“Have we fallen into a mesmerized state that makes us accept as inevitable that which is inferior or detrimental, as though having lost the will or the vision to demand that which is good?”
― Rachel Carson, Silent Spring
On Thursday, after weeks of uncertainty, as the wheels of the Conservative party machine forced his hand, Boris Johnson was finally left with no alternative but to resign. When he will leave the building permanently is still unclear, but not before he holds a lavish wedding party in the summer, which was to be held at Chequers but has now been moved due to the understandable public outcry!
It is a final insult to the nation which has borne the brunt of Tory policies, not just during the last two years and more, but since they came to power in 2010, claiming to be the party of fiscal discipline ready to save the country from bankruptcy. The shadow of unnecessary austerity which followed, on the basis of a false presentation of how the government spends, has dogged the economy ever since and caused human misery.
Whilst people may clap and cheer his departure, it is, however, yet another distraction from reality. The Prime Minister, whilst clearly not known for his integrity and honesty, and who with astonishing regularity has demonstrated his ability to dodge the fire, has been a longstanding part of successive Conservative governments which have wreaked destruction on the lives of working people and the country’s public and social infrastructure. The current one is no exception, and the evidence cannot be ignored. It is damning.
With Johnson’s ‘planned’ departure the neoliberal, market-dedicated Tory vultures are already circling for the top spot. But the idea that a new prime minister and government will mean a change of direction will quite simply be wishful thinking. To view his departure as a win for the country would be a mistake. Will the sense of overarching privilege and entitlement that dominates in Conservative thinking be replaced with a sense of duty to the country’s citizens? Probably not, when the architects of suffering are benefiting from the system remaining as it is.
As the blogger Jonathan Cook tweeted:
‘Rejoice, Rejoice! The ship of state, holed by corruption and heading straight for the rocks of climate breakdown, is to get a new captain who’s as committed to the course we’re on as the last captain.’
Just a brief look at the voting records of MPs and Ministers who may stand to replace Johnson is indicative of what to expect from any future Prime Minister. And it’s not just climate breakdown, bad as that is, that is at stake. From voting for reductions in spending on welfare benefits and for NHS reforms, (better known as privatisation), and against publicly owned bus and rail services, climate change measures or spending public money on creating guaranteed jobs for long-term unemployed youth, these issues are just the tip of the iceberg.
Steve Baker, MP for High Wycombe who once re-tweeted a report that suggested that the ‘climate crisis is not happening’, is, according to reports, considering running for PM, and has said that if he won, he would dismantle many of the Prime Minister’s Green policies (which is strange because it’s not clear that he ever was committed to any except in his rhetoric). Baker claimed bizarrely that measures to help farmers protect the environment were ‘anti-human life on Earth’, and that he would increase gas production in the UK because there was ‘no short-term threat from the climate crisis.’ The calibre of potential leadership leaves much to be desired.
This is a party, just like its opposition, wedded to a toxic market-driven ideology which is underpinned by a false narrative of how the government spends. Whilst for a time it seemed that a window of opportunity was opening to challenge those notions, given the vast public spending to prop up the economy which begged many questions about where the money came from, the household budget explanation continues to dominate, allowing present and future governments of either political stripe to persist with their smoke and mirror tricks to justify their political decisions. On the left, it’s ‘tax the rich to fund public services’, on the right, it’s ‘cut spending on public services to balance budgets.’
Rishi Sunak, a committed Thatcherite and the first to resign from Johnson’s government, has been replaced as Chancellor by yet another, Nadhim Zahawi. The Guardian reports that he is one of the richest MPs, who has used a tax haven for family investments and holds a wide portfolio of other interests including several houses. It might suggest that tax reform is not likely to be on his top list of ‘must do’s unless it favours the interests of the already excessively wealthy and the big corporations.
At the same time, he was quoted as saying that he wants to, ‘make sure that we are as competitive as we can be, whilst maintaining fiscal discipline’.
And there you have it. Fiscal Discipline. Same old. He has claimed that whilst his priority is to ‘rebuild and grow the economy’, spending plans which include potential tax cuts should not:
‘deflect from the need to limit increases in borrowing and to bring down inflation. “The important thing is to get inflation under control, be fiscally responsible. The first thing to do is to make sure that we are really careful about, whether it’s public sector pay, is that inflation doesn’t continue to be fuelled. “
If the intention is to keep spending and erroneously named ‘borrowing‘ under control, how he aims to achieve this miracle has yet to be explained, although, of course, we could take an educated guess as to his modus operandi. But growing the economy and cutting government spending are mutually exclusive propositions. The former requires the intervention of the latter.
Last week, as Minister for Education, Zahawi was advocating a nine per cent pay rise for new teachers (but only 3% for others). This week, as Chancellor, he is rowing back, saying he will now wait for the pay review bodies before deciding. Fiscal discipline is the watchword, or in other words the possibility of more austerity for public sector workers who under this government have already suffered grievously as a result of cuts and pay freezes, leaving them even less able to stand the pressures caused by rising prices. The same working people who are now potentially expected to continue to do so to keep the public finances afloat (or so the story goes), or to control inflationary pressures by avoiding a wage-inflation spiral.
