The barbarians may be inside the gates, but we can still defeat them

Hand reaching towards the sunrise over a lakePhoto by Marc-Olivier Jodoin on Unsplash

The French have a saying “plus ça change, plus c’est la même chose.” With the events of the last few days, one might consider that nothing had changed; the Tories are still in the driving seat albeit with a new leader. However, with the election of Boris Johnson to the post of Prime Minister, followed by an ignominious line up of hard right, heavily male, privately-educated Cabinet appointments one can say, at least for those of us with a progressive disposition, that the country has reached a moment of even more uncertainty and fear for the future.

In his first speech as PM, Johnson promised a ‘new golden age’. Given previous history and his leadership campaign, one must ask the question “a golden age for whom?” Johnson and his friends are dyed-in-the-wool, free market fundamentalists who favour a deregulatory free-for-all. They individually, or collectively, support capital punishment, fracking, GM crops, a watering down of employment rights and privatisation of key public services such as the NHS (although the latter, of course, is vociferously denied) and worse still are climate change deniers.

Unless they have had a collective Damascene moment, which seems highly unlikely, the golden age will be about continuing to serve their corporate masters and the further weakening of democracy, not the public purpose. With little mention of our failing public services, a fiscal stimulus maybe but in whose interests? Twenty thousand new policeman sounds good but with so many police stations closed, the time it takes to train police officers along with the need for training facilities and trainers to train them, this will be a dead duck in the water. Furthermore, Johnson has failed to address the consequences of the Conservatives’ austerity policies on society as a whole which, without doubt, has increased the pressures on law and order. It’s all nothing but rainbow coloured whitewash or is that hogwash?

In all this, one might think that the appointment of Jo Swinson to the leadership of the Liberal Democrats is a side story which is unconnected. And yet it is. Whilst most would jump immediately to the Brexit connection, given the stands of both parties on this issue, the reality is that it is that something far more insidious links them – economic ideology and austerity.

Some have, of course, claimed that austerity created the conditions for the Brexit vote, but the working-class discontent related to reduced standards of living and increased poverty and inequality predates 2010, going back over 30 years. It is as much linked to the ideological agendas pursued by successive governments since Thatcher as it is to the last 9 years of austerity.

This has been a bubbling cauldron of long-term dissatisfaction which has driven people to want change. Brexit has been the expression of that desire – a rejection of the economic orthodoxy which has deprived them of good, well paid jobs and security and a rejection of the political and economic structures which have brought it about and led dangerously to the rise of the extreme right and nationalism in the UK (as well as in the US and Europe).

It is regrettable, however, that in the political maelstrom which is dividing the country the subject of austerity and the reasons for people’s discontent have taken a back seat as Remainers and Brexiters fight it out in an increasingly vicious war of words which often fail to promote cogent reasons for either.

Boris Johnson and Jo Swinson have one thing in common – they voted for austerity. Their voting records and actions whilst in coalition government attest to that fact and we must not forget it. The Liberal Democrats enthusiastically supported the false belief engendered by George Osborne in the Treasury and David Cameron that the financial crisis had been caused by too much government spending by Labour, rather than being one created by bankers and speculators. Public sector workers as a consequence bore the brunt of cuts to public spending.

The party gave the Conservatives every helping hand they could, including supporting the government’s Health and Social Care Act which was yet one more step in the creation of a two tier American style healthcare model, went back on their promise to oppose increasing student tuition fees and put disabled people in the firing line of austerity cuts as the campaigner Frances Ryan notes in her new book ‘Crippled’ mentioned in last week’s MMT Lens. And these are just a few examples of the way in which the Liberal Democrats shamefully enabled the Tory political agenda. The words ‘thirty pieces of silver’ come to mind.

When asked during her leadership campaign, Swinson said that she had no regrets about her party’s role in austerity, claiming that there had been no alternative in order to get the country back on its feet. Never mind the realities of an economy which has shrunk by £100bn since 2010 or the pain, suffering and financial hardship that has been caused by those in acting in Coalition on the false notion that the public finances had to be put back in order and that the cuts were necessary.

And yet puzzlingly, in a tweet in May, she praised Jacinda Ardern’s well-being ‘budget’ saying:

“Economic transformation is about putting people and planet at the heart of our economy. We should be building on our existing work on wellbeing & making it central here too.”

A change of heart? One must question that in a world where politics is less about serving the people and more about gaining the power to pursue one’s own interests and serving global corporations through revolving doors. It is instructive that she accepted cash from a fracking businessman after having campaigned to save the environment. Her campaign tagline ‘Build an economy that puts people and the planet first’ seems a little less shiny with that knowledge in mind. She also failed to support proposals in Westminster aimed at fighting climate change and voted in favour of cutting the subsidy for electricity generated via renewable or low carbon schemes.

It is as if Swinson cannot or chooses not to make the connection between government deficit spending and delivering public purpose by putting the planet and people at the centre of economic, environmental and social policy. As Frances Ryan notes “austerity has harmed millions of people in Britain and continues to wreck lives.” Not to mention the economy!

