The nature of ‘Corbynomics’ – and four key questions it faces

3rd December 2019

Nick Garland and Colm Murphy

While Renewal has been an honourable exception, it remains true that, since Jeremy Corbyn’s election as leader of the Labour Party in September 2015, far more attention has been paid to the fact of his leadership than to the content of the programme envisaged by Corbyn and his allies. 

It was indicative of the genuine interest in what a radically different economy might look like that, on a chilly Monday night in November, well over 200 people gathered at Queen Mary University of London to hear about the new political economy of the British Left. Soon after the event was first announced, the general election was called, injecting the panel’s purpose with a newfound urgency. The whole panel can be watched on YouTube, but this blog covers the central points of discussion.1

Defining ‘Corbynomics’

In outlining ‘Corbynomics’, the panel ranged beyond specific policies. One of the questions that followed the launch of the 2017 manifesto was the extent to which – for all the bitter divisions and radical rhetoric of the last four years –  Corbynism represented more than just ‘Miliband microwaved’.2 Panellist and Renewal co-editor Florence Sutcliffe-Braithwaite argued that Labour’s leadership now offer an analysis of the British economy that is both ‘coherent and radical’. It largely fell on James Meadway, former economic adviser to John McDonnell, and the IPPR’s Carys Roberts to sketch out the agenda flowing from this analysis. Indeed, the similarity in their contributions illustrated the growing intellectual consensus between the Corbynite Left, Labour-sympathetic think tanks, and other social democrats – shown in the IPPR’s much-lauded Commission on Economic Justice. 

For all panellists, Britain’s political economy had fundamentally failed. Stagnating growth, low productivity, wide regional inequality, and spiralling wealth inequality were worrying symptoms of a sick body economic. Thus, Roberts and Meadway both championed fundamental reform. They want the state to ‘get into the engine’ and reshape the actual nature of the economy, rather than skim off the top. Here, Meadway cited the pathbreaking article on the ‘institutional turn’ by Martin O’Neill and Joe Guinan, published in Renewal.3 In aiming to transform the economy at the point of production, Meadway and Roberts contended that British capitalism is not working on its own terms, let alone the terms set by the Left. Thus, implicitly or explicitly, they critiqued not just Conservative (and Coalition) governments since 2010, but New Labour’s political economy. In their framing, New Labour failed to change how British capitalism worked, while its undoubted achievements proved excessively vulnerable to subsequent government cuts.

Flowing from this overarching analysis, Meadway outlined four elements of Labour’s new agenda:

  • Ending austerity and immediately investing in the economy, undoing the damage done by a decade of cuts.
  • Expanding public service provision, and reintroducing universalism to its core, firmly rejecting the means-testing of both Thatcher and New Labour (and, indeed, the calls for a more contribution-based system that were common in the party after 2008).
  • Placing a ‘Green New Deal’ at the centre of national economic strategy, to an extent unprecedented on the British left. (Indeed, Labour’s manifesto – which launched three days later – opens by pledging a ‘Green Industrial Revolution’.)
  • The ‘ownership agenda’ – rebalancing power relations through redistributing the ownership of the British economy.

In the context of British politics, these four points undoubtedly represent a major step change for Labour from Brown’s ‘prudence’ and Miliband’s ‘triangulation’. However, as the Oxford economist Simon Wren-Lewis pointed out, the left’s focus on the ‘engine’ could mean that, compared to their positions in the past, they become relatively orthodox on macroeconomics. Though Labour clearly want to spend far more than recent governments, McDonnell has deliberately maintained fiscal rules for current spending. Yet, for Wren-Lewis, the success or otherwise of McDonnell’s pitch for fiscal ‘credibility’ could be critical, as in the past it has been macroeconomics that has most often derailed left-wing governing agendas. Wren-Lewis considered the outlook for a possible Corbyn government promising in the sense that, with this macroeconomic framework – combined with the promise of much-needed investment – there could be a positive reaction from the markets. However, the recent dismissive reaction of the Institute of Fiscal Studies to McDonnell’s costings, and the recent spontaneous pledge to the WASPI women, may suggest that macroeconomic ‘credibility’ could yet return to haunt the left.

Frequently in the discussion, panellists invoked the idea of a ‘paradigm shift’. Roberts reminded the audience that the IPPR’s Commission demanded a paradigm shift in political economy, like 1945 and c. 1979. Adding a historical perspective, Sutcliffe-Braithwaite argued that striking parallels exist between the current moment and the ‘decades of crisis’  that preceded these two shifts. These included economic crisis, but also profound moments of flux within the party-political system. Today, too, she pointed to two dominant ‘crises’ dominant in narratives of our present moment – of the 2008 financial crisis and the ongoing climate crisis –  and a renewed period of flux between parties. These, she argued, had created the potential for a ‘paradigm shift’ – and only Labour has begun to adequately respond to the reality of our faltering economic system. But she also added that moments of crisis stimulate competing solutions, and transformations must be fought for and won. Thatcherism, she noted, was not the only possible alternative to the crisis of Keynesian social democracy, and ultimately it succeeded in defeating and marginalising the Left alternative in political and industrial struggles. Paradigms don’t shift on their own.