What absolute nonsense. Firstly, the UK’s public finances are not like the accounts of a private business. As such, there is no possibility of the government going bankrupt. The government is the currency issuer and as such has choices in terms of its spending priorities, which do not involve taxation or bond sales (called borrowing) to cover them. The only constraints it faces are finite real resources and the decisions about how they are distributed evenly, or not, throughout society.
Instead, we should view government spending and its policy decisions in terms of tangible benefits which have thus far served the elites and the corporations, and not working people and their families. They have led to the decline of our public sector infrastructure in areas such as health, education, and local government.
When they asked us to clap for the NHS, for those who bore the brunt of the pandemic, that shouldn’t have meant that they expected people to continue to work for peanuts after years of pulling in their belts, having been told falsely that there was no money. Or to work under worsening conditions with insufficient staff and real resources to provide good health care services. Furthermore, under the cover of the NHS logo and the noses of an unwitting public, our NHS has been packaged up to suit private healthcare interests. A heavy price has been paid and will continue to be paid.
As a report from the University of Oxford, which was published in The Lancet in early July showed, the fallout from the privatisation of health contracts has been a drop in care quality and higher rates of treatable mortality, deaths that could have been avoided. The NHS is not a business making widgets for sale. It is a vital public service protecting the health of the nation and should be publicly owned, paid for, and managed.
Spending cuts have also been responsible for a social security system which is not fit for purpose and has become a mechanism for dividing and punishing people instead of helping them in need. It has also led to many deaths as a recent report published by the Deaths by Welfare project notes. Deaths that could have been avoided with the political will.
Government policies and spending decisions have led to a low-wage economy, rising poverty, hunger and food banks, and a sicker nation.
Government has, in fact, treated its citizens as expendable in a never-ending race to the bottom. The neoliberal quest pursued by successive governments has been to reduce the size of the state on the basis of both a toxic neoliberal ideology that sets the market as the arbiter of all, and that a smaller state will need less tax to pay for it, which forms the cornerstone of Tory policy.
It is based on a notion of a bloated state that needs to be culled in the face of a scarce pool of money which deprives the business sector of funds for investment. In this respect, Rees Mogg, who seems to have travelled in the Tardis forwards in time from the 18th century and who is horrified by the idea that people can work from home just as effectively as in the office, has indicated his intention to reduce the civil service by 91,000, to reduce government spending costs. He asks no questions about the economic impact of such a strategy on an already failing economy. Or the suffering it will cause.
The undisguised hatred of state interference by the right wing fails to recognise that it is the spending decisions of the currency issuer which determine the economic health of a nation and creates the infrastructure and legal framework for business to even exist.
The State sits at the top of the pyramid and through its spending and taxation policies, everything good or otherwise flows down from there. It can’t be emphasised enough that government makes the decisions about its spending priorities and those determine how well the economy functions and who benefits.
Whilst government pretends that there is no money for public infrastructure, it has had no problem finding public money to fund wars or pour into private profit for public service provision. Public services funded with public money have become a cash cow for the private sector. If the alarm bells are not ringing, they should be!
The public sector is the last bastion against an out-of-control neoliberal-inspired capitalism which seeks to profit from human suffering to keep the global capitalist truck rolling. And this government is party to that objective, both in its policies and its household budget narratives of government spending. We shall come back to this shortly.
At the same time, that word inflation is still making the headlines on a daily basis. It is the central bank’s justification for raising interest rates and the government’s for its proposals to constrain public sector wage rises and calling generally for pay restraint, except of course if you are a CEO of a large corporation. It is worth repeating again in this week’s Lens the words of John T Harvey in an article in Forbes.
‘… it’s abundantly clear that the lion’s share of what we are facing today is being driven by supply-chain issues […] Gas prices are not going up because people had so much money they wanted to do some more joy riding and oil companies couldn’t keep up. Rather, as with the OPEC oil embargo in 1973, a geopolitical event has created uncertainty and a decrease in supply. These are the factors responsible for our inflationary woes. […] Nothing in our current scenario suggests that lowering the level of economic activity […] would be helpful. ‘
So, to keep harping on about wage-inflation spirals shows a level of economic ignorance on the part of politicians in terms of the context of these inflationary pressures and a seeming willingness of the central bank to bow to media and political pressure to increase interest rates which will not be in the best interests of the economy. It’s not like Andrew Bailey, the Governor of the Bank of England, doesn’t know this fact as he made plain early on. It will quite simply add to the woes of working people as the increased cost of money works its way through the economy in additional costs and then prices. In an environment where price rises are the result of global supply issues over which we have little control and not wage demands, they will just further damage an already failing economy.
In the face of the storm, you don’t pray for a hurricane.
