“I suppose there hasn’t been a single month since the war, in any trade you care to name, in which there weren’t more men than jobs. It’s brought a peculiar, ghastly feeling into life. It’s like on a sinking ship when there are nineteen survivors and fourteen lifebelts. But is there anything particularly modern in that, you say? Has it anything to do with the war? Well, it feels as if it had. The feeling that you’ve got to be everlastingly fighting and hustling, that you’ll never get anything unless you grab it from somebody else, that there’s always somebody after your job, that next month or the month after they’ll be reducing staff and it’s you that’ll get the bird.”
― George Orwell, Coming Up for Air
Even as life returns to some sort of normality over the coming weeks and months, if all goes to plan and restrictions are lifted, the consequences of the pandemic on the economic life of the nation will not likely be short-lived, regardless of the ‘bounce back’ predicted by the Bank of England this week. Whilst the economic pundits predict the strongest growth since 1941 (when the country was incidentally building up its infrastructure to fight a war), with an expectation of around 7.25%, it follows a contraction of 9.9% in 2020. That is not exactly a sign of a substantial economic rebound in a time when there are still many uncertainties. It was reported at the end of last week that Europe is in a double-dip recession and other major economies are still wrestling with the consequences of Covid-19 on their economies, demonstrating clearly that the UK does not exist in a vacuum.
However, aside from our dependency on global trade conditions, there will still be much uncertainty domestically as the economy opens up and the furlough scheme is wound down. Economists and treasury officials keep referring to the vast private savings that have built up over the year, which can get the economy going if people choose to spend it, but the reality is that the structural poverty and inequality that exists will mean that many will not be spending; they will still be struggling. A two-tier economy in effect, which has been caused by the pursuit of a decades-old noxious economic dogma that continues to destroy lives and create huge gaps in access to real wealth and resources. On top of that, we face the even greater threat of climate chaos which until recently has scarcely been at the top of any government’s agenda and still lacks a clearly defined global strategy to address it.
As has been noted in the media, this so-called bounce back is hardly likely to herald a return to the ‘roaring 20s’ which occurred after the devastation of the first world war, and the initial growth response is likely to taper off over time and will not be sustained. Andrew Bailey, the governor of the Bank of England, has already warned that it will be ‘a long way short of the typical growth rates the UK experienced only a decade or two ago’. Growth rates which, it has to be said, were built on the back of huge and unsustainable private debt, which predictably and spectacularly crashed in 2007, followed in 2010 by wholly unnecessary and harmful cuts to public spending. Cuts which, whilst touted as being vital to the stability of the public finances, in reality, led to economic decline and rising poverty and inequality.
Of course, whilst the media, economic pundits and politicians promote the good news of the return to growth (however uncertain that still is) to pump up people’s confidence to get them to spend, the question over GDP growth as a measure of human flourishing should still be exercising our minds in terms of the future that we want to see and who should benefit. The toxic nature of the economic system relies on the exploitation of humans and the real resources that lie at the heart of every economy.
Employment is a key measure of economic health and even before the pandemic arrived on the scene, unemployment, underemployment and insecure working practices reflected a long-standing economic ideology that sacrificed human labour on the altar of competition and profit. It was enabled by governments which defined full employment based on a random figure pulled out of a hat, which over decades have left vast numbers without jobs, or in insecure employment, existing on scarcely liveable benefits or low wages. Unemployment has suited governments and the corporations who have benefited from it. Worse, it has been allowed to create societal divisions related to ‘scroungers’ on benefits and ‘hard-working people’.
People have been viewed as expendable commodities, the consequences of which are clear to see in our society. Not just in the loss of economic output, but the very real consequences of unemployment on the economic, social, and personal lives of those affected. Consequences including social exclusion and loss of freedom, loss of valuable skills, ill health, reduced life expectancy and destabilisation of family life.
