Which economist made his name blogging about the global financial crisis and got sucked into politics in 2015? Yanis Varoufakis is one correct answer. Richard Murphy may be another. The “man behind Corbynomics”, as the 57-year-old accountant from Norfolk has been dubbed, chuckles at the comparison with Greece’s former finance minister. “No one has suggested I’m the UK’s Varoufakis,” he says, “but the thought has occurred to me.”
Murphy’s sudden rise to prominence occurred early in August after it was reported that Jeremy Corbyn’s economic plan relied heavily on his writings. The two men have known each other for about ten years after meeting through the Left Economics Advisory Panel. “If you drew a Venn diagram of my economic ideas and those of Jeremy Corbyn you’d get a large overlap,” Murphy says.
His world-view was shaped by a career in finance. He trained as an accountant with KPMG and established his own practice in his mid-twenties. Murphy says his work there and in business – among other things, he helped manufacture the Trivial Pursuit board in Europe – gave him an insight into the inequities of the global tax system, which favours large corporations and the rich.
After selling his firm in 2000, he considered becoming an academic, and then focused on new economic ideas. He starting blogging nearly a decade ago and has written roughly 12,000 posts, mostly about tax and monetary policy. (His forthcoming book is called The Joy of Tax, which, though unlikely to repeat the success of Alex Comfort’s 1972 illustrated sex manual, nevertheless shows a sense of humour. “The book is about the second most exciting three-letter word that ends in ‘x’,” Murphy says.)
Even though he and Corbyn are acquaintances rather than close friends, Murphy was pleased to see the veteran socialist enter the Labour leadership campaign. “There’s a clear desire from a great many people to know there’s an alternative to the system we have got. No one allowed them to articulate that feeling until Jeremy came along.”
Murphy did not approach the Corbyn team but, “When you create ideas, you want people to use them,” he says.
Some of the main pillars of Corbynomics relate to tax. Murphy wants higher taxes for the wealthy and large companies, and a big clampdown on tax evasion, which he says could bring in £20bn. The most talked-about policy is the so-called people’s quantitative easing, which Murphy first wrote about in 2010, calling it green QE.
Under conventional QE, a central bank uses newly printed money to buy government bonds from investors such as banks and pension funds, increasing the amount of cash in the financial system. Critics say the biggest beneficiaries of this policy in the UK have been the banks and high-net-worth individuals.
With people’s QE, the Bank of England would print money, in effect, to allow the government to build houses, schools and hospitals, thus stimulating the economy.
Like Varoufakis, Murphy is not short on confidence. “I believe that people’s QE will become the next big tool used by governments around the world,” he says.
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This article appears in the 26 Aug 2015 issue of the New Statesman, Isis and the new barbarism