The difficulty lies not so much in developing new ideas but escaping from old ones.
John Maynard Keynes
This week we begin our MMT Lens with a subject which, while not directly linked to monetary realities, is one that is connected to the toxic economic orthodoxy which has corrupted the public policy of successive governments for decades and is now culminating in the demise of the National Health Service as many of us have known it.
A decade of severe cuts to spending has left the NHS on its knees. This was a result of the bogus claims that in 2010 the Conservatives had no option but to implement cuts to public spending to get the public finances back in order, otherwise the country risked bankruptcy. The era of commitment to the false concept of sound finance began with huge cuts which affected every area of public service delivery and was used to justify the reforms and market-driven frameworks which ensued, leaving the NHS where it is today; ready for takeover by the private sector.
On the 5th of July 1948, the NHS was launched by Aneurin Bevan. It was the jewel in the crown of the government of the day. It brought hospitals, doctors, nurses, pharmacists, opticians, and dentists together under one umbrella to provide care, free at the point of delivery. Since that time much has changed. Dentistry and opticians became chargeable in 1952, and in recent decades successive governments, beginning with that of Margaret Thatcher, began to attack the principles enshrined in the creation of the NHS, of a publicly funded, managed, delivered and accountable service.
Over time, those principles have been smudged and the real political aims disguised by numerous rounds of reforms, implemented by successive governments, which created a fragmented NHS. An NHS behind whose logo lie a myriad of private or voluntary sector companies, both managing back-office operations and providing clinical services. Reforms from the introduction of the internal market by Margaret Thatcher, to Tony Blair’s continued changes (breaking an election commitment) which promised private healthcare providers a stronger presence in the NHS. The reforms were sold to the public by the claim that they would drive up the quality of service and offer choice, but, in fact, they opened the doors to the Health and Social Care Act 2012 which allowed NHS contracts to be put out to tender in the private sector.
Since that time, further reforms implemented by the ‘at arm’s length’ organisation NHS England under the direction of Simon Stevens (a former employee of the US healthcare company United Health) have aimed at moving the NHS towards a US-style integrated care system.
This week, following the leaked draft of the government NHS White Paper, journalists misled the public by claiming that it would bring about the scrapping of privatisation and competition introduced by Andrew Lansley’s reforms. The reality is something quite different. Boris Johnson ‘taking back control’ of the NHS, is yet another smokescreen for bringing a long-held objective to fruition.
The White Paper makes it clear instead that it will not lead to a reduction in the role of the private sector. It will increase it and indeed make it easier for the private sector to function within the NHS without all the bother of tendering for contracts. The deliberate drive to fragment the NHS has left it a shadow of its former self. Its logo, originally symbolising the positive change in the government’s relationship with its citizens, has become nothing more than a logo of no substance.
As the government has poured vast sums of public money into private contracts during the pandemic with little transparency or accountability, it has destroyed the validity of the claim that government has no money of its own, even though it continues to frame its spending in household budget economics. With the prospect of many more hundreds of billions of pounds of public money being spent on new independent laboratory networks and funding private hospitals to clear NHS waiting lists, it is clear that there is no scarcity of money. What is even clearer is that the government has made a political choice about where public money should flow to.
As the currency issuer, it could have made a political choice to invest long term in public health provision. Instead, the government has abandoned all pretence that as an elected body it has a duty to serve its citizens. It has used its monetary capacity to deliver its market-driven aims, which not only have given even more power and influence to big corporations through light-touch regulation, but also poured public money into private profit to keep the wheels of capitalism oiled.
At the same time, it has, also by political choice, left the public sector – health and social care, public health, and local government in a state of collapse, struggling with the consequences of 10 years of cuts which left the country unprepared for the devastating scale of the pandemic. Any claimed additional money is but a drop in the ocean in terms of what is needed to restore the NHS to a properly functioning service delivering public care. And Captain Tom’s efforts, laudable as they were, serve yet again as a distraction. We clapped for the NHS while it was sinking beneath the waves.
Deborah Harrington, director of Public Matters and Advisory Board member to GIMMS, describes government plans in an article in The Tribune this week:
“Boris Johnson’s health team is presenting this White Paper as the antidote, claiming that it gets rid of privatisation and the market, when it does neither. The White Paper does not herald a return to public service: to imagine that it could, would be to propose a political U-turn of unprecedented magnitude – a free-market government turned socialist overnight.
