|Wazza on Who we are & what we are…|
|Neil Duncan-Jordan on Minutes of Meeting 24th Feb…|
Chasing the corporate tax avoiders & fighting the cuts
By David Wearing – article courtesy of http://www.newleftproject.org
My own contribution to the NLP cuts debate (more of a discussion, as it turns out) comes in two halves. Other contributors have placed some focus on future activism, and the second half of this piece will offer a few points on that subject, specifically on the task of making the political argument in favour of our position. To set that up, in the first half, I’d like to make some straightforward remarks about the issue of the austerity agenda itself; remarks which I believe most of us will broadly agree with.
1. The Shock Doctrine Comes to Britain
Today, Britain faces one of the greatest single social injustices of the post-war era in domestic politics. The weakest and most vulnerable in society are being forced to pay the costs of a crisis created by the reckless greed of the super-rich and the intellectual docility, or dogmatism, of policy-makers (Conservative and Labour). Because the financial and business sectors weild far greater influence over policymaking than the ordinary people who will bear the brunt of the cuts, the latter will pay a price they can’t afford for a crisis created by the former, who will themselves suffer no material penalty. Those costs will primarily take the form of public spending cuts of staggering size, being rushed through without serious thought but often with palpable glee by a cabinet stuffed with millionaires who clearly have an intuitive grasp of the concept of class interest, and of protecting their own at the expense of others.
No-one, not even the strongest supporters or opponents of the cuts, understands the true extent of what their effect will be. No precedent exists for such a massive and swift attack on the public sector of society and the economy, but what is clear is that many thousands of lives will be damaged, even ruined, in many thousands of real and personal ways, often irretrievably, as a result. Those people will be picking up the tab for a party they didn’t throw, and to which they were never invited.
The political justification for the government’s “emergency budget” was a straightforward confidence trick, as Richard Seymour notes in his article at the start of this series. When the financial crash exposed the utter bankruptcy – in every sense – of the hitherto prevailing free market dogma, the financial industry and the political right urgently needed to change the subject. A critical spotlight was fixed as never before on the economic ideology that had underpinned their wealth and power for 30 years, and its gaze had to be averted. They therefore invoked the spectre of a sovereign debt crisis, which the Tories shamelessly talked up throughout the election campaign, making ludicrous comparisons with countries like Greece, which they no doubt fantasised would turn into self-fulfilling prophesy.
The substantive causes of Britain’s deficit are, first, the collapse in tax revenue that resulted from the recession caused by the historic implosion of the financial free-market in the autumn of 2008, and, secondly, the huge fiscal stimulus that was required to prevent the recession from turning into a full-blown 1930s-style depression. With striking audacity, David Cameron chose to pretend that these events had never occurred, instead blaming the deficit on the sins of leftist “big government”, thus also pretending that he hadn’t himself supported Labour’s spending plans until after the crisis broke. In truth, public spending as a percentage of GDP in the pre-crash New Labour years was consistent with the levels under the previous Conservative administrations. Say it again: the financial crash, not public spending, is the cause of the deficit.
However, this diversionary, defensive manoeuvre was not the limit of the right’s ambitions. The crisis also provided an opportunity. From the time of the Levellers, to the Chartists, right up to the present day, wealthy elites have feared and loathed the idea of democratic government serving the public good, knowing that it implies a direct threat to their privileges. A national debt crisis, real or invented, offers the perfect opportunity to finish the work Thatcher started and kill off the despised welfare state, portraying it (unlike, say, Trident, or low banking and corporation taxes) as an expensive luxury.
In other words, the historic failure of neo-liberal economics is been used to secure the final victory of neo-liberalism over social democracy; of wealth and power over the general public.
So while the banks continue to enjoy the support of big government and the nanny state, raking in massive profits and undergoing none of the substantive reform needed to prevent a second and probably far worse crisis, the Guardian reports a study showing that “the poorest 10% of households, earning under £14,200, face cuts equivalent to 21.7% of their household income. Households earning £14,200 to £16,900 face cuts of 13.6%, with about 7% for those in the middle of the spectrum. The richest, those earning over £49,700, will suffer a cut of just 3.6%”. Furthermore, there is also an understanding amongst credible observers that these cuts, by depressing demand and confidence, threaten to push a weak economy back into recession, which again will hit the poorest hardest, with mass unemployment permanently scarring a generation of young people.
In The Shock Doctrine, a book which ought to be required reading for every registered voter in Britain, Naomi Klein demonstrates that time and again, neo-liberal governments have exploited or created emergencies in order to circumvent democracy, carrying out swift and devastating attacks on popular public sector programmes while civil society is too disorientated to resist. George Osborne’s “shock and awe” blitzkrieg fits squarely into that model. Before polling day, only the Tories made a specific virtue of their deficit fetishism, and in the event polled 36.1% of the popular vote, just 1.7% more than Neil Kinnock’s Labour Party polled in their seminal 1992 defeat. What allowed the Tories to take power and enact their policy programme was the LibDems post-election volte face, which sent the latter, at the first whiff of high office, marching in quickstep towards the Tory spending cuts that they had opposed just days before. The formation of the coalition government was accompanied by the announcement of a grave fiscal emergency; an emergency that Nick Clegg, Vince Cable and David Laws had suddenly noticed when the chance arose for them to enter government.