This was brought home by an unlikely source this week when Paul Drechsler, a former Chair of the CBI and current Chair of the International Chambers of Commerce, was asked in an interview on the Radio 4 Today Programme whether cutting taxes should be the new Chancellor’s first priority. He responded:
‘I think the most important thing to do is to feed people who are hungry. I mean that is the burning platform at the moment. The poorest in our society are going to be starving to death the second half of this year. This needs to be addressed. Sprinkling a bit of cash over everybody […] isn’t going to make a jot of bloody difference.’
In the article published in Ekklesia, reference was also made to the survey commissioned by the Royal College of Physicians in May this year, which showed the impact of the cost-of-living crisis on people’s health. Responding to those results, Professor Michael Marmot who is an expert on health inequalities noted:
‘In my recommendations for how to reduce health inequalities, sufficient incomes for a healthy life was one among six. But it is crucial as it relates so strongly to many of the others, in particular early child development, housing and health behaviours. As these figures show, the cost-of-living crisis is a potent cause of stress. If we require anything of government, at a minimum, it is to enable people to have the means to pursue a healthy life.’
The cost-of-living crisis has arisen out of the ongoing pandemic and the supply issues related to the conflict in Ukraine, but the low-wage economy has been an ongoing situation caused by successive governments who have been willing to allow people to be thrown under a bus as an inflation control mechanism and, let’s be honest, to allow business to exploit the angst of the unemployed who are desperately seeking work and who then have no alternative but to compete with their fellow workers on wage rates.
The failure by the government also to address the socio-economic determinants of health through its spending policies and legislation is a shameful reminder that this has been a political choice borne of a rotten ideology and has caused great social and economic harm.
It is all the more concerning then to read in the BBC this week that according to the OBR, in its Fiscal Risks and Sustainability Report, the pressures of an ageing population on spending and the loss of existing motoring taxes in a decarbonizing economy (although no sign of that as yet) means that the UK is on an ‘unsustainable path’, unless spending is tightened, and taxes are raised.
That bogeyman of debt once again raises its ugly head and once again the public is being tricked into believing that there will be no alternative to more austerity pain if the government is to get the public finances back into the black.
In the words of Mike Hall, an MMT activist posting on Facebook, who responded thus to this patent nonsense.
‘This is a completely, factually fraudulent narrative, uncritically parroted by the propagandists masquerading as ‘journalists’ […]
UK Gov issues £s, free gratis. It has zero need, functionally to offer *savings* Bonds at all, with the pretence they’re needed to ‘fund’ anything. Monetary system facts, that the establishment mass media and politicians they elevate, continue to lie about.’
He suggests that:
‘The only way we can begin to correct this rule by false propaganda is by creating a true commons, common ownership mass media sector, free of both private money interests & centralised control by corrupt political leaders. […]
The present system of rule elites’ propaganda control means humanity (none of us) will not survive the climate and ecological collapse it is hurtling us toward.
Change must begin with the information/media system (and its consequent politics planetary wide death), or it will not happen at all.’
And here in the penultimate paragraph, we get to the heart of the matter. We have a ruling class assisted by academia, institutions and the media, parroting a lie at every opportunity about how governments spend, which allows them to suggest that we do not have the monetary wherewithal, not just to save humanity from ecological collapse, but also to address the crushing wealth and other inequalities that exist around the world, in particular in the global south, due to centuries of colonial exploitation.
The ludicrous nature of that narrative must be exposed for what it is. A lie. In a world where time is running out to address the climate crisis, those who talk about fiscal ammunition having been used up or public debt as unsustainable, or who suggest that such spending relies on a healthy economy and the taxes derived from it, or indeed that too much government spending/borrowing will create a future tax burden, are condemning future generations. The UK government, whilst trumpeting its green credentials, has done little more than just that, and now is moving full steam ahead in the opposite direction to secure its energy needs by giving energy companies drilling rights for new oil and gas exploration, and who knows, maybe fracking next.
The supply crisis has reinforced, as nothing else could, that we do not live in a vacuum and that we have become dependent on just-in-time global supply chains that can easily be affected by war, disease, and climate change. This should be the signal that we must not return to our old ways to shore up an economic system which has been proved to be catastrophic in every sense – for the planet and its biodiversity, and the people who depend upon it both here and elsewhere for their existence and livelihoods.
It is an opportunity to develop our own food and energy strategies, invest in public infrastructure and useful and productive activity to secure a better, happier, and more sustainable future for all. It is also an opportunity to work cooperatively with nations around the world for the same objectives, instead of assuming we can carry on exploiting the human and other resources of those countries, as was suggested this week by Abebe Selassie, a director of the IMF’s African department, in an article entitled ‘Neglect Africa Now and we will face labour shortages globally.’ Yes, let’s not neglect Africa, but not by stealing labour for the benefit of northern economies.
Whilst corporations continue to sell us a greenwashed world designed to keep the profits rolling, and governments tell us their spending options are limited by a finite pool of money, we are running out of time to make the difference that is needed. This is a global emergency and it’s time to get serious. That starts as always with a challenge to the narratives about how governments spend, and for that, we need a media that holds government and its institutions to account.
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