As CJ, the managing director in a famous bygone BBC television series, might have said: I did not get where I am today forecasting the outcome of elections for the Labour leadership. But we have certainly moved a long way from 1976, when there were no fewer than six heavyweight contestants, namely Jim Callaghan (who won), Denis Healey, Roy Jenkins, Tony Crosland, Michael Foot and Tony Benn.

Now, for all the badmouthing of Jeremy Corbyn, my hope is that in due course he will be seen to have been a beneficent influence, forcing the other candidates to do some serious soul-searching – for the soul of the Labour party, no less.

It was a terrible moment when the temporary leadership seemed cravenly to accept George Osborne’s cuts agenda, prompting many to ask: “What is the Labour party for?”

If nothing else, Corbyn has done a good job in encouraging other candidates to emphasise their fundamental differences with Osborne. In the sale of RBS shares, we had a reminder last week of just how damaging has been the approach to the economy from the party that arrogates to itself a reputation for economic competence.

Forgive me for a little repetition of recent history, but it is important: in 1979, the Thatcher cabinet was replete with ministers who claimed manufacturing did not matter – our future lay in services.

We now have a record current balance of payments deficit of 6% of GDP – the biggest peacetime proportion since 1830 – and the major factors behind this shocking performance are the neglect of manufacturing, the reliance on financial services, and the shortsighted approach to the temporary bonus of North Sea oil and gas.

In the middle of Thatcher’s reign, in 1986, we had the Big Bang in the City of London. This was supposed to shake up British-owned financial institutions, but its lasting effects were to make most of them foreign-owned and to introduce US investment banking culture into the UK.

One of the key causes of the financial crisis of 2007-08 was the way in which the culture of excessive risk-taking infected retail banks, as well as the investment banks, something which my old friend Lord Lawson believes has not yet been adequately dealt with, although he himself was a Big Bang enthusiast. The law of unintended consequences is alive and well.

Now this column has always had a soft spot for the underdog, and I hope I am not alone in feeling some sympathy for trader Tom Hayes, who was given a long jail sentence for his role in the Libor scandal.

Libor stands for London Inter-Bank Offered Rate. It is the key interest rate for a multiplicity of transactions between banks around the world, and the defendant was in trouble for his part in fixing the outcome. But it is patently obvious Hayes was just one cog in the wheel of a culture where such goings-on were standard – encouraged, or at the least ignored, by his superiors, who would have gained large bonuses from such activities.

Now, as Sir Nicholas Macpherson, permanent secretary to the Treasury, has said, what happened in 2007-08 was “a banking crisis, pure and simple”. It was not caused by the Labour party’s spending plans, which had received Osborne’s approval at the time; indeed it was the much-maligned Labour prime minister Gordon Brown who, with the rest of the G20 nations and the central banks, “saved the world”.

In the UK and eurozone, the fiscal stimulus was withdrawn prematurely, with the result that output per head here has only just returned to pre-crisis levels. A wasted quinquennium!

Quantitative easing – an absurd label for the expansion of the supply of money and credit – helped to put a floor under the economy and to offset the deflationary impact of the fiscal squeeze – the “cuts”. However, much of the “easing” took the form of a reversal of the contraction of credit rather than significant expansion of bank lending.

The recovery was so delayed that interest rates have had to be kept at record lows for an unconscionably long time. Indeed, much economic and financial reporting, on both sides of the Channel and Atlantic, has been bogged down in boring speculation about when interest rates might be raised by even a tiny amount.

The counterpart is the way that the media has bought Osborne’s woefully wrong view that the main economic problem was the budget deficit. The main economic problem is the poor performance of manufacturing industry, capital investment and the resultant balance of payments deficit. Everywhere I go I hear businessmen complaining that, whatever the banks are doing with quantitative easing, they are not lending enough for new investment and general plans for expansion.

There is a good case for targeted lending to manufacturing by the banks the state rescued and now controls, not returning them to a private financial sector dominated by short-term considerations. Manufacturing should receive greater priority in the tax system, which actually favours the short–term approach of hedge funds. There is such a thing, even these days, as the national interest.

Meanwhile, it was good to hear from the Bank of England last week – while it was releasing a torrent of analysis on why interest rates continue to stay low – that it believes credit conditions are improving and business investment may be picking up. I hope it is right. Certainly, it is about time.