Jeremy Corbyn is a high-risk choice as Labour leader. If elected, he could crash and burn very quickly. But it’s not that hard to see why he is the frontrunner in Labour’s leadership race. After the global financial crisis broke in the summer of 2007, the Labour government was left ideologically adrift. It had accepted the broad thrust of Margaret Thatcher’s economic settlement – the primacy of market forces, privatisation, the replacement of manufacturing by financial services as the hub of the UK economy – but then, overnight, the model seized up. When the first oil shock led to stagflation in the 70s, the Thatcherites were ready with an alternative. When the queues formed outside branches of Northern Rock Gordon Brown’s government made up policy on the hoof, such was the intellectual vacuum.

Many on the left assumed that the crisis would mark the dawn of a new, progressive era. Instead, the old orthodoxy reasserted itself, blaming government profligacy rather than the banks. In the circumstances, Brown’s government did a good job in preventing a second Great Depression: it nationalised or part-nationalised some of the banks; dusted down Keynesian remedies for boosting growth; and intervened to support strategically important industries. But there was never a sense that Labour thought there was anything fundamentally wrong with the economic model.

Corbyn’s success is not just that he articulates a more robust case against austerity than his three rivals. It is that he speaks to those who don’t accept that the economic revolution prosecuted by the right in the 1980s is set in stone.

Thomas Palley, senior economic policy advisor to the AFL-CIO (America’s equivalent of the TUC) has published a paper that would serve as a primer for Corbynomics. Palley says the reason recent economic performance has been so poor is that the postwar “shared prosperity model” was replaced by a neoliberal economic model. In the former, productivity growth drove wage growth, which led to higher demand and created full employment. That provided an incentive for investment, which led to still higher productivity and supported higher wages.

Under the neoliberal model, the link between productivity and wages was severed, and instead of growth being supported by higher incomes it has been supported by ballooning debt. It was inevitable that the Ponzi scheme would collapse, as it duly did in 2007. Palley’s argument is based on the US experience but his conclusion that economic stagnation will persist unless the model is changed applies equally to Britain.

The public may give Corbyn time to decide which of his options are runners, but don't bank on it

It could be even nastier than that. Clouds are massing over the global economy and if the storm breaks, Corbynomics would fit the bill perfectly because the lesson of the recession of 2008-09 is that, in a crisis, anything goes. The unorthodox becomes orthodox.

Should the next crisis of global capitalism be delayed (or not happen at all), Corbyn will have more of a problem. He didn’t expect to be Labour leader and it shows from his economic prospectus, which looks like something hastily put together. It is a long way from being the finished article, as demonstrated by the fact that most of the eye-grabbing policies are merely “options”.

One option is people’s quantitative easing – printing money to fund housing, reindustrialisation or the green economy – but it is not clear whether this should be kept in reserve for emergencies or used whatever the state of demand. The case for people’s QE as a contingency measure when conventional policies such as cutting interest rates have ceased to be effective is simple: the state would step in to make good a deficiency in private sector demand by investing in infrastructure projects when all else has failed.

The case for people’s QE as an everyday tool when the economy is chugging along at around its long-term trend rate, which it is at the moment, is weaker. If Corbyn wants higher public investment – an entirely legitimate aim – he should have the courage of his Keynesian convictions and say that he would pay for it through higher borrowing, something that can currently be done at historically low costs. Using people’s QE to do the same job would open Corbyn to two charges: that he was “politicising” the Bank of England and playing fast and loose with inflation.

Another policy/option is to fund a national investment bank by slashing the state’s £93bn bill for corporate tax reliefs and subsidies. This sounds wonderful, but careful scrutiny of “corporate welfare” shows that it includes capital allowances designed to persuade companies to invest, regional aid to boost growth in rundown parts of the UK, and subsidies to keep bus and rail routes open – none of which Corbyn would presumably like to see stopped.

Similarly, he says the state is losing out on £120bn of tax revenue every year, comfortably enough to clear the government’s budget deficit. Every chancellor wants to reduce the tax gap – the difference between the revenues parliament intends should be collected and the amount actually collected. The gap is currently just over £30bn, but has changed little in recent years. If there was a magic money-tree for Corbyn to shake, George Osborne would probably have shaken it by now.

Corbyn wants to rebalance the economy by boosting advanced manufacturing, a perfectly laudable aim. He also wants to cut defence spending, a policy that would cost jobs in one of the few remaining industrial sectors where Britain retains a global presence. Corbyn would create a defence diversification agency to relocate skilled workers to more socially useful employment, after consultation with the unions. Will the shop stewards at BAE Systems be thrilled at this news? Probably not. They will suspect – almost certainly correctly – that their plants will close long before the hi-tech replacement jobs are created.

It may be that the public is so desperate for an alternative to austerity that it will give Corbyn time to decide which of his options are runners and which are not, but don’t bank on it. Tony Blair had a honeymoon in 1994 because John Major’s government had seen its economic credibility trashed by Black Wednesday. Corbyn will not enjoy that luxury.

As soon as the new leader is announced, the Conservatives will unleash political blitzkrieg, an attempt to deliver an early knockout blow to Ed Miliband’s successor – whoever it is – by questioning their economic competence. Corbyn needs to be ready for this, because unless the details of his economic policy stack up, he won’t get a hearing for his big-picture analysis.