Introduction
1Committee on the Rights of Persons with Disabilities, Inquiry Concerning the United Kingdom of Great Britain and Northern Ireland Carried Out by the Committee under Article 6 of the Optional Protocol to the Convention (2016), 20.
2J. Stiglitz, Rewriting the Rules of the American Economy: An Agenda for Shared Growth and Prosperity, W. W. Norton and Co., 2015.
3Estimates reported in WWF, ‘Tens of Billions of Pounds to Be Lost by UK Economy Due to Extreme Weather – WWF Report Warns’, 26 September 2017.
4T. Hazeldine, ‘Revolt of the Rustbelt’, New Left Review, 105, 2017.
5M. Mazzucato, The Entrepreneurial State: Debunking Public vs. Private Sector Myths, PublicAffairs, 2013.
6OECD Economic Surveys: United Kingdom, October 2013, figure 23.
7See argument in GFC Economics/Clearpoint, Financing Investment: Final Words, 20 June 2018.
8Carillion plc, Annual Report and Accounts, 2016, p. 43.
9C. Berry, ‘The Making of a Movement: Who’s Shaping Corbynism?’, Sheffield Political Economy Research Institute, 18 December 2017.
1. Democratising Economics in a Post-truth World
1J. Earle, C. Moran and Z. Ward-Perkins, The Econocracy, Manchester University Press, 2017.
2H. Chang, Economics: A User’s Guide, Penguin, 2014, 163.
3Economy, The Case for Understandable Economics, 2016, 11.
4YouGov, ‘Britain’s Financial Literacy’, yougov.co.uk.
5C. Santry, ‘The UK Is “Below Average” at Teaching Financial Literacy, Study Finds’, tes.com, 11 October 2016.
6YouGov/Ecnmy Survey Results, May 2017.
7Edelman UK, ‘Edelman Trust Barometer 2017 – UK Results’, slideshare.net, 13 January 2017.
8European University Institute, ‘World Values Survey’, eui.eu.
9YouGov/Ecnmy Survey Results, May 2017.
10YouGov/Ecnmy Survey Results, September 2016.
11D. Vockins and C. Afoko, ‘Framing the Economy’, 11 September 2013, neweconomics.org.
12Full Fact, ‘The UK’s EU Membership Fee’, fullfact.org, 9 November 2017.
13Earle, Moran and Ward-Perkins, The Econocracy.
14E. Said, Representations of the Intellectual: The 1993 Reith Lectures, Vintage, 1994, 11.
2. Labour’s Fiscal Credibility Rule in Context
1T. Kirsanova, C. Leith and S. Wren-Lewis, ‘Monetary and Fiscal Policy Interaction: The Current Consensus Assignment in the Light of Recent Developments’, Economic Journal, 119(514): F482–F496, 2009.
2S. Wren-Lewis, ‘A General Theory of Austerity’, Blavatnik Working Paper No. 2016/014, 2016.
3Wren-Lewis, S., ‘What Brexit and Austerity Tell Us about Economics, Policy and the Media’, SPERI Paper No. 36, 2016.
4MMT also, quite rightly, questions why the ‘theory of the money multiplier’ is still to be found in undergraduate textbooks, when this mechanism has no relevance today (if it ever did have relevance). They also dispute the idea that government debt can crowd out private investment.
5This leads to other problems I have with MMT. They make a fetish out of distinguishing themselves from the mainstream, when in fact their basic economic model is mainstream with just some different beliefs about the stability of reactions to monetary and fiscal policy. They also have two other related characteristics which I find annoying: an obsession with what could be called the ‘accountancy’ of government funding operations, and an aversion to equations.
3. Rising to the Challenge of Tax Avoidance
1See the International Consortium of Investigative Journalists: panamapapers.icij.org; icij.org/project/luxembourg-leaks; and projects.icij.org/swiss-leaks/.
2As per HMRC’s 2016/17 annual report and accounts.
3R. Syal, ‘Amazon and eBay Turning Blind Eye to VAT Evasion, Say MPs’, Guardian, 13 September 2017.
4Her Majesty’s Revenue and Customs, ‘Research Report 433: Understanding Evasion by Small and Mid-sized Businesses’, HMRC, September 2017.
5K. Raczkowski, ‘Measuring the Tax Gap in the European Economy’, Journal of Economics and Management, 21(3), 2015: 58–72. Also see FISCALIS Tax Gap Project Group, ‘The Concept of Tax Gaps: Report on VAT Gap Estimations’, European Commission, 2016.
6Reuters, ‘EU Lost up to 5.4 Billion Euros in Tax Revenues from Google, Facebook: Report’, 13 September 2017.
7P. Sikka, ‘No Accounting for Tax Avoidance’, Political Quarterly, 86(3), 2015: 427–33.
8HMRC, Transfer Pricing and Diverted Profits Tax statistics, to 2016–17.
9House of Commons Committee of Public Accounts, Corporate Tax Settlements, the Stationery Office, February 2016, 9.
10House of Commons Committee of Public Accounts, Tackling Tax Fraud, March 2016.
11House of Commons Committee of Public Accounts, ‘HM Revenue and Customs Performance in 2014–15’, the Stationery Office, 2015.
12P. Sikka, M. Christensen, J. Christensen, C. Cooper, T. Hadden, D. Hargreaves, C. Haslam, P. Ireland, G. Morgan, M. Parker, G. Pearson, S. Picciotto, J. Veldman and H. Willmott, ‘Reforming HMRC: Making It Fit for the Twenty-First Century’, Policy Paper published by the UK Labour Party, 8 September 2016.
13S. Picciotto, International Business Taxation: A Study in the Internationalization of Business Regulation, Cambridge University Press, 1992.
