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Starmer’s Approval Rating Down to 6 Per Cent – Is Anyone Surprised?

The noxious Alex Belfield also put up a video last week in which he gleefully told his viewing public how badly Labour leader Keir Starmer was doing in the polls. According to him, YouGov or some other polling company had found that only 6 per cent of Brits think that he’s doing a good job. Actually, there might be some confusion over this, as the clip Belfield showed to back up his claim actually recorded that only 6 per cent of Brits thought Starmer was doing a ‘very good job’. It’s a minor difference, but it could mean that Starmer’s overall approval rating is actually higher, as these questionnaires commonly ask people if they think someone is doing a very good job, good job, all right and so on. Many more people could believe that Starmer was doing a good job, in addition to the 6 per cent who thought he was doing a very good job. But even so, Starmer’s popularity is low. Hardly able to contain his delight, Belfield speculated that he’d be out by Christmas. Labour was finished, especially if it elected Diane Abbott as leader.

Oh, ho, ho, ho. (Sarcasm).

But actually, if Starmer’s popularity has plummeted that far down, then there should be no surprise. Starmer has violated the cardinal raison d’etre of the parliamentary opposition – to oppose. He has simply announced that he cautiously supports the government, and wishes to give them friendly advice. When he does criticise them, it’s all with 20/20 hindsight, as Johnson has mockingly pointed out in parliament. He has no vision, no clear policies, with the exception that he’s waging war on the left in the Labour party, and so absolutely nothing to offer the great British public. And they know it.

And it shows splendidly how bankrupt Starmer’s own political strategy is. He’s a Blairite, which means that he fully supports the destruction of the welfare state and privatisation, including that of the NHS. Blair’s own election strategy consisted of finding out what would appeal to Tories or middle class swing voters and then make it Labour policy. This meant copying the Tories, or reviving failed and discarded Tory policies, like the academy schools, while at the same time telling everyone that Labour would do it better. This gained him the support of the Tory press with the exception of the Daily Heil, and Tory donors. At the same time he centralised authority in the party around himself and his clique. Party membership dropped as the views of ordinary Labour voters and supporters were ignored. But Blair was quite happy with this, so long as he had the support of the rich and the Murdoch media. As for the working class, he blithely expected them to keep voting Labour as they’d have nowhere else to go.

This failed spectacularly, as a sizable section of the British working class either stopped voting, or turned to Brexit and UKIP to articulate their alienation from contemporary parties. Starmer’s continuation of Blair’s policies, and his consequent rejection of Corbyn’s, which were genuinely popular and his determination to purge Labour of genuine socialists under the pretext of rooting out anti-Semitism are losing him working class and left wing support. He’s also losing the support of Black and ethnic minority Labour supporters through his cavalier attitude to Black Lives Matter and his studied inaction against the bullies, who racially abused Diane Abbott and other Black MPs and party activists, as well as the islamophobes.

A number of the speakers at yesterday’s Arise virtual meeting about resisting the Tories and standing for socialism in the Labour party made the point that all the talk about how ‘we’re all in it together’ during this pandemic is an utter lie. We’re not all in it together. The Tories have used the crisis, following Churchill’s dictum that you should never let a crisis go to waste, to cut services and push through policies that are making working people poorer, all with the goal of making the rich even more obscenely wealthy. The left knows this, and so aren’t backing Starmer because they recognise that he doesn’t have their best interests at heart.

At the same time, Starmer isn’t picking up Tory votes as he doesn’t really have anything to offer them either. No vision, no policies and no clear positions either. Mike’s put up several pieces about how Starmer will adopt a policy and then discard it the moment it seems unpopular. Like he was all for sending children back to school until Johnson decided he wasn’t going to send them.

I’m therefor not remotely surprised that some polls are putting Starmer’s approval rating that low. And I’d like him to be out by Christmas, but I doubt that will happen. The Blairites are determined to hang on to power anyway they can, and David Evans, the party secretary, is arrogating to himself powers to veto any Labour candidate he doesn’t think is suitable. Which means, as the good left-wing peeps pointed out yesterday, means that he has the power to stop local constituency parties choosing left-wing candidates. The various coups plotted against Corbyn and the deliberate sabotage of Labour’s election campaigning by the Blairites show that they are perfectly willing to destroy the party just to stop the left gaining power. I don’t think Starmer and his supporters will go without a very destructive, bloody fight.

As for Diane Abbott leading the party, I have my own problems with her, but I’d rather have her as leader standing to be the next PM than Starmer. She really does have the welfare of Britain’s working people at heart. But I’m enough of a realist to recognise that the press and media would have a field day reviling her, just as they’ve been doing for the entirety of her career. This would have an effect. A large number of people wouldn’t vote for her, because the Scum tells them not to. We’d need someone more acceptable to the British public, but Abbott should definitely be part of that person’s team, whoever they are.

Starmer’s popularity is waning, and this incompetent leader, who has no real policies except to advance his own faction in the Labour party, should go as soon as possible. He must be replaced by someone from the real centre of the Labour party, someone who believes in its historic policies of a welfare state, publicly owned public utilities, a genuinely nationalised NHS, decent wages and strong trade unions.

That won’t happen without a fight. But if Starmer’s popularity gets any lower, the party may not have a choice whatever the Blairites mouth to contrary.

The need is to fix the system, not just to provide ‘sticking plasters’

Food Bank Cupboard stocked with tinned and packet foodImage by Staffs Live (CC BY-NC 2.0)

“The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.”

Franklin D. Roosevelt

 

It feels lately that we, like Lewis Carrol’s Alice, have fallen down a rabbit hole into an immensely troubling surreal situation with seemingly no idea how we are going to extricate ourselves.

Whether it is the distressing daily reports of Covid-19 deaths, the disturbing video accounts of the huge pressures on our NHS or care services, the political upheavals taking place across the Atlantic and elsewhere or the most serious challenge of all, climate change, it seems ever clearer that we are in Antonio Gramsci’s ‘time of monsters’ in which ‘the old world is dying and the new world struggles to be born’.

What that world will look like remains to be seen, but recent political events would seem to suggest that we still have some way to go before the ‘old world’ breathes its last. The pandemic, combined with the consequences of forty and more years of Neoliberalism Central which has infected every aspect of our lives and dominates political decision making, has created not only public disillusionment, but also petrification as our institutions sit in their blinkered bunkers holding on for dear life to all they knew.

Whether it’s the existing and growing union between government and global corporations, policy decisions which have increased inequality and poverty and encouraged charity, volunteering and philanthropy to take up the reins of public provision, or the promotion of sound finance as a vital component of good governance, the old structures are embedded in our consciousness.

It wasn’t always like this.

During the second world war, William Beveridge was appointed to investigate social security in Britain and his report, published in 1942, identified five major problems which prevented people from improving their lives. These were:

Want (caused by poverty)

Ignorance (caused by a lack of education)

Squalor (caused by poor housing

Idleness (caused by the lack of jobs or the ability to gain employment)

Disease (caused by inadequate health care provision)

It was recognised that government had a role to play in addressing those five ‘evils’ and as a result of the Beveridge report, the post-war government set up the social security system and pursued policies which aimed to address them including full employment. It may not have been perfect, but it changed people’s lives for the better.

Over recent decades, that connection between the state and publicly paid-for provision, management and delivery of services has been broken. Responsibility for such provision is increasingly being shifted into the charitable/voluntary sector, whilst at the same time, the dominant orthodoxy of individual responsibility has led to shaming and blaming people for their situation as the government takes a back-seat role.

Food banks have become a normalised feature of Britain, as Therese Coffey, the Tory minister for the Department for Work and Pensions, indicated last year when she referred to people using food banks as ‘customers’ and suggested they were a ‘perfect way to help the poor’. It implies that government has no role at all in ensuring the economic well-being of its citizens, and worse, that the 14 million Britons who do not have enough to live on are there through their own lack of moral fibre!

When charities buy into this picture and act as mitigators for a rotten economic system (which drives the poverty and inequality, that drive, in turn, the consequences including hunger, homelessness, and illness), they are not aiming to fix the system, but to provide sticking plasters. As such, it demonstrates how they, too, have been captured by an ideology and accept it without question.

This was made shockingly clear in a paid-for content article in this week’s Guardian. The CEO of the Bethany Christian Trust, when talking about tackling the problem of food insecurity said: ‘if by giving someone a meal we’re sitting them down with people they can talk to about debt counselling, mental health issues, addiction, domestic abuse, or whatever help they might need, then that plate of food can work so much harder’.

Rather than starting with the political roots of these problems, charities increasingly view them as issues to be solved through improving the capacity of the individuals themselves to manage the challenges they face.

Quite simply, this facilitates the shifting of blame onto people, rather than highlighting the failure of the government to make provision for its citizens and is classic neoliberal text. As Neil Valley suggests in his article in the New Internationalist ‘The Self-Help Myth’.

‘The pervasive rhetoric of personal responsibility has transformed the role of government and society in the neoliberal era. Where once the role of government was to safeguard the general happiness of the majority of citizens, albeit to varying degrees, its primary role now is to facilitate the conditions where each citizen can take on more and more individual responsibility, absolving the state from its responsibility towards its citizens.’

Then step in charities to fill the gap in service provision and provide the mitigating support for the rotten toxic system which has created the need in the first place and designates those in receipt of such support as customers rather than victims.

The increasingly pervasive narrative, which is being driven further by the pandemic crisis, is that charities and the voluntary sector should be at the heart of our local communities to ensure that vulnerable people don’t fall between the cracks, rather than publicly paid for, managed and delivered state provision.

It was, therefore, all the more disconcerting this week to read the proposal in the left-wing publication The Tribune that a National Food Service should be set up. Whilst its aims to serve the public good rather than private profit are indeed laudable, one has to question the logic.

Of course, one could not object to the removal of private companies delivering public services, given that the tentacles of private profit are growing exponentially as government distributes contracts to its friends and large corporations with few strings attached, whilst at the same time the coffers remain largely bare to serve the needs of those who have for decades been at the sharp end of government policies. The resulting poverty and inequality have been highlighted during this crisis.

The proposal, however, seems to suggest that we mitigate for the crisis of capitalism being played out in the growth of hunger through mutual on the ground action, rather than dealing with its root causes – government policy driven by ideology. We don’t need a plan to ‘respond’ to this fundamental crisis of capitalism, we need a plan to change it; to put public purpose and the interests of citizens, not to mention the planet, at the heart of all government policy.

Over the last few decades, working people have borne the consequences of a toxic economic ideology underpinned by the notion of monetary scarcity, which has led to the reduction in their share of their productivity, which has translated into lower wages, insecure employment and underemployment and a decline in living standards. Poverty is the direct result. The constant repetition of these ideas via politicians, think tanks, economists and the media has led us to believe that this is the inescapable default.

Government, far from serving its citizens, has overseen through its employment and other policies, huge disparities in wealth and access to resources, allowing, for example, chief executives of big corporations to earn many more times that of their employees, not to mention garner political influence as a result.

To add to this picture is the decimation of our post-war public and social security infrastructure, which existed to provide health and social care through various publicly paid for institutions, to ensure that those in need had access to shelter, food and warmth, in times of personal tragedy, sickness, unemployment or economic collapse. When this infrastructure was built, the profiteers had no place in this model and nor should they today.

Whilst the human suffering continues to play out across the nation, the government cynically continues with its U-turns on policy in the vain attempt to keep its MPs and the public on side. Last week, as noted in the MMT Lens, Boris Johnson told MPs that ‘most people would rather see a focus on jobs and growth in wages than…welfare.’ This week, with his signature tune U-Turn, he has indicated a potential rethink of ending the £20 a week Universal Credit uplift, saying he wanted to ensure that ‘people don’t suffer as a result of the economic consequences of the pandemic’. You couldn’t make it up.

