[The] method to the madness is the fact that we do need austerity to enforce a certain organisation of society which is a classist organisation based on wage labor and exploitation that otherwise people would not be so content to accept.
Carla Mattei, author of The Capital Order, speaking on the Macro & Cheese podcast.
The clown world continues. Not the comedic prankster that makes us laugh with his or her antics in the circus ring, but one far darker reflecting the dystopian times we are living through. From the world stage in which a power struggle is evolving between the unipolar world of US hegemony, and the rising star of sovereign nations and multipolarity, to the growing recognition that the economic model that has dominated global policy and spending is collapsing, as nations reel from the continuing consequences of Covid and the US proxy war with Russia in Ukraine and damaging sanctions that have had the opposite effect from the one intended.
At the same time, while domestic concerns grow across the collective West, our leaders continue in their quest to maintain a dying empire at the expense of their citizens. One cannot fail to notice that just as the banks were bailed out with no expense spared in 2008, the industrial war machine is benefiting from billions of public cash whilst public infrastructure decays and people live in penury.
Not least in the UK, where one would have had to be marooned on a desert island not to have noticed that our public infrastructure is in a state of collapse, and the effects of the cost-of-living crisis on citizens mired in growing poverty.
From the NHS to social care, education and local authorities, service provision is stretched to breaking point, and we can no longer bury our heads in the sand over the consequences. However, let’s not imagine that this is a condition that can be blamed fully on the current global economic and political instability; it has its roots in decades of neoliberal ideology which has favoured market-led solutions to everything, including public services. And worse, its adherents have not only used austerity as a mechanism to drive our public and social infrastructure into a state of decay, but also as a convenient tool to control people and keep them acquiescent. A project of decades, maybe more. But the chickens are coming home to roost, and the price is an increasingly heavy one for society.
Before Christmas, the Guardian reported that care for the vulnerable faced collapse without adequate government intervention. Funny how the Tory promise to reform social care provision, for what that plan was worth, has been swept into the long grass yet again.
A decade of government-led austerity has cut funding to local authorities who, in turn, increasingly sought market-led solutions to social care provision to cut their own costs, leading to a vicious circle which was only going to end in one way, as the consequences of austerity became apparent over time. A broken model that faces an imminent crisis and all that means for those providing care to the most vulnerable in our society and to the recipients of their care.
At the same time, our NHS, a jewel in the crown of the welfare state set up by Aneurin Bevan and other forward-thinking politicians in the post-war period, also faces imminent collapse. One cannot fail to be moved and angered at the real stories of people left for hours either at home on the floor waiting for an ambulance, on a trolley in a corridor waiting to be seen or for a bed, or even being transported by caring family or friends to A&E.
The President of the Royal College of Emergency Medicine has said that he thinks that waiting times for December will be the worst he has ever seen, causing, he suggested, up to 500 deaths a week. Data shows that more than a dozen trusts and ambulance services have declared critical incidents over Christmas with a severe flu outbreak and rising Covid cases adding to the pressures faced by hospitals and medical staff.
On 3rd January the Mirror paper ran the headline, ‘The Future of the NHS is on a knife edge’. To make matters worse, right-wing papers like the Telegraph have reported endlessly on what it calls NHS failures, as if they can be attributed to internal mismanagement. It claims that it is an outdated behemoth, a healthcare model that is no longer fit for purpose and needs reform, whilst deliberately ignoring the fact that successive governments starting with Thatcher began their ideologically driven plan to radically reform the NHS decades ago. Privatisation in other words.
Gaslighting to create a narrative that paints the right picture of failure and thus create a public that accepts the privatising, insurance-led prescription for change. Never mind that that privatisation project began long ago. All brushed under the carpet as if it never happened. Using a crisis to facilitate the end game of the project they have been executing for decades behind the NHS logo.
Early on there were many warnings about what was happening, and it is unfortunate that the public could not believe that any government would undertake to dismantle the much-loved institution as a nationally provided health service that was not only publicly paid for, managed, and delivered, but also politically accountable.
In 2010, the politics of austerity gave the Tories the perfect smokescreen to finally drive the last nails into the coffin of the NHS as we have known it – universally accessible, public healthcare from cradle to grave. Despite active campaigns led by dedicated activists, a politically compliant media ensured that most remained ignorant. Now, newspapers like The Telegraph run headlines about the state of the NHS as if its journalists have played no role in its demise, and nor do they place any blame on the authors of this crisis.
