When Andy Burnham returned from the summer recess to make his first Commons speech as Prime Minister, he promised MPs a “clear diagnosis” of what ails Britain. From the 1980s, he said, the country took a series of wrong turns. According to him, political power was centralised, economic assets were privatised and industry was hollowed out. Thatcher was the villain and the 1970s constituted the lost Eden. The Institute of Economic Affairs rightly called it a speech steeped in nostalgia. Weeks later, at the Labour conference in Liverpool, the PM went further. Invoking 1945, he declared that “we built the common good“, then promised to repeal the Thatcher-era ban on public ownership of water companies and to launch GB Grid, a publicly owned company to take on private energy operators. Energy, water and housing were to come back under “public control”.
“Common good” is no accident of speechwriting. It is the title of Mariana Mazzucato’s recent book. She is the self-billed “one of the world’s most influential economists” and her consultancies with governments, international agencies and politicians are too numerous to list here but investigative reporter Charlotte Gill’s blog provides good coverage. The day before Burnham took the Liverpool stage, she published a Project Syndicate column urging that the state’s public-finance institutions be scaled up and the fiscal rules reformed to let them “grow”. Britain, she says, has recorded the lowest public investment in the G7 for most of three decades, a gap she puts at roughly £500 billion. The column opens by welcoming Chancellor John Healey’s pledge to sharpen the focus of those institutions, which tells you who is advising whom. Mazzucato is the media’s favourite economist, whose ideas helped shape Labour’s pitch for power, and who is fêted on Channel 4, in the New Statesman and the Guardian, and on podcasts without end. She is no less active in social media (here and here).
Meanwhile one barely hears of Jon Moynihan, whose two-volume Return to Growth is probably among the most thorough audits of British stagnation, as I argued in my review. The pattern is familiar. In 1980 the Malthusian doomster Paul Ehrlich bet the economist Julian Simon that the prices of five metals would rise over a decade. All five fell, and Ehrlich mailed Simon a cheque for $576.07. Ehrlich went on collecting honours despite every one of his dire predictions failing. Simon died in 1998 with little notice from the legacy media. Mazzucato is the Paul Ehrlich of British economics, consulted by the powerful whatever the predictive or analytical worth of her work. Moynihan is the Julian Simon. Britain is being handed the Fabian compass when what it needs is Moynihan’s detailed, classical liberal reform manual.