Not only did she show herself to be impervious to the suffering caused by her party’s support for Tory policies, she also demonstrated the usual political ignorance about how the government’s finances work.

As the economist, Ellis Winningham said in a recent podcast (here)

“The only fiscal rule that should exist is one that targets prosperity. What I mean by that is plain and simple. Deficits should be targeted at full employment and public purpose. The people’s well-being should be looked after 100% at all times.”

Swinson’s words and actions have been in complete denial of this rule.

In these uncertain times, serving public purpose has been replaced with serving self-interest and in doing so well-being has been replaced by suffering and hardship. There cannot be many whose lives have not been touched in some way whether personally or via friends or family by government- imposed austerity. The collapse in social care and mental health services are just two examples. The lie of “care in the community” from support for elderly sick people being discharged from hospital to those suffering from mental health difficulties is being exposed on a daily basis and it is shameful. All of us hope that the services will be there in case of need, but increasingly they are not.

The social and economic impact of cuts to spending, both at national and local level, are leaving the most vulnerable without the care they need and leaving already financially hard-pressed families to take up the strain of looking after their loved ones. Those working in social care, which is often provided by private, profit seeking companies, are equally stressed with increasing workloads and poor pay and many are choosing to quit their jobs. In turn, local government with cuts to its budgets struggle to meet the costs of privately provided care and those care companies are increasingly thinking about exiting the sector as the public funding stream dries up along with their profits.

In mental health both for adults and children, the situation is equally grim. Premature discharge, either from community care or hospital, often leaves the vulnerable and marginalised to cope without adequate support or even any support at all. Sick people seen as troublemakers or attention seekers are abandoned to their own devices if they ‘fail’ to comply, or those with complex issues are off-loaded into private profit-driven facilities miles away from family and friends. In many cases families are left to take the strain.

In a target driven world where figures and balance sheets are more important than people’s lives, all serve to hide the actual scale of the problems being faced by people behind closed doors or on the street as a result of political and economic ideology. The health of the public finances has been used cruelly to justify austerity.

As noted in last week’s MMT Lens, we still have politicians, journalists and institutions who are living in fantasy land about public debt and deficit and woe betide any government that spends beyond its financial means. Fiscal Credibility Rules rule!

One such article appeared this week in the Guardian written by the economics editor Phillip Inman entitled “Labour and Tories both plan to borrow and spend. Is that wise?” Inman compares the British to the Italians who are proposing a fiscal stimulus on borrowed money, where of course no comparison can be made since Italy is the user of the euro as a foreign currency and has to issue debt in that currency to fund its spending, unlike the UK which has to do neither in order to spend.

Inman then proceeds to claim that whoever is making spending promises or tax cuts, Conservatives or Labour, it will require a huge increase in government borrowing. He claims that higher borrowing will put the public finances at risk and that in the light of worsening public finances and the coming ‘economic chill’ it would be better to ‘hunker down’.

With the nation mired in excessive household debt and the consequences of 9 years of austerity which has decimated public and social infrastructure, surely Phillip Inman might by now have come to the conclusion that hunkering down has not revitalised the economy. Instead, it has demolished it and worse harmed the lives of those who have had to live through it; from those who have the misfortune to be involuntarily unemployed to those with disabilities, the chronically or terminally ill, those without a roof over their heads and parents who struggle to feed their children. (For an excellent critique of Philip Inman’s article follow the link here.)

The public doesn’t need to take a degree course in economics to grasp the simple realities of how a government spends, or that it neither needs to get tax or to borrow before it can do so. These are elemental ideas. What the public does need to know is that government has deliberately made political decisions to cut investment in public infrastructure and spending on the services on which we all depend as well as deny those in need adequate financial support to live without fear.

The public needs to ask serious questions about why there is no money for the public purpose but plenty for buying arms, pursuing wars and bailing out banks, not to mention the many billions which find their way into private profit for delivering public services like the NHS. These are surely the clues that the public has been hoodwinked by a lie about balanced budgets being more important than the state of the economy and people’s lives. The answer to the question ‘where will the money come from’ is simple. The government spends it into existence. No tax or borrowing required.

Just imagine the revolution there would be if the public knew the truth. Just imagine how that knowledge could make the difference between saving or destroying the planet and creating a healthier, more well-balanced world for its citizens, where resources are more equally shared and political and economic solutions to poverty and inequality can be sought.

Modern Monetary Theory is but a description of how money works and of course, in itself, is not a magic bullet. There are no certainties. The rise of right-wing extremism in the US, the UK and Europe is worrying indeed, but that is no reason not to hope for something different. We have to start somewhere. Certainly, we can only work with what knowledge we have already, but that shouldn’t stop us using the full force of our human imaginations to create a better world for us all.

Note: If you want to learn more, GIMMS has a simple to read introduction to Modern Monetary Theory, along with plenty of other resources to inform and challenge the prevalent narratives of how money works. (link here)

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The post The barbarians may be inside the gates, but we can still defeat them appeared first on The Gower Initiative for Modern Money Studies.