Questions for the future

Looking ahead, the panel discussion revealed four questions that touched on potential tensions and challenges for Corbynomics:

1. The language of priorities

A key question concerns the extent to which Labour must prioritise a small number of policies out of the stream of proposals (and major spending commitments) that appear in the manifesto. Firstly, Wren-Lewis posed the ‘first hundred days’ problem – the difficult constraints of time and institutional capacity in implementing such a radical agenda, and the need for a sense of ‘what’s important to do first and what to leave for later’. Furthermore, given the combination of a number of signature spending commitments and the Shadow Chancellor’s fiscal rule, Wren-Lewis suggested that, if Labour enter government, McDonnell may have to become an ‘iron chancellor’ in the face of departmental funding demands to maintain their ambitious capital programmes. A further issue, which Carys Roberts noted, was that an agenda involving multiple significant changes to the tax system needs to be rolled out gradually to allow for unforeseen changes. 

This also connects to a related, electoral question – whether a smaller number of signature commitments provides greater clarity of political messaging. Meadway acknowledged the importance of these questions and offered an insight into Labour’s mindset in 2017. Had the party won, the plan had been to hold an emergency budget immediately after the General Election to clear the way for the abolition of tuition fees in the September – ‘a very clear symbol about what kind of government you are… that we are going to do things differently, and we are going to do things fast, and things are going to get better as a result.’ 

2. Decentralism, the nation state and the international ‘institutional turn’ 

As Colm Murphy has previously argued in Renewal, there is a tension between Labour’s commitment to a radically decentralist agenda for economic and political power, and its ambitions for large-scale programmatic change embodied in the Green New Deal.4 Sutcliffe-Braithwaite discussed this issue in relation to Corbynism’s relationship with the older Bennite Left, arguing that the left’s new agenda diverged from Bennism in its lack of paternalism and its greater commitment to worker democracy and participation. She suggested this decentralist impulse should not be abandoned. Meadway also avowed the importance of the ‘bottom-up’ socialist tradition. However, by contrast, Roberts noted that Labour’s offer on devolution has been relatively modest, although it has improved recently. Yet, the relationship between decentralisation and the expanded central state was underexamined: the unspoken implication was that the latter is a precondition for a serious redistribution of economic power. Similarly, the discussion did not discuss at all international, supranational and transnational economic structures, which, to a large extent, would determine the success or otherwise of Corbynomics’s domestic agenda. Even the likely outcome of Brexit was essentially absent from discussion. As David Adler argues in Renewal, a national and local ‘institutional turn’ must develop a clear strategy for reforming or creating new international institutions, to truly secure a new political economy.5

3. How radical?

As Wren-Lewis argued, Labour’s radical rhetoric means it is ambivalent about whether it wants to make Britain more like its European neighbours, or whether it wants more of a fundamental break from neoliberal capitalism. Indeed, Meadway acknowledged that he would accept a Germanic model of capitalism as at least a starting point for change, declaring it would ‘make Britain normal again’. However, he pointed to two imperatives which meant Corbynism was more radical than this: first, the need to curb global warming, and second, the desire for more democratic forms of ownership and control associated with Britain’s sometimes-neglected libertarian-left traditions. If the conditions for Corbyn’s success within Labour in 2015 and in the 2017 General Election lay in his articulation of a fairly conventional social-democratic message, does this point to a fragility within the Corbyn coalition, between those with a broadly liberal-left egalitarian politics, and those harbour more radical instincts? The cultural theorist Jeremy Gilbert frames this as a tension between an ‘altruistic’, anti-austerity liberalism advocating ‘a massive exercise in moral redress’, and a more hard-edged socialist politics that prioritises ‘collective empowerment’.6

4. Can Corbynomics survive a General Election defeat?

Some panellists implied that a proper ‘paradigm shift’ involves forcing other parties to accept the new landscape, if not necessarily convince them entirely. Thus, evaluating the success of Corbynomics may mean looking beyond Labour to other political parties. Are we already seeing the beginnings of this paradigm shift? In this election, as Wren-Lewis noted, all the main parties are at least rhetorically committed to ‘ending austerity’ (although the Conservatives’ commitment to a hard Brexit and the party’s threadbare manifesto suggests there would an enormous divergence in public expenditure under the two parties in practice). Or is much more change required? Relatedly, a central question about Corbynism has always been its ability to permanently change the Labour Party. Can ‘Corbynomics’ outlast its figurehead?  Its relevance has only grown following the apparent failure of the leadership to reshape the Parliamentary Labour Party. Consequently, if Corbyn loses on 12 December, what happens to Corbynomics? To some extent, there is evidence that Corbyn’s election has transformed Labour; it is highly unlikely the caution of the Miliband years will return. But as Sutcliffe-Braithwaite noted, just because there is the potential for a paradigm shift, this does not spell inevitability – and just because our existing paradigm can no longer guarantee growth and prosperity, as Wolfgang Streeck reminds us, that does not guarantee a better alternative will triumph.7 At the time of writing, the long-term prospects for Corbynomics remain uncertain.







7. Wolfgang Streeck, How Does Capitalism End?, (Verso, 2016).