To Deliver on His Promises, Burnham Must Debunk Rightwing Economic Myths About Government Spending
Source: https://www.theguardian.com/profile/larryelliott. "Rightwing economic myths could derail Burnham’s project – to destroy them, look to Keynes | Larry Elliott | The Guardian." October 1, 2026. www.theguardian.com
The Gist
The author argues that Prime Minister Burnham talks nostalgically about rebuilding Britain's postwar prosperity, but his government keeps cutting spending and raising taxes because it still believes outdated right-wing myths about economics—like the idea that government money works just like household money. The author says these myths (that borrowing is always bad, that markets can't be challenged, that governments shouldn't pick industries to support) are false, and Burnham needs to publicly reject them if he actually wants to achieve his goals, just as Keynes and past governments did.
Conclusion
If Andy Burnham wants to successfully re-industrialize Britain and restore postwar-style prosperity for working people, he must explicitly challenge and dismantle four neoliberal economic myths (the household budget analogy, the 'black hole' framing, the taboo on picking industrial winners, and the idea that markets can't be bucked), rather than merely criticizing neoliberalism's legacy while operating within its constraints.
Premises
- The comparison of government finances to a household budget (the 'nation's credit card' myth) is false, because a currency-issuing government cannot go bankrupt the way an individual can.
- The rhetoric of 'black holes' in public finances is a convenient fiction used by those who want to shrink the state, since fiscal rules are arbitrary, changeable, and routinely abandoned during crises.
- Successful industrial strategy requires governments to pick winning sectors, as demonstrated by China, Japan, Taiwan, South Korea, and even Thatcher's own promotion of financial services.
- The claim that governments cannot 'buck the market' is empirically false, as shown by the Bank of England's 2009 bond-buying program and the 2020 furlough scheme.
- The postwar golden age Burnham idealizes was built on principles opposite to current neoliberal orthodoxy: governments prioritized full employment and tightly controlled financial markets through capital controls, rather than being constrained by market discipline.
- Burnham's government is currently constrained by neoliberal assumptions it claims to reject, meaning his actions (tax rises, spending cuts) contradict his stated nostalgia for a more interventionist era.
Assumptions
- Keynesian economic principles are correct and provide a valid alternative framework to neoliberal orthodoxy.
- Rhetorical and ideological framing (e.g., 'credit card', 'black holes') meaningfully shapes actual policy constraints, not just public perception.
- Historical precedents (Attlee government, 2009 QE, 2020 furlough) are sufficiently analogous to current circumstances to justify similar policy approaches today.
- Political will and rhetorical reframing alone can overcome structural and institutional constraints imposed by financial markets.
- The postwar period's economic management approach could be successfully adapted to contemporary Britain despite vastly different global economic conditions.