She goes on to say, in a very personal statement which we should all heed:
“I’m not just a patient now – I write and research on these matters myself. But as a patient, I’m worried. As a mother and grandmother, I am devastated to know that the range of care available to me throughout my life will not be guaranteed to my children and grandchildren. The NHS was an extraordinary gift – a gift squandered since by governments prepared to mislead the public on this most precious and important issue, because corporate approval means more to them than the public good.”
It is important to note at this point that the roots of this process lie in decades of neoliberal ideology and its tentacles which have spread around the world through organisations such as the IMF, the World Bank, and the World Economic Forum. As Stewart Player, the author of ‘The Plot against the NHS’, indicated in his article published by the Socialist Health Association in 2017:
[the] “basic strategy now adopted for the NHS in England has its origins in the business-dominated international policy circuit, of which the WEF is the apex, rather than in either the Department of Health or NHS England – let alone in the creative input of local communities, doctors and nurses […] What a comparison of the FYFV with the WEF reports suggests, instead, is that what is now planned for the NHS in England is not a home-grown response to meet distinctively English circumstances, which the FYFV presents itself as being, but what the global policy-making elite at Davos sees as a way of avoiding further growth of spending on publicly-provided health care.“
We are at the mercy of a global system which puts profits above people, and in this case, patient care. We are at the mercy of a group of people who claim, falsely, that money is scarce, and that public provision at its current levels is unaffordable, whilst at the same time cultivating a culture of private profit-based provision.
While our NHS slides into a potentially irreversible situation, as Covid-19 allows the government to use the pandemic to drive its agenda forward as quickly as possible, the consequences of years of government policy compounded by almost a year of the relentless gloom and indeed sorrow continue to play out.
It beggared belief to witness video footage filmed this week in Brent and Glasgow which showed residents queuing to access food banks or soup kitchens in freezing temperatures. It was described rightly by many as shocking and humiliating and reminiscent of the Great Depression in the 1930s.
Journalists and other commentators have decried food poverty as if it were a discrete phenomenon, rather than asking the question as to why so many people are going hungry in one of the wealthiest countries in the world, notwithstanding the current crisis. As GIMMS has commented many times the solution to hunger is increasingly seen as a charitable one – public donations to food banks or supermarkets distributing food through various organisations (to reduce waste as much as to feed people).
It is a situation which is being normalised in society. At the exits of supermarkets, we are invited to donate a bag of pasta or a few tins of something – soothing our collective conscience perhaps. Hunger and the poverty from which it originates predates Covid-19 and is the direct result of the market-driven ideology which is pursued by the government through legislation, spending and policy decisions which keep wages low and increase job insecurity. In other words, political decisions to serve business needs rather than those of citizens.
Nobody needs to go hungry, but we are institutionalising dealing with it through charity rather than government action. Decades of neoliberal propaganda have demonised people by shifting blame to individuals, while in an act of sleight of hand, the real culprits are released of any responsibility for the state of the nation. Whilst at the same time, the coffers of private companies and politicians’ friends become bloated with public money which should be going into public provision instead.
Although we are told regularly it is a question of monetary affordability, it is not. It is a question of what we want to prioritise in our society given the limitations that real resources pose. If we want better public services, to reduce inequality or deal with climate change then we will have to consider how we share out those resources in such a way as to deliver them for the greatest good possible rather than serve the greed of the few.
In the short term, as Yeva Nersisyan and Randall Wray of the Levy Institute pointed out in a paper which was referred to in a Guardian Editorial earlier this week:
[the] “government is engaged in relief, not stimulus, spending. It is offering much-needed assistance to the devastated balance sheets of households, school districts and local governments. Rescuing public services, making sure people do not starve and building COVID-19-testing systems is not an economic stimulus but a necessary antidepressant.”
In the longer term, the challenges are even starker. Addressing the vast inequalities which were created as a result of the pursuit of market dogma and the looming climate crisis bearing down upon us, begs an important question about how we deliver a ‘just, equitable and inclusive’ transition to a sustainable economy.
