Editorial: The Guardian

• Rachel Reeves delivered an important speech providing insight into UK Labour Party's economic thinking.
• She identified the economic damage wrought by austerity and the price paid by political instability.
• While recognizing the need for a radical agenda to deal with economic stagnation, political polarisation and the climate emergency, her response falls short of the scale of challenge.
• She alludes to Janet Yellen’s “modern supply side economics” but refuses to back Yellen’s stand that there are social benefits in running the economy “hot” by maximising the use of all available resources.
• She argues for a larger, activist state, but her approach suggests that government can only nudge business along the direction they have already taken.

Conclusion: Reeves stance, useful in blunting Conservative attacks, is profoundly misjudged in bolstering the very institutions she criticises. A better balance between capitalism and democracy requires alternatives that Reeves should offer.

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