John McDonnell and the Great Leap Backward by Geoffrey Smith @FortuneMagazine November 25, 2015, 11:19 AM EST E-mail Tweet Facebook Linkedin Share icons Well, that was surreal. It’s a while since anyone thought it useful to quote Mao Zedong, leader of China’s Communist Revolution and author of the biggest humanitarian disasters of the 20th century, in the Mother of Parliaments at Westminster. Man-made famines and party purges with a death toll of 40 million have always seemed a bit of a vote-loser in the key marginal electoral districts of the Midlands and outer London, don’t you know? Still, that didn’t deter John McDonnell, the man responsible for articulating the economic policy of Her Majesty’s Loyal Opposition under its new hard-left leader, Jeremy Corbyn. McDonnell thought that the best way to rebut the Conservatives’ new spending plans for the next five years was to quote from Mao’s Little Red Book, the anthology of Mao quotations that has inspired and soothed the troubled conscience of so many mass-murdering vanguard élites of the last 50 years. “We must learn to do economic work from all who know how, no matter who they are. We must learn from them as teachers, learning from them conscientiously and respectfully, but we must not pretend to know what we do not know.” (This of course, from a man whose idea of economic progress was to force peasants to use their cooking pots as feedstock for ramshackle blast furnaces in every village, and to shoot those who protested.) McDonnell’s antics were, admittedly, self-conscious. He was having a dig at a supposedly free-market loving government’s desperate attempts to get China to finance a new generation of nuclear power stations and other infrastructure projects. All the same, it seems a fair bet that the incident will be remembered largely for betraying how well acquainted McDonnell is with the thoughts of one of history’s greatest murderers. The incident is all the more embarrassing for coming less than a week after claims that McDonnell had called, before the general election in May, for Britain to disarm its police and disband its MI5 domestic intelligence service. Those ideas are just a little out of touch with the political mood after the Paris terror attacks. (He denied having signed the pamphlet, by ‘Socialist Campaign for a Labour Victor’, despite having been photographed posing with it). It’s difficult to say which the governing Conservatives enjoyed more: the sight of Labour’s front bench committing political suicide, or the sight of Labour’s more moderate backbenchers writhing in embarrassment and staring with grim resolution at their mobile devices, pretending not to hear. Either way, the incident overshadowed a major climbdown by the re-elected Tories over two of their biggest economic ideas: the phasing out of tax credits for the low-paid, and big cuts to public spending, both aimed at closing the biggest budget deficit in the G7. Chancellor of the Exchequer George Osborne not only ducked that, but also dropped plans for the biggest ever cuts in departmental spending, choosing instead to freeze it in real terms. As with France last week, Osborne has thrown out plans to cut police spending in the wake of the Paris attacks. All the same, he’s still projecting a budget surplus by the time the next elections come round in 2020, as well as a lower debt-to-GDP ratio. Much of the extra money is coming, as it so often does in such cases, from increased assumptions about revenues (the GDP forecasts for 2016 and 2017 were revised up). The rest will come from a politically astute stamp duty on second homes and rental property purchases, helping to keep Britain’s sky-high house prices under control. In addition, the Chancellor is assuming that the National Health Service, which swallows some 10% of GDP, will be able to find 22 billion pounds ($33 billion) in extra efficiencies–that’s out of a budget of £120 billion–by 2021. Most analysts of the U.K.’s health sector (for example, The King’s Fund) would sooner trust Chairman Mao’s promises than such heroic assumptions, but McDonnell’s urge to play to the gallery seems likely to ensure that there’s no chance of focusing minds on that for now.