14European Commission, Proposal for a Council Directive on a Common Corporate Tax Base, COM(2016) 685 final 2016/0337 (CNS), 25 October 2016; European Commission, Proposal for a Council Directive on a Common Consolidated Corporate Tax Base (CCCTB), COM (2011) 121 final – 2011/0058, 2011 (CNS).
15P. Sikka and H. Willmott, ‘The Dark Side of Transfer Pricing: Its Role in Tax Avoidance and Wealth Retentiveness’, Critical Perspectives on Accounting, 21(4), 2010: 342–56.
16European Commission, Proposal for a Council Directive on a Common Corporate Tax Base.
17UK House of Commons Committee of Public Accounts, ‘Tax Avoidance: The Role of Large Accountancy Firms’, the Stationery Office, 2013.
18See Jesse Drucker, ‘Man Making Ireland Tax Avoidance Hub Proves Local Hero’, Bloomberg, 28 October 2013; and T. Hadden, P. Ireland, G. Morgan, M. Parker, G. Pearson, S. Picciotto, P. Sikka and H. Willmott, Fighting Corporate Abuse: Beyond Predatory Capitalism, Pluto, 2014.
19A. Mitchell and P. Sikka, The Pin-Stripe Mafia: How Accountancy Firms Destroy Societies, Association for Accountancy & Business Affairs, 2011.
20F. Modigliani and M. H. Miller, ‘Corporate Income Taxes and the Cost of Capital: A Correction’, American Economic Review, 53(3): 433–43, 1963.
21G. Gros and S. Micossi, The Beginning of the End Game, Centre for European Policy Studies, 2008.
22Dominic Crossley-Holland, ‘Lehman Brothers, the Bank That Bust the Boom’, Telegraph, 6 September 2009.
23Cyrus Sanati, ‘Cayne and Schwartz at Odds over Bear’s Leverage’, New York Times, 5 October 2010.
24Kevin Dowd, No Stress III: The Flaws in the Bank of England’s 2016 Stress Tests, Adam Smith Institute, 2017.
25From April 2017 there will be a phased restriction of the tax relief to the basic rate of income tax. It is not being abolished.
26Change to Win, Unite the Union and War on Want, ‘Alliance Boots and the Tax Gap’, 2013.
27G. Plimmer and J. Espinoza, ‘Thames Water: The Murky Structure of a Utility Company’, Financial Times, 4 May 2017.
28M. Robinson, ‘How Macquarie Bank Left Thames Water with Extra £2bn Debt,’ BBC News, 5 September 2017.
29J. Burton, ‘Vultures Who Left Thames Water with £10bn of Debt: Controversial Aussie Bank Macquarie Sells Stake in UK Giant’, Daily Mail, 14 March 2017.
30H. Mance and K. Stacey, ‘Please Restore Strikeout Online: Midnight Embargo Anger as No-Tax Company Wins Mobile Deal’, Financial Times, 13 May 2013.
31‘BEPS Action 4: Interest Deductions and Other Financial Payments’, Organisation for Economic Cooperation and Development, 2014.
32HMRC, ‘Tax Deductibility of Corporate Interest Expense: Consultation’, October 2015, updated 5 December 2016.
33J. Mirrlees, S. Adam, T. Besley, R. Blundell, S. Bond, R. Chote, M. Gammie, P. Johnson, G. Myles and J. M. Poterba, Tax by Design, Institute for Fiscal Studies, 2011.
34House of Commons Work and Pensions and Business, Innovation and Skills Committees, ‘BHS’, House of Commons, July 2016.
35Office of Tax Simplification, ‘Tax Reliefs: Final Report’, March 2011.
36‘Tax Reliefs’, National Audit Office, April 2014.
37V. Houlder, ‘Cost of UK Tax Breaks Rises to £117bn’, Financial Times, 10 January 2016.
38National Audit Office, Tax Reliefs, 7 April 2014.
39House of Commons Public Accounts Committee, ‘The Effective Management of Tax Reliefs’, House of Commons, March 2015.
40House of Commons Public Accounts Committee, ‘HM Revenue and Customs Performance in 2015–16’, House of Commons, December 2016, 5.
41‘The Effective Management of Tax Reliefs’, National Audit Office, November 2014, 11.
42‘Consultation Document – VAT: Retail Export Scheme’, HMRC, July 2013.
43Hansard, House of Commons Debates, 9 October 2017.
44Table showing ‘Costs of Tax Relief’, gov.uk/government/uploads/system/uploads/attachment_data/file/622401/Table_10_2.pdf. HM Treasury, ‘Tax Reliefs in Force in 2015–16 or 2016–17: Estimates of Cost Unavailable’.
4. To Secure a Future, Britain Needs a Green New Deal
1D. Wallace-Wells, ‘The Uninhabitable Earth Famine, Economic Collapse, a Sun that Cooks Us: What Climate Change Could Wreak – Sooner Than You Think’, New York Magazine, 9 July 2017.
2Ibid.
3D. McCrum, ‘Saudi Aramco IPO Will Leave Fund Industry with No Place to Hide: Listing Offers a Unique Experiment to Prove the Value of Paying Stock Pickers’ Fees’, Financial Times, 20 July 2017.
4Ibid.
5G. Tily, ‘The National Accounts, GDP and the “Growthmen”’, primeeconomics.org, January 2015.
6S. Brittan, The Treasury under the Tories, 1951–1964, London, 1964, 141
7M. Liebreich, ‘Bloomberg New Energy Finance Summit’, agora-energiewende.de, 25 April 2017.
8Ibid.
9Ibid.
10ComRes, ‘Survey of British Adults on Behalf of ECIU on Climate Change’, February 2017.
11Ibid.