In the aftermath of the pandemic, unemployment remains a scourge which has been highlighted by the high numbers of workers who have found themselves, with the number of those who had already been without work prior to the pandemic, having to rely on miserly state support, which despite the pandemic uplift is still insufficient to keep people from the door of the food bank or wondering how to pay their bills.
The unemployment rate may have fallen slightly in the last quarter, but the numbers hide great disparities and the human stories associated with the loss of a job. Recently published figures revealed that the burden has fallen disproportionately onto young people, women, and ethnic groups. Data on long-term youth unemployment shows that it is the youngest workers who have borne a heavy burden, with those under the age of 35 making up almost 80% of jobs that have been lost in the past year, including graduates.
Also, according to the TUC, many more women have been made redundant than during the Global Financial Crash, with around 94,000 losing their jobs between December 2020 and February this year. It is predicted that the female jobs market, which is dominated by retail and hospitality, will remain very unstable in the coming months, particularly as government furlough support reduces and then comes to an end in September.
People from Black, Asian, and Ethnic communities who often work in precarious, poorly paid employment have also been hard hit by the consequences of the pandemic, with a much higher unemployment rate than the overall average for white working people.
Whilst the growth pundits work on increasing public confidence to spend (even though many are still suffering from the cumulative effects of previous government policies on their purses and their quality of life) one might have to consider the possibility that the economy could remain permanently smaller in a changing world forced to address the serious consequences of the on-going climate emergency. Assuming we do.
Reading the newspapers during these last few weeks, the instinct seems to be to restore the world to its pre-pandemic structures, based on private consumption to create growth. But it doesn’t have to be like this. There is an alternative. There is a potentially different world that doesn’t involve returning to the stone age, but asks us to re-evaluate our priorities and consider our ecological future to bring about real human flourishing.
For example, this week the Green Alliance Think Tank proposed investment in green jobs. The Alliance has suggested that such jobs should be at the heart of government recovery plans and says that around 16,000 jobs could be created by taking action to reverse the decline in the natural world, which could include tree planting and coastal restoration. Investing in local communities would in turn provide huge economic benefits; providing employment and visible improvements to the local environment in which people live.
Also this week, Mary-Ann Stephenson, Director of the Women’s Budget Group suggested that instead of job creation focusing largely on construction projects, which form a large part of the government’s investment programme, that public spending on care could create almost three times as many jobs as the same investments in construction. Over the last year, we have woken up to the value of our key workers both in the public and private sector, and we should not forget their contribution as vital to economic health.
Let’s imagine a way forward.
With the need to move away from carbon-based industries and excessive consumption, to implement more ecologically sound and socially just practices, we could with political will reinvest in the public infrastructure which has been decimated because of cuts to spending driven by political ideology.
Such investment could reap benefits two ways – re-envisaging our values towards human ones instead of those of capital and profit whilst at the same time rejigging our economy away from excessive private consumption and the ecological damage that ensues from it.
We need a plan for direct public sector job creation to fill the growing gaps in healthcare, social care, education, local government, and public administration which have been so damaging to the economy. Whilst such investment is currently anathema to neoliberal governments which have spent the last few decades de-investing in publicly provided and paid for goods, justifying their actions as being financially necessary to get the public accounts in order whilst at the same time pouring huge sums of public money into private corporations to run those same public services, if the political will exists then everything is possible.
In tandem with government investment in a properly formulated green agenda and a larger public sector, a Job Guarantee should necessarily form part of any future government policies. Not only to subdue inflation, but to ensure that nobody is left behind when recession hits or health emergencies occur and create higher unemployment. It is damaging to the economy when people have less money in their pockets and damaging to the people who must suffer the consequences of unemployment. Cyclical in nature, the Job Guarantee would provide temporary useful public sector employment, paid at a living wage with the sick pay and other protections that workers need, when the private sector is unable to take on more workers, thus avoiding the damaging social and economic costs of joblessness.
