Friday, July 31, 2015
Thursday, July 30, 2015
Jeremy Corbyn and Chris Dillow
ON CORBYNOMICS
by Chris Dillow
Jeremy Corbyn's economic policy deserves more attention than it's getting.
It seems to me that this comprises two necessarily related elements. One is higher corporate taxes: he wants to "strip out some of the huge tax reliefs and subsidies on offer to the corporate sector" - which he claims to be £93bn a year. This would depress investment, by depriving firms of some of the means and motive to invest. However, this would be offset by "people's quantitative easing" - a money-financed fiscal expansion:
The Bank of England must be given a new mandate to upgrade our economy to invest in new large scale housing, energy, transport and digital projects.
This amounts to what Keynes called a "socialisation of investment":
It seems unlikely that the influence of banking policy on the rate of interest will be sufficient by itself to determine an optimum rate of investment. I conceive, therefore, that a somewhat comprehensive socialisation of investment will prove the only means of securing an approximation to full employment; though this need not exclude all manner of compromises and of devices by which public authority will co-operate with private initiative. (General Theory, ch 24)
This is a response to a genuine problem - low capital spending. The share of business investment in GDP has (in nominal terms) been trending downwards since the mid-70s.
Sunday, July 26, 2015
AV Club reviews Rectify: "Sown with Salt"
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