When New York City Mayor Zohran Mamdani named Anthony Shorris and Lina Khan to lead the city\u2019s Economic Development Corporation (EDC)\u2014as president and board chair, respectively\u2014he did more than fill two important vacancies in his administration. He also underscored his recognition of a key challenge with which the left has long grappled: how to deliver not only economic redistribution but also economic growth.<\/p>\n
As is customary for the left, Mamdani\u2019s winning electoral message focused on the redistribution side of the equation: improving affordability, advocating a rent freeze, providing free use of public buses, establishing municipal grocery stores, pursuing racial equity, delivering universal childcare, and taxing the wealthiest households. Since assuming office at the beginning of this year, he has\u00a0made\u00a0notable\u00a0progress\u00a0on many of\u00a0these promises, while strengthening daily governance and the\u00a0delivery\u00a0of\u00a0basic services, reducing bureaucracy, and promoting housing construction.<\/p>\n
Mamdani\u2019s initial successes are all the more striking because, like other American mayors, he faces structural limits on his policies, including a state government that circumscribes the city\u2019s scope of action on taxes and regulation, and a bond market sceptical of redistribution. Moreover, New York City is the center of a fractured metropolitan economic region in which the city drives growth\u2014and covers the costs and problems this process creates\u2014while politically independent suburbs capture much of the wealth.<\/p>\n
Compounding the challenge, US President Donald Trump\u2019s administration is particularly hostile toward Mamdani, who has become a test case for the kind of people-oriented progressive agenda that Republicans (and many Democrats) decry as incompatible with growth and innovation. But Mamdani is not alone in facing such criticism, nor is this exclusively an American issue. Across Europe, leaders promising economic justice have often struggled to convince the public that they can deliver dynamism.<\/p>\n
This has been the case for Germany\u2019s Social Democrats, whose redistribution-oriented proposals have been inadequate to prevent their polling numbers from sinking into the single digits in some states. It has also been true for France\u2019s left-wing alliance, which largely touts a redistribution-focused program, including a higher minimum wage, price controls, and a wealth tax. In 2024, more voters\u00a0reported\u00a0trusting Marine Le Pen\u2019s far-right party on the economy than the left-wing alliance or President\u00a0Emmanuel Macron\u2019s centrist alliance.<\/p>\n
Spain\u2019s leftist governing alliance has seemingly flipped the script, delivering some economic growth. But its approval ratings are falling, partly because of the lack of progress on another key element of the economic-justice agenda: housing affordability.<\/p>\n
These political difficulties point to a fundamental challenge. At a time of historic inequality and inadequate public investment, redistribution is essential; but no jurisdiction can tax and regulate its way to affordability. A growth-enhancing agenda that generates good jobs and productive capacity is also crucial.<\/p>\n
Harvard\u2019s Dani Rodrik offers a way forward. Under his \u201cproductivism\u201d framework, governments build the capacity to create good jobs at scale, not in manufacturing\u2014a sector that evokes much nostalgia, but has limited potential for employment growth\u2014but in services like health care, logistics, hospitality, and child and elder care. This approach is consistent with progressivism, as it \u201cputs less faith in markets\u201d and \u201cis suspicious of large corporations,\u201d while emphasising \u201cproduction and investment over finance, and revitalising local communities over globalisation.\u201d<\/p>\n
Elements of this framework are apparent in the EDC\u2019s\u00a0agenda\u00a0for New York, which includes the use of \u201ccity-owned land, financing, and investment\u201d to \u201ccreate good jobs\u201d and \u201csupport small businesses.\u201d And Mamdani\u2019s selections appear well-suited to implement it. Shorris is a\u00a0veteran\u00a0of New York City government\u2014having served as executive director of the Port Authority and first deputy mayor under Bill de Blasio\u2014who is respected by the city\u2019s business community.<\/p>\n
In contrast, Khan, who chaired the Federal Trade Commission under President Joe Biden, built her reputation on challenging the concentration of corporate power and using government to defend workers, small businesses, and consumers from it. Beyond the EDC, New York\u2019s first-ever deputy mayor for economic justice, former Acting Secretary of Labor Julie Su, will defend workers\u2019 rights, such as by supporting unionisation, promoting worker training, and improving job quality.<\/p>\n
But protecting workers and supporting small businesses will not deliver good jobs at scale. Mamdani\u2019s administration must also find ways to work with the large firms in the industries that anchor New York City\u2019s economy and fund its budget, namely finance, health, logistics, and technology. If Mamdani cannot show progress on this front soon, he will give the left\u2019s critics more fuel in the run-up to November\u2019s midterm elections.<\/p>\n
The experience of Britain\u2019s new Labour prime minister, Andy Burnham, shows just how delicate the balancing act will be. As mayor of Greater Manchester, Burnham helped lay the groundwork for that region to become Britain\u2019s fastest-growing, including by investing in areas like education and public transport. These efforts were bolstered by the devolution of some spending and decision-making powers to regional authorities.<\/p>\n
As prime minister, Burnham has\u00a0called for\u00a0more \u201cflexibility\u201d within fiscal rules to\u00a0finance investments\u00a0like the \u201cbiggest council house-building program since the postwar period,\u201d alongside increased defence spending. But the bond market reacted negatively to Burnham\u2019s plans, fearing a sharp increase in borrowing. Higher interest rates could constrain Burnham\u2019s programme and the UK\u2019s overall growth potential.<\/p>\n
Burnham also wants to take devolution further.\u00a0Mariana Mazzucato\u00a0of University College London believes that this can\u00a0play a powerful role\u00a0in driving inclusive growth, as long as it is pursued in the context of a national industrial strategy. But the political pressure to deliver quick victories could undercut Burnham\u2019s ability to satisfy various stakeholders\u2014voters, the bond market, and businesses considering investment. The same goes for Mamdani.<\/p>\n
Nonetheless, Mamdani has shown that he is not afraid to tackle hard problems. Though delivering growth alongside equity might be among the thorniest economic-policy challenges today, his appointment of Shorris and Khan, with their contrasting reputations and experiences, suggests that he understands it. With Mamdani\u2019s mayoralty having emerged as a kind of bellwether for progressive politics, the entire Atlantic left should be rooting for him.<\/p>\n