Economic Theory

No, leading economists are not supporting Corbyn’s far-left agenda

“Jeremy Corbyn wins economists’ backing for radical plan” thundered the Observer’s front page on Sunday. As I meandered around the supermarket, I did a double-take. Would distinguished economists really back printing money to fund government investment, rent controls, widespread renationalisation (in some cases without compensation), a “maximum wage”, huge tax hikes and greater powers for Trade Unions?

Surely not. I soon realised the newspaper was reporting a letter written by economists published in the Observer itself. Forty left-leaning economists can easily be rustled up to express support for a left-wing agenda in a left-wing newspaper with left-wing readers: hardly “Nixon goes to China” stuff. I should know – I’ve signed letters calling for lower taxes in more free-market rags. Readers discount views according to the source, so perhaps this wasn’t an interesting story after all.

Yet other news outlets, from Sky News to the Independent to the Times, repeated the story. Some used the term “leading economists” to describe the signatories. Had economists I’ve read and learnt from had damascene conversions to the Corbyn cause?

Two things struck me when I read the letter. First, contrary to the impression given by the Observer, it did not endorse Jeremy Corbyn’s broad policy platform. There was no call for publicly-owned railways or 70 per cent income tax rates on high earners. No, this was a wail about “austerity” – government spending cuts. One gets the impression that these guys have never seen an economic “stimulus” they disliked. For the most prominent signatory, former Bank of England ratesetter Danny Blanchflower, this is pretty accurate. Many others have also been calling for higher government spending since the 1970s.

While we can debate the details and timing of the government’s attempts to reduce the deficit, however, the mainstream position is now far away from that of the signatories. In 2011, when the economy was flatlining and interest rates looked stuck at the zero lower bound, heavyweights lined up to argue about whether further borrowing was necessary and desirable. Now, with reasonable growth and interest rates more likely to rise, that ship has sailed. Big-beast critics of the last government’s macro policy, like Jonathan Portes, now suggest deficit reduction over the next five years is appropriate. Even Paul Krugman implies the case for fiscal stimulus to try to boost growth is weak.

Second, this was not a group of “leading economists” by any stretch of the imagination. Nor am I, of course, but it’s reasonable to note that none of the signatories is currently employed at Russell Group universities. Some aren’t even trained in economics, and others are retired left-wing activists. For several, the only hit that comes up when googling their name is this letter. One, John Weeks, is someone I debated with recently. He concluded his speech by declaring that capitalism leads to fascism. Even recognisable names, such as Mariana Mazzucato and Steve Keen, are usually introduced as “heterodox”– i.e. at variance with established opinion.

So the idea this letter represents mainstream economics must be challenged. When Sky is reporting it without an alternative viewpoint, it can mislead the public. But this also shows something interesting about the political left. People across the political spectrum like to appeal to the authority of “experts” to improve credibility. But for the left, this is crucial. Unlike supporters of markets, left-wing interventionists believe experts can direct economic activity for us. Building up the idea that “experts” support these interventions and believe they work is therefore of critical importance to obtaining public acceptance.

Unfortunately for Corbyn, this collection of names neither endorses his programme nor represents a significant or meaningful strand of economic opinion, despite the Observer splash.

Ryan Bourne is the IEA’s Head of Public Policy. This article first appeared in City AM.

Head of Public Policy and Director, Paragon Initiative

Ryan Bourne is Head of Public Policy at the IEA and Director of The Paragon Initiative. Ryan was educated at Magdalene College, Cambridge where he achieved a double-first in Economics at undergraduate level and later an MPhil qualification. Prior to joining the IEA, Ryan worked for a year at the economic consultancy firm Frontier Economics on competition and public policy issues. After leaving Frontier in 2010, Ryan joined the Centre for Policy Studies think tank in Westminster, first as an Economics Researcher and subsequently as Head of Economic Research. There, he was responsible for writing, editing and commissioning economic reports across a broad range of areas, as well as organisation of economic-themed events and roundtables. Ryan appears regularly in the national media, including writing for The Times, the Daily Telegraph, ConservativeHome and Spectator Coffee House, and appearing on broadcast, including BBC News, Newsnight, Sky News, Jeff Randall Live, Reuters and LBC radio. He is currently a weekly columnist for CityAM.

6 thoughts on “No, leading economists are not supporting Corbyn’s far-left agenda”

  1. Posted 25/08/2015 at 11:35 | Permalink

    Worth noting as well that many of those that are economists are not macroeconomists.

    If your “research has been in the fields of globalization, crisis, income distribution, wage-led growth, employment, investment, development, and gender” you are not necessarily especially well-placed to comment on the impact of central bank monetary expansion on the macoeconomy.

  2. Posted 25/08/2015 at 13:48 | Permalink

    Of course, there are economists spouting nonsense in Russell Group universities too – Simon Wren-Lewis, for example. As it is very difficult to ‘prove’ anything in economics, people who no serious commercial organisation would employ can set themselves up in academia and spout nonsense.

  3. Posted 27/08/2015 at 12:30 | Permalink

    The comment about none of them being ‘currently employed at Russell Group universities’ is a bit of a low blow. As I understand it, a few of them were Emeritus professors hence are simply retired Russell Group academics. But I think there’s a broader point here: it’s easy to kick heterodox economists, but prejudice also exists against free-market heterodox economists. I certainly struggle to think of any Hayekian economists being employed within the UK university mainstream, and the same could probably be said for those free-market supporters of the New Institutional Economics (NIE). So by all means attack the ideas of these guys based on your differing economic paradigms, but I would be very wary of rebuking them simply because their economics doesn’t fit in with the stale mainstream espoused by the majority of Russell Group unis.

  4. Posted 06/09/2015 at 08:30 | Permalink

    It is strange that the Russell Group is held up as the symbol of excellence when free market commentators have already denounced its as a protected cartel.

  5. Posted 07/09/2015 at 10:20 | Permalink

    Shouldn’t it be David Blanchflower?

  6. Posted 13/01/2016 at 07:11 | Permalink

    Perhaps I’m a little late to this debate now – but being as it is still live (Corbyn is now party-leader) I just wanted to point out something – are these the same ‘leading economists’ that got us into these problems with the banks in the first place? Because if they are I can’t say I take their views very seriously in that case.

Comments are closed.