Public duty and the public purpose? Or, self-serving interest? Politicians have a choice. We have a choice.
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.
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