12Verco, ‘Warm Homes, Not Warm Words, Report for WWF-UK on How the UK Can Move to a Low Carbon Heat System’, October 2014.
13DECC, ‘The Future of Heating: Meeting the Challenge’, March 2013.
14J. Corbyn, ‘Protecting Our Planet’, Labour Party.
15TUC Economic Report Series, ‘Green Collar Nation: A Just Transtion to a Low-Carbon Economy’, 2015.
16Verco and Cambridge Econometrics, ‘Building the Future: The Economic and Fiscal Impacts of Making Homes Energy Efficient’, 2015.
5. Fair, Open and Progressive: The Roots and Reasons behind Labour’s Global Trade Policy
1Cited in F. Trentmann, Free Trade Nation: Commerce, Consumption and Civil Society in Modern Britain, Oxford University Press, 2008, 134.
2F. Trentmann, ‘Wealth versus Welfare: The British Left between Free Trade and National Political Economy before the First World War’, Historical Research, 70(171), 1997: 70–98.
3R. Toye, ‘The Labour Party’s External Economic Policy in the 1940s’, Historical Journal, 43(1), 2000: 189–215.
4D. Irwin, P. Mavroidis and A. Sykes, The Genesis of the GATT, Cambridge University Press, 2008; also R. Toye, ‘The Attlee Government, the Imperial Preference System and the Creation of the GATT’, English Historical Review, 118(478), 2003: 912–39.
5‘Exporters and Importers in Great Britain, 2014’, Office for National Statistics, November 2015.
6For the Many, Not the Few: The Labour Party Manifesto 2017, Labour Party, 2017, 30.
7‘Estimate of the Proportion of UK SMEs in the Supply Chain of Exporters: Methodology Note’, Department for Business, Innovation and Skills, May 2016.
8Global Value Chains and Development: Investment and Value Added Trade in the Global Economy, United Nations Conference on Trade and Development, 2013.
9UK Balance of Payments: The Pink Book, Office for National Statistics, July 2016.
10‘International Trade in Services, UK: 2015’, Office for National Statistics, January 2017.
11‘UK Environmental Goods and Services Sector (EGSS): 2010 to 2014’, Office for National Statistics, January 2017.
12R. Baldwin (ed.), The Great Trade Collapse: Causes, Consequences and Prospects, Centre for Economic Policy Research, November 2009.
13Making Trade an Engine of Growth for All: The Case for Trade and for Policies to Facilitate Adjustment, International Monetary Fund, World Bank and World Trade Organization, March 2017.
14NAFTA at 20, AFL-CIO, March 2014.
15‘Impact Assessment Report on the Future of EU–US Trade Relations’, Commission staff working document SWD (2013) 68, European Commission, March 2013.
16Trade and Employment: From Myths to Facts, International Labour Organisation, 2011.
17P. Minford, Should Britain Leave the EU? An Economic Analysis of a Troubled Relationship, Edward Elgar, 2nd edition, 2015.
18S. Van Berkum et al., Implications of a UK Exit from the EU for British Agriculture: Study for the National Farmers’ Union, LEI Wageningen UR, April 2016.
19Agriculture in the United Kingdom 201, Department for Environment, Food and Rural Affairs, July 2017.
20B. Milanovic, Global Inequality: A New Approach for the Age of Globalization, Harvard University Press, 2016.
21Global Wage Report 2016/17: Wage Inequality in the Workplace, International Labour Organisation, December 2016.
22S. O’Connor, ‘UK Workers Squeezed as Inflation Outstrips Wage Growth’, Financial Times, 12 July 2017.
23‘Reflections Paper on Services of General Interest in Bilateral FTAs (Applicable to Both Positive and Negative Lists)’, European Commission, February 2011; ‘Commission Proposal for the Modernisation of the Treatment of Public Services in EU Trade Agreements’, European Commission, October 2011.
24Doing Business 2017: Equal Opportunity for All, World Bank, 2017.
25I. Arto et al., ‘EU Exports to the World: Effects on Employment and Income’, Publications Office of the European Union, June 2015.
26N. Kabeer, S. Mahmud and S. Tasneem, ‘Does Paid Work Provide a Pathway to Women’s Empowerment? Empirical Findings from Bangladesh’, Institute of Development Studies, September 2011.
27Assessment of Labour Provisions in Trade and Investment Arrangements, International Labour Organisation, July 2016.
28Ibid.
29J. Ruggie, ‘Business and Human Rights: Mapping International Standards of Responsibility and Accountability for Corporate Acts’, UN document A/HRC/4/035, 9 February 2007.
30‘Good Business: Implementing the UN Guiding Principles on Business and Human Rights’, HM Government, May 2016.
31‘Government Pledges to Help Improve Access to UK Markets for World’s Poorest Countries Post-Brexit’, UK government press release, 24 June 2017.
32IMF Involvement in International Trade Policy Issues, Independent Evaluation Office evaluation report, International Monetary Fund, 2009.
33P. Collier, The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done about It, Oxford University Press, 2007, 87.
34Bittersweet Harvest: A Human Rights Impact Assessment of the European Union’s Everything but Arms Initiative in Cambodia, Equitable Cambodia and Inclusive Development International, 2013.
35M. Grady, ‘Post-Brexit Trade: Options for Continued and Improved Market Access Arrangements for Developing Countries’, Traidcraft, February 2017.
36C. Stevens and J. Kennan, ‘Trade Implications of Brexit for Commonwealth Developing Countries’, Commonwealth Secretariat, August 2016.
37A. Cobham and P. Jansky, ‘Global Distribution of Revenue Loss from Tax Avoidance: Re-estimation and Country Results’, United Nations University World Institute for Development Economics Research, March 2017
38L. Poulsen, ‘British Foreign Investment Policy Post-Brexit: Treaty Obligations vs Bottom-Up Reforms’, UCL European Institute, July 2017.
