There can be no denying that, over the last several years, there has emerged a broad economic consensus in favour of a fundamental transformation of the UK economy.  

In 2019, a poll from the Institute for Public Policy Research and YouGov found that 60 percent of people wanted the government to introduce significant changes in how the economy is run. In 2020, a poll from UNITE and Survation found that 60 percent of people believed that cuts to public services had had a negative impact, while 71 percent believed that taxing the wealthy would be preferable to renewed austerity. In 2022, Ipsos Mori found that 67 percent of people agreed that ordinary working people do not get their fair share of the nation’s wealth.  

This represents a shift from previous data. The British Social Attitudes Survey shows that a majority of UK adults favour increasing taxes and spending more ever since 2017, before which point more were in favour of keeping spending the same.  

It’s not hard to see why such a consensus had emerged by the 2020s. My generation, which came of age around the financial crisis of 2008, had lived through an era of near-unprecedented crisis and stagnation.  

Millennials joined the labour market in the wake of the greatest financial crash since the Great Depression and the worldwide recession that followed it. Graduates born a few years later didn’t have it much better, as they were forced to pay more than £9,000 per year for their university education.  

Then came the great stagnation that followed the great recession. In the UK, wages and productivity stagnated for the longest time in more than a century. The Resolution Foundation found during this period that my generation would be the first in the history of modern capitalism likely to be worse off than their parents.  

Then came the pandemic. COVID-19 did not only take hundreds of thousands of lives, it forced millions of people to stay trapped in their homes during what should have been their prime years of education, or their first years in the labour force. It also forced hundreds of thousands of older people out of the labour market altogether due to the debilitating impact of long-Covid. 

And then came the cost-of-living crisis. By March 2023, UK workers had lived through 15 successive months of lower-than-inflation pay increases, meaning households were getting poorer every month.  

The IFS recently released the astonishing statistic that wages by 2026 would be over 40 percent lower than what they would have been had pre-crisis trends continued. In other words, living standards have essentially remained flat in the fifteen years since the financial crisis of 2008. The Resolution Foundation called this period of stagnation ‘completely unprecedented.’ 

In this context, it is no longer radical to argue that the UK economy requires deep, structural transformation. With the power to set taxes, levels of public spending, wages in the public sector, and regulation in the private sector, the British state is the only institution capable of enacting such a transformation. It follows that the British electorate is in favour of a radical shift in economic policy.  

So why is the Labour Party refusing to provide such a shift?   

Keir Starmer is undoubtedly a timid and conservative leader who shies away from the kind of radicalism championed by Jeremy Corbyn and John McDonnell, making him a deeply inappropriate person to have at the helm at this time of unprecedented economic chaos.  

Many of his former cheerleaders now recognise this problem—especially after some disappointing local election results—and are encouraging the Labour leader to come up with some interesting economic policy ideas.   

But there are reasons to believe that Starmer’s reticence to back radical economic transformation is not simply the result of his cautious character.  

The problem with state-led economic transformation is that it encourages people to believe that they have some control over the nature of the economy, rather than the economy having total control over them. 

Most people are led to believe that ‘the economy’ is some abstract entity that goes up and down based on psychological patterns and random exogenous shocks. They believe, in other words, that the economy is an external force that controls their lives—not unlike the way ancient societies treated the whims of their gods.  

Pleasing ‘the economy,’ like pleasing the ancient gods, often requires some form of sacrifice. This is why David Cameron’s argument that the age of excess had to give way to the age of austerity was so convincing in the post-crisis period. ‘The economy’ had been disturbed, and now it had to be placated.  

This ideology is what allows our elites to consistently get away with imposing policies that clearly have a negative impact on the vast majority of people. Without ever providing any evidence, policymakers will state that ‘the economy’ requires tax cuts, or public spending cuts, or deregulation. Experts will nod along and, without the ability to challenge them, most people will simply accept their word as gospel. 

And the policies these ‘experts’ promote just so happen to privilege the interests of the already wealthy while eroding the power of the working classes.

But when the government acts to change the nature of the economy, this ideology is flipped on its head. Suddenly, it’s not ‘the economy’ that is in charge of the people; it’s the people who are in charge of the economy.  

This is both the meaning of economic populism and the reason for the entrenched bias against any form of progressive state intervention among the British establishment.  

The promise of progressive economic policy makes it viable for working-class people to organise in order to demand economic policies that could promote their interests. What’s more, the increase in employment also associated with greater levels of government spending also makes it easier for workers to organise for better pay and conditions.  

It’s not hard to see why such a spectre would be scary to those who benefit from the status quo. If the state of the economy is something that we can shape with changes to economic policy, then what is to stop people from arguing for significant redistribution from the wealthy to the poor? What is to stop workers from organizing to demand wage increases in line with inflation? What is to stop them from organizing to demand the power to organize production itself?  

My instinct is that Starmer simply does not think in such ideological terms. His expert advisers inform him, allegedly objectively, which kinds of policies would be good for ‘the economy’, and he rigidly adheres to their advice.  

But Starmer’s expert advisers, not to mention those who fund him, will be deeply aware of the problems posed by the kind of economic populism that proved so popular during the Corbyn years, and their advice will be expressed accordingly.  

For as long as economic policymaking is dominated by ‘experts’ whose views are formed without reference to the needs of ordinary people, the UK’s economic crisis will continue to get worse. What we need is economic democracy—and that’s what terrifies the British establishment.