Apr 172014
 

If you have been keeping an eye on British Politics over the last couple of years, since the financial crash of 2008, you might be mistaken for thinking that the political parties, Conservative, Labour, Liberal, Green, and Nationalist, are all adhering to and promoting economic policies that are core to their ideological beliefs.

The coalition government is thought to be promoting a conservative form of austerity in order to move the economy back to laissez-faire liberal doctrine and remove the state as an inhibitor of free-market rationalism.

Labour, on the other hand, is generally perceived to be advocates of Keynesian demand management principles – i.e. the slump is the wrong point for austerity, it’s the boom when we will pay off our debts.

Nationalists want increased local control over the economic conditions of their local populations and see this happening either through independence or through border controls. With the Scottish Nationalists it would be an approximation of autonomy from Westminster, and for UKIP, it is through a combination of border controls and an abandonment of the rules-based transnational market of the EU that fuels their aspirations for economic independence.

The other group offering a distinctive economic ideology is the Greens, who want to shift consumerism from it’s present position as the engine of the driver of growth, to sustainability and environmental protection as the key drivers of economic action.

All this seems straightforward and predictable, but what if I said to you that it is a misplaced presumption and that what you are seeing in UK politics is not what you are getting? Indeed, the level of ideological cross-dressing and the double-speak of politicians has reduced our understanding of the options in front of us to a burnt-out husk that is profoundly anti-democratic and actually bad for the economy.

An excellent article in The Guardian by Simon Jenkins points out the absurdity of our present economic and political choices. Jenkins argues that:

“On coming to office, Osborne did indeed cut the “planned rate of increase” in public spending, as Darling had pledged to do. In 2009 total spending was £634bn. By next year it will be £732bn, higher even in real terms. The only big item truly butchered has been local government, and the coalition cares not a fig for that. Osborne has missed all his budget balancing targets and is way off course on borrowing, which still hovers around £100bn. He would be savaging Balls if the latter had been in office. Compared with Greeks or Spaniards, Britons do not know the meaning of austerity.”

Meanwhile, Ed Balls has agreed with Osborne that the state of the public finances is such that the amount the UK spends on welfare has to be capped, regardless of the evidence or the need of the country during the financial period the government deems this appropriate, which is after all entirely arbitrary. You might think that this policy would cause outrage on the Labour benches, but only thirteen MPs rebelled against the Labour leadership and voted against the cap.

If you follow mainstream political reporting in the UK it will tell you that the Conservative Party is riven with division over Europe, and while this might be true of it’s MPs and it’s members, there is another story emerging from the leadership of the party. This story is one in which Cameron, Osborne and Clegg, rather than being the children of Thatcher, are actually and secretly the children of the arch conservative interventionist Michael Heseltine, and that they want Britain’s economic model to be more closely aligned to the German model. Fraser Nelson, writing in The Spectator calls this Cameron’s ‘Northern Alliance’, in which the UK, or what is left of it after Scottish independence, is part of a reconfiguration of the EU along more integrated and state-structured lines. Osborne’s recent charm offensive for the UK to be more German is no accident. He wants to shift the UK economy from a consumption-based dynamic, to a producer and an expert-based dynamic, and the only way to do that is to form an alliance that is able to ‘guarantees fairness’ – or as Mark Blyth calls it German ‘ordoliberalism’.

I know this might sound bonkers, but if the Conservatives win the next general election they will take Britain into a closer alliance with the EU and will even adopt the Euro, despite the offers and talk of referendums and opt-outs. The conservative-nationalist rump will find a home in UKIP, the Europhile Liberal Democrats will form a permanent alliance with Cameron and Osborne, who will then be joined by the New Labour Tendency who will see the compromise offer of a market-driven welfare state along German lines as too irresistible to miss.

So, where does this leave the USA and Britain’s supposed historic ties with the entrepreneurial and dynamic liberal economy that it represents? Well President Obama is more to the left on the economic argument than the Germany dominated Europeans. Insisting on a Keynesian stimulus package while reforming and restructuring the private debt accrued in the crisis, through interventionist state action doesn’t seem very neoliberal or laissez fair, but then the US economy has been growing at a steady rate since 2009 and has recovered much of it’s reversals that it incurred from the crash of 2008. The fundamental alternative that the USA will offer will be the ability to inflate or deflate it’s economy in comparison to others through it’s exchange rate, and not as Europe is doing at present – through internal deflation.

If you are worried about the democratic implications of this, look at Greece and Italy who have seen their democracies overturned and replaced by technocratic committees in the name of competition and sound finances. How long can Spain, Portugal, Greece and Ireland sustain unemployment rates of twenty-five percent without significant social unrest or a shift to right-wing and fascist parties? This is the massive gamble that is being played out here.