6. ‘De-financialising’ the UK Economy: The Importance of Public Banks
1Thanks are due to Giorgos Diagourtas for excellent research assistantship.
2The crisis of 2007–9 has given rise to a large literature on its causes and outcomes. The account given here draws heavily on my book Profiting without Producing: How Finance Exploits Us All, Verso, 2013.
3For an influential account of this process see G. Gorton and A. Metrick, ‘Securitized Banking and the Run on Repo’, Journal of Financial Economics, 104(3), 2012: 425–51.
4Financialisation is a term that is increasingly deployed in the social sciences to indicate the rise of finance in recent decades. For a useful survey of the literature, see N. A. J. Van der Zwan, ‘Making Sense of Financialization’, Socio-economic Review 12(1), 2014: 99–129.
5For a useful description of the functioning and the magnitude of the UK financial system, see O. Bush, S. Knott and C. Peacock, ‘Why Is the UK Banking System So Big and Is That a Problem?’, Bank of England Quarterly Bulletin, Q4, 2014: 385–94; and O. Burrows, K. Low and H. Cummings, ‘Mapping the UK Financial System’, Bank of England Quarterly Bulletin, Q2, 2015, 114–29.
6Separate data for banks and building societies have been discontinued from January 2010 onwards.
7Note that (a) following Bank of England money market reform on 18 May 2006 the Bank of England ‘Bank Return’ was changed. This series forms part of the new Bank Return, with data starting on 24 May 2006. (b) The large increases in Reserves and other accounts and Advances and other accounts from January 1999 arise from the Bank of England’s role in TARGET, as a result of which other European central banks may hold substantial credit balances or overdrafts with the Bank.
8The complexity is substantial and developments will depend on political choices; for a provisional assessment, see DGECON (Directorate-General for Internal Policies, European Parliament, Committee on Economic and Monetary Affairs), ‘Implications of Brexit on EU Financial Services’, European Parliament, June 2017.
7. Better Models of Business Ownership
1All data are taken from the ONS UKBAE data set, ‘UK Business: Activity, Size, and Location’, and associated statistical bulletins. I would like to thank Les Huckfield for a number of useful suggestions.
2See the House of Commons Library Research Paper 14/61 for details on privatisations in the UK.
3See, for example, the collection of essays in J. Williamson, C. Driver and P. Kenway (eds), Beyond Shareholder Value: The Reasons and Choices for Corporate Governance Reform, TUC, 2014.
4This section, and the two following sections, draw on the 2017 report to the Shadow Cabinet entitled ‘Alternative Models of Ownership’, with contributions by Cheryl Barrott, Cllr Matthew Brown, Andrew Cumbers, Christopher Hope, Les Huckfield, Rob Calvert Jump, Neil McInroy, Linda Shaw and others.
5See S. Arando, et al., ‘Assessing Mondragon: Stability and Managed Change in the Face of Globalization’, William Davidson Institute Working Paper 1003, 2010.
6See B. Craig et al., ‘Participation and Productivity: A Comparison of Worker Cooperatives and Conventional Firms in the Plywood Industry’, Brookings Papers on Economic Activity: Microeconomics, 1995: 121–74. See G. Dow, Governing the Firm: Workers’ Control in Theory and Practice, Cambridge University Press, 2003, for a useful overview of the literature.
7See ibid. See the International Cooperative Alliance’s ‘Blueprint for a Cooperative Decade’, 2013, for a useful discussion of ‘cooperative capital’.
8See, e.g., M. Hayes, ‘The Capital Finance of Cooperative and Community Benefit Societies’, Cooperatives UK thinkpiece 11, 2013, for a discussion of methods of financing consistent with cooperative principles. Interestingly, limited return on capital is applicable as a general principle to any instrument involving limited liability – not just the financing instruments of cooperatives and other non-capitalistic forms of production.
9See H. Lawton-Smith, ‘Deregulation and Privatization in the UK Freight, and Bus and Coach Industries’, Regulatory Policy Research Centre Working Paper, 1995; and A. Pendleton, Employee Ownership, Participation, and Governance: A Study of ESOPs in the UK, Routledge, 1995.
10See Social Enterprise UK’s ‘State of Social Enterprise Survey 2015’ for information on the size, behaviour, and reach of social enterprises, some of which is summarised on their website.
11See H.-J. Chang, ‘State-Owned Enterprise Reform’, UNDESA Policy Note, 2007, for a useful policy-focused discussion of nationalisation. See L. Hannah, ‘The Economic Consequences of the State Ownership of Industry, 1945–1990’, in R. Floud and D. McCloskey (eds), The Economic History of Britain since 1700, Vol. 3, Cambridge University Press, 1994, for a discussion of the UK experience of nationalised industry.
12See N. Calamita, ‘The British Bank Nationalizations: An International Law Perspective’, International and Comparative Law Quarterly, 58(1), 2009: 119–49, for a recent discussion of compensation in the context of bank nationalisation. See the Office of National Statistics, ‘Ownership of UK Quoted Shares’ Statistical Bulletins for information about UK share ownership. There is a great deal of media coverage concerning Royal Mail share price movements post-privatisation in and around October 2013, and the House of Commons Library Briefing Paper 06668, ‘Privatisation of Royal Mail’, provides further information.
13See the ‘Report of the Committee of Inquiry on Industrial Democracy’, 1977, also known as the ‘Bullock Report’, and the 1976 Industrial Common Ownership Act.
8. Beyond the Divide
1M. Jacobs, I. Hatfield, L. King, L. Raikes and A. Stirling, ‘Industrial Strategy: Steering Structural Change in the UK Economy’, IPPR, 2017.
