Anti-austerity figures have emerged because young people feel badly let down by centre-left governments such as Blair’s, says Nobel economics laureate

A Nobel prize-winning economist has said it is unsurprising that an anti-austerity figure such as Jeremy Corbyn has emerged as a contender for the Labour leadership.

Speaking in London on Sunday, Joseph Stiglitz warned that policies from centre-left governments such as Tony Blair’s had undermined the middle-ground message, partly by entrenching wealth for the very few.

Asked about the emergence of Corbyn against more moderate candidates, Stiglitz said young people were the most likely supporters as they felt badly let down by more mainstream politics.

“I am not surprised at all that there is a demand for a strong anti-austerity movement around increased concern about inequality. The promises of New Labour in the UK and of the Clintonites in the US have been a disappointment,” said the former World Bank economist who is a professor at Columbia University in the US.

“Unfortunately the centre-left parties have wimped out. They have joined in saying: ‘Oh yes, we have to have a kinder version of austerity, a milder version of austerity.’ But one of the disappointments of the eurozone, and Europe more broadly, is that you have these elections, these centre-left parties get elected and they have to cave into Germany and so they then do a rhetoric that is gentler but the outcome is not much gentler.”

Stiglitz said in the US research showed that all the economic gains since the early 1980s had gone to the top 10%. “The bottom 90% of the economy has seen stagnation for a third of a century and similar trends – not as bad – are at play elsewhere.

“It’s just very hard to say these centre-left parties – with emphasis on ‘centre’ – have been able to deliver for most people. Their economic models have not delivered and their message is not working. So to me it’s not a surprise that you have seen, say in the United States, which obviously I know better, that [anti-austerity] progressives are getting a much stronger voice in the Democratic party.”

Facebook Twitter Pinterest Nobel prize-winning economist Joseph Stiglitz leaves the Greek prime minister’s office after a meeting with the finance minister, Euclid Tsakalotos. Photograph: Orestis Panagiotou/EPA

Stiglitz argued that the crisis triggered in the eurozone by what he saw as the wrong-headed bullying of Greece to accept a deal that only offered “depression without end” was in danger of feeding anti-EU sentiment in Britain’s forthcoming referendum on EU membership.

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“The UK made one very good decision [which] was not to join the euro. It may have made it for the wrong reason but it was still the right decision and you should count your blessings,” he said at a meeting organised by his publishers in central London.

Stiglitz said the whole eurozone currency model had not been a success and he did not think of anything that could have been more divisive for the European Union than the handling of the Greek debt crisis.

“You feel the antipathy between the Germans and the Greeks and elsewhere … there are many people who are hypothesising that it will play a role in the UK referendum, that people will say: ‘Who would want to be a member of that [European Union] club?’” he told an audience at the Dover Street Arts Club.

Stiglitz said the best way to save the European political project was “to let the euro go … Not only has there been evidence of a lack of solidarity, there is even a misunderstanding of what solidarity is, and you can’t have a group of countries with the same economic arrangements without some degree of solidarity.”

The latest Greek debt deal and the austerity policies to be imposed on Greece by the European leaders and the International Monetary Fund were bound to fail, he said.

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“Both the young and the old are being very adversely affected by the troika [lenders] programme and yet people at the negotiating table do not include either the very young people or the very old people. There is a sense that the negotiators are not hearing the voice of some of the people who are being affected strongly.

“Talking about the broader impact on the UK and elsewhere, it is very clear outside Germany that the view that austerity is bad is very widespread. I think it is the correct view. Its obviously going to lead to a stronger sentiment, people saying we have to fight austerity.”