There then followed an “emergency budget”, sadistically slashing welfare payments in the midst of persistent unemployment, and a demand that government departments draw up plans for budget cuts of up to 40% (a number worth allowing your imagination to dwell upon) within a matter of weeks, prior to a further spending review.
As many credible economists and commentators have pointed out, this is not only unnecessary but actively dangerous. The deficit is entirely manageable, and can be dealt with over a far longer term through a mixture of sustainable growth, progressive tax rises, and cuts to areas of spending that the poor do not rely upon, such as foreign wars and weapons of mass destruction. The real priorities for the economy are to establish a recovery that creates jobs (requiring sustained or increased government spending to inject demand) and to effect sweeping reform to the financial sector before another crisis strikes. The “emergency budget” makes the first problem far worse, leaves the second problem untouched, and creates a whole set of new problems into the bargain.
In short, there is (at least from the point of view of the public, rather than elite interest) no emergency requiring this budget. The emergency is the budget.
Popular efforts can and must be made to prevent the coalition from implementing this cruel agenda and to defend ordinary people from a potentially devastating attack on their basic livelihoods. Because of the nature of the cuts, the public sector unions, as democratically organised groups of employees on low and middle incomes, will clearly have a key role to play. But this will be no means be the limit of the campaign. The Fawcett Society’s legal challenge to a budget whose costs will be borne disproportionately by women shows that civil society is capable of throwing up many novel and innovative challenges to the ConDem’s austerity measures. The pain of the cuts will be felt by such a range of people, and observed with mounting horror by an even wider range, that a broad front of opposition is highly likely to take shape. That will be necessary, because the scale of the threat is historic, and the vested interests behind the cuts agenda are powerful. But popular movements have demonstrated their own power repeatedly in our own political history, so the result of the coming battle is by no means pre-ordained. Ultimately, it depends on us.
2. The Message
Winning the battle against the government’s agenda will certainly involve forms of direct action, as Tom Denning discusses in his contribution. It will also involve the task of explaining the stance we are taking, and it is this latter area that I would like to focus on now.
What I believe I have demonstrated, or underlined, in the first half of this article is the fact that we have a compelling, powerful and persuasive case to make. It is an argument that can be made in clear and plain English, and in terms that convey the fundamental character of the issue; its scale, its causes and its dynamics. It is a message that can form the basis of substantive agreement between socialists, social democrats, left-liberals and Greens. But more importantly, it is a message that is likely to resonate amongst a wider British public that, as Johann Hari reminded us before the election, remains consistently to the left of all three major parties.
That resonance will only increase as the effect of the cuts begins to be felt. In his article in this series, Sunny Hundal discussed how and where to direct activism that “gets people angry”. This is unlikely to be necessary. When you can’t provide a decent, dignified life for your children, when you see friends, relatives and colleagues suffering for a crisis they played no part in creating, you don’t need an activist to come along and persuade you to object to it. You will have got there just fine by yourself. In fact, the basic and plain injustice of ordinary people being forced to pay the bankers gambling debts is one that, when it enters the realm of personal experience, is likely to bring even some conservative voters into the anti-cuts campaign, at least in specific areas that matter to them. This is going to be an issue that frequently transcends politics and speaks to people’s basic human sense of right and wrong.
The challenge for activists therefore is not to generate objection to tightening economic circumstances, but to offer an account of how those circumstances came about. The US Tea Party movement is an example of how badly things can go wrong when the hard right – rather than the broad left – provides the explanatory narrative in times of economic hardship. This is why it is critical for us to help create an accurate understanding of what is taking place. We have a responsibility to prevent popular anger being exploited and misdirected at immigrants and other scapegoats. And we have a responsibility to expose the absurd lie that our country cannot afford to allocate its resources in accordance with basic levels of decency and humanity.
The task of making our case brings with it its own challenges. Sunny is right to be conscious of the fact that concepts such as class and trade unionism have been corrupted in prevailing discourse. “Class war” has become a political swearword, invoked when Gordon Brown mentions that some Tories went to Eton, but not when the son of a family of bankers becomes Prime Minister and passes the costs of a banking crisis onto the poor. New Labour nodding dog John Prescott is habitually referred to as the “old class warrior”, unlike Margaret Thatcher who actually deserves the description. In the event of any industrial dispute, the media operates on the default setting that the union is always wrong, irrespective of the facts, and that striking is always wrong, irrespective of whether other options have been explored and shut down. Such is the quality of mainstream political debate.
A relentless propaganda campaign has been waged by the right and the corporate media for decades to render toxic the language, practical tools and analytical concepts of the left. But Sunny should take heart from the fact that, as the Johann Hari article cited above shows, the public has a surprising capacity to resist such propaganda; not always, but very often. What should also encourage him is that, while the left remains under constant attack from its powerful enemies, the substance of its analysis does retain the redeeming features of being accurate, relevant and highly persuasive.
