyalty to local communities. This plays out as a zero-sum – sometimes even negative-sum – game hugely beneficial to corporations but far less so for localities and ordinary people. The conventional development model usually requires huge sums in publicly-funded inducements per job created. Of course, these supposedly ‘new’ jobs are often not really new jobs at all, but jobs that were formerly elsewhere. When the subsidies expire, the game is often played out all over again, with a new location as victim of the corporate shakedown. This dynamic can clearly be seen in Port Talbot, where union officials dismiss Tata’s claim that the closures are about greening their operations globally. ‘It’s nothing to do with green,’ says Gary Keogh, vice-chair of the Port Talbot multi unions. ‘This is about pounds, shilling and pence … They want to make their steel in Jamshedpur [in India] … bring it thousands of miles across the ocean on ships with diesel engines, and call it green. It’s time people were honest.’ Viewed from the perspective of the economy as a whole, the fickle behaviour of mobile international corporate capital and its peripatetic ‘investment’ produces short-term shareholder value at the expense of ‘throw-away cities’ in which entire communities and regions are tossed on the rubbish heap. As firms pick up and move their production elsewhere – usually in pursuit of cheaper labour for their bottom line – they leave behind empty factories and houses, and half-empty schools and hospitals, with all that implies in terms of associated capital and carbon costs and wasted lives. In an era in which such waste is simply no longer affordable (in planetary biophysical as well as social terms), it is past time we returned to the possibilities inherent in a proactive industrial strategy, both locally and nationally.” https://lnkd.in/dYyJfDHY