This leaves us with an interesting dilemma, who should we listen to and what should we expect out of an economic growth model for the UK in the next five years and beyond as we try to come to terms with the collapse of the Thatcher/Regan coup? Should we listen to Cameron and Osborne, who are expert at saying one thing but doing another, or should we listen to Miliband and Balls who… well here’s the problem… they don’t seem to be saying very much at all, and this is what is worrying. Do Miliband and Balls want to follow Merkel and turn the UK into a duplicate of the German model, or will they follow the US and maintain a stance that looks to liberal entrepreneurialism and demand led markets that offer a limited social underpinning?

It’s not like these issues are being discussed openly, and I’d like to know more about the choices that are on offer. In a perverse way everything is up for grabs. The Conservatives have formed a permanent alliance with the Orange Book liberals and are rediscovering by stealth that Europe is a potential guarantor of economic growth, as long as it is governed by rules and structure. Will we see Labour rejecting the paternalism of ‘ordoliberalism’ and seeking an alliance with American liberals and social progressives along a liberal-Keynesian model of aggregate demand management in the context of global markets? Or, we could all resort to nationalism and fight with Russia as a way of distracting ourselves from thinking and analysing how these things might work out.

Aug 122013
 
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Only in the topsy-turvy world of Neo-Liberal economics can the further decline in Greek Gross Domestic Output (GDP) be called a triumph. And yet, that is what economically conservative newspapers like the Daily Telegraph are saying about the latest batch of figures that show that Greece is in recession for the twentieth consecutive quarter.

According to the Daily Telegraph “Excluding the borrowing costs on its massive debt burden, the Greek government is now raising more money than it spends.” What the Telegraph isn’t reporting is that this has been achieved by massive lay-offs of civil servants, a relaxation of the minimum wage and a punitive property tax that will only be exempt for those living below 6000 euros a year.

Obviously, the most simple economics lesson from history has not been heeded. When in a slump, the only way out is to stimulate demand in the economy. As Simon Jenkins in The Guardian has rightly pointed out for some years now, the best way to do this is to give the money directly to people to spend, rather than to bankers in the form of Quantitate Easing and the purchase of bonds. How much QE money has been salted away in tax havens and used to keep share prices high?

Instead of the stimulus money going into the Greek economy to ensure that it can grow it’s way out of debt, the austerity nutters are continuing to bleed the Greek economy dry while expecting a miracle. No wonder the politics of fear and uncertainty are taking hold in Greece.

The Greek unemployment rate is now at a staggering twenty-seven per cent, with no sign that it is coming down. All those people out of work, dependent on squeezed state benefits and charity hand-outs. Before long we have to start asking what will be left of the Greek economy, because at this rate there is going to be very little to work with afterwards to restore growth.

As Zygmunt Bauman points out “The fraudulence of the promised ‘trickle-down’ effect of opulence at the top has now been laid bare – for everybody to watch helplessly and bewail – but the ‘collateral casualties’ of the grand deception are here to stay for a long time to come. The foundations of social solidarity and communal responsibility have been sapped, the idea of social justice compromised, the shame and social condemnation attached to greed, rapacity and ostentatious consumption have been wiped away and they have been recycled into objects of public admiration and celebrity cult”.

It is not the ordinary people of Greece who brought this about, but the international financiers in London and around the world who have inflicted this burden on the Greek people. I can only utter my indignation – twenty quarters of recession! Surely someone might have got the idea by now that this isn’t working? Imagine how much it is going to cost to repair the damage and sort out the cost to Greek society once this wicked experiment is over?

Apr 072013
 
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I’ve started to read some of Vaclav Havel’s essays, and this immediately jumped out at me…

“Seldom in recent times, it seems, has a social system offered scope so openly and so brazenly to people willing to support anything at any time, as long as it brings them some advantage to unprincipled and spineless men, prepared to do anything in their craving for power and personal gain; to born lackeys, ready for any humiliation and willing at all times to sacrifice their neighbours’ and their own honour for a chance to ingratiate themselves with those in power”.

“The overall question, is this: What profound intellectual and moral impotence will the nation suffer tomorrow, following the castration of its culture today? I fear that the baneful effects on society will outlast by many years the particular political interest that gave rise to them. So much the more guilty, in the eyes of history, are those who have sacrificed the country’s spiritual future for the sake of their power interests today” Vaclav Havel.

Jul 012012
 
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All in it together?

As the frenzy surrounding the Jubilee celebrations dies down, and the inevitable hype of the European Cup has evaporated, we are only left with the Olympics to console us as a national distraction from our economic woes. Not that the Olympics will distract us for long mind, as the enforced and coerced straightjacket of global-corporate branding will give island Britain very little opportunity to express the wide and diverse range of its authentic voices. The Olympic message is pre-packaged, pre-heated and, quite frankly, nothing but naked totalitarianism.

Under the ideology of brand-management, the individual freedom of British communities to express themselves has been squashed. The Olympic Torch passes through Melton Mowbray on 3rd July, but what difference can a small market town like Melton make when the story is tightly controlled and managed by LOCOG? The organisers of the London Olympics wont dare let anyone deflect these local events away from the centrally defined message. This is a chance for London to share in the power of global super-brands alongside global corporate organisations. These organisations claim to be on our side, but don’t play any meaningful role in our communities. Coca Cola and MacDonald’s bring us better lives, they say, but once the torch has moved on, so will the super-brands.

