A crisis in credibility - Labour's economic programme

·52 min·5 clips

Sociologist Will Davies explains why Labour's economic programme faces a crisis in credibility as it tries to fix Britain's stagnant growth.

The episode begins with host Alex Doherty introducing guest Will Davies, a sociologist and political economist, to discuss his LRB article 'A Crisis in Credibility, Labour's Conundrum'. Davies outlines the scale of Britain's economic crisis, noting 15 years of stagnant GDP per capita and wage growth, exacerbated by Brexit and high immigration. He contrasts this with the late 1990s when Gordon Brown commissioned a McKinsey report on productivity, highlighting that current conditions are too dire to ignore. The discussion turns to the Truss government's 2022 mini-budget, which Davies interprets as a libertarian 'shock therapy' attempt to unleash capitalist energies, though it failed disastrously. Davies then explains Labour's economic strategy under Starmer and Reeves, which emphasizes fixing 'foundations' like transport, energy, and planning rules—a 'modern supply-side economics' approach akin to the Biden administration. He details the critique of this as 'de-risking' or the 'Wall Street consensus', where the state guarantees profitability for private asset managers like BlackRock to fund infrastructure. Davies notes that even if successful, the Office for Budget Responsibility suggests productivity gains might take over 10 years, creating electoral challenges. The conversation explores Labour's efforts to build credibility by aligning with international elites like the IMF and the Biden team, while balancing worker rights and business demands. Comparisons are drawn to US politics, where Bidenomics initially promised progressive reset but shifted toward national security and trade wars with China. Davies concludes that the UK lacks the US's hegemonic position, making a similar security-focused narrative less viable, though defense spending may become a future fiscal pressure. The episode closes with a call for reviews and credits.

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