Yes, indeed, to more jobs through the implementation of a Job Guarantee, to drive better wages overall and restore the government’s role as the price setter and rebuilding public service provision. But in the meantime, let’s ensure while the consequences of the pandemic continue to cause economic and social pain, that all people have enough to pay their bills and keep food on the table without worry, stress or having to get into debt to keep their heads above water. We have witnessed the power of the public purse, let us not allow that knowledge to be polluted by the restoration of household budget politics.

It is regrettable that politicians, journalists, institutions and think tanks, in their weekly forecasts of doom and gloom, continue to build up the narrative of money scarcity and a future price to pay for this massive round of government monetary intervention. A narrative that will be used to justify eventual hard decisions or another round of austerity in some form or another.

Whilst the livelihoods of many people lie in the balance, not just for now but in a rapidly changing world, we still have to endure the false notions of tax rises to pay for government spending and the penchant for sound finance. Such narratives suggest, not only that people must suffer, but also that the cost of saving our planet from climactic destruction will be too high.

The fact that the government continues to find huge sums of money to support businesses and yet quibbles over a few pounds to working people, suggesting that it is unaffordable should surely be a public conversation starter!

As the chancellor opines that there are some hard choices ahead, one of his treasury ministers clearly of the deficit dove variety, softens the blow by suggesting that the need for tax rises to tackle the record levels of government borrowing could be delayed at least until the economy ‘bounces back’. As if somehow increased tax revenues equate to the capacity to spend or pay down the national debt.

The experts at the Institute of Fiscal Studies and other think tanks then put the fear of God into the public that £40bn in tax rises might be necessary to put the public finances back onto a sustainable footing. Thus, making that public even more cautious about the government’s future spending plans. Self-fulfilling prophecies come to mind.

And then, just this week, when people thought that the vast round of government spending signified a change of approach to managing the economy, Rishi Sunak told Conservative MPs that he will be using his March budget to begin the process of restoring ‘order’ to the public finances through implementing higher taxes.

To those Tories who would like to see the Universal Credit uplift continue beyond April, he gave a reminder of its high cost which represents, according to his calculations, an equivalent of 1p on income tax plus 5p per litre on fuel duty. Thus, further reinforcing the idea that the provision of higher welfare benefits means collecting tax from elsewhere to cover it.

The ‘someone, somewhere will have to pay for it’ model of the state finances will no doubt be used cynically to drive further wedges between the haves and the have nots and justify the further decimation of the already inadequate social security safety net.

According to this narrative, the magic porridge pot is running on empty and needs replenishing in order to pay down debt and avoid a giant burden for future generations.

This tale of supposed coming woe serves to keep people in their place while reinforcing the old myths about how governments spend. It displays both economic illiteracy and a disregard for the lives of those who will lose out as a result, not to mention addressing the biggest challenge of all – climate change.

And then at the ‘left’ end of the household budget scale, we have economists, opposition politicians, unions and other so-called experts, urging the Chancellor to take advantage of low borrowing rates of interest to avoid tax rises until the economy gets back on its feet and restores tax revenues, or reinforcing the false narratives about taxing the rich to pay for the pandemic. The household budget model is endemic and those on the political left keep shooting themselves in the foot repeatedly.

A paper published by the LSE’s International Inequalities Institute last December, using data from 18 OECD countries over the last five decades, concluded unsurprisingly enough that tax cuts for the rich didn’t trickle down; that they contributed to inequality and did little to stimulate business investment.

The authors then went on to suggest that it was time to tax the rich more to repair the public finances. This was backed up in the same month when the Wealth Tax Commission, founded in April of last year, concluded that a one-off wealth tax would raise significant revenue and be fairer and more efficient than other alternatives. To be exact, it suggested that a ‘one-off wealth tax on millionaire couples would raise £260 billion’ The implication being yet again that such a tax could be used to repair the public finances.

Whilst we can’t avoid these false tropes, which lead the public astray and reinforce the messages that government spends like a household, we can challenge them. When Matt Hancock, the Secretary of State for Health and Social Care, bleats on as he did this week about the NHS Pay review body taking ‘account of the extremely challenging fiscal and economic context’ in its decision about future pay rises, we can show the public that such decisions have no connection, either with the current state of the public finances or the future monetary affordability of those pay rises.

We can reinforce the message that curtailing public sector pay won’t increase the ability of the government to ‘set the public finances straight’, any more than the decade of austerity did. It could actually have a negative, indeed disastrous, effect on the economy at a time when it will, without doubt, need continuing government support.

Aside from the fact that public sector and, indeed, other key workers have seen their pay dwindle in real terms as a result of a decade of pay freezes or inadequate employment legislation, and that the pandemic has revealed the vital nature of their contribution to society, all increasing taxation will do is leave less money for working people to spend into both the national and local economies. Also, should that increased taxation fall on corporations, (as is being suggested) who will likely pass that additional cost on through higher prices to working people anyway, it will create a double whammy effect.

Whilst a pay rise will increase tax revenues, it will not increase the government’s capacity to spend. But we see the false narrative again in a study published this week by the London Economic Consultancy. The report claimed that the government would recover 81% of the cost of any pay rise in additional taxes, which would, in turn, have significant ‘knock-on’ benefits for the Treasury. Clearly suggesting that tax funds its spending.

Whether from the left or right of the political spectrum, the public is treated daily to a mishmash of false information dictated by the dominant economic paradigm which masquerades as truth. It’s no wonder that people are confused and feel disempowered or turned off by politics and economics, which they feel do not relate to their lives at all, even though, in reality, these things have everything to do with them.

While politicians, journalists and economists argue about monetary affordability and who should pay for government spending, people are dying and will continue to die for the want of a government that puts their interests first.

What happens next will depend on a successful challenge through raising public awareness that there is indeed an alternative to the vast disparities in wealth, the rise of poverty and inequality, the whittling down of democracy and increased corporate dominance in our lives. And it starts with understanding how government really spends.

 

Upcoming Event

Phil Armstrong in Conversation with Pavlina Tcherneva – Online

January 24th 2021 @ 4:00 pm – 5:30 pm GMT

GIMMS is delighted to present another in its series ‘In Conversation’.

Phil Armstrong, author of ‘Can Heterodox Economics Make a Difference’ published in November 2020, will be talking to Pavlina Tcherneva.

Pavlina is program director and associate professor of economics at Bard College and a research associate at the Levy Economics Institute. She conducts research in the fields of modern monetary theory and public policy and has collaborated with policymakers from around the world on developing and evaluating various job-creation programmes. Her work on the Job Guarantee spans over 20 years.

Author of the recently published book ‘The Case for a Job Guarantee’, she challenges us to imagine a world where the phantom of unemployment is banished and anyone who seeks decent living-wage work can find it – guaranteed. It will be of particular relevance as we begin to grapple with the economic fall-out of the Covid-19 pandemic but for anyone passionate about social justice and building a fairer economy it should be essential reading.

We invite you to join us for this informal event which we are sure will be both stimulating and insightful.

Tickets via Eventbrite

 

Past Event

Phil Armstrong in Conversation with Fadhel Kaboub – Online

Author and MMT Scholar Phil Armstrong talks to professor of economics and president of the Global Institute for Sustainable Prosperity Fadhel Kaboub about how MMT insights apply to the global south, colonial reparations, the MMT Job Guarantee contrasted with Universal Basic Income, and much more.

 

 

Audio via the MMT Podcast here

 

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The Gower Initiative for Money Studies is run by volunteers and relies on donations to continue its work. If you would like to donate, please see our donations page here

 

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The post The need is to fix the system, not just to provide ‘sticking plasters’ appeared first on The Gower Initiative for Modern Money Studies.

The Covid-19 pandemic shows the need for change. For a real ‘Reset’.

Button with label "Push to reset the world"Photo by Jose Antonio Gallego Vázquez on Unsplash

‘We live in capitalism. Its power seems inescapable. So did the divine right of kings.’

Ursula K Le Guin

The year 2020 will be not be remembered with any great affection. So much suffering, loss of human life and economic uncertainty has left the nation in turmoil. Whilst in normal times we would be welcoming the new year with resolutions and hope for better days to come, the prospects for the future remain very uncertain.

Whilst the government’s handling of this pandemic crisis has been chaotic and indecisive with disastrous consequences, it has also revealed the dire state of our public and social infrastructure for which decades of ideologically driven government policies have been responsible. That, combined with the vast wealth and other inequalities that exist in both rich and poor countries across the planet and the climate tsunami following up frighteningly behind, should leave a bad taste in our collective mouth. It should start to make us question the very foundations of the economic model now turning to sand before our very eyes.

Covid-19 has exposed in the most distressing way the damaging consequences of the pursuit of balanced budget narratives which have allowed governments to justify public sector rationalisation or austerity on the grounds of unaffordability, and overseen a huge increase in poverty and inequality. Successive governments have abdicated their responsibility for the lives of citizens; their responsibility to create a fairer distribution of wealth and real resources and ensure that the public infrastructure meets their needs. Instead, they have plumped in favour of that elusive but all-seeing ‘god of the market’ which, in real terms, has meant ceding control to global corporations who direct the policy orchestra and pouring public money into the pockets of those same corporations with little transparency or accountability.

Whilst the government has found the power of the public purse to manage this crisis, there have been winners and losers throughout which reflect its ideological persuasion. It has only been with public pressure that it has been forced into political U-turns to help some of the poorest people in our communities, whilst leaving still others in distress and without adequate support. The road to Damascus moment still eludes a government which has chosen a path that so far has only led to economic hardship and inequity for many and yet great wealth for a few others.

It has also done so with the usual threats of a financial price to pay in the future to keep the household budget narratives of state spending alive and well. It would not do for the public to be disabused of the notion that taxes fund spending, that government has to borrow to cover its deficit and that public debt is real and will require difficult decisions at some unspecified time in the future. Such narratives are vital to government and will, without challenge, allow them to be able to finish off the job of destroying publicly paid for and managed public and social infrastructure and thus ensure the continuing dominance of global corporate power. We do indeed face a continuing hollowing out of democracy in favour of a growing alliance between the state and big business and the big political revolving door.

Whilst GIMMS and other educational organisations across the world have made huge strides in raising awareness of how money really works, the task ahead remains a daunting one. The weekly news is testament to the ongoing consequences of government policies and the spun narratives of how government spends but also encouragingly shows the power the public has to effect change, and not just through the ballot box. The on-going saga of free school meals continues to rumble on and elicit government U-turns. The latest, and most shameful, were the pictures on social media of the meagre ‘rations’ from a private company contracted and paid huge sums to provide substandard food packs which it turned out largely reflected government guidelines and did not meet the standards for the nutritious, balanced diet all children need to grow and thrive. It is to be regretted that the government, in the same week, went on to tell headteachers in England not to supply vouchers and food parcels to disadvantaged children during the February half-term, signalling it was already doing enough which is clearly not the case. There are no excuses for hungry children, or hungry adults for that matter.

The fiasco was yet another example of public money being poured into private profit and at the same time failing to address the reasons for children going hungry in the first place. Poverty and hunger are not new phenomena. Covid-19 has, without doubt, put a spotlight on the prevailing economic system and the economic decisions of successive governments which have not only been responsible for increasing poverty and inequality through employment, welfare and taxation policies but also shifted blame and created widening societal divisions which allow the real authors of economic distress to go scot-free.

It is therefore shameful that the Chancellor Rishi Sunak whilst facing opposition from campaigners is still considering cutting the meagre £20 per week universal credit uplift which has helped people struggling to get by during the pandemic. The consequences of the crisis will be with us for many months to come, possibly years, and therefore the government with its power of the public purse has no excuses when it comes to ensuring that its citizens can pay their bills and put food on the table while the disruption continues. Instead, its policy responses have proved not strategic but piecemeal and ill-thought-out with plenty of U-turns along the way.

Whilst we need the power of the public purse to mitigate the economic consequences of the current crisis, we also need a government with a long-term strategy for addressing the poverty and inequality that has arisen over decades and which has allowed top managers to reap excessive monetary rewards whilst depriving working people and their families, whose standards of living have declined substantially through low incomes and insecure employment.