Currently, as politicians spew their climate rhetoric, Boris Johnson claims he is committed to action and the public express support for real change, there is also a desire to restore normality after such a gruelling year. This week Andy Haldane (and the Chancellor before him) invited the public to indulge in a spending spree with their savings once the pandemic releases its grip on the economy. Are they inviting us to return to our old spending patterns for short term gain? Putting aside the fact that for many people there are no such savings, and many have only increased their debt, face unemployment or future job insecurity, those with savings may prefer a more judicious approach in the short to medium term if they feel uncertain about where the economy is headed or indeed the planet!
This is an opportunity to reimagine what is important with concrete proposals for change. Growth is being touted as the mechanism to overcome the economic consequences of the pandemic. But what sort of growth? The destructive sort which has already been laid bare by the realities of an already over-exploited planet where huge wealth, poverty and inequity exist side by side or a radical rethink to how we live our lives. Consumption which brings transitory pleasure or creating a world that is sustainable, puts protecting biodiversity at the top of the agenda and focuses on human well-being rather than human and planetary exploitation.
In an article in the Guardian this week the economic commentator Larry Elliott suggested one option is to leave it to the market. But haven’t we had enough of the god of the market and its undelivered promises which have also brought about huge disparities in wealth, crushing poverty and inequity?
The WEF’s Great Reset posits a solution but in reality, positive as it is presented, it just leaves the same oligarchs and philanthropists in place directing the orchestra in their own image for their own benefit and a smaller role for public provision through elected government.
We make no excuse for raising these issues again and again in our blogs. It may seem like a broken record but there is a huge amount at stake for future generations and not so future.
It boils down to chumocracy, revolving doors and corporate control or the institution of a functioning democracy. The possibility that people can elect a government to deliver public purpose and create a public and social infrastructure to serve the public good instead of public money being siphoned off into private profit. Currently, the latter situation looks to continue as global corporations greenwashing their way to more power and profit consolidate their power through those seated in parliament who approve it.
We need a new way of envisaging well-being and it is only government that has the monetary and legislative firepower to create the change we need, should it have the political will to do so. It may seem that the human will to commit to real change may be in the balance but as Elliott notes in his article ‘The need for change is glaringly obvious and the opportunity is there too. That opportunity must not be squandered.’
And yet whilst the country and indeed the planet faces some exceedingly difficult challenges, the media oracles continue this week with their usual warnings about the level of government debt and ask how are we going to pay for the astonishing amounts the government has spent so far to manage the ongoing economic fallout from the pandemic and deliver government promises relating to promised societal ‘levelling up’ and dealing with climate change?
These questions dominate the discussion in the media and beyond on a weekly basis. Rishi Sunak, having already promised not to increase income tax, national insurance and VAT is running out of possibilities to bring the public finances back into balance, according to the economic pundits. An increase in Corporation Tax perhaps? Or a wealth tax which could raise up to £260bn in revenue to cover debt or future government expenditure or so the story goes.
Yet again, despite the incredible sums already spent there is apparently a limit to governments financing themselves through the ‘printing presses’ without compromising the ability of the central bank to keep inflation at an acceptable level. It denies yet again the monetary realities of the currency issuer and fixates instead on the wrong solution. Taxation. Whichever path the Chancellor takes going forward, he could cut short any economic recovery at all. Taking money out of the economy can only contribute to further pain at a time when the government needs to be spending more, not just to mitigate the economic effects of the pandemic but also address the future challenges looming in front of us.
If we want to redistribute wealth and remove the power such wealth commands, yes to increasing taxation. But believing it could get the government out of a sticky debt wicket or give it fiscal space to spend is to misunderstand the role of tax which, at base, is not to fund government spending. The real challenges the government faces are not budgetary, but of managing real resources to bring about change.
With this household budget understanding, the only solution might be to envisage yet more cuts to public sector spending which would add to the already underfunded and overburdened public and social infrastructure which the evidence of the last year has shown it to be unfit for purpose despite the brave and staunch efforts of public employees.
Furthermore, there is no ‘fiery pit of economic disaster’ if the UK does not get its financial house into order as was suggested by a senior analyst at the AJ Bell Investment Consultancy in a right-wing newspaper this week. The fiery pit is more related to the planetary disaster that faces us all if governments around the world fail to cooperate and spend sufficiently to bring about that just, equitable and inclusive transition we so desperately need.
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