No shock doctrine for Britain
The economic case against short term cuts has been widely made. So much so, that a large majority voted in the election for parties opposed to cuts this year. In fact, Vince Cable promised us that opposing any immediate cuts would be (as well as support for savage cuts next year) a condition of forming a coalition Government.
What the media tell us less often, is that many mainstream economists don’t accept the idea that substantial cuts to the welfare state in the UK are sensible at all. I am not an economist, but I can point you to these excellent pieces by Nobel Laurette and former chief economist to Bill Clinton then the World Bank, Joseph Stiglitz, and former monetary policy committee member David Blancheflower. Both of these men are notable in the world of economists in that they actually predicted this recession. Unlike almost any of the far right economists on whom the Con/Dem coalition is basing it’s arguments.
Cuts are not only not needed. They are also potentially hugely damaging. The economic cost of entrenched unemployment is huge, but not as big as the cost to people’s lives. The economic cost of education lost to bigger class sizes is huge. Bigger still is the human cost of children not learning what they could. The economic cost of single parents not being integrated back into the community through their local Sure Start centre is enormous. But even bigger is the cost to that community in losing them.
What is interesting though, is how successfully the Tories have built the case for cuts to the services. Their attack has been two pronged:
1) we can’t go on like this – I’ll cut the deficit, not the NHS.
2) Big society, not big government.
In other words, they haven’t talked about the evils of socialism, as people do in the States, or about the tax cuts they will deliver, as Milton Friedman always advised the right to do. They made the case that public service cuts were simply necessary. They used a cunning bit of footwork to do so – they played the trust card. Essentially they said ‘cuts are unpopular but necessary. Labour will say otherwise. But you know from the expenses scandal that they are liars, and if they say something more popular, it will prove that they are lying to you’. Brown wanted still to argue that the election should be about “Labour investment vs Tory cuts”. He was, I think, probably right, but we’ll never know.
The second prong – the Big Society – is one of those ideas which encapsulates enough truth to sound vaguely plausible, but then turns out to mean nothing at all apart from “shred the welfare state”.
But now, the rhetoric is over. The Tory/Lib Dem government is forcing through it’s emergency budget. This is little more than a classic use of The Shock Doctrine – use an economic crisis to push through right wing economic policies. We have just a few weeks to stop them. Join the resistance.
erm, I’d put Indonesia top of the list probably, along with Chile – & Brazil, Colombia, post-USSR Russia, etc, etc, etc.
I guess the only real difference is that you’d struggle to find apologists for Stalin on the British left. You’ll find plenty of apologists for Milton Freidman on the British right, despite his active personal help of many of these regimes.
Mr Young- perhaps, but you cannot disguise the fact that, whether intended or otherwise, the term “far-right” (when used in a derogatory manner…as opposed to those occasions where it’s used positively…..) gives rise to an immediate image which can lend the writer’s position more weight than a criticism of classic right-wing economics probably otherwise would. It may be standard shorthand, but it also a lazy slur which can contort the entire crux of a point. I agree with the fact that use of the term “far-right” the sentence was appropriately qualified with the “Con-Dem” reference, but in left leaning blogs such as this, some of the more rabid among you don’t need any further excuse to lump anyone of moderate right-wing inclination as a nazi, or fascist. Perhaps my objection was more to the popular bastardisation of certain political terms, which I feel if read by a certain person, frothing sufficiently at the mouth, would convey an impression the author otherwise probably intended to avoid.
Mr Ramsay- I assume you refer specifically to Chile? Let us be clear, the policies of the left will always have a sizable aggregate lead over those of the right where it relates to murder, torture and the systematic infringement of civil liberties.
@ GrassyKnollington. It is standard shorthand to refer to welfare state economists as Left, and market-based ones as Right. So it is unobjectionable to call someone who advocates a very far-reaching role for the market a ‘far Right’ economist.