Boris Johnson suggested earlier this week that he was still in favour of reducing Universal Credit saying:

‘what we want to see is jobs, we want people in employment, and we want to see the economy bouncing back. And I think most people in this country want to see a focus on jobs and growth in wages than on welfare’.

A change of heart? Given that the Tory government has presided over exactly the opposite over the last 10 years through austerity and economic policies which have increased economic instability whilst at the same time serving the corporate estate, instead, it is likely to be yet another in a long line of so far undelivered promises to level up. However, the sentiment is correct and is what should be driving government policy. We need a recognition of the power of the public purse to pursue full employment through a Job Guarantee and the vested power of government to legislate fair employment terms and conditions with the aim of shifting the balance of power back to working people instead of where it currently lies in corporate hands with government approval. We need a government prepared to address the key issues of our time using its currency-issuing powers, not just for the coming months but for always. Whilst Rishi Sunak calls upon the nation to spend the savings resulting from lockdown to get the economy going again (aside from the fact that he is turning a blind eye to the many millions of people as reported by the Resolution Think Thank this week who have lost out or got into further debt as a result of the pandemic adding to their already insecure lives) the looming crisis of climate change has been put on the back burner and time is running out. The god of growth must be worshipped anew to get the economy back into shape.

Aside from the fact that people are unlikely to spend their savings like drunken sailors in the near future, given the on-going uncertainty about the economy and jobs, exhorting the gods of growth and indiscriminate private consumption as a solution to economic slow-down would not only be folly but denies the clear power of government to spend to effect real and sustainable change.

We need a sea change in how we live our lives to address the already happening climate catastrophe and indeed, it will only be through large scale government action in spending policies and legislation that will enable this to happen. There is a pressing need for a national investment strategy that includes a massive and long-term investment in education and training in order to secure our future productive capacity. We much focus on high-skilled, low-carbon and well-paid jobs both for the private sector and in a much-expanded public sector to ensure high-quality basic services are provided to everyone, including our disabled and elderly citizens. Our nation must become more productive if we are to reduce our working week and support our retirees and support to those nations without the necessary real resources to support their communities.

The overarching need is to protect our environment for future generations which should also include acting to redress the vast wealth inequalities that exist. We need to restore our sense of the value of publicly paid for and provided public sector work to national well-being, implement a Job Guarantee to provide stability through an effective countercyclical response to the inevitable economic ups and downs all economies face, and a living income for anyone who is unable to work for health reasons or caring or other essential duties including higher education. Of course, these will not be magic bullets to bring about a perfect world, but provide a basis for a conversation that we need to have.

These are important decisions, not just concerning the big macroeconomic questions about creating an efficient functioning economy, but also relating to the sort of society we want to see. For left-wing progressives, this would suggest creating a fairer and more equitable society where people have sufficient wages to live comfortably with adequate nutrition and good living conditions as well as good public services such as health and education. Assuming that the future will bring forth a political party that has the express intention of addressing these issues, change is in our collective hands as an electorate and we should not forget the power we hold.

It is regrettable that currently there is no such party dedicated to the change we need and that all roads are still leading to an ever-distorted capitalism wherever you place the X on the ballot paper.

Whilst the very real human consequences of government decisions and its policies continue to play out in our communities and our families the government, opposition politicians, economists and journalists continue to pound out the messages of monetary scarcity; either talking about the need for ‘hard choices’ to deal with the deterioration of the public finances or delaying the ‘repayment pain’ until economic conditions will allow.

Whether it’s Rishi Sunak the Chancellor or his shadow opposition sidekick Labour’s Annaliese Dodds, they both adhere to a household budget narrative of the public accounts, in other words, the diktat of sound finance as if a government suffered from the same constraints as business. The operative question in either case being, at what point do you enact such fiscal tightening, not whether you actually need to. How the state really spends cannot have escaped their notice, and yet they stick to the orthodoxy like glue.

Whilst that is undeniably to be expected with the Conservatives, whose agenda is more about creating an alliance with big business under cover of stories about monetary scarcity and ‘hard choices’, Annaliese Dodds in this week’s Mais lecture indicated clearly her party’s on-going adherence to the false notion that government constraints are monetary. Whilst, to be fair, she gave a cutting analysis of the effects of government policies on people’s lives both before and after the arrival of Covid-19, she stuck to the orthodox economic mantras. Namely keeping the City sweet by maintaining the joke of supposed Central Bank independence and having a ‘responsible approach to government debt.

She summarised her approach to fiscal policy as requiring ‘a set of rules around both annual and the stock of debt, that simultaneously demonstrates a prudent approach to the public finances and leaves space for investment in the future and the ability to adapt to crises’. A sound approach to the public finances she said must ‘also include consideration of the quality and effectiveness of public spending.’ Whilst such evaluation should always be a part of government spending strategies (and clearly, we have seen in recent months and years the exact opposite) the concept of sound finance continues to be the guiding doctrine of politicians on both sides of the political spectrum. They might have different spending objectives, but both are couched within the clear limitations of household budget thinking.

As society implodes as a result of rising poverty, inequality and ill health which has arisen as a result of government policies and placed increasing pressures on public services such as our NHS which this last year has bravely served the nation in a deliberately created environment of insufficient staff, facilities and other resources, there is only one direction in which we can place the blame. Governments whose decisions have favoured market solutions through privatisation and legislative policies which favour them – with shocking consequences.

In similarity to nature’s web of life, which is defined by its interdependence, our economy does not exist as disparate parts. The economy represents the lives of working people and the businesses that employ them, and its health is reliant on the public and social infrastructure provided by the government to support it. Remove one vital link and you risk that eventually the whole will collapse.

This is the frightening consequence we already face, not just in the real but finite resources upon which our societies are built and owe their existence, but also our dependency on the goodwill and care we express for others. As reliance on charitable institutions to feed hungry people or deal with rising homelessness increases, or rich philanthropists replace public institutions with the equivalent of poor law boards dictating the pace and deciding who will be a beneficiary, our society will continue to break down on the basis of a ‘convenient lie’ that the state has no money of its own and there is no alternative course of action.

Instead of examining the public accounts and deducting from the financial position the health of a country, a future government should be turning that idea on its head to see the reality of the challenges we face. The reality of the real constraints which are not money but real resources and how they can be managed fairly in the interests of all citizens. The fast-approaching reality of climate change and its consequences threaten to engulf us if world governments fail to work together to create better, fairer and more sustainable solutions.

We need a ‘Reset’. Not the ‘Great Reset’ being promoted by the World Economic Forum which, whilst sounding just the thing to address rising inequality and climate disaster, will maintain the same power structures with the same corporations dictating the rules in the interests of accumulating more profit and wealth whilst still clinging to the sham economic model which seeks to keep power in the hands of the few.

We need quite a different ‘Reset’ as suggested by Associate Professor Fadhel Kaboub in a GIMMS ‘in conversation’ event last week. One where public purpose, not profit or greed, directs government spending and legislative actions for a sustainable and fairer future and without which the light at the end of the tunnel will recede, not get closer.

There is an alternative and history is still to be written on the choices we make. We once believed that the Earth was flat, that it was at the centre of the universe and the sun and planets revolved around it. Those notions were disproved by the observations of scientists like Copernicus and Galileo. We need now to disprove the notions that money is scarce – not because knowing it makes a difference in itself, but because knowing it will enable us to decide what history will eventually record about the decisions that were taken as a result.

We can be on the right side of history if we choose to be.

 

Upcoming Event

Phil Armstrong in Conversation with Pavlina Tcherneva – Online

January 24th 2021 @ 4:00 pm – 5:30 pm GMT

GIMMS is delighted to present another in its series ‘In Conversation’.

Phil Armstrong, author of ‘Can Heterodox Economics Make a Difference’ published in November 2020, will be talking to Pavlina Tcherneva.

Pavlina is program director and associate professor of economics at Bard College and a research associate at the Levy Economics Institute. She conducts research in the fields of modern monetary theory and public policy and has collaborated with policymakers from around the world on developing and evaluating various job-creation programmes. Her work on the Job Guarantee spans over 20 years.

Author of the recently published book ‘The Case for a Job Guarantee’, she challenges us to imagine a world where the phantom of unemployment is banished and anyone who seeks decent living-wage work can find it – guaranteed. It will be of particular relevance as we begin to grapple with the economic fall-out of the Covid-19 pandemic but for anyone passionate about social justice and building a fairer economy it should be essential reading.

We invite you to join us for this informal event which we are sure will be both stimulating and insightful.

Tickets via Eventbrite

 

Past Event

Phil Armstrong in Conversation with Fadhel Kaboub – Online

Author and MMT Scholar Phil Armstrong talks to professor of economics and president of the Global Institute for Sustainable Prosperity Fadhel Kaboub about how MMT insights apply to the global south, colonial reparations, the MMT Job Guarantee contrasted with Universal Basic Income, and much more.

Audio via the MMT Podcast here

Video will be available soon.

 

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The Gower Initiative for Money Studies is run by volunteers and relies on donations to continue its work. If you would like to donate, please see our donations page here

 

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The post The Covid-19 pandemic shows the need for change. For a real ‘Reset’. appeared first on The Gower Initiative for Modern Money Studies.

Talk Radio’s Kevin O’Sullivan and Rod Liddle Get Upset about British Universities’ Dictionary of British Slave Traders

And now for a much more serious subject. The day before yesterday, 30th December 2020, Talk Radio posted this video on YouTube of one of their presenters, Kevin O’Sullivan, talking about the compilation of a Dictionary of British Slave Traders by a group of British universities with that fixture of the right-wing press, Rod Liddle. The project is led by a professor Pettigree, and involves the universities of Lancaster, Manchester and University College London. O’Sullivan quotes Prof. William Pettigree, who said that after Black Lives Matter it was important that there should be further, accurate information on the breadth of Britain’s involvement in the slave trade. As you can imagine, neither O’Sullivan nor Liddle are fans of the project. Some of their arguments are good, but others are just them using the issue to ride the usual Conservative hobby horses of attacking state education.

Non-White Slave Trade Ignored

The Dictionary will have 6,500 entries, including small investors, women, and people, whose involvement in the Abominable Trade has not been mentioned before. O’Sullivan claims that this is a device for finding out whether a perfectly respectable living person had an ancestor 350 years ago, who invested £5 in a plantation, and then make their blameless descendant into a pariah and get them sacked. He states that we need the Dictionary ‘like a hole in the head’, denounces the obsession with the slave trade as a ‘national sickness’. Liddle, who is introduced as writing for the Sun, the Spectator and the Sun on Sunday, agrees, calling it ‘self-flagellating imbecilic obsessiveness’. He states that the Dictionary isn’t about anyone, but specifically the White English. It doesn’t mention the Ottoman Empire, the people, who profited from the slave trade in the West African countries, specifically Ghana. He states that he was in a cab a couple of months ago, whose driver was Ethiopian. The driver told him how much he hated Britain. When Liddle asked why, he was told that it was because Britain was the country that invented slavery and enslaved whole nations. He’d never heard of the Roman Empire, the Ottoman Empire or the slavery that continued in his own country for hundreds of years after Britain had stopped it. He’d never heard of the fact that Britain was the first country to abolish it. Liddle also makes the point that Ethiopia, where it continued, had never been colonised. Liddle goes on to claim that universities are implanting in people’s minds the notion that it was only the British, who were slavers and had this wickedness. This is, he said, reflected in ‘that very stupid woman, who is head of the British Library’, Liz Joly, who said that ‘White people invented racism’. Liddle goes on about how we also invented television, the printing press, democracy, but we invented slavery, sin and mosquitoes. It’s utter rubbish and time we got over it.

