Re-constituting left macroeconomics

As I re-read Naomi Klein’s “Shock Doctrine”, it seems clear that a key task for the British Left is to re-build consensus around (neo)Keynesian macroeconomics, the central tenets of which would be: use of fiscal policy, i.e. government spending, to maintain and create employment (especially following recession), public ownership of key institutions (health, education, utilities and transport) and proper regulation of markets (to ensure, inter alia, that financiers don’t rip the piss at the public’s expense).

Keynesian macroeconomics was of course the dominant perspective within elite circles following World War II. In the UK, it was the Keynesian perspective that informed the construction of the welfare state, that led to unprecedented growth, that achieved something close to full employment. In spite of these laudable achievements, however, Keynesianism was ultimately displaced by Friedmanite neoliberalism, which preached, and continues to preach, an unholy trinity of cuts to social spending (= austerity), privatisation and deregulation – policies that have historically pushed people into poverty and stratified societies that were hitherto relatively equal.

One of many significant points that Klein makes in her book is that, due to the popularity of Keynesian-inspired macroeconomic programmes, and in spite of generous funding from the Ford Foundation, the architects of neoliberalism, Milton Friedman et al, were forced to spend years in the wilderness, biding their time. But, it was time they used productively, by training and organising a new class of would-be neoliberal economists and technocrats, ready to pounce as soon as the opportunities presented themselves.

Something similar, I would argue, now needs to happen in respect of a return to left-Keynesian macro, and the obvious sponsors are the Trade Unions. What could Trade Unions do? Well, perhaps they could:

– help train new left-Keynesian economists (by providing school/university scholarhsips);

– sponsor and promote existing left-Keynesian economists and (genuinely) left think tanks;

– promote increased understanding of left-Keynesian economics within their own leadership structures and general membership;

– promote increased understanding of left-Keynesian economics within the wider population, in conjunction with left media and, possibly, new, TU-funded media (this, I think, is crucial – the left needs, as a matter of urgency, a FREE, mass produced weekly paper).

I’m spit-balling here, but you get the picture: we need to unite around a shared leftist conception of the macroeconomy, and the TUs seem well positioned to act as catalyst.

Post Script:
I’m acutely aware that, by advocating Keynes, I’ve just, at a stroke, lost swathes of socialists, anti-cuts activists and climate change activists; people who, with not inconsiderable justification, would argue Keynesianism just isn’t enough; that we need to look beyond a reformed, redistributive capitalism. So, just for the record, I entirely concur with this assessment. At the same time, we do need to actually get from A to B… and I’d say there are worse routes than the one I’m advocating here.