2G. Blakeley, ‘Paying for Our Progress: How Will the Northern Powerhouse Be Financed and Funded?’, IPPR, 2017. P. McCann, The UK Regional–National Economic Problem: Geography, Globalisation and Governance, Routledge, 2016.
3C. Roberts, M. Lawrence and L. King, ‘Managing Automation: Employment, Inequality and Ethics in the Digital Age’, IPPR, 2017.
4R. Martin and P. Sunley, ‘On the Notion of Regional Economic Resilience: Conceptualization and Explanation’, Journal of Economic Geography, 15(1), 2015: 1–42.
5Blakeley, ‘Paying for Our Progress: How Will the Northern Powerhouse Be Financed and Funded?’
6T. Hazeldine, ‘Revolt of the Rust Belt’, New Left Review, 105 (May–June), 2017. J. Green, ‘Anglo-American Development, the Euromarkets, and the Deeper Origins of Neoliberal Deregulation’, Review of International Studies, 42(3), 2016: 425–49. J. Christensen, N. Shaxson and D. Wigan, ‘The Finance Curse: Britain and the World Economy’, British Journal of Politics and International Relations, 18(1), 2016: 255–69.
7G. Blakeley, ‘On Borrowed Time: Finance and the UK’s Current Account Deficit’, IPPR, 2018.
8ONS (Office for National Statistics), ‘UK Economic Accounts: Balance of Payments – Current Account’, 2018.
9G. Standing, The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay, Biteback Publishing, 2016. I. Kaminska, ‘Brexit and Britain’s Dutch Disease’, FT Alphaville, 12 October 2016.
10C. Rhodes, ‘Historic Data on Industries in the UK’, House of Commons Library, 2016.
11J. Springford and S. Tilford, ‘Sterling Slump Won’t Rescue the British Economy’, Centre for European Reform, 2016.
12M. Kitson and J. Michie, The Deindustrial Revolution: The Rise and Fall of UK Manufacturing, 1970–2010, Centre for Business Research, Cambridge University, 2014.
13ONS (Office for National Statistics), ‘Monthly Average, Effective Exchange Rate Index, Sterling’, 2018.
14ONS, ‘UK Economic Accounts: Balance of Payments – Current Account’.
15M. Baddeley, ‘Structural Shifts in UK Unemployment 1980–2002: The Twin Impacts of Financial Deregulation and Computerisation’, University of Cambridge Centre for Economic and Public Policy, 2005.
16J. Jenkins, ‘The Labour Market in the 1980s, 1990s, and 2008/09 Recessions’, Economic and Labour Market Review, 4(8), 2010: 29–36.
17ONS (Office for National Statistics), ‘Regional Labour Market Statistics in the UK: June 2018’, 2018. IPPR Commission on Economic Justice, ‘Time for Change: A New Vision for the British Economy – the Interim Report of the IPPR Commission on Economic Justice’, IPPR, 2017.
18See, for example, NOMIS, ‘Qualifications – Area Composition’, nomisweb.co.uk, 2018.
19E. Cox, ‘Taking Back Control in the North: A Council of the North and Other Ideas’, IPPR, 2017.
20S. Lavery, L. Quaglia and C. Dannreuther, ‘The Political Economy of Brexit and the UK’s National Business Model’, SPERI, 2017.
21A. Davies, The City of London and Social Democracy: The Political Economy of Finance in Britain, 1959–1979, Oxford University Press, 2017.
22OECD (Organisation for Economic Cooperation and Development), ‘Table 1.4. Tax Revenues of Subsectors of General Government as Per Cent of Total Tax Revenue, Revenue Statistics – Taxes by Level of Government’, 2016.
23H. Blöchliger, B. Égert and K. Fredriksen, ‘Fiscal Federalism and Its Impact on Economic Activity, Public Investment and the Performance of Educational Systems’, OECD Working Paper, 2013. D. Bartolini, S. Stossberg and H. Blöchliger, ‘Fiscal Decentralisation and Regional Disparities Economics Department’, OECD Working Paper, 2016. C. Jeffery, ‘Wales, the Referendum and the Multi-level State’, speech at Cardiff University, 8 March 2011; CURDS (Centre for Urban and Regional Development Studies), ‘Decentralisation Outcomes: A Review of Evidence and Analysis of International Data’, Department for Communities and Local Government, 2011. E. Cox, G. Henderson and L. Raikes, ‘Decentralisation Decade: A Plan for Economic Prosperity, Public Service Transformation and Democratic Renewal in England’, IPPR North, 2014.
24Cox, ‘Taking Back Control in the North’.
9. Democratic Ownership in the New Economy
1G. D. H. Cole, Guild Socialism Re-stated, Leonard Parsons, 1920, 12.
2S. Kasmir, ‘The Mondragon Cooperatives and Global Capitalism: A Critical Analysis’, New Labor Forum, 25(1), 2016: 52–9.
3J. Restakis, Humanizing the Economy: Co-operatives in the Age of Capital, New Society Publishers, 2010.
4J. Duda and V. Zamagni, ‘Learning from Emilia Romagna’s Cooperative Economy’, thenextsystem.org, 18 February 2016.
5J. Walljasper, ‘A More Equitable Economy Exists Right Next Door’, Alternet, 22 March 2017.
6From N. Klein’s preface to Lavaca Collective, Sin Patrón: Stories from Argentina’s Worker-Run Factories, Haymarket, 2007, 8.
7J. McDonnell, Speech at Co-op Ways Forward Conference, Co-operative Party, 21 January 2016.
10. A New Urban Economic System: The UK and the US
1More information on these pieces of work can be found at New Start, ‘Good City Economies’, newstartmag.co.uk; CLES, ‘Bringing Community Wealth to Birmingham’, cles.org.uk, 28 September 2016; and URBACT, ‘URBACT Network: Procure’, urbact.eu/procure.