The Coronavirus Lockdown Prevented Criticism of BLM at Football Matches

O’Sullivan dismisses Pettigree’s comments about the need for the Dictionary as nonsense, and describes the obsession with the slave trade as a kind of ‘national insanity’. He asks why the country is obsessing about the actions of slave traders who lived three centuries ago. Liddle says we’re not obsessing. It’s a tiny, tiny minority, who are obsessing. And they’ve been partly able to get away with it because of the Coronavirus. This has allowed footballers to take the knee in support of an organisation that wishes to abolish the family and capitalism. This wouldn’t have happened if there had been fans in the ground, because as soon as fans were allowed, they booed. This occurred not just at Liddle’s club, Millwall, but also at Colchester and Dallas in the US. They’ve got away with this because this year has meant the lone voice of the common sense public has not been heard. O’Sullivan agrees with him, stating that the people have been eclipsed by the lockdown and the authorities in politics and football have been allowed to proceed without comment from the public and fans. Liddle states that it’s a salutary lesson that when these restriction are placed on our lives, there is nothing they won’t try to get away with. He then goes to tilt at the Beeb, stating that they used the Coronavirus as an excuse to ban the words to ‘Land of Hope and Glory’ and ‘Rule, Britannia’.

Liddle Attacks his Daughter’s State School for views on British Empire

O’Sullivan agrees with him that the obsession with slavery and the ‘Woke’ thing is that of a tiny, tiny minority, who are vocal and noisy. He hopes that in this coming year, 2021, the Dictionary never gets published, and that the people’s voice gets heard and we are able to push back against these noisy people. Liddle then describes how, when his daughter went to state school last year, she was taught in her history lessons, which went uncontested, that the reason Africa was in poverty was because of colonialism. He states that this is easy to disprove, as Ethiopia, which was never colonised, is exactly the same as Eritrea. Both countries are equally impoverished and despotic. Liberia, which was never colonised, is as badly off as Sierra Leone next door. Singapore, on the other hand, was colonised for 200 years, and is the most affluent country in the world. There is, Liddle claims, a reluctance to face the truth because of this liberal mindset. This is based on a fallacy, which falls apart if you pick at it.

O’Sullivan then asks Liddle if they teach Critical Race Theory at his daughter’s school. This ‘controversial and very dubious philosophy’ is being taught in schools all over the country, which states that if you’re White, you’re racist, even if you don’t think you are. He states that it’s fine if adults want to learn this nonsense, but really dangerous to teach it to children in schools. Liddle again agrees with him, says he’s sure his daughter was, and that they got her out of it not just because they were teaching ‘that rubbish’, but because most of the time they weren’t teaching at all. There were no lesson during the Covid outbreak, not even online, O’Sullivan jokes that it was probably better that she was getting no lessons at all then. Liddle replies that she got lessons from him on how the British Empire brought decency and democracy to the world as a corrective for five minutes.

Rod Liddle criticises ‘self-flagellating’ Dictionary of British Slave Traders – YouTube

There are several issues to unpack here. Firstly, if the Dictionary was only an academic exercise in researching the depth of British public involvement in the slave trade, then I don’t think there should be any objection to its compilation and publication. There’s already been considerable research on the subject. A little while ago one historian of the subject said that they were actually astonished by how widespread participation in the slave trade and slavery was, with ordinary members of the public investing their money in it. In fact you could easily produce a list of British slaveowners simply by going through the government’s Blue Book published c. 1840 for the compensation given to the slaveowners after abolition. From the 1820s onwards the British government passed legislation designed to halt the illegal importation of slaves in their colonies by passing legislation demanding that all slaves be registered. This could also be used. The compensation returns and slave registries might have some surprises for those, who believe that only White people owned slaves. Several of the slaveowners in the Caribbean included the Maroons, the free Black communities outside British law. I also believe, though I’m not sure, that the free people of colour, the free Black population, may also have owned slaves.

Real Danger of Innocent People Demonised for Ancestors’ Involvement

O’Sullivan’s claim that the book would be used to denounce and pillory perfectly decent people for what their ancestors did hundreds of years ago is hysterical, but unfortunately also a real possibility. I had to make a similar decision myself when I was working in the Empire and Commonwealth Museum. It seemed that there was a strong possibility that some of the people described as slavers may have been the remote ancestors of people I knew personally. I had to think very carefully about telling them, and was eventually advised against it by one of their close friends. They told me that I shouldn’t tell this person about their possible connection to the slave trade, because they were very anti-racist themselves and the information would only upset them. I’ve no doubt that this is true of very many people. I also think that behind some of outrage from O’Sullivan and Liddle, but which goes unspoken, is the fear that it will be used by activists to demand reparations for slavery. I’m not sure how much this will affect ordinary people, though. In the 18th and 19th centuries most people in this country were the ‘labouring poor’, who comprised 90 per cent of the population. These had problems enough paying for food, clothing and accommodation. They wouldn’t have had the disposable income to invest in anything, never mind slaves or plantations, even if they were so inclined. Really we’re only talking about the middle classes and aristocracy as investors and slaveowners. Reparations for slavery are a different issue, but this has its dangers too. Over time, many of the wealthy or comfortably off people, who owned slaves, will have lost their money. All it would take to cause real controversy and angry backlash is if poorly paid people struggling to make ends meet get a demand for reparations from richer Black people. If that happens, you can expect the story to be all over the Heil, Depress and the rest of the press like a rash.

Need to Teach Extra-European, Islamic and Asian Slavery and Slave Trade

I also agree with O’Sullivan and Liddle that more should be taught about extra-European slavery. This includes that of the Arabs and Muslims in north Africa, the Ottoman Empire and the Islamic slave trade from east Africa across the Indian Ocean. Liddle is also quite right about the Ethiopians practising the slave trade. Way back in the 19th century we sent a punitive expedition into Abyssinia to stop them raiding British territory for slaves. One of the books we had in the library at the Empire and Commonwealth Museum was Major Darnley’s Slaves and Ivory. This was published in the early part of the 20th century and described Darnley’s own personal undercover investigation of slavery within the Abyssinian empire. Darnley published the book to make the public aware that the Abyssinians were still raiding British Uganda for slaves, and that the Ethiopian princes were destroying whole regions of their own empire through such raids. He wished to generate sufficient outrage that public opinion would swing behind a British invasion of the country. Dame Kathleen Simon, a determined foe of slavery, actually praised Mussolini and the Italian Fascists in her book on it for their invasion of Abyssinia, which she felt would at least extinguish slavery there. I do think there is a real need to teach this aspect of the slave trade to counter the notion that it was only Britain that was only, or primarily responsible for it. Britain wasn’t the first country to outlaw it – that was Denmark – but we were the leading country to do so and insist that other nations follow.

The East African Slave Trade in the 19th Century, from James Walvin, Atlas of Slavery (Harlow: Pearson Education 2006) 129.

Concentration on Western Slave Trade Product of Black Rights’ Movement

Research into the historic slave trade has been linked with the campaign for Black liberation since the time of W.E.B. Dubois. Hence the fixation on it by contemporary anti-racist activists. Driving this is the continued impoverishment and disadvantaged condition of the Black community as a whole. But real, Black chattel slavery has re-emerged in Libya and in sub-Saharan African countries like Uganda. There is little interest in combating slavery there. When right-wing critics urged western anti-racist activists to do so, the response has been that it should be ignored as a distraction from continued demands for racial equality here in the West. Kate Maltby, a White contributor to the I, made that argument in its pages a few months ago. She has a point, but it’s still no reason to ignore real slavery as it exists now in order to concentrate on angry denunciations for past crimes. There are books published on non-European slavery. Jeremy Black includes it alongside western slavery in one of his books. James Walvin includes maps of the African and Indian slave trade and routes alongside transatlantic slavery in his Atlas of Slavery. There are books on African slavery, and there is a particular study of the Islamic slave trade, Islam’s Black Slaves: A History of the Other Black Diaspora, by Ronald Segal. I think, however, that there may be some objection to teaching about these slave trades from some anti-racist activists, who may feel that it would somehow be racist or even islamophobic to do so.

Liddle Promoting Privatisation of State Education with Comments

But as you can hear from the video, O’Sullivan and Liddle were also determined to use the issue of slavery to attack other right-wing bugbears. Like the Coronavirus lockdown. This is there to save lives, but it’s too much for the right, who favour the economy at the expense of people’s lives. Hence the rant about footballers taking the knee for Black Lives Matter. Liddle also uses it, surprise, surprise! – to attack state education. We’ve been this way before. I remember the rants of the right-wing press under Thatcher, when the Scum, Heil, Depress and the rest ran stories about children in state schools being indoctrinated with left-wing propaganda, like Peace Studies, while anti-racist fanatics in Brent forced them to sing suitably altered nursery rhymes like ‘Ba Ba Green Sheep’. That was a lie put out by the Scum, supposedly, but I’ve met people, who swore they sang it at school. Thatcher used those fears to push through her creation of academy schools, telling the British public that it would put them in control of their children’s education. And this would be taken out of the hands of evil, left-wing Local Education Authorities. In fact, Thatcher’s academy school programme was a complete flop. It was being wound up by Norman Fowler before Blair took the idea out of the Tory dustbin, dusted it off and then made it official Labour policy. And unfortunately the wretched schemes been going ever since. In fact academy schools are not better than state schools and are far more expensive. They should be wound up and education renationalised. But this would upset the parasites running the academies. I don’t think it’s an accident that Liddle came out to rant against state education when he writes for the Scum, as Dirty Rupe would like to move into education as well.

Neo-Colonialism and African Poverty

As for the terrible condition of modern Africa and the legacy of British colonialism, it’s quite true that much of the continent’s problems don’t come from it, but from the rapacious venality and ruthless tyranny of their post-independence rulers. But we took over these countries partly to exploit their resources, and their poverty is partly caused by the Neo-colonial economic system that prevents them from industrialising and confines them to exporting raw materials to the Developed World. I can remember being taught all this in ‘A’ Level Geography nearly forty years ago from teachers, who were definitely not Marxists trying to indoctrinate us. As for the success of Singapore, this can be used to support the socialism Liddle and O’Sullivan fear and despise. Singapore’s leaders were influenced by the Fabians and their belief that the state should take a leading role in the economy. Singapore ain’t a socialist country, but its success does refute Thatcherite free market economics.

While O’Sullivan and Liddle thus are quite reasonable in their criticisms of the proposed Dictionary, they are using it as a tool to promote a wider, right-wing agenda. One that will cause further poverty and endanger lives, but will benefit their paymasters in the press barons and big business.

Will Johnson Quit or Be Forced Out, Once He Has Wrecked the Country For Brexit?

Also in Lobster 80 for Winter 2020 is a very interesting piece by Simon Matthews, whose observations about Johnson’s real motives for running for PM and supporting Brexit I discussed in my previous blog post. Matthews has a piece, ‘Time for the Pavilion (or: there are 365 Conservative MPs)’ pondering whether Johnson will either retire as PM or be forced out by angry members of his own party, once he has successfully ruined the country with a hard Brexit.

And Matthews makes some very interesting observations. Johnson’s majority looks impressive, but is actually very fragile. 50 Tory MPs, for example, voted against the imposition of the second national lockdown at the beginning of November. And many of the 80 new MPs forming the Tories’ parliamentary majority actually have very small majorities in their own constituencies. He writes

Secondly, and less remarked upon, Johnson’s majority of 80 is actually quite fragile. No fewer than 78 Conservative MPs have a majority of 5,000 or less, and of these 34 have a majority of 2,000 or less. Indeed,
all the fabled ‘red wall’ seats that Johnson gained are in this category. Any MP in this situation would be aware that it really wouldn’t take much of an electoral swing to oust them.

Also, although the background of the typical Tory MP is privately educated, with a background in the financial sector, think tanks and policy groups, and is strongly anti-EU, there are still 102 Tory MPs who support the European Union.

Finally, and a puzzling anomaly, there are still 102 Conservative MP’s who were pro-EU in 2016. Admittedly, some of these may have been so at that time because it was party policy (i.e. now party policy has changed,
their views will have changed, too); and there will be others who were ‘pro-EU’ on the basis of Cameron’s re-negotiation of 2015-2016. But, nevertheless, amongst those 102 there must be some (40? 50?) who would much rather the UK stayed as close to the EU as possible, including membership of the Single Market, Customs Union and the EEA rather than exit everything, in its entirety.

