Monday 4 May 2015

Why Austerity?

I was confused by all the chat surrounding the elections. So many points of view. So many meanings for words. So much playing at ‘politics’. I decided to gather my thoughts about politics, economics and austerity. The results, still far from satisfactory, follow.

Most cultures have a small group of people, an elite, that commandeers most of the available wealth and power. The elitists reckon this is OK “Because I am worth it” and because “It is God’s will - and so by Divine Right.” And anyway, in terms of fairness, some of the wealth will ‘trickle down’ from the rich to the poor, and a rising tide floats all boats. This line of thinking leads to massive exploitation of people (eg slavery and sweat shops) and of the environment (eg greenhouse gases and waste disposal). The elitists form the ‘Establishment’.

Most cultures have a large group of people, the masses (aka the proletariat or plebs), who aspire to a more equal distribution of wealth and power. This usually involves using the government to manage the process.

There are four main political persuasions depending on the desired size of government and on the distribution of wealth and power (see box):





The present UK elite connives to hold on to and accumulate more wealth and power, and to keep government small. This is the politics of the right with labels such as Neo-liberals and freemarket fundamentalists. Amongst other things they lobby for:

  • lower taxes,
  • fewer regulations,
  • a smaller state, cut back the welfare nanny, and
  • weaker trade unions and tame media

The present UK politics of the left (the Labour party) can be labelled as neo-liberal lite. To act as a more effective opposition they need to recreate themselves as democratic socialists. This seeks a more equitable distribution of wealth and power through taxing and spending in a welfare state. Key manifesto points include:

  • Progressive taxation to pay for the welfare state
  • Appropriate regulations eg health and safety at work; environmental stewardship
  • A welfare state to provide eg Education, NHS, infrastructure, housing, pensions, national defence
  • Trade unions - Minimum wage, free press

It appears that, previous to Mrs Thatcher, common sense was on the side of social democracy and neo-liberalism was on the lunatic fringe. Thatcherism with its spin doctors reversed Establishment thinking and promoted the view that greed is good. This line of thinking continued with new labour and then with Cameron’s tories.

Past governments have accumulated debt which has to be paid back using income from tax. But that income is also needed to pay for the welfare state. There is not enough income to pay for both. There are two solutions – (1) increase taxation and (2) cut welfare spending. This calls for austere (harsh) policies involving cuts to welfare - some people are going to suffer – guess which?

Austerity disadvantages the masses and offers many advantages to the elite. Some of the policy options are set out in the following table:




The austerity theory has lost all credibility and is back on the lunatic fringe everywhere except in the UK. (Ref Krugman). It is OK to borrow to support the welfare state. The increased productivity that results can pay back the debts.

…oooOooo…

I found the following two articles in the Guardian to be insightful:

Owen Jones (2015) A cruel society is being built. Voting Labour begins the fightback http://www.theguardian.com/commentisfree/2015/apr/21/cruel-society-vote-labour-rights-tory

Paul Krugman (2015) The austerity delusion. The case for cuts was a lie. Why does Britain still believe it?
 http://www.theguardian.com/business/ng-interactive/2015/apr/29/the-austerity-delusion

And the following book titillated my left leaning tendencies - Owen Jones (2014-09-04). The Establishment: And how they get away with it. Penguin Books Ltd. Kindle Edition.

…oooOooo…

  • My initial enculturation puts me left of centre where I know my subservient and dutiful place eg as cannon fodder in two world wars and as a frequenter of food banks.
  • In my early days I reckoned with Schumacher that ‘small is beautiful’ and I enjoyed the thoughts of anarchists.
  • These days I tend towards subsidiarity and letting a thousand flowers blossom, while recognising the limitations of the ‘good and great’ who are not my ‘elders and betters’.
  • What passes for ‘reality’ in myself and others is just a figment of our imaginations.
  • Participatory democracy demands understanding multi-stakeholder processes (MSP)
  • Those who engage with mindfulness meditation can be non-attached to their world view and to their host of subsidiary points of view. Such people can be a calming influence in political debate on local through to international platforms.

A couple of my early lyrics come to mind:

“There’s a voice inside you – it’s the voice of other men
It’s the voice of people dead and gone
Whose preaching makes the world go on – or off”

“You’ll find plenty question masters making quagmires of their brain
“The man said, ‘there is no answer’,
They said, ‘you are insane.’”

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