One may object to the conflation of the word ‘fascist’ (meaning a corporatist system of government in which representatives are chosen by sector (‘faces’ of the sector)) with ‘evil’; but this is now universal usage, and does not constiute an error of which we can accuse the author of the sentence: “Unlike almost any of the far right economists on whom the Con/Dem coalition is basing it’s arguments.” One may, however, criticise his apostrophe.
Though there are of course strong links between murderous and torturous regimes and the imposition of neo-liberal policies.
sorry, that was lazy. I should have been clear that I do not associate what I see as far right economic policy with fascism – that is a fair point. By far right, in this sense, I meant neo-liberal.
I disagree with the majority of your article, however, I will confer one nugget of advice: your assertion that small-state economists are “far-right” is a slur on an entire group of classic-liberal thinkers. You set your argument out reasonably well but please do not cheapen your position by relying on ill-informed classifications. You fall in to a Leftist trap, in that you fail, whether though lack of knowledge or prominence of prejudice, to differentiate between the approach of a liberal/libertarian economist, and that of a, now totally irrelevant, fascist. Read your history, the difference, and your error, will become immediately apparent.
Labour wasted a huge amount of money on the NHS using the repulsive corporate welfare scheme the PFI. I’d be more than happy to see those legally corrupt contracts cancelled and that would save the NHS billions.
Health spending by other developed countries is high compared to the UK and yet the UK has good outcomes, demonstrating that the NHS is actually efficient with how it spends money.
So apart from joining a facebook group how do we go about fighting our own shock doctrine.
I think Nishma makes a very good suggestion of starting a planning group.
Ben, the problem is that we tried mathematics as a mechanism to ensure the smooth functioning of financial markets. As Keynes told us, financial markets are just as much about emotion as calculation. Perhaps once this fact is realised (again), the maths folk will have to find some other place to pursue their career. I suggest working on calculations related to delivery of new public transport schemes would be a good place to begin.
CDF – And the trouble is the mathematicians in the City seem to be having a GREAT TIME – being more intellectually challenged, and feeling greater collegiality, than in university departments. So a friend told me. I was stumped for a reply. – Maybe indentured labour in the LHC?
Ben – you and I are in absolute accord on this. I know of brilliant mathematicians who are being lured into the City when their skills could be used to much better purposes.
@CDF I don’t think we’re going to find much to disagree on. I’d only add, though, that the City, and inequality generally, hoovers up human talent which otherwise could be put to productive use; there are many genuinely brilliant people in the City whose talents are wasted for real productivity.
There are different types of cuts. I don’t think anyone is going to argue that cutting Trident and ID cards is a good idea. Systems used for the purposes of surveillance should also be cut, as is the apparatus that supports it.
What we should be concerned about are cuts to genuine investment, i.e., improvements in the health service, public transport and education (which I think you’re spot on in identifying as a problem). In other words, I think we need to make distinctions and choose our battles; let’s go after them at times when they are specifically damaging our future.
#Blanco and alternatives. How about: rescind Trident; capitulate in Iraq and Afghanistan; claim taxes off the ultra-rich; reduce the City through financial policing, and steer the freed up human talent into green technology and education.
Labour increased public spending on services like the NHS massively. In fact they spent so much money that it was simply not sustainable. I thought Greens are against unsustainable economic growth? We have to reduce the amount of money the government spends, or we need to increase taxes by a huge amount – not just on the rich, but middle income earners too.
Cuts would’ve come at some point. What’s your alternative, throwing more money at the problem?
Apart from a facebook group, how do you propose an opposition? Are you going to plan any actions, any demos? Are you going to work with organisations like 38 degrees?
I think this is important and I congratulate you on starting a campaign that is so essential, but there are steps through which we should take it further and we can grasp them now when people are still so shocked!
I think it would be useful to start having a planning group of those interested and set out a strategy on how to take this forward. But perhaps you’ve already done that and I am lost in my own little world as usual…