However, two years ago Covid began to open our eyes to a disturbing reality and the consequences of austerity. Our NHS struggled to meet the challenges the pandemic posed, as a result of inadequate government funding and a serious failure of strategic planning.
All that is left now as a result of decades of government reforms is a fragmented, hollowed-out shell, serviced in many cases by private healthcare companies all taking their cut of public money. A service that has been run into the ground financially, which has led to cuts in services, beds, and hospital facilities and brought about hospital closures. Combine that with a shortage of doctors, nurses and other health professionals and the perfect storm was inevitable.
We are now witnessing a public institution in its death throes. People are lying on trolleys in corridors or dying, not because there was no alternative, but because the currency-issuing government chose this path as part of its neoliberal, market-led agenda that despised the role of the state in public health provision, unless it was to pour public money into private profit.
We were invited by politicians to clap for those who put their lives at risk, and now those same people are being demonised for striking for better pay and conditions in the face of a cost-of-living crisis, worsened by a decade of public sector pay squeezes, imposed by the Tories. Being a public servant today does not pay the bills, put food on the table, or ensure a decent standard of living, however dedicated one is to helping those in pain or needing life-saving treatment. It isn’t any wonder that the service is falling apart, as staff flee to find better wages and working conditions.
It is not the NHS that is failing us, it is the government. Last month, Stephen Barclay, Secretary of Health and Social Care, claimed that the country could not afford further pay rises for nurses, suggesting that it would ‘divert resources from frontline services into unaffordable pay increases.’ In the same month, Sajid Javid claimed that the current NHS funding model was unsustainable, and that we needed an honest debate about its future. Conveniently, there was no mention of the role of Tory policies in this train crash. The Tory Government has consistently and shamelessly used household budget accounting as a smokescreen for their plans.
You might be led to believe by such statements that the government has a finite pot of money to divvy out. But there is no shortage of money.
The government as the currency issuer has only one constraint to its spending. Real resources. Government chooses how those real resources are distributed and who benefits. Currently, we can see with growing clarity just who have been the beneficiaries of government spending and legislative policies. It is not our public and social infrastructure, and nor is it citizens.
Corporate welfare has reached astronomical amounts (just think about Test and Trace and the PPE scandals) and the excessively wealthy have profited from the crisis, whilst people have died and will continue to die, without adequate government intervention. Imagine that, state-sanctioned killing as a political choice.
This is what it all boils down to – having the political will to invest in a publicly funded, managed, and delivered healthcare service, or indeed any public service. In the case of the NHS, we can ask whether the government has ensured through its strategic planning and spending policies that it has enough nurses, doctors, other healthcare professionals and hospitals or treatment facilities. Clearly not. And if not, what can be done to create or divert real resources from the private sector into better healthcare or other public sector provision? That is the role of government. Money is not the problem, the economic ideology which drives government policy is.
We as a society must decide on our priorities. Do we want investment in vital infrastructure to create a functioning publicly paid for, managed, and delivered public sector to benefit us all? Or the privatisation of everything with more corporate welfare to keep the capitalist wheels from coming off and the profits rolling?
The cost to society of the latter has already been laid bare. We can afford a functioning NHS and good public services. We can’t afford a government, any government, that tells us there are financial limits to creating public well-being.
Whilst understanding how the government spends offers a window to discover the art of the possible, it has been made clear, particularly in recent months, that politicians on both sides of the political spectrum, rather than choosing to serve their citizens, prefer to inflict more pain instead, to maintain the economic order that prioritises their corporate friends and obscene wealth.
The current government has made its position plain and GIMMS has covered this in previous blogs. More austerity to come. Sunak’s recent five pledges tell you all you need to know. As if we haven’t had enough of promises that go nowhere.
Halving inflation, growing the economy, national debt falling, (apparently to secure future public services), falling NHS waiting lists and last of all ‘stop the boats’ (as if somehow, we have not played any role at all in people travelling many thousands of miles to find safety). Just how he intends to do that while imposing more austerity and cutting the national debt is anyone’s guess. Just more of the sort of nonsense one has come to expect from those espousing the ‘Grantham’ model of the economy.
At the same time, Labour is keen to get on the same bandwagon of fiscal discipline, and over many months this has been made clear by the shadow Chancellor Rachel Reeves, and many others.