BoJob’s position is very precarious. If things get very desperate, and the Tory party does decide it wants to form a ‘government of national unity’ in a coalition with Labour and the Lib Dems, it would only take 45 Tory MPs to oust him.

The article then goes to discuss the problems Johnson faces from Brexit, and particularly the challenge it poses to the integrity of the UK, and opposition from Northern Ireland, Scotland, Wales, the EU and the Americans, and members of both chambers of parliament. He’s also got severe problems with the Covid crisis, and the havoc this and the consequent lockdown has played with the economy. The sacking of Dominic Cummings could be seen as a warning shot to Johnson from Brady and the party’s donors out in the tax havens, who feel they are being ignored by the PM. But he notes that the donors and corporate backers really don’t seem to have an idea of the massive damage that Brexit will inflict on the UK economy. It will destroy 60-65 per cent of UK manufacturing, and although stockpiling of food and other goods has been going on since 2017, these supplies can only last for so long. So that Britain will return to the food queues of the ’60s and ’70s at the borders.

He makes the point here that the majority of British ports are foreign owned. In footnote 7 he writes

The owners of the UK’s main trading ports are Associated British Ports (owned in Canada, Singapore and Kuwait), Forth Ports (Canada), Hutchison Port Holdings (Singapore), Peel Group (the Isle of Man and Saudi Arabia), PD Ports (Canada) and Peninsular and Oriental Group (complex, but seemingly Dubai, China and Hong Kong). The latter group include P&O Dover Holdings Ltd, which operates most of the ferry services out of Dover, and is owned by the Peoples Republic of China. (The other ferry services at Dover, DFDS, are owned in Denmark). The intention post-Brexit of declaring many UK ports ‘free ports’, when so many can be connected back to tax havens anyway, is striking, and one wonders to what extent the owners of these ports have lobbied for that outcome.

Matthews concludes that Boris is on such shaky grounds that he may well decide to jump before he’s pushed.

The truth is that Johnson can now be ambushed by so many different groupings for so many different reasons, that the chances of him remaining PM after he has delivered the hard Brexit his backers require
must be doubtful. And why would he anyway? He looks bored most of the time and wants money. Leaving Downing Street – and the cleaning up – to others, gives him time to spend with his many different families, time to write his memoirs for a hefty advance, the chance of a US TV show and time to kick on, as all ex-UK PMs do, with earning serious money on the US after-dinner speaking circuit. The possibility that some formula will be devised to facilitate his exit, possibly a supposed medical retirement, looks likely.

After all, he’s been sacked from every job he’s ever had. Why would he wait until he is sacked from this one?

See: Time For the Pavilion (Winter 2020) (lobster-magazine.co.uk)

I found this interesting in that it showed that there is grounds for optimism amongst the gloom. The Tories have a huge majority, but it’s fragile. Very fragile. If Starmer actually got his act together and started behaving like a leader of real opposition party, he could start cutting it down significantly. But he doesn’t, perhaps because, as a Blairite, the only policy he has is stealing the Tories’ and winning the support of their voters, and backers in big business and the Tory media. Hence his silence and his determination to persecute the socialists in the Labour party.

It also shows just how much damage the ‘No Deal’ Brexit Johnson seems determined to deliver will do to Britain. It’s going to wipe out nearly 2/3 of our manufacturing industry. This won’t matter for the Tories or Blairite Labour. Blair took the view that British manufacturing was in decline, and that it could be successfully replaced by the financial sector. This hasn’t happened. Ha-Joon Chang’s 23 Things They Don’t Tell You About Capitalism argues very clearly that the British and other economies still depend very much on the manufacturing sector. The fact that it appears comparatively small to other sectors of the economy merely means that it hasn’t grown as much as they have. It does not mean that it is irrelevant.

And it also shows once again how this chaos and poverty is being driven by a desire to protect the Tories’ backers in the financial sector, and the foreign companies owning our utilities, as well as the British rich squirreling their money away in tax havens. Shaw pointed this all out in once of his books written nearly a century ago, condemning the way the idle rich preferred to spend their money on their vapid pleasures on the continent, while the city preferred to invest in the colonies exploiting Black Africans instead of on domestic industry. He stated that while the Tories always postured as the party of British patriotism, the opposite was the truth: it was the Labour party that was genuinely patriotic, supporting British industry and the people that actually worked in it.

Shaw was right then, and he’s right now, no matter how the Tories seek to appeal to popular nationalistic sentiment through images of the Second World War and jingoistic xenophobia about asylum seekers. The Tories haven’t backed British industry since Thatcher and Major sold it all off. The only way to build Britain back up is to get rid of her legacy.

Which means getting rid of Johnson, the Tories and Starmer.

Just getting by is not enough

Woman shopping in a supermarketPhoto by Kevin Laminto on Unsplash

“The rich run a global system that allows them to accumulate capital and pay the lowest possible price for labour. The freedom that results applies only to them. The many simply have to work harder, in conditions that grow ever more insecure, to enrich the few. Democratic politics, which purports to enrich the many, is actually in the pocket of those bankers, media barons and other moguls who run and own everything.”

Charles Moore

In the light of the possible wage freeze for 5 million public workers, the economist Grace Blakely explained on Double Down News this week why billionaires should pay, ‘not working people who sacrificed their lives to keep our economy going.’ Whilst the sentiment is right that working people should not pay for the crisis, her suggestion that the billionaires should step into the breach and pay what they owe instead is just more neoliberally inspired claptrap. The implication that the very rich are stealing from the public purse and that we should bring back John McDonnell’s magic money tree from the Cayman Islands is a shameful and false narrative being peddled by a supposed left-wing economist who clearly is still caught in the headlights of false household budget accounting. By such shifting of blame elsewhere, Blakeley fails to acknowledge the real power of the public purse to spend, should the government choose to, on public purpose and also the power of the state to legislate to ensure that the rich pay what they owe. In this fairy tale narrative of taxes fund spending, she ignores the fact that, amongst other things such as redistributing wealth through progressive taxes, taxation is the mechanism to reduce the influence of the wealthy in the corridors of political power. That should surely be the left-wing argument for ensuring the billionaires pay their dues.

Blakely’s appeal came in response to the proposal by the Centre for Policy Studies for a three-year public sector pay freeze, which it claimed could save the government cumulatively £23m. It also suggested in its newly published report that the pain had not been shared equally and that private sector workers had suffered more than those in the public sector. The CPS put forward that NHS workers could be exempt from the freeze to account for their hard work and sacrifices during the pandemic giving an albeit reduced saving.

Robert Colville, the Director of the CPS, suggested that the public finances had been decimated and that it would be difficult to justify generous pay rises in the public sector when private sector wages were falling, given that there was a need to control public spending and reduce the structural deficit which the pandemic was likely to have opened up.

Once again not only do we see the powers that be aiming to drive further wedges of envy between the public and private sector, but also a reinforcement of household budget accounting in terms of how the government spends.

Over the last six months and more, the public sector has stepped up to the plate in response to Covid-19. The Prime Minister and his Chancellor have stood in Downing Street to clap for the NHS and social care workers and the nation responded. The public sector – the NHS, education, social care, and services provided by local government – has, along with other key workers in the private sector, ensured that services were kept going. That care for the elderly continued to be provided in difficult circumstances, that the food and other vital supply delivery networks continued to function, that supermarkets and other shops were stocked and able to provision the nation.

The pandemic has demonstrated, as no other event perhaps could, how interdependent society is and that key workers in the public and private sectors, many of whom are low paid, underpin the foundations of society so that it can function effectively. The world of Mrs Thatcher’s ‘there is no society’ has been well and truly discredited.

And yet after all the clapping and talk of levelling up, the government might be on the brink not only of creating more societal division in a cynical sleight of hand to distract attention away from government actions, but also of freezing the pay of public sector workers who have already suffered the consequences of a decade of Tory austerity. It is time to question who the government is serving. The markets and exploitative corporations or its citizens?

We have been brainwashed into believing that the government is at the mercy of the market and must serve it. The public has accepted the lie that government spending is constrained and dependent on private businesses generating the wealth which in turn generates the taxes that we are told fund government spending.

And yet the reverse is true. It is the government which sets the economic bar. It is the government which spends to tax, which sets the price for labour and legislates for protective employment law. It has been a political choice to cede responsibility for ensuring that people both in the public and private sector are paid wages commensurate with a good standard of living, that would put paid to continuing poverty and inequality.

At the other end of the scale, the power of the public purse has been shown to work perfectly when it is a question of pouring vast sums into private profit, in many cases with little accountability. The term ‘chumocracy’ has also been applied to how many of these contracts have been awarded.

Only this week, we have seen yet another demonstration of how the use of the public purse is a matter of political choice as the government agreed a four-year £16.5bn increase in defence spending. Boris Johnson called it ‘a once-in-a-generation modernisation of the armed forces … [required] to extend British influence and protect the public’ and restore Britain as “the foremost naval power in Europe”. We seem to be going back in time!

Labour unsurprisingly has supported these plans, but did ask how they would be paid for. Patrick Butler from the Guardian questioned how such a vast amount of money was justified when the ‘public finances have been stretched by the pandemic’.

The vision of stretched finances appeals to household budget explanations of how governments spend and is designed to reinforce the narrative of scarcity of money. Over the last few months, it surely must start to dawn on the public that there is no scarcity of money. The public finances have not been stretched, indeed they have been positively overflowing. The government simply made a political decision to spend money on defence, just as it did to support furlough or after public pressure to feed hungry children in schools.

In terms of how the government spends, it does not have to choose one expenditure over another. It does not have to match its spending to tax revenue or worry whether it can borrow money. It is just a decision based on political priorities. Feeding hungry children wasn’t a priority until it became politically expedient for it to be.

It is disheartening that time and time again mainstream journalists persist in toeing the establishment line that money is scarce and there will be a future price to pay. In an article in the Financial Times this week, it was suggested that that the Exchequer was running on empty and that the Tories in the wealthy south will soon be asked to support tax increases to help left-behind regions.

Let’s reiterate yet again that the state of the public finances is not dire, the Exchequer is not running on empty and, since tax does not fund government spending, increases will not help left-behind regions. In fact, taxing more in a period of economic decline or as a country was coming out of one would be positively harmful.

When it is suggested that drivers could be charged for using roads to help Rishi Sunak cover a tax shortfall of £40bn caused by the rising popularity of electric cars, one is tempted to point out that there is no hole in the finances to plug. Whilst we might want to use taxation to encourage people to use public transport, the only holes to plug are the potholes caused by cuts to spending on our road network.

It cannot now be any clearer that the UK government, which has the power of the public purse to authorise spending through its central bank, is not hindered by scarce monetary resources. That it just spends. The clear political priority is to spend on defence to ‘extend British influence’ rather than invest in a public and social infrastructure that serves the interests of the nation or addresses the rising poverty and inequality which has arisen as a result of government policies over the past 10 years.

The question of affordability has been used by successive governments to justify their spending policies. And yet, whilst successive governments have always found money for defence or prosecuting wars, whether it can be found to pay public sector workers decent wages is quite another matter.

In the same vein this week, the Treasury was reported to have been reluctant to commit more money to delivering the Prime Minister’s 10-point plan for moving to a low-carbon economy. Aside from the usual puff and rhetoric from politicians on a practical level, there are still questions as to whether words will be translated into real, firm actions. In an open letter to the government, it was reported this week that the UK would not be able to deliver on its zero-carbon commitments unless it intervened in the energy from waste sector and that recycling rates have reached a standstill. Ministers have also been accused of using the pandemic to justify further delay on promised action on food waste reporting until 2021. While the planet’s biodiversity continues to decline as the planet warms and valuable resources go up in smoke with few constraints, the government continues to prevaricate.

In saying that hard choices exist in relation to public sector pay or suggesting that we haven’t enough money to address climate issues, the Treasury ignores the elephant in the room. That the real human and planetary cost of not spending on these vital things will be immeasurable.