11. Debt Dependence and the Financialisation of Everyday Life
1H. Y. Feng, J. Froud, S. Johal, C. Haslam and K. Williams, ‘A New Business Model? The Capital Market and the New Economy’, Economy and Society, 30(4), 2001: 467–503.
2W. Lazonick and M. O’Sullivan, ‘Maximizing Shareholder Value: A New Ideology for Corporate Governance’, Economy and Society, 29(1), 2000: 13–35.
3G. Krippner, ‘Financialization and the American Economy’, Socio-economic Review, 3(2), 2005: 173–208.
4A. Gamble, The Spectre at the Feast : Capitalist Crisis and the Politics of Recession, Palgrave Macmillan, 2009.
5C. Hay, ‘Pathology without Crisis? The Strange Demise of the Anglo-liberal Growth Model’, Government and Opposition, 46(1), 2011: 1–31.
6J. Froud, S. Johal, J. Montgomerie and K. Williams, ‘Escaping the Tyranny of Earned Income? The Failure of Finance as Social Innovation’, New Political Economy, 15(1), 2010: 147–64.
7P. Langley, The Everyday Life of Global Finance: Saving and Borrowing in Anglo-America, Oxford University Press, 2008; J. Montgomerie and D. Tepe-Belfrage, ‘Caring for Debts: How the Household Economy Exposes the Limits of Financialisation’, Critical Sociology, 43(4–5), 2016: 653–68.
8Office for National Statistics, ‘Households and NPISH: Saving Ratio: Per Cent: SA’, 2017.
9The Money Charity, ‘Credit Statistics’, 2017.
10A. Finlayson, ‘Financialisation, Financial Literacy and Asset-Based Welfare’, British Journal of Politics and International Relations, 11(3) 2009: 400–21,; R. Prabhakar, ‘Asset-Based Welfare: Financialization or Financial Inclusion?’, Critical Social Policy, 33(4), 2013: 658–78.
11S. G. Lowe, B. A. Searle and S. J. Smith, ‘From Housing Wealth to Mortgage Debt: The Emergence of Britain’s Asset-Shaped Welfare State’, Social Policy and Society, 11(1, 2012): 105–16; M. Watson, ‘House Price Keynesianism and the Contradictions of the Modern Investor Subject’, Housing Studies, 25(3), 2010: 413–26.
12M. McLeay, A. Radia and R. Thomas, ‘Money in the Modern Economy’, Quarterly Bulletin, Q1, Bank of England, 2014.
13A. Mian and A. Sufi, House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again, University of Chicago Press, 2014.
14J. Montgomerie and M. Büdenbender, ‘Round the Houses: Homeownership and Failures of Asset-Based Welfare in the United Kingdom’, New Political Economy, 20(3), 2014: 386–405.
15Bank of England and P. Manaton, ‘Housing Equity Withdrawal (HEW) – Notes’, Statistical Notes, Bank of England, 2016.
16The Money Charity, ‘Credit Statistics’.
17J. Montgomerie, ‘The Pursuit of (Past) Happiness? Middle-Class Indebtedness and Anglo-American Financialisation’, New Political Economy, 14(1), 2009: 1–24.
18D. Gibbons, Solving Britain’s Personal Debt Crisis, Searching Finance, 2014.
19Department for Business, Innovation and Skills, ‘Student Loan Company Statistical Release 2013–14’, 2014.
20Step Change, ‘Statistics Yearbook, Personal Debt 2013’, stechange.org, 2013.
21Office for Budget Responsibility, ‘Economic and Fiscal Outlook’, 2017, Chart 3.23.
12. Platform Monopolies and the Political Economy of AI
1This is measured by market capitalisation. These companies are Apple, Alphabet, Microsoft, Amazon, Tencent, Alibaba and Facebook.
2In the economics literature, platforms are often referred to as two-sided (or multi-sided) markets. I prefer the term ‘platform’ because it does not assume the market-centric nature of the interactions. See J. C. Rochet and J. Tirole, ‘Platform Competition in Two-Sided Markets’, IDEI Working Papers, 152, Institut d’économie industrielle, 2003; J. C. Rochet and J. Tirole, ‘Two-Sided Markets: A Progress Report’, RAND Journal of Economics, 37(3), 2006: 645–67; A. Gawer’s introduction to the collection she edited, Platforms, Markets and Innovation, Edward Elgar Publishing Inc., 2009.
3This is something of a simplification, as for some platform businesses, placing a limit on the number of users can be a useful strategy. For an accessible elaboration of some of these nuances, see D. Evans and R. Schmalensee, Matchmakers: The New Economics of Multisided Platforms, Harvard Business Review Press, 2016.
4K. Marx, Capital: Critique of Political Economy, Vol. 1, Penguin Classics, 1990, 776–81; D. Autor, D. Dorn, L. Katz, C. Patterson and J. Van Reenen, ‘Concentrating on the Fall of the Labor Share’, NBER Working Paper, 2017; S. Barkai, ‘Declining Labor and Capital Shares’, Job Market Paper, 2017; B. Blonigen and J. Pierce, ‘Evidence for the Effects of Mergers on Market Power and Efficiency’, NBER Working Paper, 2016; Council of Economic Advisors, Benefits of Competition and Indicators of Market Power, Issue Brief, 2006; J. De Loecker and J. Eeckhout, ‘The Rise of Market Power and the Macroeconomic Implications’, NBER Working Paper, 2017.
5The gambling industry is perhaps the pioneer in making effective use of these techniques: I. Leslie, ‘The Scientists Who Make Apps Addictive’, 1843 Magazine, 2016; N. S. Schüll, Addiction by Design: Machine Gambling in Las Vegas, Princeton University Press, 2014.
