Matthew Taylor is currently chief executive of the Royal Society of Arts and, before that, was Tony Blair’s most senior policy advisor. Regarded as one of the most original and open-minded thinkers on the left, there is, of course, little room for even the best of Blairites in today’s Labour Party.
Nevertheless, one must welcome any sign of intelligent life when it comes to leftwing thinking on the economy. For instance, here he is blogging on the shallowness of those who think that a spot of stimulus is all it takes to get our economy back on track:
This is one of the reasons why the downturns that follow a deep financial crisis are so long lasting. Even if growth picks up, the debt overhang remains, ready to crush the recovery as soon as interest rates twitch upwards.
Then there’s the productivity gap:
Thank heavens for at least one lefty who understands the true nature of what we’re up against. If only there were more like him. But what if there were? Would that represent an intellectual victory for the right?
The answer to that is yes – in terms of the austerity required to align the scale of our public spending to our current capacity to pay for it. However, if we’re talking about the doctrine of ‘expansionary austerity’ – which holds that a display of fiscal restraint on the part of the government will be enough to get growth back to where it was before the crisis – then the answer is no.
Expansionary austerity – like the gibberings of the neo-Keynesian stimulus monkeys – is just another species of magical thinking. In normal economic circumstances, it may well be possible to influence the ‘animal spirits’ of the market place, thus encouraging economic growth to speed-up or slow-down as required. But there is nothing normal about our current circumstances; our economy is beset by a series of deep structural problems – and it will take deep structural reform to secure our future.
Matthew Taylor sets out six policies he would like to see enacted:
You may disagree with some, most or even all of these ideas, but at least they represent the ambition of thought that is so desperately required of us today.