Over eight years ago George Osborne criticised green policies as a ‘burden’ and a ‘ridiculous cost’ to British businesses. Since then the environmental landscape has changed irrevocably as the climate tsunami bears down upon us with ever greater urgency. Governments have become masters at making promises or giving speeches with hat tips to change, but which result in very little. To suggest that there is a monetary constraint reveals much about the ideology which governs the government’s policies and the constituency it serves, but in the end, the burden of not acting will not be monetary, it will affect every aspect of our lives – economic and societal.

This is an opportunity not to be wasted. We have allowed an economic system to exploit working people. Businesses have justified low wages and poor employment conditions as prerequisites to competitiveness. Government having abandoned full employment policies in the 1970s has rolled over instead of assuming its considerable powers.

A recent report published by the Social Equality Commission quoted a female supermarket worker who said ‘when you dig really deep, I think it is about happiness and stability, and feeling valued … because money is secondary to all that. As long as you can get by, you shouldn’t worry about it.’

Happiness and stability are, without doubt, important but how such happiness and stability can occur when people are struggling to make ends meet is debatable. Just getting by is not enough and nor is it fair. Good wages and secure employment allow people to have a good standard of living, to be able to plan for the unexpected or indeed to save for the future. People are being brainwashed into accepting their lot on the lie of there being no alternative when there is such imaginable wealth in the hands of few people whose power and influence dictate its distribution.

From a macroeconomic perspective, the bottom line is that people with good wages and employment security spend their money in their local communities and the wider economy which in turn support local and national businesses. It seems the Chancellor, by suggesting he has to plug the hole in the finances either by higher taxes or public sector pay freezes, is displaying a deliberate ignorance, dictated by ideology, of the macroeconomic importance of people having money in their pockets. Let’s remember that one person’s spending is another’s income. It is fundamental!

To conclude this week’s lens, it is only right that we bring our readers’ attention to an editorial in the Guardian which highlighted that:

Coronavirus has thrown into sharp relief the inequalities in Britain. The bottom fifth of the working population have seen incomes cut sharply and their savings reduced to nothing. For the poor, there’s little or no cash to furnish even the barest of Christmases, while those at the top have seen cash pile up in bank accounts.

And then went on to criticise Sunak by saying that:

‘he continues to peddle the myth that the extra government borrowing during the pandemic means that he has to make “hard choices” to “balance the books”. The chancellor is softening the ground for austerity policies. Mr Sunak is making an ideological choice by using the wrong model of the economy. If he does not relent then he will be responsible for unnecessary unemployment and poverty.

It then urged Sunak to rethink his future policies by recognising that:

‘the government can take responsibility for maintaining the total level of spending in the economy at level that keeps the country as close to full employment as possible where a working week is at a reasonable length and paid at a reasonable wage.’

This is a moment of great change. A moment of great opportunity to create a fairer society for all. The economist Herman Minsky wrote: “a necessary ingredient of any war against poverty is a program of job creation; and it has never been shown that a thorough program of job creation, taking people as they are, will not, by itself, eliminate a large part of the poverty that exists”.

Unemployment and its associated economic and social ills could be mitigated by the introduction of a government-backed Job Guarantee, not only to deal with the economic fall out from the pandemic which will continue for some time to come but also act as a just transition mechanism as we address climate change. As a macroeconomic tool, it offers a cyclical approach to unemployment that would create a more stable economic environment to deal with the ups and downs of the economy with the added advantage that working people are not left to perish when times get tough.

Instead of talking about monetary scarcity and unaffordability, an argument which dominated the narrative for decades, the debate must now move to how we can create a more sustainable and equitable future in the context of the distribution of finite real resources and who gets them.

Society, through its elected government, has to decide its priorities. Real and sustainable human and planetary well-being delivered by powerful states with the power of the public purse governing in the interests of their citizens? Or a rehash of the current economic model which has at its heart a greenwashed control by global corporations.

 

Event Recording

GIMMS’ event “Phil Armstrong in Conversation with Neil Wilson” is now available as a podcast via the MMT Podcast. Our thanks to Christian Reilly for publishing it.

 

The MMT Podcast #75 Neil Wilson & Phil Armstrong: In Conversation

 

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The post Just getting by is not enough appeared first on The Gower Initiative for Modern Money Studies.

The deceitful image of money scarcity has no place in our society.

Hands of two women. A younger woman holding the hands of an elderly woman.Image by Sabine Van Erp from Pixabay

Society is indeed a contract. It is a partnership … not only between those who are living, but those who are dead and those who are to be born.

Edmund Burke
Reflections on the French Revolution – 1870

 

In the news this week the government did yet another turnabout following Marcus Rashford’s campaign and public pressure by announcing a £170m winter grant scheme to support low-income families. During the same week, the Trussell Trust reported that there had been a 47% rise in the number of parcels distributed via its networks in the 6 months to September 2020 compared to the previous year; that more than 1.2 million parcels were distributed, of which 470,000 were to children. And this was, it suggested, just the tip of the iceberg as these figures did not include the number of people helped by the numerous local organisations, independent food banks and local authorities who have stepped in to support their communities.

Whilst the Trust attributed some of these increases to the pandemic, which has had a devastating, effect the Trust was clear as to the underlying reasons why people need support. The key issues were related it said to a fundamental lack of income which has left people struggling to afford the essentials. As Emmie Revie, the Chief Executive of the Trust commented to the Guardian:

 

‘We have to find better ways of supporting one another as a society than leaving people to rely on food charity. It’s not just about ending food banks, it’s about finding an alternative to the need for mass distribution of charity food in the fifth wealthiest country in the world.’

 

The threads of poverty lie in adherence to a failed market-focused economic ideology and the government policies and spending decisions that result from it. Child hunger is just one of many interlinked consequences and research published this week by the Living Wage Foundation showed that during 2019/20 nearly three-quarters of independent care workers in England were paid less than the real living wage. They are, it said, among the 5.2 million workers in low paid, insecure jobs – 1.3 million of whom are key workers. The analysis noted that care workers earn an average of £8.50 per hour and 24% are on zero-hours contracts. It, like the Trussell Trust, highlighted the existing inequalities in our society which has hit the lowest earners the hardest and that was before the pandemic struck. Whilst the nation clapped with Boris Johnson Tabitha, a care worker, said:

 

‘I feel like a Roman Gladiator going into the ring on a night shift. Everyone is clapping for you, but you’re pitting yourself against a deadly disease without the proper pay and protection.’

 

As the government has increasingly ceded its responsibilities for its citizens through cuts to spending on public infrastructure both local and national, which in turn has led to an ideological and financial response at local level as private profit-seeking companies were invited to tender for contracts to deliver social care services, the consequences have been devastating. For those being cared for as much as those doing the vital work of caring for others.

As the government lauded its financial acumen in managing its accounts, its decisions have led to a vicious cycle of deprivation and poverty and public infrastructure decay. The connections are irrefutable. Surely it must dawn on the nation soon, as government and other institutions begin to wind up and reinforce the household budget narrative in support of action to get the public finances ‘back in order’ after all this spending, that its health and economic well-being is being reduced to one of balanced budgets and unaffordability.

At the same time as Rishi Sunak suggested that he may increase capital gains tax to pay for billions borrowed and the COVID-19 debt which is supposedly racking up, the Resolution Foundation published its report entitled Unhealthy Finances: How to support the economy today and repair the public finances tomorrow. In its report, it focused specifically on the dual challenge it believes the government is facing ‘to ensure that there is sufficient fiscal support through the crisis and recovery, and setting fiscal policy on a sustainable path.’

Even though it said that the government should commit not to start such consolidation until the economy had recovered, it still claimed that the government must do what is required to ensure that the public finances are sustainable and adopt a balanced current budget rule.

In the report, it suggested continuing to use low interest rates as a tool for supporting the economy and noted the fiscal damage being caused by lower tax receipts and higher spending. It proposed, amongst other things, reforming the tax system to raise revenue and imposing a health and social care levy to provide any additional revenue required.

Here we have all the usual implied but false language narratives about government spending – taxing to spend, borrowing and unsustainable public debt, repairing the public finances, financial sustainability, balanced budgets.

We’ve been here many times before and clearly the establishment is determined not to lose control of that narrative. The fightback is in full swing. The deficit and debt worrywarts are working overtime to keep the public in line. Heaven forbid that people should learn the truth about how the government really spends!

However, as that knowledge is going more mainstream, questions are being asked as it is becoming ever clearer that human and planetary well-being lies with government choice, i.e. who gets the money. It is therefore intolerable to think, in the light of this growing understanding of the spending capacity of government, that government and think tanks are suggesting that taxes be increased to pay for this imaginary round of borrowing and the subsequent imaginary national debt which has arisen from it.

Whilst one could certainly make a case for reforming the whole tax system to ensure a fairer distribution of wealth, the justification by the Resolution Foundation or the Chancellor for increasing taxes does not stack up for the following two reasons:

  • That such action would quite simply take money out of the economy at a time when it would still be recovering from the economic effects of the current crisis compounded by previous cuts to public spending which have had a cumulative effect on the economy. Private debt levels prior to the pandemic were already high but have soared by 66% since May to £10.3bn. The number of people in serious debt has doubled since March rising to 1.2m with a further 3 million at risk of falling into arrears. Raising taxes with this scenario in mind would seem self-defeating and destructive.
  • That taxes don’t fund government spending and cannot be used to reduce public debt

Quite simply the ‘taxes fund spending’ story is just a lot of accounting smoke and mirrors to suit an agenda which aims to keep people downtrodden and accepting their fate. The trope of financial unaffordability is deep within our own household budget psyches and shifting such narratives can be hard work. Much depends on loosening our attachment to them through knowledge and more importantly the desire for something better.

Taxes will not pay off the national debt any more than they will boost financially a failing social care system. Our public services including social care and the NHS are in crisis as a result of government choices, not a lack of tax money the government can collect. Privatisation and the profit motive, along with public spending cuts have both played a role in destroying what could and should have been funded publicly.

The deceitful image of money scarcity, with government reliant on taxes and borrowing to spend, has no place in our society as children go unnecessarily hungry and our young people face a gloomy future.

In this week’s Guardian, Patrick Collinson wrote that the COVID-19 crisis could have a lasting impact on young people’s pensions: indeed, the lives of young people have been turned upside down with future employment prospects damaged and life opportunities curtailed. However, future private pensions are the least of the worries of young people as they start out in life. It is the government’s role now to ensure, through its policies, that young people can thrive and build themselves a future and decent state pension provision should be a significant part of that.

We need to expose the con of private pensions which are reliant on fickle markets and a stable economy. Margaret Thatcher’s economic vision which was inspired by Friedrich Hayek and Milton Friedman reflected her belief in the superiority of the market. The idea implicit in this dogma was that the welfare state deprived people of the opportunity to make their own provision for old age. Thus, we witnessed the opening up of the market for private pensions in an attempt to weaken the state’s own pension provision. The current crisis is exposing their weakness which even before the pandemic was becoming clear and invites us to question the state’s ideological reliance on the private pension sector.

The solutions are to provide decent state pensions to give retired people financial security and ensure a decent standard of living and to reduce the pension age. The current round of retirement age increases is based on the lie that state pensions will become increasingly unaffordable as the birth rate falls and tax take reduces which will, it is claimed, cause an unacceptable burden on future taxpayers. We need to break the false connection between the payment of tax and receiving a pension.

The question of how it can be paid for doesn’t arise if we understand how the government spends. It would be paid for in the same way the government always pays for things; by creating the money out of nowhere. A simple transfer with a few computer keystrokes authorised by the Treasury and carried out by the Central Bank. We need to knock on the head the idea that a portion of our tax is being collected somewhere in a savings pot to be divvied out at retirement or indeed that taxes serve to pay for public services.

Assuming that government has invested through sufficient spending on public and social infrastructure including education, training, new technologies and by embracing full employment policies, then an earlier retirement and a good state pension is possible. Such investment will not put a financial burden on the lives of future generations, it will enhance them and those of retirees. We just have to decide as a nation how we want the real, but finite, resources we have at our disposal to create a better life to be shared out.