6B. Morris and D. Seetharaman, ‘The New Copycats: How Facebook Squashes Competition from Startups’, Wall Street Journal, 9 August 2017.
7For a more in-depth analysis of the different types of platforms and where they may be headed, see N. Srnicek, Platform Capitalism, Polity Press, 2016, chapters 2–3.
8B. Fu, R. Wang, M. Wang, Deep and Cross Network for Ad Click Predictions, Cornell University Library, 2017.
9For examples, see Amazon’s AWS AI Blog: aws.amazon.com/blogs/ai.
10N. F. Ayan, J. M. Pino and A. Sidorov, Transitioning Entirely to Neural Machine Translation, Facebook Code, 2017.
11It is important to add that this emphasis on data often means that the gendered and racialised biases of society are simply transferred over to systems based on mirroring social data. R. Calo and K. Crawford, ‘There Is a Blind Spot in AI Research’, Nature International Journal of Science, 13 October 2016; K. Crawford, ‘The Hidden Biases in Big Data’, Harvard Business Review, 1 April 2013.
12A. Gupta, A. Shrivastava, S. Singh and C. Sun, Revisiting Unreasonable Effectiveness of Data in Deep Learning Era, Cornell University Library, 2017.
13M. Andreessen, ‘Why Software Is Eating the World’, Wall Street Journal, 20 August 2011.
14N. Laptev, S. Shanmugam and S. Smyl, ‘Engineering Extreme Event Forecasting at Uber with Recurrent Neural Networks’, uber.com, 9 June 2017.
15H. Godwin, ‘The Software Routing 260,000 Grocery Deliveries a Week’, ocadotechnology.com, 15 August 2017.
16J. Ryan, ‘How the GDPR Will Disrupt Google and Facebook’, pagefair.com, 30 August 2017.
17P. Brietzke, ‘Robert Bork: The Antitrust Paradox: A Policy at War with Itself’, Valparaiso University Law Review 13 (2), Winter 1979: 403–21.
18A. Grunes and M. Stucke, Big Data and Competition Policy, Oxford University Press, 2016; L. Khan, ‘Amazon’s Antitrust Paradox’, Yale Law Journal 126, 3 January 2017: 710.
19The following analysis is based upon the more detailed reflection on the case in Grunes and Stucke, Big Data and Competition Policy, 74–84.
20J. Taplin, Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy, Little Brown and Company, 2017.
21A. Desai, ‘Wiretapping before the Wires: The Post Office and the Birth of Communications Privacy’, Stanford Law Review 60 (2), April 2010: 553–94.
22B. Laurie and M. Suleyman, ‘Trust, Confidence and Verifiable Data Audit’, deepmind.com, 9 March 2017.
23For more on platforms and how they baffle our Westphalian assumptions of sovereignty and territory, see B. H. Bratton, The Stack: On Software and Sovereignty, MIT Press, 2016.
24N. Schneider and T. Scholz, Ours to Hack and to Own, O/R Books, 2017; T. Scholz, Platform Cooperativism: Challenging the Corporate Sharing Economy, Rosa Luxemburg Stiftung, 2016.
13. A New Deal for Data
1This chapter draws on a 2018 study co-written by Francesca Bria and Evgeny Morozov called ‘Rethinking the Smart City, Democratizing Urban Technology’, Rosa Luxemburg Stiftung.
14. Rethinking Economics for a New Economy
1J. M. Keynes, The General Theory of Employment, Interest and Money, Macmillan, 1936, Chapter 24
2J. Earle, C. Moran and Z. Ward-Perkins, The Econocracy: The Perils of Leaving Economics to the Experts, Manchester University Press, 2016. Chapter 2, ‘Economics as Indoctrination’, is particularly helpful.
3Labour Party, Manifesto 2017: Creating an Economy that Works for All, Labour.org.uk, 2017.
4A useful introduction to the recent reforms in British higher education can be found in A. McGettigan, The Great University Gamble: Money, Markets and the Future of Higher Education, Pluto Press, 2013. The topic is also discussed at length in Earle, Moran and Ward-Perkins, The Econocracy, Chapter 5, ‘Rediscovering the Liberal Education’.
5The cap is now indexed to inflation, so the fee cap for 2017 is £9,250.
6D. Jobbins, ‘Almost All English Universities to Charge Maximum £9,000 Tuition Fee’, thecompleteuniversityguide.co.uk, 13 August 2015.
7Competition and Markets Authority, ‘An Effective Regulatory Framework for Higher Education’, assets.publishing.service.gov.uk, 23 March 2015.
8K. Soffen and K. Uhrmacher, ‘Every County’s Obamacare Marketplace Will Have an Insurer in 2018’, Washingtonpost.com, originally published 14 June 2017, updated 11 September 2017.
9For an introduction to some of these schools of thought, L. Fischer, J. Hasell, J. C. Proctor, D. Uwakwe, Z. Ward Perkins and C. Watson, Rethinking Economics: An Introduction to Pluralist Economics, Routledge, 2018, is quite helpful.
15. Public Investment in Social Infrastructure for a Caring, Sustainable and Productive Economy
1UK Women’s Budget Group and Scottish Women’s Budget Group (WBG), ‘Plan F: A Feminist Economic Strategy for a Caring and Sustainable Economy’, 2015.
2See ibid.
3J. Stiglitz, A. Sen and J.-P. Fitoussi, ‘Report by the Commission on the Measurement of Economic Performance and Social Progress’, ec.europa.eu, 2009.
4D. Elson, ‘Gender Budgeting and Macroeconomic Policy’, in J. Campbell and M. Gillespie (eds), Feminist Economics and Public Policy: Reflections on the Work and Impact of Ailsa Mckay, Routledge, 2016, 25–35.
