A leading alternative economist and campaigner in the North-East has criticised the Labour Government for failing to change the economy and for continuing to let the people down.
County Durham born Maeve Cohen had hoped a new government would be progressive and seriously change things for the better. “But all we have seen is just how powerful vested interest can be,” she told a meeting of the Hexham Debates.
Reevenomics doesn’t work
She said not enough was being done to help the fundamental essentials of life; housing, health, education and cheap public transport.
“The argument goes that we cannot spend more than we have on the current account – that’s day-to-day expenditure. Although we can borrow to invest in infra-structure because that increases productivity and therefore GDP.
“But it is absolutely ludicrous to argue that boosting education and care, for example, doesn’t increase productivity. We are the economy. If you’ve got someone constantly calling in sick, that is not good for business. It is mad.
“Until you have a well fed, healthy, well-educated population that can easily get around you will not have good productivity and a strong economy.”
“We have these fiscal rules and constraints on what we can borrow money for. They don’t work. We have learnt these lessons before, but we seem to have forgotten them. In the 1800s we knew we needed free schooling. After the war we had to bring in rationing to make sure people were fed. We know we must look after the population.”
We can tax the rich
Maeve also disagreed with those who say the government can’t tax the rich more to help support society. “Of course we can tax more. Our tax system is incredibly regressive, but there are many ways we can change it to make it more progressive. Some argue you can’t tax the rich because they will leave the country. But this is over-stated. They have families and ties here, just the same as poor people.
“We are still living under the same system of organised money, but with a different government in power. We need to change our thinking.”
Re-thinking economics
Maeve began her alternative view of the world while she was studying at Manchester University. She noted that all her economic lecturers pushed the same view on how things worked. Capitalism meant increasing profits and this was supposed to lead to an increase in a country’s GDP, which was judged to be good for everyone. In other words, the theory of trickle-down.
Maeve and some of her fellow students rebelled and formed an organization called “Re-thinking Economics,” which is now a global network of students and organisers fighting for a new way of teaching and practising economics – so that it truly helps us deal with the real-world.
It comes back to those essentials of life and how we can’t have a fully functioning society, or economy, without them. Maeve believes that GDP should be just one measure of a good economy. Other factors such as health and quality of life should be included as well.
“To just rely on GDP is bizarre. Things like friendship, or beautiful scenery, like we have in Northumberland, you can’t put a price on that. But it has value, and we can’t judge that when we prioritise this one market-driven way of thinking about the economy.”
Change our thinking
Maeve said traditional thinking on the economy and GDP kept producing crises in society. She cited the care-industry stating that if you tried to increase productivity and profits in care you had a choice; either pay the staff ever lower wages, or reduce the ratio of nurses to residents.
“That almost certainly means you are failing in the very thing you have been established to do – provide the best care for people.”
“We have to question this dependence on profit. We have to build economies that meet the needs of humans. And one of the most pressing needs is that they have a planet that functions and is habitable.
“The planet can handle some shocks, but it can’t handle them forever, again and again. We’ve built an economic system that just keeps depleting everything.”
The Preston model
Maeve, who is currently working on a project at Newcastle University, told the meeting that there were other alternative economic models which could be used. Such as Community Wealth Building – often referred to as The Preston Model where it was first tried out in the UK.
This tries to ensure that local businesses rather than multi-nationals are used by big spenders in an area, such as councils, hospitals and universities.
Foundational economy
Also, that investment should go into foundational businesses in an area. These are those businesses, which, in Maeve’s words, “are not going anywhere” – such as supermarkets, or hair-dressers, or a local plumber.
“In the north-east around 70% of businesses are foundational,” she said. “But the tendency is to invest in things like big-tech instead which ultimately doesn’t provide that many jobs. Foundational companies may not be very sexy but they are important. These are what we should be investing in and it will boost everything.”
Maeve praised North East Labour Mayor Kim McGuinness for investing in the Foundational Economy and for making it a priority.
And finally, she praised gatherings like The Hexham Debates. She said, “It’s so important that we keep campaigning. Events like this will eventually force change.”