Earlier this week, there was an interesting exchange of views on a Facebook labour group when someone posted the following:

 

‘You do realise the Bank of England are printing new notes by the million. All we will get from Johnson is a bankrupt country.’

 

It is disappointing to observe in that post and the thread that followed that some individuals on the left seem to get pleasure from continually shooting themselves in the foot. By excoriating what they see as a reckless Tory government because in their view it is spending too much and driving us towards bankruptcy or hyperinflation, adds a certain touch of irony to the criticism since it was the Conservatives who used similar arguments against Labour’s spending plans in the last election. It all boils down to where is the money going to come from and who is going to pay?!

This type of scaremongering is damaging to a left-wing agenda and is borne of lack of knowledge. It is regrettable that, even when presented with the facts about how the government spends, many still choose to persist in reinforcing the myths and ignore the fact that it is impossible for the UK government to go bankrupt or run out of money and that government does not need our taxes to pay for public services not even the taxes of the rich. Ultimately, that is to deny monetary reality and what that knowledge could mean for any future progressive government’s spending plans if such a government were to exist although that is currently quite another story!

If we are going to debate, let’s do it from a position of knowledge rather than making exaggerated and untrue statements about how we are all going to hell in a hand cart because the Tories have spent too much. Let’s remember that in 2010 the same arguments were being levelled at Labour following the Global Financial Crash; another era of suffering and hardship for many. And that it was the Tories who said in 2010 that there was no alternative to cuts to public spending to get the public finances back in order and yet have suddenly without a problem found the monetary wherewithal to save the economy from the worst effects of the crisis. For the left to use this argument against the Conservatives is counter-productive to future progressive agendas.

The household budget ping pong played by successive governments at election time, which examines critically the fiscal record of a government or asks how its spending plans will be paid for, has done great damage to society and the economy. Such arguments overlook the real measures of economic health relating to how government serves its citizens in real social improvements from the provision of health and social care, education, policing, a social safety net and public transport networks to local service provision of libraries, municipal parks and refuse collection. All these things which previously were determined as the public good have been attacked by a governing elite serving its own interests and those of its financial donors.

As Peter Fleming, professor of business and society at City, University of London wrote:  Austerity [redefined] these things as fiscal liabilities or deficits rather than shared investments in common decency’.

Let’s argue for a better, fairer and kinder society based on real knowledge of monetary reality and not baseless statements which only serve to promote continuing political inertia on the left in terms of understanding how money works and how that knowledge fundamentally changes how we can respond to today’s and tomorrow’s challenges.

 

Newly published

This week, we published a fact sheet on Negative Interest Rates

Negative Interest Rates

and a new paper by Phil Armstrong and Warren Mosler

Weimar Republic Hyperinflation through a Modern Monetary Theory Lens

 

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The Gower Initiative for Money Studies is run by volunteers and relies on donations to continue its work. If you would like to donate, please see our donations page here
 

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Cummings Creates Civil Service to Take Over from Private Consultants, Who Took Over from Civil Service

Published by Anonymous (not verified) on Sun, 08/11/2020 - 11:17pm in

Yesterday Mike put up a piece about Dominic Cummings’ reinvention of the wheel. Presumably he did so after he received an important report from the Department of the Bleedin’ Obvious. Boris Johnson’s pet polecat, or the distinguished advisor from Epsilon 6, as Spitting Image portrays him, has finally woken up to the fact that the legions of private consultants they brought in to do the work of the civil service, is too expensive and simply isn’t as good as civil servants. So he has created a new official department, called the Crown Consultancy. As an example of the exorbitant cost involved, Mike quotes the figures for the amount the Tories spent between 2016 and this year on just eight private consultancies – which include the usual rip-off merchants like KPMG, Deloitte and McKinsey. It’s £2.6 billion. The work obviously should have been left to the civil service, who, like other state departments, should have been properly funded with an appropriate level of staffing. Instead of being cut to pieces because the Tories don’t trust experts.

The fact that civil servants are far more efficient than private sector consultants should hardly be a revelation, no matter how new it may seem to Tories and other fans of outsourcing. It’s been known for over a decade and a half. William Blum, a long-time opponent of American imperialism and capitalism, has this little snippet in his 2014 book America’s Deadliest Export: Democracy: The Truth About US Foreign Policy and Everything Else (London: Zed Books).

A study of 17,595 federal government jobs by the Office of Management and Budget in 2004 concluded that civil servants could do their work better and more cheaply than private contractors nearly 90 per cent of the time in job competitions. (p. 257).

Privatisation and outsourcing doesn’t work, and the evidence has been staring everyone in the face for decades. But the decrepit, rotting facade of Thatcherism is propped up because it enriches big business, who in turn line the pockets of the Tories and Blairite Labour with corporate donations, as well as giving them seats on their boards.

While giving poor service, poverty and starvation to everyone else.

See: https://voxpoliticalonline.com/2020/11/07/reinventing-the-wheel-after-replacing-civil-servants-with-expensive-private-consultants-cummings-wants-to-replace-them-with-a-civil-service/

We can afford to choose public purpose spending

Published by Anonymous (not verified) on Sun, 08/11/2020 - 8:06am in
Public duty and the public purpose? Or, self-serving interest? Politicians have a choice. We have a choice.

A row of white doors along a wallImage by Arek Socha from Pixabay

The problems we face did not come down from the heavens. They are made. They are made by bad human decisions, and good human decisions can change them.

Bernie Sanders

 

In this week’s news, the economic train crash continues as it was announced that more than 7200 workers are set to lose their jobs as the pandemic continues to take lives and cause huge economic suffering to the lives of the still living with worse yet to come.

Boris Johnson said this week at one of the government briefings that we should be ‘humbled in the face of nature’, that the NHS could collapse if the government failed to heed the warnings of the experts and that he was not prepared to take a risk with the lives of British people. Those statements should have been the moment for a sharp intake of national breath in disbelief at the spinning of a story which belies a cynical sleight of hand to shift the blame from the real culprits and display feigned empathy that it has the interests of the nation at heart. Through 10 years of austerity politics, the government has willingly taken risks with the lives of British people with its policies and spending decisions which have stripped down our public infrastructure and led to over a hundred thousand preventable deaths through cuts to health and social care spending and social security reforms.

On the one hand, we should indeed be humbled in the face of nature as the consequences of human activity linked to the exploitation of resources and excessive consumption as the price for seeking the god of growth and profit begins to be made very clear. But that was not Johnson’s intention. It was yet another example of how the government manipulates the narrative through its use of words to shift the arguments away from its own disastrous policy and spending decisions that have exposed the gaping holes in our public and social infrastructure.

When the Prime Minister says we need a second ‘lockdown’ to stop our hospitals being overwhelmed, that cannot be the fault of nature. When we are short of 100,000 NHS workers of which 44,000 are nurses, that cannot be blamed on nature. When the Cygnus report published in 2016 exposed the serious gaps in Britain’s pandemic response plans, nature had no role to play.

Alluding to nature aims to take the heat off the government to make as if it were not responsible for this epic train crash of policies and spending decisions. We have limped from one mess to another; each crisis building incrementally consequences that could have been avoided. From successive financial crises to the arrival of Covid-19 and the subsequent government management of it. These were manmade not nature made, as were the disastrous solutions.

Austerity has brought us here and austerity kills and has killed. It is as David Stuckler explained in his book The Body Economic: Why Austerity Kills’

‘an economic ideology [which] ‘stems from the belief that small government and free markets are always better than state intervention. It is a socially constructed myth – a convenient belief among politicians taken advantage of by those who have a vested interest in shrinking the role of the state, in privatizing social welfare systems for personal gain.”

Our country didn’t just fall into this situation by accident; it happened as a result of a toxic economic orthodoxy which dominates policymaking at the heart of Westminster and indeed beyond nationally and globally from national governments to global institutions such as the IMF, the World Bank and the World Economic Forum. The destruction of our public and social infrastructure, in favour of market solutions, left us totally unprepared and yet still the market solutions command power. As public money continues to be dished out to non-accountable, profit-hungry companies, corporate welfare reigns at the expense of a publicly delivered, managed and accountable public service model. The corporatisation of everything is at a terrible human cost. The massaging of the public purse for corporate benefit, not public purpose. And anything goes!

This was further emphasised this week when Simon Stevens, a former advisor to Tony Blair who worked for the US private healthcare company United Health and now heads NHS England said ‘there is no health service in the world that by itself can cope with coronavirus on the rampage’. Whilst one cannot deny the enormity of this global health and economic challenge, this is yet another attempt to bypass or ignore the realities of a lethal economic ideology which has as one of its tenets the belief that cutting public spending is a necessary policy to balance a nation’s budget.

Ten years of public spending cuts in real terms, the ongoing damaging reforms to the NHS which have fragmented it and commercialised it; pared-down facilities and reduced number of beds (from 300000 in 1987 to 141,000 today), 100,000 fewer NHS workers than needed; and the failure to acknowledge the Cygnus report, has left the UK insufficiently prepared for the emergency we now have before us.

This was cruelly demonstrated by the realities of the Nightingale Hospitals which were set up to manage the predicted overspill of Covid patients once established hospital beds had reached capacity. As a Keep our NHS Public publication revealed this week ‘the need for the existence of these urgently-created hospitals is a powerful illustration of how little wriggle-room exists in our hospital system and how resilience has been stripped away by chronic underfunding’. It also pointed to the fact that the Government had also failed to mention exactly who would staff the temporary hospitals when the nursing shortage was already so acute. ‘Robbing Peter to pay Paul’ was always going to be revealed as a huge PR exercise which led people up the wrong path but could not deliver.

Stevens also forgot to mention the pursuit of the same damaging neoliberal ideology arising out of the World Economic Forum’s concern for the financial sustainability of public health care which Stewart Player covered in this article from 2017. It showed the WEF’s influence in developing a world vision for health care and whose ideas we have seen reproduced here in the UK with the help of private consultancies such as McKinsey and Co.

It particularly looked at the ‘fiscal pressures to curb expenditure’ and the ‘wider economic context of high levels of public debt and stagnant state revenue.’ It examined in particular ‘various forms of rationing and shifting the cost burden onto individuals and employers through … mandatory insurance’ or ‘increasing tax revenue’ or potentially increasing healthcare productivity ‘through delivering more services with fewer resources’ which would ‘go a long way to ensuring their financial sustainability.’

This is the same Simon Stevens who has been a significant player in the damaging reforms to a now fragmented NHS to cut costs and make it a nice profitable opportunity for private healthcare companies.

Whether we talk about the NHS, education or other vital public services which provide the foundations for a healthy economy, the public is continually being programmed to accept the narrative of the problem with public debt and the need for financial sustainability as much as it is being programmed to accept that the private sector does it better or indeed that volunteering can take the place of government intervention.

After the very necessary big spend of trillions of pounds (even if as left-wingers we can argue about the details of that expenditure) ‘there will be a price to pay’ is the mantra still being touted.

Whilst the government pours vast sums into private profit, we see an on-going denial of government responsibility for public well-being through its spending decisions. As the government’s corporate friends gain access to the public purse with no seeming limits, our public support systems are denied sufficient funding.

From its decision not to extend free school meals, lauding of public generosity in donating to food banks or other charities to its appeals to people’s human empathy with invitations to volunteer, we are being sucked into accepting these things as normal. As they reinforce the narratives of fiscal responsibility, the public is being sucked into accepting that government has no role to play in public purpose. By the time the nation notices this trickery, it will be too late. We will have fulfilled willingly David Cameron’s Big Society dream without realising where it is leading us.

Whether its Lord Stuart Rose, Chairman of Ocado, who said on Channel 4 News this week ‘We have to be able to protect our economy and generate the sort of income that tax provides so that we can pay for the hospitals, pay for the services and keep the NHS going.[…]We’ve now borrowed £400bn this year that’s £40,000 roughly for every taxpayer in the UK … it is going to be a deep hole that we are going to have to dig ourselves out of later. Let’s talk about the 20-30-year-olds who are going to have to live with that for the next 20 or thirty years.’

