UK Economist Pushes For Progressive Agenda vs Rightist Parties

Past policy failures and unmet populist promises present an opportunity for progressive leaders to push a viable agenda. But they will need to think about not only redistribution but also wealth and value creation.

Photo Insert: London's financial district

Arguments against austerity need to move beyond the appeal for “shovel-ready” projects and promote strategies to deliver a strong, sustainable and inclusive recovery, Prof. Mariana Mazzucato of the University College London (UCL) stressed in an essay for Project Syndicate.

There are five key dimensions to a winning progressive economic policy agenda.

First, it must offer a new narrative about how value is created, to replace the old, entrenched narrative in which only the private sector plays the leading role, and the state merely fixes market failures along the way. What is needed is a clear notion of collective investment for the common good, with the public sector as the investor of first resort, not just the lender of last resort.

Second, a progressive agenda must deliver both a well-resourced welfare state and a dynamic innovation state, because the two go hand in hand.

Without social services, too many people will remain vulnerable and unable to access the basic ingredients for well-being and economic participation – including education, job security, and health. And without innovation, economic growth and solutions to pressing societal problems – be it a pandemic, climate change, or the digital divide – will remain out of reach.

Third, we need a Green Deal that emphasizes the “deal” as much as the “green.” This means a new social contract. Both the risks and rewards associated with public investments in the green transition should be socialized. It is no accident that profits are growing while investment is not.

That is simply a reflection of increasing financialization across the Fortune 500: More than $5 trillion has gone toward stock buybacks over the past decade, and the majority of private funds go back into finance, insurance, or real estate.

In the US, the new CHIPS and Science Act, which consists of $52 billion in subsidies for domestic semiconductor manufacturers, has reassuringly introduced some conditionality, and more can be done to ensure that the value created benefits people and the planet.

Fourth, new institutional structures are needed to make the most of collective wealth creation.

Given the short-termism that is so prevalent in modern finance, public banks and other public funding structures, including community wealth funds, should be leveraged to create a greater store of patient capital, with financing going toward those businesses that are willing to invest and innovate.

Lastly, a progressive economic agenda needs to be inspirational. Progressive economic policies must be accompanied by citizen engagement to forge a clear link with improvements in people’s lives. Imagine, for example, if the arts were leveraged today as they were in US President Franklin Roosevelt’s Works Progress Administration.

Unless progressive leaders promote a positive and inclusive narrative about the future, they won’t win elections. But to formulate a winning strategy, they first must break clearly with the thinking that has shaped economic policymaking for too long.

WEEKLY FEATURE : MVP Group Keeps Lights On During Pandemic