The wealth of thinking. Economist (and NewEconomyBrief.net editor) Michael Jacobs explains in the Guardian the wealth of new economic thinking which can help tackle the challenges of the post-Covid era. The multiple crises we currently face “are not bugs in the economic system but inevitable outcomes of the way it is now organised,” meaning that deep economic reform is needed. The new economics, he notes, challenges much of the orthodoxy of the last 40 years.
New economic thinking in the US? The Biden Administration has surprised many with the radicalism of its economic plans, with huge stimulus spending focused on climate change and social infrastructure, higher taxes on the rich, a “high pressure” labour market to raise wages and improve working conditions, and measures to curb the monopoly power of big corporations. In her speech “A Better Deal for Americans” US Treasury Secretary Janet Yellen has set out the Administration’s new economic approach.
New economic theory and policy. For the last decade the Institute for New Economic Thinking (INET) has been developing and publicising non-neoclassical academic and policy research. The independent website Evonomics publishes accessible summaries of and commentaries on new economic thinking.
NewEconomyBrief.net. Visit our new website Resource Bank page, Changing the Paradigm, for more resources on new economic thought, and the institutions pioneering new economic policy ideas.
Investing in a resilient post-Covid-19 recovery. Building Forward, a new report from the Bennett Institute for Public Policy at the University of Cambridge, argued that “investing public funds - in people’s health and skills, and in social, natural, and physical capital - is the best way to bring about a more resilient and prosperous future, and to deliver the ‘levelling up’ agenda".
ONS moves beyond GDP? The Office for National Statistics Centre of Excellence has published a discussion paper outlining “a new wider index which is consistent with, and complementary, to GDP”. This new index will include “how the environment has been impacted by economic growth (natural capital)” and involves future plans to include “data on the investment in people’s education and learning (human capital) too”.
Which groups are losing out in the recovery? A new briefing paper from the What Works Centre for Wellbeing looked at how Covid-19 has affected inequalities in employment status and income of different ethnic groups. (Blog post summary)
“The biggest overnight cut to social security since WW2.” The Joseph Rowntree Foundation has published analysis of the impacts of the £20 per week uplift cut to Universal Credit on every Westminster constituency. It finds that 21% of all working-age families (with or without children) in Great Britain will suffer a £1,040 cut to their annual incomes, with over 400 constituencies experiencing a third of working-age families with children hit. (Twitter thread summary)
Data on low-paid jobs by local authority. The Health Foundation has mapped the proportion of jobs below two-thirds of UK median gross hourly pay for each local authority in Great Britain. Explore their interactive map here.
Labour shortages, regulation and ‘pinch points’. The FT’s Sarah O’Connor explains why the labour shortages seen across the economy can’t be solved without stronger regulation in the labour market and improved rights for workers: “The system shaved money off our shopping bills but it wasn’t resilient.” The jobs website Indeed has reported further growth in advertised pay for sectors experiencing rapid hiring as demand for staff outpaces supply. But the Resolution Foundation’s Torsten Bell reminded readers that the number of furloughed workers has not fallen since July, implying only localised labour shortages in specific sectors.
Normalising shorter working time in Germany. Autonomy’s Philipp Frey compared the proposals for shorter working weeks in the German election manifestos and concluded: “it’s clear that the demand for shorter working hours has begun to unite the centre left.”
The global consensus around industrial strategy continues. The New Statesman's Jeremy Cliffe writes: "French industrial policy, once deeply unfashionable, is taking hold elsewhere as even Anglo-Saxon governments recognise the value of a strategic state in an era of pandemics, climate crisis and geopolitical competition."
Fossil fuel lobbying. A peer-reviewed academic article traced the history of an influential group of economic consultants hired by fossil fuel companies to inflate the forecasted costs of climate policies to delay action on climate change.
XR targets City of London. The City of London was the focus of last week’s Extinction Rebellion protests. WWF and Greenpeace’s analysis of the UK financial sector's environmental footprint judged the City of London as the 9th biggest emitter of CO2 in the world if it were a country.
Brown QE. Central banks have powerful tools to reduce emissions, but a new report by Oil Change International has found 12 of the world's largest central banks are “all failing to align their lending, asset purchases and regulatory activities with the Paris Agreement target.” Though the Bank of England (BoE) was “partially aligned” with IPCC emission pathways, its lending, asset purchases and regulatory activities were still found “grossly inadequate to address the climate crisis”.
Bottom-up regeneration. A new report from Power to Change recommended a “neighbourhood strategy for developing social infrastructure” rather than top-down approaches to 'levelling up’, where communities compete for centralised pots of funding. The report points to US President Biden's Community Revitalization Fund as an example of best practice which “puts communities in the lead”.
Land for housing. David Steward published a blog for the Scottish Land Commission about moving from a market-led approach to housebuilding to “one governed by the public interest”, recommending Regeneration Partnership Zones, new approaches to land value capture, the creation of a Land Agency, transparency obligations over land ownership, and more.