Corbyn v. The Deficit Dimwits

NetEnt-Fisticuffs-Videoslot-236x300Jeremy Corbyn’s unexpected leap to the front of the Labour Party leadership race has inadvertently created a modern miracle: it has united every organ of the mainstream media from the Guardian to the Telegraph, and every politician to the right of Dennis Skinner.

They all agree that his plans for the economy are bonkers. If he wins the leadership race and pursues his Corbynomics policies everyone who makes a living from telling the rest of us how the world works is telling us that Labour will be “unelectable” in 2020 and beyond.

In condemning Jeremy Corbyn’s alternative approach to economic policy this near-universal coalition of the great, the good, and the wise is telling us what must be true: that government spending has been out of control for years and must be reduced; that the deficit is unsustainable; that we can’t go on living beyond our means.

We know these things must be true because we’ve been told them so often and we’re too lazy, too stupid, too ignorant, too damned compliant to think for ourselves and see that they don’t make any sense whatsoever.

They’ve got it back to front, these self-appointed arbiters of common sense. They think that money is the limiting factor. They think that “our means” are limited to the amount of money that the government is able to collect as taxes.

But money is just numbers in a computer that can be created and destroyed in infinite amounts by a finger on a keyboard, therefore money cannot be the limiting factor when it comes to providing ourselves with the things that we need. “Our means” are limited only by the capacity of our brains and muscles to do useful work, by our ability to organise ourselves to work together, and by the natural resources of the planet.

This is the fundamental difference between Corbyn and his opponents. He recognises that we – our collective energy and intellect – are “our means”, and that we have oodles of productive capacity to spare.

In terms of human resource we are nowhere close to “living beyond our means”. We have plenty of man and woman power available to provide the best of education, health care, transport, and everything else that we decide should be done for the common good. Money – the thing that his opponents think constrains our public services – is merely the tool that we use to mobilise ourselves.

Jeremy Corbyn is trying to take the debate by the scruff of the neck, drag it away from its obsession with money and bring it back to being about people. He’s trying to remind us that the purpose of government is to help people to do good things for each other. The naysayers and doom-mongers are refusing to budge, pointing at the deficit and shaking their heads at Corbyn’s “economic illiteracy”.

But his logic is flawless: we have an abundance of human capital and the ability to employ it in the service of our communities, therefore we are nowhere near “living beyond our means”. But he is up against a culture that has been brainwashed into believing that the demon deficit must be defeated, otherwise we are all doomed. Not the first time that faith-based fear has trumped logic.

Corbyn is trying to fight back by accepting the deficit myth and claiming that his end game is a balanced budget, achieved through economic expansion rather than service cuts. I think that this is a mistake.

The deficit is a myth. Sterling is a sovereign currency which means that the government has the power to create and spend an infinite amount of money. It doesn’t need tax revenue. It doesn’t need to borrow. It doesn’t need a deficit. Corbyn should reject the deficit myth outright and tell us the truth about money.

He should tell us that money is a tool that we should use to do good things, not an asset to be hoarded (we have plenty of other ways to store our wealth). He should tell us that money is constantly being created and destroyed by banks for profit and that this, not the deficit, is at the root of our economic problems.

He should tell us that we can create however much money we need to fund public services and make the economy flourish, and that we can destroy however much money we need to control inflation.

He should tell us that, when he’s elected as Prime Minister, he will reform our financial systems so that they work properly for the common good, so that never again will we have to listen to deficit dimwits telling us that there’s “not enough money” or that we’re “living beyond our means”.

By suggesting that some institution of the state should control the creation, distribution, and destruction of money Corbyn will attract howls of derision from those who believe that government cannot be trusted with direct control of the money supply.

He can hit back with a swift left by championing a money supply system that is automatic, that cannot be influenced by the government of the day.

And he should finish them off with a thumping right that exposes the current system for what it is: a scam that’s been designed by bankers to make bankers rich.

We know that the our financial system is rotten and in need of reform. We want our hospitals and schools and roads to be properly funded. We know that austerity is the politics of despair. All we need is a credible alternative and we will vote for it in our millions.

Against all the odds Jeremy Corbyn is emerging as that credible alternative. He is on his toes in the middle of the ring and has the crowd behind him. He doesn’t need to dodge the deficit question. He should square up to the deficit dimwits and lay them out cold.



2 thoughts on “Corbyn v. The Deficit Dimwits

  1. Malcolm, just in case you feel sometimes that your blog posts are dropping into a black hole and nobody is reading them, I want to say that I for one am reading them and am still very inspired, and I am sure I’m not alone. It’s hard to find the time to leave a comment unfortunately.

    I posted a link to this blog on a Green Party website forum a few weeks back, and had a few interested responses, plus one who thought your system would destroy banking and, shortly after that, civilisation – basically he was afraid people would turn to hoarding valuables under their beds.

    I too have been wishing that Jeremy Corbyn would organise his argument in just the way that you plead for in this latest post. Why doesn’t he??

    • Matthew,

      Thanks for the feedback. It’s good to know that people are reading and sharing.
      I really don’t understand why Corbyn and Co aren’t promoting a real alternative to the financial dysfunction that’s holding us back. Done right it would be such a vote winner.

      Maybe we should bombard him and John McDonnell with tweets until they pay attention.

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