We urgently need to address the coming economic fallout, not only of the pandemic but also of the need to move towards a sustainable economy. We need to develop a strategy for a just transition that does not leave human beings stranded or without useful, productive, and socially-oriented work.
However, as always, and here we get to the standard stumbling block, such plans are always connected to the false narrative of monetary affordability. How will we pay for it? And this week, as in so many weeks before, we read prime examples of how this household budget narrative plays out in government and media circles, to the real detriment of a public conversation about the future. Such narratives impede action because they make false claims about how governments spend and allow them to pursue their own political agendas.
This week Gavin Williamson, the Secretary of State for Education, said that the Arts were not ‘strategic priorities’. Aside from the cultural contribution and pleasure they bring to people, they also provide employment and add £112bn to the economy; so how that is not a strategic priority is anyone’s guess. That’s money in wages circulating in the economy, as in one person’s spending is another’s income, whether it is teaching them in our schools, colleges, and universities, or going to museums, art galleries or attending musical or dance performances. A deeply short-sighted judgement which was encapsulated precisely by the author Michael Rosen on his Facebook Page.
“We condemn and will do all in our powers to oppose the 50% cut in provision of arts subjects in universities. It represents a combination of authoritarianism, philistinism and neo-liberalism. It would remove the professionalisation of arts training and the development of critical thought in relation to the arts. The arts are an essential part of how we interpret, understand and position ourselves in the world whether as individuals or in groups. Universities have had a centuries-old tradition of providing a space in which serious discussion, debate and training in relation to the arts have taken place and as a consequence the arts in universities have enriched society.
From another perspective, it has also provided the training necessary for jobs in the highly profitable culture industries and the basis for people to go on to manage and set up cultural projects, businesses and trade. These cuts are not a solution to anything. They are an ideological attack on a sector incorrectly deemed as not part of the economy. The government has shown that it has the means and methods of raising revenues through its mechanisms with the Bank of England, so these cuts are being proposed purely for ideological, not economic, reasons.
There are ramifications beyond universities: these cuts will have a knock-on effect on primary and secondary education as a route to higher education through the arts being cut off. This will also disproportionately affect students from low-income backgrounds as they will be unable to support themselves through a time of acquiring arts training. The effect of this will be to ensure that the arts become a profession of the affluent.”
And there you have it. While politicians stick to the household budget nonsense, even Michael Rosen knows how the monetary system works.
Under this plan, the cuts to spending on the arts will be redirected to other areas such as nursing and computing, in the mistaken belief that the government must save in one place to spend in another, as if it had a limited budget and had to make hard choices about how to divvy up the tax revenue so as to keep the public finances on track.
To be clear, a government which issues its own currency does not have a limited budget based on tax revenues or the ability to borrow to cover its deficit. Assuming the real resources exist or can be acquired through implementing taxation policies, the government can fund education for the cultural enrichment of the nation and the benefit of the economy. We do not need automatons for capitalism; we need people educated for life.
And that brings us to another vital area of the economy. The NHS, Public Health and Social Care. After a traumatic year for those caring for sick patients, in an environment which has had to cope with cuts to real spending affecting every aspect of the public service and leading to a shortage of nurses and other health professionals, beds, equipment, and facilities, a study by the London School of Economics and the Lancet Medical Journal is clear that the Covid-19 pandemic has reinforced the ‘economic case to invest in health … to enhance societal well-being.’ It proposes that total expenditure needs to increase by around £102 billion in real terms in 2030-31 to restore the NHS back to a properly functioning public service.
However, it then goes on to make the usual assumption that since investment in the NHS, social care and public health is crucial for ‘fiscal sustainability’, taxes would have to increase to cover the investment.
Professor Elias Mossialos from the LSE said:
‘For the NHS to be truly the envy of the world again politicians will need to be honest with the public that this will require taxation to meet funding levels comparable to other countries.’
