Catch-Up Service: 'Wait until we get our hands on the OBR' – Paul Mason

I was on the BBC's Daily Politics yesterday with Paul Mason, who is an engaging and thoughtful proponent of Marxist-influenced economics. (My segment starts about 26 minutes in.) I interviewed Mason about his book, Postcapitalism, here and here. Since then he has left Channel 4 News and is free to express his support for Jeremy Corbyn and John McDonnell.

Naturally, I welcomed McDonnell's conversion before last month's Budget to what I call fiscal responsibility and what Mason used to condemn as "austerity" and "neoliberalism". McDonnell said: "There is nothing left-wing about ever-increasing government debts, or borrowing for day-to-day expenses." I said it was a shame that he had managed Jeremy Corbyn's leadership campaign because on this evidence he should have managed Liz Kendall's.

Mason surprised me by saying that Kendall was a "good candidate", but then surprised me even more by saying "the reason all governments have fiscal rules is that they make sense" and that McDonnell set out his rules because it "stops your own supporters from thinking that everything can be sorted by taxes on the rich or spending boosts".

He even admitted that "the hardest thing for him [McDonnell] to do under these rules would be to get the debt down [as a share of national income] after five years".

Then, however, came the get-out clauses. First, McDonnell's rules specifically exclude times when real interest rates are close to zero, as they are. But also: "Wait until they – we – get our hands on the Office for Budget Responsibility," Mason said. Its assumptions would be changed by making it truly independent, he said – independent of the Treasury and the multipliers it uses to estimate the stimulus effect of increased economic activity.

"You could do more QE [quantitative easing, commonly known as printing money]," he said. McDonnell has backed off the idea of "People's QE" but Mason said that, in his lecture today in the shadow chancellor's celebrity economists' series, he would make the argument for it.

Finally, Mason started to redefine capital investment. "A lot of infrastructure is about the capacity of the workforce," he said, implying that education and training could be classed as capital spending, which would make balancing the current spending books easier. I look forward to learning more from Mason's lecture.

After my part of the programme, in which Mason was challenged from the so-called centre (I was introduced as a "Blairite commentator"), he was then confronted from the so-called left, by Peter Taaffe, the leader of the Militant tendency, now called the Socialist Party (from about 50 minutes in). Mason used to be a revolutionary Marxist, and Taaffe took a dim view of the development of his politics. Mason said the young people rioting on the streets of Paris (yes, still) are "not fighting for a Leninist revolution", and that all "ordinary working people" want is "an area of self control within capitalism".

I regard it as progress when people stop wanting to replace capitalism with something else, but Taaffe was disgusted at Mason's capitulation to "the most ruthless capitalist class in history".

I'm not a member of any party, but I do wonder what Labour Party members would have made of Mason's invitation to Taaffe: "Just come in, join the Labour Party."