Jeremy Corbyn is a name that may not be familiar to most Australians. He is the leading candidate for the leadership of the British Labour Party following the resignation of Ed Milliband after the disastrous results of the national elections earlier this year.
In the finest traditions of old Labour, Jeremy Corbyn is creating a significant stir among party heavyweights. He has signalled nationalising the railways, retaining public ownership of the National Health Service, introducing rental controls and even the abolition of Britain’s Trident Nuclear weapons.
The reason that the Labour Party heavyweights both in and out of parliament are so concerned about Corbyn is that his policies are resonating very favourably with the Labour Party rank and file and the broader population generally.
Notwithstanding the results of the recent national election, the British people are clearly looking for something better than either major party has thus far offered. Corbyn’s manifesto offers just that.
But the main reason those Labour heavyweights aligned with the Tony Blair free-market Labour model are fearful of Corbyn, is his proposed PQE (Peoples Quantitative Easing) economic policy.
His plan is for England’s central bank (the Bank of England), to set up a National Investment Bank to invest in new infrastructure needed to support the hi-tech and innovative industries of the future, including a new mandate to upgrade the economy by investing in new large scale housing, energy, transport and digital projects.
What is contentious about this plan is that it would be financed without incurring debt. The spending would be new money that would generate employment by directly financing infrastructure projects that create jobs and add value to the national wealth.
The difference between this approach and the QE program the Cameron government undertook with limited success was that Corbyn’s money would go directly to the market rather than to commercial banks.
In other words, Quantitative Easing (money creation) for the people instead of banks.
You may recall part of Kevin Rudd’s stimulus program in 2008 was to credit the bank accounts of taxpayers with two rounds of $900. He did this because he knew the people would spend it, thus providing a temporary boost to the economy to offset a potentially disastrous downturn.
While he did that, the U.S. Eurozone and the UK governments chose to put QE money (created money) into the banks thinking that they would lend that money to investors and developers of hard core projects that would generate employment and restore western economies.
Unfortunately, the banks viewed their windfall differently and much of that money went into non-productive enterprises such as asset appreciation, investing in the stock market, bonuses for financial services and a host of other wealth creating opportunities for the super-rich.
As a consequence, the stock market surged, the wealthy got wealthier but little was achieved in restoring employment levels back to pre GFC days. There were some positive signs in those three economic powerhouses with QE, but they were nothing compared with what could have been achieved had the Rudd styled stimulus been played out instead.
Corbyn’s detractors have spoken out with the usual retorts about inflation, hyperinflation, blah, blah, blah, not the least of whom is our own Greg Sheridan from Newscorp’s The Australian.
He writes, “Corbyn’s positions are at once antique, bizarre, ideological, extreme left-wing and absurd.” One wonders why Sheridan is so critical of Corbyn when by his own words he sees Cameron as the principal beneficiary.
The biggest fear that has generated so much right wing criticism seems to be the realisation that if Corbyn were to become Labour leader and win the next election, the soft, comfortable world of corporate chiefs, and the fortunes of the rich and powerful would be threatened.
So too, the dominance of those groups over the common man and woman in the street, who have worked so tirelessly to keep the wealthy in control for the past three decades.
Prue Plumridge from the UK’s ‘Think Left’ writes, “We have reached such a time in history now. The destructive neoliberal status quo of the last few decades is being shaken to its core and there is an opportunity at last for a conversation about where we go from here and how we can bring about change. It won’t be easy but Jeremy Corbyn has started the ball rolling by offering a radical vision which not only restores the core values of the Labour party and responds to a changing world but also opens up an opportunity for dialogue on such issues as climate change, finite resources and sustainable living. It is a positive start.”
One can only imagine the media reception Bill Shorten and the Australian Labor Party would receive were they to bite the bullet and present a similar anti-austerity policy framework to the Australian people.
But they won’t of course. Today’s Labor party has, ever since the Hawke-Keating years, become no more than a mirror image of the neo-liberal Coalition with a slight bias toward the average worker and no stomach for real economic reform.
But if presented in the right way, in language that nullifies the frantic, desperate cries of the neo-liberal elite, Shorten and Labor could well present a Corbyn styled manifesto that would both resonate with an electorate that is clearly fed up with the status quo and at the same time, reset the economic argument.