Power, Brexit, gender, tech.

AuthorJacobs, Michael

The IPPR's Commission on Economic Justice published its final report, Prosperity and Justice, on 5 September 2018. Based on two years of research, and led by a group of twenty-two Commissioners from across business, trade unions, activism, churches and academia, the report is a uniquely authoritative statement of an emerging new paradigm in British economic policy. The report sets out an analysis of the deep-seated problems with the UK's economy, and offers a transformative plan to 'hard-wire' justice and sustainability into Britain's economic model. Michael Jacobs was director of the Commission, and Carys Roberts one of its principal researchers. Renewal caught up with both of them to discuss the politics of the report: its scope, aims, omissions, and underlying sensibilities.

'For us, it's very important that it isn't just people on the left who have welcomed this report'

Theories of change

Florence Sutcliffe-Braithwaite: This is a hugely ambitious report, making a large number of interlinked recommendations which together add up to a plan to fundamentally transform how our economy works. So my first question is: how do you go from this report to getting a version of it implemented?

Michael Jacobs: This is obviously the most important question! And in general it's a difficult one for think tanks. Think tanks play a very specific but limited role in what you might describe as a theory of political change. Mostly, they do some research, publish a report, hope that some people read it, and then move on to the next thing. Effectively they throw their products into the world, and then hope that they swim--and of course in practice most of them sink. We need the Commission's report to be different. And IPPR does indeed have a theory of change underlying the report, which we shall be trying to implement over the next few years. Essentially this involves attempting to shift the whole nature of the debate about the economy--and to do so in a way that captures almost all of the centre ground plus its left and right wings.

We talk in the report about the 'paradigm shifts' that occurred after 1945 and 1979. After 1945 people on the right as well as the left accepted the Keynesian revolution. And similarly, after the free market revolution of the 1980s, the left as well as the right (not all of it, but certainly the governing left, the Labour Party) came to accept a lot of the Thatcherite settlement. Ten years after the financial crash it is clear that the economy is simply not working, and nor is conventional economic policy (as we show in the report). So today we need another paradigm shift. And we want our narrative and policy agenda to form the basis of that shift.

So for us it's very important that it isn't just people on the left who have welcomed this report, but people right across the political spectrum, from John McDonnell to the Daily Mail. We're delighted that McDonnell has described it as a new Beveridge Report, but part of the theory of change here is that we want to change the whole conversation; we need the report to seep into every political and economic policy debate. Our strategy now is to embed the report in public debate, and to take it out to the wider public with events across the country, so that when people ask, 'well what can we do about the economy?' there's a reference--a blueprint--here to give them an answer.

The crucial thing that this report argues is that there is an alternative. It presents a coherent narrative, and a coherent set of policies. That's why we did a Commission, rather than just writing a report. By getting the Archbishop of Canterbury, the General Secretary of the TUC, the managing partner of McKinsey, a community organiser for Citizens UK and all the other people who are on the Commission to produce the report, we gave it huge credibility and authority. It's hard to rubbish all those people at once. And that's of course why it got so much publicity when it launched.

Active state and open markets

FSB: Can you say something, then, about the main thrust of your recommendations?

MJ: The core messages are very simple. First, the economy isn't working. Secondly, you can reform an economy in fundamental ways. Thirdly, a fair economy is a stronger economy. It simply isn't the case that you have to trade-off growth and equality, or prosperity and justice. But, fourthly, you don't create justice simply through redistribution; you have to hard-wire it into the way the economy works. You need to change the structures of the system: in corporate governance, the labour market, the ownership of wealth and housing, the role of the state and private sector, the tax system, and the conduct and institutions of economic policy. And in each case this requires, fifth, a redistribution of power.

And that's why I think the report marks a significant leap from New Labour's economic policy. That largely aimed to redistribute the fruits of an economy whose fundamental workings were left unchanged. Towards the end of the Labour government we experimented with a bit of industrial strategy, but by and large we didn't change the structures of the economy. Indeed we even further deregulated parts of it, including the financial sector. And then we tried to redistribute the fruits. We did that quite successfully, slowing down the growth of inequality, and vastly improving public services. But the underlying engines of inequality and poor economic performance were not changed. So the model we are putting forward now says that we need to hard-wire justice into the functioning of the economy. It's a much more interventionist strategy.

So we argue uncompromisingly for a more active state. There are a whole range of ways we think the state should shape markets, many of them using independent or semi-independent institutions, like a national investment bank, regional economic authorities in England, and so on. But we also argue that we need much more open markets. The digital sectors which now dominate our economy are...

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