The first section of this article shows that concept of class, or at least of economic and social hierarchy, and of disparities in power, is indispensible to any serious attempt to understand the reality of what is happening. The cuts agenda is intrinsically bound up with conflicts of interests between different socio-economic groups, between the elite and the rest. Because it is correct in a way that requires no complex or tenuous explanation, this analysis is not one that can easily be batted away with the standard right-wing platitudes and clichés.
This is all the more true if we pay attention to the language that we use to convey our ideas. For example, my description of trade unions as “democratically organised groups of employees on low and middle incomes” shows that it is a simple matter to present unionism in a way that emphasises its legitimacy and importance to democracy and fairness in economic life, while simultaneously undermining attempts to portray it as something sinister and dangerous to the interests of ordinary people.
We must be mindful of the challenges to our arguments, and give serious thought to how we can overcome them. But equally, returning to Hari’s point, we should not allow the distorted and detached nature of debate within the political class to blind us to the realities of public opinion on the ground, which may well be highly receptive to our analysis of the austerity agenda. In a recent poll, 72% of respondents said that “ordinary voters” have little or no influence on government policy, with 73% saying that “large companies” have “a fair amount” or “a great deal” of influence. When asked what the level of influence ought to be, 87% said ordinary voters should have “a fair amount” or “a great deal” of influence, while 31% said large companies should have the same.
The poll also showed that 41% supported the idea of trade unions having “a fair amount” or “a great deal” of influence, while 58% thought they had that level in practice. So there is a disparity between the view of what the level of union influence should be and what it is – a gap of 17%. However, this is far less than the gap in respect of large companies, which is 42%. Voters are far more concerned about the exessive influence of corporations than of unions. Furthermore, and as I have argued, the numbers in respect of unions can be moved by us pointing out the simple fact that they are, after all, organisations of “ordinary voters”.
So notwithstanding the challenges of political debate, the underlying state of public opinion offers us real grounds for encouragement. Where unpromising poll numbers do exist, they are by no means set in stone, or there to be genuflected before. It is important to make the effort to persuade and secure the support of as wide a range of people as possible. A strong and well formulated argument can mobilise those who already agree with you in principle, and it can change the mind of many of those who are potentially sympathetic.
Above all, and perhaps more than at any time in its recent history, the left can make its economic case with firmness and with confidence. Like a third-rate Ronald Reagan tribute act, David Cameron has wheeled out a tediously over-familiar performance, wherein government is always the problem and the market is always the solution, irrespective of the reality of the situation. Roll back the frontiers of the state, we are told, and the thrusting free-market will step in to drive prosperity for the benefit of all. To hear these arguments made in 2010 borders on the surreal, given the events that brought the economy to this point. The government’s case is not only wrong, it is backwards to an extent that is almost laughable, relying as it does on an economic philosophy that has just suffered a seminal humiliation at the hands of history.
As the Nobel economics laureate Joseph Stiglitz stated last year the fall of Wall Street was to “market fundamentalism” what the fall of the Berlin Wall was to Communism. “With the collapse of great banks and financial houses”, the idea that “democratic market capitalism [is] the final stage of social development” and “that unfettered markets, all by themselves, can ensure economic prosperity and growth” is now “over”. “Today only the deluded would argue that markets are self-correcting or that we can rely on the self-interested behavior of market participants to guarantee that everything works honestly and properly”. Another Nobel economics laureate, Paul Krugman, said that the scholarly supporters of that market fundamentalism would now have to face some brutal truths about how many of the ideas and assumptions they had generated in recent years had played out in actuality.
Economists from the left, centre and even some on the right have poured scorn on the government’s economic policy. Stiglitz says he is “incredulous” at Tory austerity plans, dismissing as “crazy” and “fear-mongering” the claim that Britain is at risk of defaulting on its debts. Krugman says he was “shocked” when he heard of the Conservatives’ economic policies going in to the election, saying that they would drive the UK back into recession “for sure”. David Blanchflower, a former member of the Bank of England’s interest rate-setting Monetary Policy Committee, has said of Osborne simply: “he scares me”. Samuel Brittan, veteran commentator for the Financial Times, describes Cameron and Osborne as “behaving like owners of a whelk stall rather than economic managers of a nation with its own currency.”
Our opposition to ConDem austerity, therefore, belongs on the front foot. It should be expressed with confidence, and occasionally with scorn for the thoroughly discredited thinking that underpins the Tory deficit fetishism. At all times, the government and its supporters must be forced on to the defensive, just as even mild sceptics were forced onto the defensive during the bubble years, when free market dogma reigned supreme. It is vital that we strike this posture, that we adopt this mindset, because the broad left, as well as defending those who will be hurt most by the cuts, also has a positive opportunity to grasp. The perceived legitimacy that buttressed neo-liberalism for three decades has never been weaker. A coalition against austerity can and should also produce ideas for an alternative economic model that can, once the government is defeated, drive forward to turn the page on neo-liberalism and zombified Thatcherism once and for all. The stakes are high and, as far as the political argument itself is concerned, we are by far in the strongest position.
David Wearing a PhD candidate in Political Science at the School of Public Policy, University College London. His articles have been published by The Guardian and Le Monde Diplomatique. He is one of the co-editors of the New Left Project