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Chasing the corporate tax avoiders & fighting the cuts
By David Wearing – article courtesy of http://www.newleftproject.org
The following is the text of a talk I gave at a teach-in at King’s College, Cambridge last Sunday, organised by Cambridge Defend Education.
So this hour is billed as a debate between myself and Richard Seymour on the topic of “Cuts – necessity or ideology?”.
Well, in the first place, there’s unlikely to be much debate – as opposed to discussion – since I think Richard and I substantively agree on the nature of the cuts: their purpose, their likely effect, the context in which they arise, et cetera.
And in the second place, I myself don’t intend to answer the “necessity or ideology?” question directly, because I don’t think that’s necessarily the right way to frame it.
What I’m going to try and do instead is to deconstruct the question, and hopefully get us somewhere more illuminating in the process.
So I hope no one resents being lured here under false pretences. Feel free to stick around anyway.
Let’s begin with this term, ‘ideology’.
Now, if you’re sufficiently well-trained you’ll know that ideology is a Bad Thing. The Cold War is over, we’re at the End of History, everyone’s happy, and so the modern sensible, pragmatic policymaker doesn’t get bogged down in ideology. He or she just cares about ‘what works’.
Well, that’s what we’re told anyway, which of course begs the question, “what works” for whom, and to what end? That’s what I’m going to talk about over the next 15 minutes or so.
The problem with this standard use of the term ‘ideology’ is that it becomes confused with dogma.
But ideology is not the same as dogma: deterministic, inflexible and impervious to new information and arguments.
Ideology is, at its best, a dynamic, rational tool, vital to the task of engaging in politics.
• The construction of one’s ideology – or worldview – should involve the examination and re-examination of our moral values and how they relate to our political priorities.
• It should involve a rigorous and ongoing attempt to understand the world – its history and its current state.
• And it should involve applying continuous, serious thought to how best we can transform the political economy of today into one more in tune (or at least less out of tune) with our morals and our principles.
What happens if you don’t make this conscious, intellectual effort to form your own understanding of the world is that you instead absorb, by default, the conventional wisdom of the time.
You soak it up, passively, without sufficiently reflecting upon its relevance or its veracity. And you allow it to frame your understanding of the political world.
Now in a society like ours, which suffers from
• severe wealth inequality,
• lack of social mobility,
• and notable concentration of wealth and power at the top of a structure that is – while fluid and diverse up to a point – still recognisably hierarchical
you would expect the conventional wisdom in politics to be shaped overwhelmingly in the interests of the social and economic elites.
And that is in fact what happens. The media is owned by wealthy individuals and corporations. Politicians rely on large financial donations to get into power, and on the co-operation of those who control wealth in order to govern effectively. The system naturally selects and promotes those whose views and actions serve the dominant interests and marginalises those who don’t.
The conventional wisdom – the dogma – that comes out of that system, is one you’re all familiar with.
• Big government is bad (unless its bailing out banks or funding huge military expenditure).
• The free-market is wonderful (except where profit can’t be made without the support of the nanny-state: see the UK arms industry for an example).
• The rich need ever greater financial reward to incentivise their entrepreneurialism and ingenuity (even when such rewards drive recklessness and greed to such an extent that the financial system collapses)
• The poor require regular humiliation and enforced belt-tightening to incentivise them to find jobs (that don’t exist, because the financial system collapsed).
We would be confused by the prevalence of these contradictions, these nonsenses, this hypocrisy, were it not clear that this is a self-serving system of thought produced by power in its own interests. That’s where the consistency lies.
So it shouldn’t surprise us that many economists have been baffled by the coalition’s economic policy.
• The Nobel prize winner Joseph Stiglitz says he is “incredulous” at Tory austerity plans, dismissing the claim that Britain is at risk of going bankrupt as “crazy” and “fear-mongering”.
• Another Nobel prize winner, Paul 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 Monetary Policy Committee, has said of Osborne simply: “he scares me”.
Because if you’re asking yourself whether the cuts are necessary in order to deliver a British economy that provides jobs and a decent standard of living for everyone, then the answer has to be no. And what thin justifications have been put up in defence of the idea that the cuts are necessary in that sense, dissolve upon serious examination.
In fact the reality – for reasons I hope you’re all familiar with by now – is that far from being necessary to achieve economic security and prosperity for all, the cuts will destroy jobs, and cause real suffering for millions.
However, if you were to ask the question, “are the cuts necessary to advance the interests of the most influential and powerful sectors of society?” ……. well, then we might be getting somewhere.
Ever since the first recognisable demands for democracy were articulated in Britain, the dominant class has understood the threat that democracy presents.
The Parliamentary Republicans at the time of the English Civil War dismissed the demand for universal male suffrage explicitly on the grounds of class interest.
