Investment, Competitiveness and the New Economics
The election of Jeremy Corbyn to the Labour leadership owed much to his argument that austerity is the wrong response to the UK’s economic problems, and that a successful economic policy should address the goals of improving our productive capacity and a fair distribution of the fruits of economic success. These assertions have changed the shape of political debate and given a hearing to ideas which are mainstream among economists but have often been sidelined in political debate.
Yet serious questions remain about how Labour’s ‘new economics’ might work in practice. And in Productive Purpose, Bryan Gould offers some answers. He argues that we first need a new approach to monetary policy, so that the power of government can be used to stimulate investment in greater productive capacity and full employment. Second, any strategy for sustainable growth and increased investment will be frustrated unless the main inhibition to any policy for growth – the damaging and long-term loss of international competitiveness suffered by British industry – is overcome.
Gould demonstrates how a strategy built on these twin pillars of increased productive investment and improved competitiveness could revolutionise the UK’s economic prospects.