5See I. Ilkkaracan, ‘The Purple Economy: A Call for a New Economic Order Beyond the Green’, in U. Röhr and C. van Heemstra (eds), Sustainable Economy and Green Growth: Who Cares?, LIFE e.V./German Federal Ministry for the Environment, 2013, 32–7. Purple is historically associated with women’s liberation movements struggling to achieve gender equality, and it was used alongside green and white as the colours of the Women’s Social and Political Union, which led Britain’s women’s suffrage movement in the early twentieth century.
6Ö. Onaran, ‘The Role of Gender Equality in an Equality-Led Sustainable Development Strategy’, in H. Bargawi, G. Cozzi and S. Himmelweit (eds), Economics and Austerity in Europe: Gendered Impacts and Sustainable Alternatives, Routledge, 2017, 40–56.
7D. Elson, ‘A Gender-Equitable Macroeconomic Framework for Europe’, in Bargawi, Cozzi and Himmelweit, Economics and Austerity in Europe, 15–26.
8Ö. Onaran, M. Nikolaidi and T. Obst, ‘The Role of Public Spending and Incomes Policies for Investment and Equality-Led Development in the UK’, GPERC Policy Briefs, University of Greenwich, #PB17-2017, 2017; T. Obst, Ö. Onaran and M. Nikolaidi, ‘The Effect of Income Distribution and Fiscal Policy on Growth, Investment, and Budget Balance: The Case of Europe’, Greenwich Papers in Political Economy, University of Greenwich, #GPERC43, 2017; Ö. Onaran and T. Obst, ‘Wage-Led Growth in the EU15 Member States: The Effects of Income Distribution on Growth, Investment, Trade Balance, and Inflation’, Cambridge Journal of Economics, 40(6), 2016: 1517–51.
9Ö. Onaran and A. Guschanski, ‘Reverting Inequality: A Win–Win for People and Economic Performance’, in A. Harrop (ed.), Raising the Bar, Fabian Society, 2018, 45–54; Ö. Onaran and A. Guschanski, ‘Capital Lessons: Labour, Inequality and How to Respond’, Institute for Public Policy Research Progressive Review, 24(2), 2017: 152–62.
10Ö. Onaran and D. Tori, ‘Productivity Puzzle? Financialization, Inequality, Investment in the UK’, GPERC Policy Briefs, University of Greenwich, #PB16-2017, 2017; Ö. Onaran and D. Tori, ‘The Effects of Financialization on Investment: Evidence from Firm-Level Data for the UK’, Cambridge Journal of Economics, forthcoming.
11Onaran, Nikolaidi and Obst, ‘The Role of Public Spending’; Obst, Onaran and Nikolaidi, ‘The Effect of Income Distribution’.
12A £1 billion increase in public spending without increasing any tax rates would generate about £150 million extra tax revenues, because it leads to higher national income via the multiplier effects. See Obst, Onaran and Nikolaidi, ‘The Effect of Income Distribution’.
13Ö. Onaran, C. Oyvat and E. Fotopoulou, ‘The Effects of Income, Gender and Wealth Inequality and Economic Policies on Macroeconomic Performance’, Rebuilding Macroeconomics, ESRC NW+Project Report, forthcoming.
14Ibid.
15J. De Henau, S. Himmelweit, Z. Łapniewska and D. Perrons, ‘Investing in the Care Economy: A Gender Analysis of Employment Stimulus in Seven OECD Countries’, report by the UK Women’s Budget Group for the International Trade Union Confederation, Brussels, 2016; R. Antonopoulos, K. Kim, T. Masterson and A. Zacharias, ‘Investing in Care: A Strategy for Effective and Equitable Job Creation’, Working Paper No. 610, Levy Economics Institute, 2010; I. İlkkaracan, K. Kim and T. Kaya, ‘The Impact of Public Investment in Social Care Services on Employment, Gender Equality, and Poverty: The Turkish Case’, Research Project Report, Istanbul Technical University Women’s Studies Center in Science, Engineering and Technology and the Levy Economics Institute, in partnership with ILO and UNDP Turkey, and the UNDP and UN Women Regional Offices for Europe and Central Asia, 2015; Onaran, Oyvat and Fotopoulou, ‘The Effects of Income, Gender and Wealth Inequality’.
16. Rentier Capitalism and the Precariat: The Case for a Commons Fund
1G. Standing, The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay, Biteback, 2016.
2For example, the five US-based Big Tech giants bought 519 firms between 2007 and 2017.
3K. Farnworth, ‘The British Corporate Welfare State: Public Provision for Private Businesses’, SPERI Paper No. 24, University of Sheffield, 2015.
4Over-financialisation is a form of Dutch disease, accelerating deindustrialisation. In 1975 finance equalled 100 per cent of GDP; in 2015 it was 300 per cent.
5G. Standing, The Precariat: The New Dangerous Class, Bloomsbury, 3rd edition, 2016.
6See Standing, Corruption of Capitalism, Chapter 5. This theme is developed in my book Plunder of the Commons: A Charter for Revival, Allen Lane, forthcoming.
7An alternative to a threshold would be an overhaul of local taxation, involving an updating of property values that for council tax are still based on 1991 values.
8Of course, the Forestry Commission should be reformed, and banned from privatising any more than it has quietly been doing.
9As of 2018, according to Treasury data there were 1,156 forms of tax relief, depriving the Exchequer of well over £400 billion a year. It is presumed in what follows that these could be phased out, and that part of this could be redirected to the Commons Fund.
10The points made in this section are developed in more detail elsewhere. G. Standing, Basic Income: And How We Can Make It Happen, Pelican, 2017.