Protesters at the G8 summit call for economic justice. Picture by: Philip Toscano / PA Archive/Press Association Images. All rights reserved.As the second Labour party leadership contest in twelve months draws to a close, polls suggest Jeremy Corbyn is set to comfortably beat his opponent Owen Smith and secure a second mandate. It has become startlingly clear that the centre & right wings of the party are lacking any kind of economic strategy beyond Owen Smith’s campaign sloganeering, their shared loathing of Jeremy Corbyn conveniently obfuscating the fact. Are they anti-austerity? If so, how do they wrest ‘economic credibility’ from the Tories? If the party is not avowedly anti-austerity, would a post-Corbyn leader return to the electorally disastrous political triangulation of Ed Miliband’s tenure?
The harking back to the economic achievements of New Labour belies a disturbing lack of acceptance of the greatly changed economic environment in which the next Labour prime minister will operate. The gains made during the New Labour years relied on a grossly under-regulated finance sector, healthy global growth, reliance on cheap credit to prop up stagnant wages, a low government debt overhang and the net contribution to government coffers made by millions of new EU migrants. It is highly unlikely any of these factors will pertain under a future Labour government.
Since the second world war, the Labour party, like its social democratic sister parties across Europe, has tied its fate to that of capital. Where Labour has made gains, it has relied on a healthy capitalism - and in the case of New Labour, the expectation of future growth via free and easy credit. As Stuart Hall notes,