Indeed, politicians do need to be honest with the public, but not in terms of raising tax to fund the NHS. The political decisions they have made based on a false accounting of how the state monetary system works have left our public and social infrastructure in a state of decay, and increasingly in the hands of private corporations. These were policy choices justified on the back of the claim that the last Labour government had spent all the money, and that therefore the Chancellor of the time had no option but to rein in spending to get the public finances in order. It proved the perfect opportunity to continue pursuing the neoliberal agenda of privatisation begun by Thatcher and continued by successive governments.
The constant repetition of the household budget narrative of government spending has ensured that it is ingrained in the public consciousness. An article in the Guardian published two months ago suggested voters were demonstrating a ‘new willingness to sacrifice more of their earnings to repair the damage done by the pandemic.’ People were concerned about the eventual need to pay back the enormous sums of money spent by the government to keep the economy afloat, recognising in addition that it could not keep borrowing forever. As a result, people thought that the country would need to tackle its debt which necessarily and in the words of Rishi Sunak would require ‘hard choices.’
The only changes in people’s preferences in how to deal with the debt, compared with 2009 after the financial crash, were that tax rises would be preferred to spending cuts; suggesting that the evidence of the consequences of spending cuts has made an impression on public perception.
The author suggested in the article that it offered an opportunity to reframe increased taxation as ‘part of people’s contribution to the national effort…or as an act of paying back to our NHS …. a desire to tackle the debt but through fair tax rises rather than reduced spending.’
As long as this false narrative determines the public conversation, we can forget about addressing climate change, the continuing rape and pillage of the Earth’s resources to drive consumption, or the vast inequalities in wealth and access to resources. Because while people believe the household budget narrative, these things will always be unaffordable, despite the fact that governments have shown quite clearly their currency-issuing capacity, both in bailing out the banks and supporting the economy during the pandemic.
On that basis, the limits are always driven by concerns about money and debt, when the real limits to spending are the real resources themselves and the ability of the planet to continue to provide us with the means for existence. How we find the solutions to our pressing challenges will depend on a change of public perception and rethinking the future.
The warnings are there on a weekly basis and are covered endlessly by the GIMMS team. From the cuts to foreign aid which have reportedly wiped out funding for 42 vital projects around the world, projects which should be part of the global drive towards creating a just and sustainable transition (and incidentally saving less than the cost of the now white elephant Downing Street press room) to the almost daily reports of how human activities are affecting the planet and its ability to maintain a steady sustainable balance. The headlines daily underline the growing seriousness of the challenges we face.
Research published this week in the journal ‘Nature’ exposes the threats posed to coastal cities as a result of the melting of the Antarctic ice sheet which could raise oceans by 17cm to 21cm by the end of the century.
Andrea Dutton, an expert in sea-level rise at the University of Wisconsin, said of the research that Antarctic melting will ‘bring about coastal retreat and migration of a scale we have never before witnessed’, observing that ‘we will not be able to just adapt because it is impossible to engineer our way out of this.’ ‘The conclusion’ she said, ‘is a stark reminder of the urgency in making deep and sustained cuts in our greenhouse emissions.’
In other research, scientists have shown that pesticides are causing widespread damage to the natural ecosystems contained in the soils which underpin life and make up a part of the vast food web that cycles energy and nutrients, promoting plant growth and soil productivity. In a report published last December by the UN, scientists were clear that without action to halt soil degradation the future looked bleak, given that it takes thousands of years for soils to form. Those same soils which feed us.
With the very foundations of life at stake, it is time governments took the challenges seriously rather than tinkering around the edges. As Damian Carrington in the Guardian wrote this week, ‘until every government and corporate decision has to pass the bullshit test – does it really cut carbon now – then we are kidding ourselves if we think we are treating the climate crisis like the emergency it is.’
However, not only should we be addressing carbon reduction but also the exploitation of real resources and their damaging consequences as a result of an out-of-control capitalism dedicated to maintaining profits at the expense of human beings and the health of the planet.
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