Dear Scotland: contemporary views on how and why the union harms scotland

The Economic Illiteracy of Labour

Labour is economically clueless.

Rachel Reeves says she’ll follow the Bank of England’s destructive interest rate policies and the Office for Budget Responsibility’s useless forecasts. Both institutions are neoliberal to the core and helped spawn the 2008 financial crisis and 13 years of austerity.

Labour doesn’t understand that government’s first responsibility is to ensure that public services – energy, transport, water, health, education – are well-funded. The private sector can’t grow without the public sector supplying a healthy and well-educated workforce and needed infrastructure.

But, of course, Thatcher sold most UK public assets on the cheap – health and education are next on the chopping block and water in Scotland – to foreign corporations and governments, who are making out like bandits. Like the Tories, Starmer opposes renationalisation and Streeting wants more private health care.

And Reeves has boxed herself in, pledging to stick to her iron-clad fiscal rules, a self-imposed strait jacket that guarantees more austerity. She fails to understand what Keynes understood – that governments can afford what they need because they are not like households. They are currency issuers and are only constrained by the economy’s productive capacity. The UK economy is starved of public investment but Labour refuses to deliver it.

This begs the question – why does Labour want to govern if it doesn’t understand the first thing about what governments are supposed to do? One thing’s certain – Labour’s economic illiteracy will ensure the UK’s continued demise.

It’s not as certain that Scotland will escape before the UK hits rock bottom.

Leah Gunn Barrett

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