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Council should listen to the professor

07 January, 2021 — By John Gulliver

Professor Mariana Mazzucato

SOMETHING is going wrong with capitalism largely because of the pandemic.

It isn’t simply in crisis. To survive it needs to become something different.

These are not my views particularly but those of a leading economist at London University whose books and opinions are probing all the established beliefs. Her name is Professor Mariana Mazzucato – and she is clearly a friend, perhaps mentor, of the Labour leader in Camden, Georgia Gould.

And that is where a strange paradox begins – because there are no signs, so far, that any of Mazzucato’s rebellious ideas have rubbed off on Councillor Gould or her fellow councillors.

For years they have been pursuing traditional “opposition” policies trying to adjust to the government’s austerity programme as well as possible – for instance, coming up with an “investment plan” involving a mixture of public and private housing schemes. The author John le Carré described “austerity” succinctly as “planned penury”.

The council’s programme has run into criticisms – doubts about its efficacy abound. None of this is helped by Town Hall deals with developers allowed to build controversial towers with capital from offshore tax havens.

Strangely enough, Professor Mazzucato was among those selected by Cllr Gould to set up a commission locally to help reduce inequality – growing by the year – in the borough. But little has been published by the commission, or if it has, the council seems reluctant to publicise it.

A curtain of silence seems to hang around the commission.

I have tried to contact Professor Mazzucato’s office but have been told she was too busy to talk to me. However the professor, who pours out her books and opinion in heavy economic journals, is now promoting her latest work, Mission Economy: A Moonshot Guide to Changing Capitalism.

And last week – on December 29 – she published a devastating critique of capitalism in the Financial Times, headed “Capitalism’s flaws have been exposed by the pandemic”.

What made this catch my eye was not that it found fault with capitalism – a growing body of economists may well share her opinions – but that she argued that it was “structurally flawed”. In short, it had to be drastically reformed if our economy is to survive.

Camden’s council leader Georgia Gould

This puts the professor ahead of many radical economists – and, in my opinion, exposes a gap between her views and those of Camden’s Labour leadership.

There is little doubt the professor believes in state intervention in the economy. In her article, and in previous interviews, one with CNN, she makes it clear that certain state aiding economies such as in Kerala in India, Vietnam, and other Far Eastern countries, have been enormously more successful in tackling the Covid disease because they did something, for example, that the UK government failed to do – invest in public health measures on a large scale before being threatened by infection, not later when it can be too late.

Confronted with the disease, the UK government has spent in less than a year about £400billion on propping up companies and “furloughing” millions of workers. But it is basically short termism, or so the professor would say, I assume.

The state should aid private companies but with strict “conditions” – the word means some­thing to the professor because she refers to it as “conditionalities”. She is making that part of her programme.

She points out, for instance, how aid is denied companies in France who fail to carry out emission reductions.

And in Denmark there is no help for private companies which are offshore tax havens.

Now, that rings a bell. One of the controversial elements in the deal allowing a Chinese-backed company to build a 25-story block in Somers Town was that the capital came from an offshore haven. This has led to a scandal in another controversial block in Talacre Park, Kentish Town, but it didn’t seem to bother the Labour leadership or council officers who drew up the scheme for the massive Somers Town tower.

The article in the Financial Times by Professor Mazzucato should, in my opinion, be compulsory reading among Labour councillors.

Several hundred words long, on the main opinion page, it spells out why and how capitalism needs to be changed.

She advances the suggestion that workers and public institutions should receive a “citizen’s dividend” giving people equal share in a fund tied to the national wealth – all of this to help create a more equitable society.

And she appears to be in favour of “citizens’ assemblies” which would spark real consultations with the public not the online ones favoured at the Town Hall.

And she doesn’t think much of policies that rely on the employment of consultants – commonly and wastefully used at the Town Hall – because they “infantilise” governments.

Are the professor’s views shared by Labour in Camden? If so, there are few signs that they are in current policies. Therein lies the strange case of the professor and the council.

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