Most people in this country agree that housing, transport, education and broadband are all inadequate and far behind where they need to be to meet the needs of a modern economy.
Unlike the Government, which thinks only the private sector can sort these problems out, Corbyn suggests that Government should use its economic clout to make things happen. Is that so bad?
Ironically, most business leaders would agree, up to a point.
Government should be taking advantage of today’s low interest rates to borrow money to invest in infrastructure.
Not to do so is to squander a once in a generation opportunity to rebuild this country.
Corbyn’s People’s QE is his way of paying the bill and it has attracted a lot of ridicule — notwithstanding the irony that printing money to get things moving is an idea endorsed not only by Milton Friedman — the Right-wing intellectual father of monetarism — but also by former Fed chairman, Ben Bernanke, who said that when all else failed, government could get the economy moving by dropping money from helicopters.
The point is that getting the Bank of England to print money to buy bonds issued by housing associations, health trusts, or an infrastructure bank is a perfectly credible and workable idea.
But it is a also bit of a red herring — no pun intended. It would actually be a lot simpler to allow these organisations to raise money in the markets directly with a Treasury guarantee as Network Rail already does.
"What perverse logic is it that makes us trust overseas governments to run businesses but recoil at the idea of one of our own?"
<p>Anthony Hilton</p>
People’s QE should be taken not literally, but as a way of pointing out that the money is there for these projects if government chooses to go for it. It is a shortage of political will, not a shortage of money, which is holding us back.
And to the criticism that borrowing money in this way would cause inflation and send the pound lower on the foreign exchanges — bring it on.
Every central bank in the world, from here to Japan, is trying to cause inflation because they fear the alternative — deflation — could cause long-term stagnation.
Inflation lightens the burden of a world drowning in debt. But it is also likely, in present conditions, that a modest degree of money printing could be done without provoking excess inflation, so the real issue is whether Corbyn would only do it to a modest degree. Here, to be realistic is to have doubts.
Corbyn has also suggested nationalising the railways, banks and energy companies.
One might ask, as the Adam Smith Institute did, what would be the point — but it would hardly be a disaster. Network Rail is already state-owned.
The Department of Transport successfully ran the East Coast franchise for five years until last year. The nationalised railway companies of other nations — the Germans, the French and the Belgians — have all operated trains here.
If a Belgian nationalised company such as Abellio is acceptable, why not a British nationalised company?
And the rail franchise system only works at all because of massive, albeit indirect, Government subsidies. Free enterprise it is not.
Whether nationalisation would be any better is a moot point, but no sane person would invent the present system if we were not already stuck with it.
Likewise the power companies: at present, private sector management is hardly covering itself in glory.
Indeed the Financial Times warned yesterday of the serious risk of power cuts as result of years of under-investment — something which never happened under state control, except immediately post-war when generally the criticism was that they invested too much.
Power companies have been accused of under investing
Again, the French state-owned EDF is already a major power supplier here — and, with the Chinese, is going to build our first new nuclear power station.
What perverse logic is it that makes us trust overseas governments to run businesses but recoil at the idea of one of our own?
There is, of course, a lot for people not to like in Corbyn’s economic book — the prospect of higher personal taxes, for example, and the general unworldliness of so much of it — but the critics need to choose their targets with more care.
The growth record of neo-liberal free market economics — the mantra for the past 35 years — was recently shown by a group of Cambridge researchers to be worse on almost all counts than the system we had before Mrs Thatcher came along.
The present economic outlook here — and internationally — is far more fragile than the Government cares to admit and it is reasonable to look for an alternative way of doing things.
Whether or not Jeremy Corbyn is the right answer is clearly in doubt, but it will do George Osborne no harm to be challenged.
