Cast your mind way back to the 2017 general election, and you may remember Amber Rudd chastising Labour during a panel debate for its belief in a “magic money tree”. It was a riff on a familiar theme. Once in government the Left can’t resist turning on the public spending taps, ultimately jeopardising the country’s credit rating and the health of the economy. Only the Conservatives could be trusted to shepherd the public finances responsibly, even if it meant intense hardship for some as spending cuts ate into vital services and the welfare state.

Of course, as luck would have it, the Tories discovered the magic money tree immediately after the election - just in time to splurge £1 billion on Northern Ireland in exchange for the Democratic Unionist Party propping up a minority government in Westminster. Cynicism aside, the ease with which those funds were allocated reflected the economic conditions of the time. Treasury ministers and officials may have been mildly worried about the impact on the public debt, but they certainly weren’t worried about the inflationary effect of such spending. Five years on, that has perhaps changed.

There are two main economic constraints on governments wanting to spend their way to a better society (or at least to electoral success). One is fiscal: quite simply, how much spending is funded by tax revenues and how much by public borrowing (facilitated by the Debt Management Office issuing gilts and bills on the financial market). The other is monetary: how much a single pound can buy for the public sector, households and businesses at any given time. Where you think these two constraints start to bite depends a great deal on your theoretical outlook, which is inseparable from your political beliefs.

Since the 2008 financial crash, Western governments have worried a great deal about fiscal constraints. After the cost of bailing out collapsing banks massively expanded public debt, governments were locked into a spiral of tax rises and spending cuts in an attempt to balance the books. The doomsday scenario for mainstream policymakers was running out of cash and having to accept an emergency loan from the International Monetary Fund, effectively surrendering sovereignty to technocrats with scant democratic accountability. Even in Britain, where such an outcome was never a serious risk, George Osborne seldom missed an opportunity to flash voters with the cautionary example of countries like Greece.

For over a decade, the primary critique of this approach from the Left was that it hugely overestimated the risks of public indebtedness, and equally underestimated the damage of spending cuts and stagnant economic output on the most vulnerable communities. The relentless pursuit of a balanced budget was both foolish and barbaric, setting an elusive mathematical goal above the hardship inflicted in real life. Far better for governments to restart spending - maintaining public services and the welfare safety-net, stoking demand, boosting employment and business confidence - and rely on the tax revenues from future growth to recoup the initial outlay. As one of the richest countries in the world (and, crucially, having kept itself out of the Eurozone) Britain could easily afford to do this without veering close to the debt peonage imposed on other states.

In hindsight, Labour and the wider Left won the theoretical argument even as we lost successive elections. It’s hard to think of a single country where austerity led to a fulsome economic revival without ravaging the fabric of society along the way. (Compare China’s stimulus-led recovery after 2008, which has only accelerated its trajectory towards superpower status.) Nevertheless, it is increasingly clear that the fiscal debate of the 2010s was bracketed within certain economic conditions that have now ceased to exist. To understand why, we need to turn to the other constraint on public spending - the need for price stability.

James Bartholomeusz is a Young Fabian and works in campaigns and policy at a global union federation. He writes here in a personal capacity.