Or the former Shadow Chancellor of the Exchequer Ed Balls suggesting that whilst governments don’t need to think about returning to austerity, spending cuts or tax rising ‘it’s gonna take fifty years or more to recover from the fiscal consequences of this pandemic and then going on to claim that ‘it was the children born in the 50s, 60s and 70s who ended up paying for the aftermath of the second world war and it will be future generations who will bear some of the burden of dealing with the pandemic …’

It shows very clearly how stuck politicians and business leaders are in the economic orthodoxy which has done so much harm already and their willingness to carry on with that harm. The suggestion that the children born in post-war years were burdened with paying for it through higher taxes fails to acknowledge that that spending created the public and social infrastructure from which they all benefited in successive years as did the pursuit by successive governments of full employment at least until the 70s when neoliberal orthodoxy began to take hold. With public ‘debt’ at 248% of GDP in the post-war period, nobody suffered, and everyone gained.

That investment which created the NHS, an education system and good local government providing essential services, all helped to enhance people’s lives and by dint of that construct a fairer economy. Later adherence to the concept of fiscal responsibility and its damaging bedfellow austerity created the exact opposite. Indeed, as David Stuckler observed in his book referred to earlier:

‘Had the austerity experiments been governed by the same rigorous standards as clinical trials, they would have been discontinued long ago by a board of medical ethics. The side effects of the austerity treatment have been severe and often deadly. The benefits of the treatment have failed to materialize. Instead of austerity, we should enact evidence-based policies to protect health during hard times. Social protection saves lives.’

Both of these public figures are promoting an idea that has had its day. If only they knew about modern money realities – or perhaps they do?

That the government:

  • is the monopoly issuer of the £ sterling
  • has to spend before anyone can pay their tax
  • doesn’t have to borrow to spend. That the term ‘borrowing’ is purely a convenient sleight of hand that suits politicians to promote to justify their spending decisions and serve corporate interests.

And that:

  • the size of deficits in themselves are not a suitable measure of any government’s economic record
  • the only burden that future generations will face is one caused by a government that has failed to invest today in the real resources whether its people or the things used in the production of the goods and services which enhance our lives and make a better tomorrow.

As Thomas Fazi, co-author of Reclaiming the State published in 2017, wrote a year later:

“One of the key insights [of MMT] is that the ‘deficit’ numbers by themselves – whether in percentages of GNP or in absolute quantitative terms – are meaningless. The government can ‘sustain’ any amount of deficit […] to pay its obligations. Of course, this is not a license for irresponsible spending. Creation of money, and its utilization in ways which do not enhance productive capacity of the domestic economy are sure to cause harm to the economy. Rather, MMT provides us with a license for responsible spending. If there are worthwhile projects which will utilize resources currently lying idle, then there is no need to be scared of the deficit numbers in spending on these projects. Viewed in this light, the project of building a million houses is not constrained by the budget of the government. Rather it is constrained by the availability of resources which are required for this purpose. If there is idle productive capacity in terms of labor, land, and materials, spending in this area will utilize them to the maximum. If the capacity does not exist, then a carefully balanced spending strategy, which builds capacity in a way coordinated with the increasing demand for utilization of this capacity, can be funded by deficit financing, without causing harm to the economy. Of course, it goes without saying that this requires skilful management and planning”.

We need to re-create a model of good government in which politicians dedicate themselves to the concept of public duty to serve the public purpose and not their corporate friends, or themselves via the revolving door.

Newly published

 

This week, we published guides to quantitative easing, or QE.

Basic information is available in our FAQs here

and a fuller explanation is in our QE Fact Sheet

 

Upcoming Event

Phil Armstrong in Conversation with Neil Wilson – Online

November 15 @ 14:00 pm – 15:30 pm

The GIMMS team is delighted to host its next ‘in conversation’ event at which Phil Armstrong will be talking to Neil Wilson

Neil is an expert in finance and information systems and one of the UK’s leading thinkers about MMT. After more than 30 years in the systems business, Neil learned the hard way that operations rarely follow the manual. Moving from network crashes to financial crashes, Neil was intrigued as to whether the economy could be fixed with a reboot – which lead him to Modern Monetary Theory (MMT). His work challenges the high-priesthood of Important Grey Men who refer to people as ‘resources’ and who believe debt is bad for government and good for you.

He dreams of a world where everyone who wants a living wage job can find one, close to their home, their friends and family.

You are invited to join us for this informal event which we are sure will be both stimulating and insightful.

Register via Eventbrite

 

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The post We can afford to choose public purpose spending appeared first on The Gower Initiative for Modern Money Studies.

A Total Fiasco

Published by Anonymous (not verified) on Mon, 02/11/2020 - 5:42pm in

England’s response to the coronavirus pandemic now relies on unskilled teenaged call centre workers, taking the place of experienced clinicians.

By George Monbiot, published in the Guardian 28th October 2020

Until a working vaccine is released and widely used, our best hope of controlling Covid-19 is testing, tracing and isolating people who might carry the disease. Even after a vaccine is produced, test and trace will remain essential, as inoculation will not be completely effective, or universally accepted.

Today, it’s our only real hope of preventing repeated lockdowns, and other great interruptions to our lives. Yet the English system on which our freedoms depend is a total fiasco. The government has so far spent £12bn on test and trace. But, as a result of catastrophic mismanagement, it might as well have flushed this money down the toilet, as tracing has failed to reach the critical threshold (roughly 80% of contacts) needed to reduce the infection rate. Last week, after a further fall, the figure stood at just under 60%.

To put this in context, £12bn is more than the entire general practice budget. The total NHS capital spending budget for buildings and equipment is just £7bn. To provide all the children in need with free meals during school holidays between now and next summer term, which the government has dismissed as too expensive, is likely to cost about £120m: in other words, just 1% of the test and trace budget.

Because so much about this essential programme has been shrouded in secrecy, it’s not easy to see where the money has gone. But the breakdown of the system appears to result at least in part from its oversight by corporate executives (led by Dido Harding), with no relevant experience in public health and a track record of failure, rather than by professional public servants.

The government has created an opaque and unmanageable hybrid system of public and private provision, in which favoured corporations have received vast contracts without competition, advertising or even penalty clauses. Public health, reorganised in the midst of the pandemic to give even greater control to Harding and her chums, is in semi-privatised meltdown.

But that isn’t even the half of it. I’ve been talking to someone working on test and trace in a call centre subcontracted to Serco. I’ve confirmed their identity and job, but to protect their position, the worker wants to remain anonymous. Here’s what this person told me.

Until last week, the workers at the call centre were doing the simplest job in the tracing chain, calling those who have been identified as contacts of infected people and telling them to isolate themselves for 14 days, giving them some scripted advice and collecting a small amount of data. But last week, the call centre announced that all the workers on this contract were being “upskilled”. Instead of making these simple calls, they would now be calling infected patients and discovering all their contacts over the past fortnight. To use the official terms, they have suddenly been promoted from level 3 call handlers to level 2 clinical contact caseworkers.

In its advertisements for this job, the NHS explains applicants must be at Clinician Band 6 level, who will be working as part of a team of “experienced clinicians”. You must have a health or science degree or “demonstrable equivalent experience or qualifications”; experience in “a field related to public health or health and social care services as a practitioner” and “registration with the relevant professional body”. Among your tasks are “conducting a public health risk assessment”, “providing public health advice” and “using your clinical knowledge to help escalate complex cases”. Anyone accepted for this role would be “provided with appropriate training”.

But the workers at the call centre who have been “upskilled” to this level are mostly school-leavers and students, with no relevant qualifications. While the job is officially advertised at between £16.97 and £27.15 per hour, they are all being paid the minimum wage, which means £6.45 for the 18- to 20-year-olds (most of them) and £8.72 for over-25s.

Serco issued an internal notice explaining this change, which was leaked to the press. From 21 October, it said, “a number of experienced agents from Serco and Sitel will assist with index case tracing”.

What it didn’t say is that some of these “experienced agents” are 18 years old. The “appropriate training” for the magical transformation to “experienced clinician”, my contact tells me, lasted four hours. It was conducted remotely, as they now work from home, and consisted of a PowerPoint presentation, an online conversation, a quiz, some e-learning modules and some new call scripts. “We weren’t asked if we wanted to ‘upskill’: there was no consultation and no choice. We were just told. No one felt able to say no.” After the announcement, “I spent three hours crying about it. Other people in the team were crying and having panic attacks.”

So how has it gone? “As you might have guessed, it’s an absolute shitshow.” During the first hour of the first day, three of the young tracers called people who had just lost someone they loved to Covid-19. The people they spoke to were in extreme distress. After these calls, all three tracers “were distraught and crying”, and unable to work for the rest of the day.

“We had no training in bereavement counselling. Just one page of speech bubbles, with a few Mickey Mouse baseline things to say: ‘if somebody is upset, be patient’, ‘give them time to talk’. It’s not going to help if someone has just lost their husband to Covid.

“Some of my colleagues are really struggling. People know their skillsets. We would never have applied for the job if this was what was advertised.”

The worker added: “We’ve had nonstop messages reminding us of our nondisclosure agreements. It means they’re bricking it because they know that it’s a really shit decision. They must know we are really unhappy.”

When I asked Serco to explain the decision to turn level 3 call centre workers into skilled contact tracers, it told me the instruction came from the government, so I should address my questions to the Department of Health and Social Care (DHSC). The department confirmed that it had made the decision. It seems outrageous that this crucial shift was not made public, but came to light only when the Serco memo was leaked.

The department has made two striking claims: everyone who has taken on this role volunteered for it, and the level 2 job has been split in half – two initial calls are now made to each contact, one by an “upskilled” call centre worker, and one by a “qualified health professional”, who dispenses medical advice and decides whether or not to escalate complex cases.

My contact flatly rejects both claims. “No, absolutely not. There wasn’t any consultation, we were just told ‘this is what we’re doing’.” As for splitting the level 2 job: “There is no other call by a trained clinician. It’s us who are asking the medical questions. We have to read out a list of symptoms and ask which ones they’re experiencing. ‘Do you have diarrhoea?’, ‘Have you experienced altered consciousness?’ etc. If the patients want health advice, we just tell them to ring 111. If they report very serious symptoms, I would flag that to a clinical lead, but it would have to be an immediate risk to self or others, and I would have to assess whether it reaches that level.” In other words, ordinary call centre workers, not professional clinicians, are “escalating complex cases”.

What this represents, without any public announcement, is not only a radical deskilling but also a further transfer of work from the NHS to the private sector. Level 2 contact tracers were health professionals employed by the NHS. Now they are call centre workers employed by Serco and Sitel. Public sector clinicians are replaced with unqualified private sector workers, on the minimum wage and eminently exploitable. Upon their judgments, our health, our freedoms, perhaps our very lives depend.

While public health is in meltdown, Serco’s shares are surging. It has made such profits this year that it is now considering a dividend. If it issues one, it will consist of money passed from us, via the government, into shareholders’ pockets.

And this is just what we can see. We know that billions have been spent on untendered contracts with private corporations, but much of the money dispensed so far is untraceable. It has been reported that, of the pandemic spending by the DHSC, an estimated £3bn is missing from public accounts. The Good Law Project is suing to discover how and by whom the money was spent. I keep thinking of George Best’s response when asked what happened to his fortune: “I spent a lot of money on booze, birds and fast cars – the rest I just squandered.”

At the same time, the NHS is so underfunded that it is now asking volunteers to fill critical positions. A recent series of advertisements called for applicants for the posts of project manager, lead data warehouse developer and business analyst to work unpaid, on contracts that would usually offer between £450 and £550 a day.

People ask me, “is this a cockup or a conspiracy?”. The correct answer is both. The government is using the pandemic to shift the boundaries between public and private provision, restructure public health and pass lucrative contracts to poorly qualified private companies. The inevitable result is a galactic cockup. This is what you get from a government that values money above human life.

www.monbiot.com

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