Editorial: The Guardian

• Gordon Brown of Labour relied on academically rooted theories to inform his economic strategy.
• In contrast, the current Labour team has not thoroughly clarified their approach to driving economic growth.
• Stephanie Kelton's proposal, a theorist of Modern Monetary Theory, is a challenge to mainstream economic thinking.
• Kelton argues that the government can create and invest money as long as there is capacity in the economy to absorb cash.
• Her theory gained notoriety during the Covid-19 pandemic, when governments ramped up spending without determining where the money would come from.
• Brown's successor, Rachel Reeves, prefers sticking to the consensus and commits to implementing austerity measures in the future.
• The strategy of cutting taxes to attract private investment and boost productivity has failed since 2010.

Conclusion: Modern approach to economics must go beyond consensus and austerity policies, embracing a more flexible viewpoint on government spending and investment.

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