By Justice Markandey Katju
Keir Starmer's Labour Party has no doubt won a landslide victory in England's recent parliamentary elections.
But I submit he will become very unpopular in about 6 months time, and hated throughout UK in one year from now. On what basis do I say this ?
Keir Starmer has made a lot of tall promises about improving the economy of UK in his post election speeches.
He said that he will introduce policies which will result in economic growth, increase employment, restore stability, increase public services, reduce cost of housing, etc etc-- all platitudes, shibboleths, cliches and hokum, without giving any details, which indicates Keir Starmer has little idea of economics.
A nation's economy grows when new industries and businesses are rapidly set up and increased. But this can happen only if there is rapid growth in demand, for after all the products of the new industries have to be sold. But how can they be sold if people do not have the purchasing power to buy the new goods ? Hence the solution to the problem is not how to increase production ( that can easily be done by modern teccniques ), but how to raise the purchasing power of the people.
But how can that be done ?
In the Soviet Union, the policy of rapid industrialisation came with the adoption of the first Five-Year Plan in 1928. The methodology adopted was this: the government fixed prices of commodities and kept reducing them by 5-10 per cent every two years or so. This enabled people to buy more goods with the same wage (as the real wage is relative to the price index), and this led to steady expansion of the domestic market ( for stability a country must mainly rely on its domestic market, for reliance on foreign markets, which may be cut off, is always precarious ).
Simultaneously, production was rapidly stepped up in the Soviet Union, and this increased production could be sold in the domestic market as people now had more purchasing power. Also, this rapid industrialisation created millions of jobs, which solved the problem of unemployment. Thus the Soviet economy rapidly expanded at a time when the Great Depression, starting from the Wall Street crash of 1929, was going on in the US and Europe, resulting in the closing down of thousands of factories, which threw out millions of workers from their jobs.
In my opinion, the same methodology alone can solve the economic crisis in the UK which has had very slow economic growth, taxes rising, and lacklustre investment for about 15 years, but that will not be accepted in the system prevalent in UK today. So, the situation will keep getting worse.
Keir Starmer may enjoy his victory today, but he will become another Rishi Sunak soon
(Justice Katju is a retired judge of the Supreme Court. These are his personal views.)
