IN HIS introduction to 16 essays by more than a score of contributors, shadow chancellor John McDonnell points to how the 2007-8 great financial crash shattered the core myths of neoliberalism, namely that markets are the best possible basis on which to organise an economy and that wealth would trickle down from the top once barriers to corporate profit-making — notably state regulation and trade-union strength — were removed.

[[{"fid":"11880","view_mode":"inlineright","fields":{"format":"inlineright","field_file_image_alt_text[und][0][value]":false,"field_file_image_title_text[und][0][value]":false},"link_text":null,"type":"media","field_deltas":{"1":{"format":"inlineright","field_file_image_alt_text[und][0][value]":false,"field_file_image_title_text[und][0][value]":false}},"attributes":{"class":"media-element file-inlineright","data-delta":"1"}}]]What has happened since then, he argues, is that company profits have soared while problems of poverty and homelessness have grown as a consequence of austerity.

A deeper analysis would also have to acknowledge that while corporate profits have indeed continued to boost the income and wealth of the capitalist class in Britain, the long-term tendency of the rate of profit to fall has driven the turn to neoliberalism and financialisation.

McDonnell’s concise yet wide-ranging contribution flags up important dimensions of economic policy that are dealt with crisply and informatively by other authors, notably tax avoidance, dealt with devastatingly by Prem Sikka; climate change — Ann Pettifor neatly outlines the content of a “green new deal” — and financialisation and the case for public-sector banks and different models of economic ownership advanced by Costas Lapavistas.

In a thought-provoking chapter, Antonia Jennings reflects upon the extent to which the economy has come to dominate the political agenda in Britain since 1950 or so, which is certainly the case during general election campaigns.

Yet few electors really understand the economy at the macro-level and many people find the terms in which it is discussed unintelligible. This serious scale of economic illiteracy, she justifiably concludes, constitutes a major part of our “democratic deficit.”

She’s right to cite the extent to which many people were fooled much of the time by the bogus argument that austerity was a fiscal necessity, “excessive” public spending supposedly having created an unsustainable and unprecedented level of public-sector debt.

And she’s also correct to recall that both sides in the EU referendum campaign put forward “inconsistent, nebulous and bombastic claims.” But she then singles out and exaggerates the impact of a figure on the side of a London bus which most Leave voters, who voted primarily on grounds of democratic control and sovereignty, probably never saw.
 
Nonetheless, Jennings usefully proposes five reforms to raise public understanding of economics and the real economy, not least in universities where business studies and other economy-related courses continue to pump out neoliberal propaganda to the exclusion of all other perspectives.

Political economy novices may find the contribution by Simon Wren-Lewis particularly opaque. He defends Labour’s new Fiscal Credibility Rule (FCR) developed by the shadow chancellor’s Economic Advisory Council.

This holds that when interest rates are heading towards rock-bottom in a depressed economy, or have already arrived there, governments should switch targets from deficit reduction to economic stimulus.

Central banks should buy up bonds to inject money and demand into the economy — quantitative easing — which might include, though the chapter is not explicit here, public-sector bonds issued to fund infrastructure investment. This is what what McDonnell has dubbed “People’s Quantitative Easing (PQE).”

Debt and the deficit would rise but this could be paid down later once the economy and tax revenues are expanding. Wren-Lewis acknowledges that such a strategy requires national governments taking back powers to direct their central bank, which runs counter to the EU monetary system with its eurozone and European Central Bank.

This is to underestimate the contradiction between Labour’s FCR and PQE on the one side and EU treaties and rules on the other. The latter explicitly outlaw “excessive” government debt and deficits in all but the most dire and short-term circumstances, although Britain is exempt from any penalties.

They ban central bank purchases of public-sector debt instruments and demand alignment with the eurozone system of central bank “independence” from democratic control.

Despite his trenchant criticisms of the EU monetary system and its austerity programmes, Wren-Lewis asserts that Britain outside the EU and its single market would forever be a depressed economy with low interest rates which would be highly vulnerable to negative shocks and with Labour always facing a hostile, pro-austerity media.

It’s a gloomy prognosis, belied by the many positive and creative policies proposed elsewhere in this immensely readable book. The ideas presented by Nick Srnicek and Francesca Bria on artificial intelligence and data use and control are especially fresh and interesting.

The book’s main shortcomings are the lack of any rigorous examination of Britain’s possible future relations with the EU. Theresa May’s proposed Withdrawal Agreement would cut across at least a dozen of the policies advocated by various contributors, while almost any kind of customs union acceptable to the EU would make nonsense of Barry Gardiner’s chapter on post-Brexit trade agreements.

And then there is the question of how a left-led Labour government might deal with financial and economic sabotage, unanswered here.

Economics for the Many is published by Verso, price £12.99. Robert Griffiths is general secretary of the Communist Party.