Thread by @DerbyChrisW

1. TONY BLAIR’S ESSAY 🧵
What anyone tempted to take Tony Blair's essay seriously needs to remember, is that he's a dyed-in-the-wool neoliberal.

institute.global/insights/polit…

2. TONY BLAIR’S ESSAY 🧵
However, his statement that the Labour Party is playing with fire over its future and the future of the country is correct, but for the wrong reasons.

3. TONY BLAIR’S ESSAY 🧵
Blair is on record saying that when he was the Prime Minister he thought his job was to build on some of the things Margaret Thatcher had done, rather than reverse them.

4. TONY BLAIR’S ESSAY 🧵
What he isn't saying, nor is the Labour Party, nor the corporate media, is that investment in the economy by the government would drive economic growth.

5. TONY BLAIR’S ESSAY 🧵
Indeed, such investment is essential if the UK is ever to escape the malaise that nearly 50 years of neoliberalism has created.

6. TONY BLAIR’S ESSAY 🧵
We need a huge fiscal stimulus to bring our crumbling infrastructure up to the standard commensurate with the UK being the world's fifth largest economy. That would generate significant economic growth and create more than a million well-paid jobs.

7. TONY BLAIR’S ESSAY 🧵
Public services also need a huge injection of resources, and the privateers must be ejected, because their overriding priority is private profit not public service.

8. TONY BLAIR’S ESSAY 🧵
It is a national scandal that our public services have been turned into a cash cow for the private sector.

9. TONY BLAIR’S ESSAY 🧵
Similarly, all the utilities must be brought back into public ownership for the same reason. The most egregious example of the way in which the privatisation of our utilities has been abused is the water industry.

10. TONY BLAIR’S ESSAY 🧵
But all the utilities are abusing their privatised status to rip off consumers and line the pockets of corporate fat cats.

11. TONY BLAIR’S ESSAY 🧵
Furthermore, social security benefits should be substantially increased. What the corporate media and neoliberals like Tony Blair won’t tell you is that this would also drive economic growth.

12. TONY BLAIR’S ESSAY 🧵
That is because people on low incomes tend to spend any extra money they obtain in the local economy creating a strong multiplier effect, whereas wealthy individuals tend to hoard it.

13. TONY BLAIR’S ESSAY 🧵
However, neoliberal ideologues like Tony Blair are committed to market solutions. But market solutions have created the mess in which we are in today. Indeed, it's market solutions that has plunged more than 14 million British citizens into poverty.

14. TONY BLAIR’S ESSAY 🧵
Moreover, market solutions have resulted in most of our manufacturing and heavy industries being offshored to other countries, where higher profits can be extracted.

15. TONY BLAIR’S ESSAY 🧵
The millions of previously secure, well-paid jobs in those industries have been largely replaced by precarious, low-paid employment instead.

16. TONY BLAIR’S ESSAY 🧵
Blair’s obsession with market solutions and globalisation has left the country significantly more vulnerable to price shocks, as the events in Ukraine and the Middle East have proven.

17. TONY BLAIR’S ESSAY 🧵
We should therefore be seeking to make the economy as self-sufficient as possible, which means repatriating some of those industries that we’ve lost and developing new ones.

18. TONY BLAIR’S ESSAY 🧵
It also means government investment in areas like agriculture to make us much less reliant on imports.

19. TONY BLAIR’S ESSAY 🧵
Of course, if my prescription for improving the economic wellbeing of Britain was ever put to Tony Blair, he would no doubt respond by saying it is unaffordable.

20. TONY BLAIR’S ESSAY 🧵
But that is because he accepts the household budget analogy of the economy. In other words, he would argue that governments have to manage their finances like a family.

21. TONY BLAIR’S ESSAY 🧵

That assertion is a complete fallacy, because the government issues the currency, so it can never run out of money. Consequently, it doesn't need to tax or borrow before it can spend

22. TONY BLAIR’S ESSAY 🧵
In fact, taxes and so-called borrowing do not pay for govt spending. What the government should be focused on is the availability of real resources in the economy like workers, raw materials, machinery and energy etc, not the availability of money.

23. TONY BLAIR’S ESSAY 🧵But taxes are essential to control inflation, to deter spending on dangerous products like cigarettes, and to tackle economic inequality. Taxation also creates a value for the currency because our tax liabilities must be paid in pound sterling.

24. TONY BLAIR’S ESSAY 🧵
It is also important to stress that the talk about government borrowing is actually a misnomer. Truth be told, governments don't actually borrow as such.

25. TONY BLAIR’S ESSAY🧵
They sell government bonds, also known as gilts, on which interest is paid to provide a risk-free investment for the likes of super-rich individuals, insurance companies, banks and pension funds. These bond sales are really a form of corporate welfare.

26. TONY BLAIR’S ESSAY🧵
There is no obligation on the govt to sell bonds. They are required to do so as a result of a policy decision taken by Margaret Thatcher's Tory government in 1981. The then Chancellor of the Exchequer, Geoffrey Howe, introduced the "Full Funding Rule."

27. TONY BLAIR’S ESSAY 🧵
This means that when the amount of tax collected by the govt is lower than the amount it spends, it's required to make up the shortfall by selling an equivalent amount of govt bonds. It's yet another way of lining the pockets of the already wealthy.

28. TONY BLAIR’S ESSAY
The fact that Tony Blair's govt never scrapped this rule is yet another damning indictment of his period in office.

29. TONY BLAIR’S ESSAY🧵
Needless to say, Sir Keir Starmer and Rachel Reeves have maintained this rule, and all the indications are that Andy Burnham would leave it in place, too.

30. TONY BLAIR’S ESSAY🧵
But prior to 1981, post-war governments regularly engaged in deficit spending, including the 1950s and 60s, when inflation was consistently low. Although those pre-1981 governments also sold bonds.

31. TONY BLAIR’S ESSAY 🧵
One of the main reasons for doing so was to control the money supply. That is because bond sales reduce the amount of money circulating in the economy, and that helps to fight inflation.

32. TONY BLAIR’S ESSAY 🧵
As for playing with fire, if the Labour Party accepts Tony Blair’s advice, it will not only be accelerating its own demise; it will be pouring petrol on the inferno that 50 years of neoliberalism has created.

33. TONY BLAIR’S ESSAY 🧵
So, rather than listening to Tony Blair, we would do well to look at the examples set by the Attley and Wilson Labour govts.

34. TONY BLAIR’S ESSAY 🧵
They demonstrated that public ownership and deficit spending didn’t cause inflation, but it did create a fairer society, and that is what we should all be demanding today.