This week, Chris Mason from the BBC asked Keir Starmer, the leader of the Labour party, if he would match Conservative spending limits at the next election. He replied that ‘we’re going to inherit a very badly damaged economy […] we will not be getting out that big government chequebook.’ Excuse me! This is the very time to get the big government chequebook out! Not cut expenditure.
The narrative of austerity is back (as if it had ever gone away). The one that demands public sacrifice to restore health to the public accounts. How this works when his big plan is to, ‘give people a sense of possibility … show light at the end of the tunnel’, is an unanswerable conundrum. Whatever Starmer’s pledges are, they cannot be delivered with more austerity or promising jam tomorrow. This is not a political game of who can be more fiscally disciplined, this is a matter of life and death.
In his New year’s Address, he also promised a bill to enact the transfer of powers from Westminster, with nice, warm, but shallow words about local democracy and community revival, all under the ghastly Brexit rhetoric of ‘taking back control.’
But firstly, one might ask taking back control for whom? Well, he made that clear when he indicated his plan for more public-private partnerships the sort that began with Tony Blair. His health secretary, Wes Streeting, another privatiser, has made it clear too that he is not averse to using the private sector to manage long waiting lists.
But as Prem Sikka noted in a tweet this week, privatisation has destroyed social care and is killing the NHS, and public money is being sucked out and putting profits before people. Why would we want to continue with this exploitative model of healthcare? Why not invest in a publicly funded, managed and delivered NHS and social care system instead? It is perfectly possible.
Secondly, Starmer seems to have forgotten that the money for this brave new world of community power has to come from somewhere! And that somewhere is government, as the currency issuer. This exposes the clear contradiction in his proposals when he has made it plain that he won’t be opening the ‘big government chequebook’. Perhaps he’s hoping they can achieve much without spending anything by relying on community goodwill to do the business. The Big Society perhaps? Folly indeed.
Let’s clarify the facts. The government’s big chequebook is not like our own – as currency users we are limited by personal or business income, or government funding in the case of local authorities. Our currency-issuing Government’s capacity to spend is only constrained by real resources, not to mention, in this case, by political will. The only way is to spend our way out of this crisis by investing in the decaying public and social infrastructure, to create a functioning economy that puts the well-being of citizens central to it.
But can we imagine a government that rejects the nonsense of household budget accounting and puts people at the heart of its agenda through its spending and legislative policies? Currently, there is not one on offer, whether you vote Labour or Tory.
Worse still, the new leader of the TUC, a body that is supposed to represent working people, said in a recent Guardian piece that with regards to spending, Labour ‘can’t turn the taps on from day one’, as if it must wait until the economy has grown and increased tax revenues to spend on public services. They have to ‘fix’ the public finances first.
Again, just more neoliberal tosh from someone who should have the interests of working people as a top priority in terms of the restoration of a functioning public sector, not the preservation of a system which is impoverishing its members. Clearly, there are still some in the union movement who have been co-opted to sing from the common economic hymn sheet – at least until we get the public accounts back into good health. This ignorance is killing people.
What we need at this moment in time is a government that will use its currency-issuing powers to deliver public purpose, from investing in the public and social infrastructure, which is the backbone of a functioning economy, to addressing the growing poverty and inequality and the existential crisis of climate change that have resulted from the toxic economic system which prevails.
We need a government that forgets book balancing and focuses instead on the real-life issues that affect us all, including how it will distribute the real resources it has at its disposal to address the serious challenges ahead, and ensure that fairness and equity are at the heart of those decisions. An imaginary prospect at present.
Knowledge is the key to the power to change things. Understanding how government really spends is the first step to saying there is an alternative to an economic system that is about maintaining power and wealth in the hands of the few. As Matty Erskine tweeted last week:
‘We don’t need the economy to grow to have decent public services. We need a government to accept its role and duty in mobilising the nation’s resources in the service of people. And understand it is not in thrall to the market. After that society will grow and prosper.’
It may not seem like it, but whilst the world is in a state of flux, the current instability and uncertainty offer a continuing opportunity to challenge the economic system which has done so much damage and will continue to do so if we bury our heads in the sand or feel that the problems are just too big for anyone to address. Just remember, there is an alternative and we could do so much better. Don’t let anyone tell you that we can’t.
Join our mailing list
If you would like GIMMS to let you know about news and events, please click to sign up here
Support us
The Gower Initiative for Money Studies is run by volunteers and relies on donations to continue its work. If you would like to donate, please see our donations page here