The power of executive management, branding and global corporate organisations have defined Britain for some time now. Small elites of super-connected individuals have been able to ‘executively manage’ Britain with impunity. Spending and wasting billions on half-baked projects that have no meaningful checks and balances in place to provide accountability and stability. Since the 1980s British political life has been about how a tightknit clique of people can get to the top of the centralised state and exert executive control over the machine of government. To make it do what they believe should be in the interests of themselves and people like them. This was the model that the Labour Party accepted with New Labour in the 1990s, and which the Tories initially struggled to re-brand in the 2000’s.

The present attempts by Britain’s governing coalition of Conservative and Liberal Democrats to maintain this model of governance are looking shaky and increasingly fragile. This particular brand of politician wants to be treated like CEO’s for some international conglomerate. A conglomerate that is recognised for its brand identity only, but which is otherwise faceless and shadowy. The decision making process they use is opaque. While the rhetoric extols the heroic nature of ‘crucial decisions’ and ‘doing whatever it takes’, these are nothing but power-plays that boost the image of each politician’s individual prowess and executive autonomy. Their aim might not be sky-high salaries while in government, but they are likely to earn millions when they leave office. Their grip on power is justified, however, along the same terms as the CEO of many international corporations, in the name of the market and of ‘talent’. There can be no independent corroboration of their abilities, and we are told that there is no way to test if the two are not mutually exclusive.

Britain has been governed since the 1980s, off-and-on, by so-called strong leaders who have sought to express themselves through simple slogans. ‘The lady is not for turning’, ‘New Labour, New Britain’, ‘Vote Blue, Go Green’, and more recently ‘We are all in it together’. As the economy hovers, however, on the edge of a meltdown even worse than the great depression of the 1930s, it would be appropriate for us to reflect on what has brought us to this place. Particularly, it is time to start thinking about our self-delusions, those things that brought us to the point of self-imposed, reckless austerity being seen as the only answer to our economic problem. When in fact, all of the evidence is suggesting that austerity is leading us nowhere. In this maelstrom of self-delusion one phrase resonates and cuts-through more than any other. ‘We are all in it together’. And yet, recent events and news about the crisis in banking practices have convinced us that this is far from the truth.

George Osborne’s empty soundbite and slogan has been found out for what it is. It is a vapid and narrow papering. A veneer over the ideological dismantling of the British state and the imposition of the rule of one class over another – in perpetuity and without a single shot being fired. George Osborne minted this sound bite in order to justify the most extreme fiscal contraction the British economy has seen for many generations. The aim was to bind the British people into a neo-liberal drive towards a smaller state that would be founded on low taxes, individual reliance and hand-bag economics that equates good governance with simple moralism. Cameron, Clegg and Osborne banged on about how the country had ‘maxed-out’ its credit card, how we were next in line to be trashed by the financial markets, and how private companies would ride to our rescue and rush in to fill the gap that was being cleared for them with the dismantling of the state.

Never has so sudden an economic turn-around been imposed with such scant evidence. As Nick Cohen argues in today’s Observer, “Although it is easy to damn David Cameron, Nick Clegg and, above all, George Osborne, as boys doing men’s jobs, it is not true that they are incapable of taking bold decisions. In 2010, they took the audacious step of stopping Gordon Brown and Alistair Darling’s Keynesian efforts to nurse Britain out of the crash.”

So what is the starting point for getting us out of this mess? Actually there is a simple approach that can make effective headway almost immediately. Adopting, turning and using the slogan ‘We are all in it together’ as the battle-cry of a coalition of patriots, progressives and radicals. Cheering this slogan back at George Osborne and his clique would drown-out the message of the neo-liberals, who so plainly don’t want us to all be in this together. Adopting this slogan to challenge the powerful elites and corporate executives jetting around the world with impunity would serve as a reminder that corporate capitalism has a single purpose, and that is to serve society, and not the other way around. ‘We are all in this together’ resonates as an ideal that is clear, heartfelt and something that can be taken up by diverse communities of different backgrounds and different expectations, but who all recognise that the extreme individualism of the past should be consigned to the past.

There are calls for a debate about how we renew social capitalism as an essential part of our social democracy, our civic society and the moral fabric of our nation. To be sustainable this re-evaluation of our economic sustainability has to find wide-based agreement and support founded on a moral and ethical democracy that is transparent and fair. If we are all in it together, then bankers will face prison for their crimes alongside rioters. The powerful will have to negotiate and agree their freedoms along with the powerless. The global will have to negotiate with the local to agree their freedom of action. The short-term needs of industry will have to be negotiated with the long-term sustainability of the eco-system. And the Olympic ideal of peaceful competition without the burden of politics, religion, or racism might be achieved – only now we might want to include ‘corporate might’ within the core of these ideals as we wake up to the dangers of executive dominance and self-serving rip-off capitalism.