The Parliamentarians said that only those who had a legitimate stake in the nation – by which they meant property – should have the right to deliberate and decide the nation’s affairs.
Were such rights to be extended to the masses, then the right to enjoy one’s property would soon find itself subordinated to the right of the majority to eat, to survive, and other such inconsequential trivia. This was to be avoided above all.
Yet despite a series of defeats, the demands for democracy persisted over time and, to the extent that power was forced to concede some ground to the public, the nightmares of the 17th century Parliamentarians began to come true.
The slow, incremental extension of the vote over the 19th and 20th centuries was followed by the establishment of trade union rights, the right to welfare payments, and support to the least well-off, funded out of general and broadly progressive taxation.
The Labour landslide of 1945 saw the establishment of a welfare state and of a broadly social-democratic consensus that held for thirty years.
Capitalism remained in place, as did profound wealth inequality, and the inequalities of power and influence that went with it.
But the public had at least succeeded in forcing its way into the realm of politics to some degree, and won some not-insignificant victories for itself in doing so.
The social and economic elites were never going to accept that for long. And when the post-war political and economic consensus broke down, it was their worldview and their interests, driven forward by the government of Margaret Thatcher, that prevailed.
That government set about reversing the popular gains of preceding decades, reasserting elite dominance, and establishing a new political consensus in favour of a smaller public role in the economy, less support for the poorest and most vulnerable, and a greater share of the spoils of capitalism for the wealthiest and most powerful.
That new political consensus – which we now recognise as neoliberalism – was fundamentally accepted and carried forward by New Labour. The financial industry in particular was given free rein to amass wealth, to dodge tax, to give reckless greed its fullest expression…..and you all know the results of that.
A financial crash of historic proportions, leading to a recession, leading to a collapse in tax revenues and a spike in benefit payments as people lost their jobs, all of which in turn opened up a hole in the public finances.
Now at the time of the collapse of Lehmann Brothers in 2008, there was a lot of feverish talk about the End of Capitalism, or at least of neoliberalism. And indeed something like that should have been the outcome.
A few months later, Joseph Stiglitz said that 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 behaviour of market participants to guarantee that everything works honestly and properly”.
But again that raises the question: “works for whom?” Naomi Klein showed a clearer understanding of how public policy is designed to serve specific interests. In September 2008 she said:
“[R]est assured: the [free market] ideology will come roaring back when the [bank] bailouts are done. The massive debts the public is accumulating to bail out the speculators will then become part of a global budget crisis that will be the rationalization for deep cuts to social programs, and for a renewed push to privatize what is left of the public sector.”
And as we know, this is exactly what is happening now.
In her book The Shock Doctrine, Klein demonstrated that time and again, neo-liberal governments across the world 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 on the public sector 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, where the latter, at the first sight of high office, turned 180 degrees and proceeded to march in quickstep to the austerity drumbeat which 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.
That manufactured emergency – and the accompanying hysteria over the non-existent threat of national bankruptcy – has provided the cover for a new round of Thatcherite, neoliberal reforms that will constitute another victory for the class Osborne, Cameron and Clegg serve (and are a part of) and another defeat for the general public.
What is at work here is not so much an “ideology” as a series of dogmatic reflexes, which provide a veneer of justification for the exertion of narrow class interests through public policy.
To the extent that any of this is “necessary”, it is necessary from the point of view of the ruling class, to push back against the limited victories won during the era of democratisation, and to establish a new social, economic and political hegemony.
This applies as much to Browne’s education reforms as it does to the shock therapy being imposed on the rest of the country. What is at stake is more than a rise in the price of a degree for individual students, or a cut in the level of government funding for universities, huge though those issues undoubtedly are in themselves.
This is also, beyond that, an attack on the very idea of education as a public good.
When Browne says that the tertiary education sector needs to align itself more closely to the needs of the economy, what he means is that intellectual activity, like every other form of social activity, needs to subordinate itself more completely to the demands of big business.
The International Relations scholar Robert Cox once said that “theory is always for someone and for some purpose”. The same is true of concepts like ideology and necessity in political discourse.
You can call it capital versus labour. You can call it the elites versus the public. That up to you. The point is that, in politics in general – and on the question of the cuts above all – the clash of these competing interests must be acknowledged and understood as a core explanatory theme.
From there it simply follows that, if you are concerned for the welfare of the majority, if you believe that the national wealth should be put at the service of the nation as a whole, so that people can lead secure, dignified and fulfilling lives – if that’s your ideology – then what is necessary – at this time – is to resist.
David Wearing is a PhD candidate in Political Science at the School of Public Policy, University College London. His articles have been published by The Guardian, Le Monde Diplomatique and openDemocracy. He is one of the co-editors of the New Left Project