To get through its crisis, Britain needs to return to the school of political economy known as Varieties of Capitalism (VoC). Here's why:
The UK economy is built on an eco-system of impatient capital, generalist skills, services industries and weak unions.
In VoC theory, that makes UK a "liberal market economy" (LME). A country that makes these mutually-reinforcing factors its competitive edge.
Ed Miliband got this theory, yet shied from its implication: Britain must accept its unequal model or attempt a risky change of eco-systems.
His 2015 programme was a tortuous attempt to confront Britain's inequalities within its LME eco-system. Perhaps for that reason, it failed.
Theresa May inadvertently shares this outlook. She is not against Britain's current economic model, but thinks it can be made more equal.
But Jeremy Corbyn envisages the UK shifting to what VoC theorists call a "coordinated market economy" (CME), like Germany or Sweden.
That means making: impatient capital -> patient, a generalist skills system -> vocational, hierarchical workplaces -> collaborative.
I have long believed this shift impossible in UK for deep & path-dependent cultural reasons. VoC theory assumes LME/CME split unbreachable.
So I thought UK's best hope was to increase equality within its LME constraints, ie through infrastructure spending, devolution, education.
In fact, I made a whole Radio 4 documentary advancing this theory about VoC and Britain: bbc.co.uk/programmes/b04…
But what if I got that wrong? What if Britain can accommodate a shift to a more CME economy, to a more guild-like web of mores & structures?
Corbyn's good result makes me wonder: is Britain less wedded to an LME model than I thought? Could its culture accept an eco-system shift?
In short: could Britain turn from a LME to a CME? And could it make a success of that? I used to think the answer obvious. No more. [ENDS]