Austerity – It’s a lie & unnecessary!
“If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”
Joseph Goebbels, Hitler’s Reich Minister of Propaganda
It’s a political – not an economic – decision to maintain austerity.
The lie that’s been told in the UK, and all over the world, is that austerity is necessary to reduce debt. Yet after 5 years of austerity in the UK, the Institute for Fiscal Studies1 tells us that only 40% of the planned public spending cuts had been implemented by the end of 2014.The election result means the Tories have the requisite majority to start implementing the remaining 60%, including the £12 billion of welfare cuts they managed to avoid quantifying before the election. But has debt reduced?
Far from it! the Office of National Statistics has just issued the latest figures and in August 2015 the debt was £12.1 billion, over 15% higher than in August 2014. It appears that Osborne’s debt reduction strategy is in tatters but the reality of austerity is that it reduces wages, conditions of employment and social security entitlement, while asset values, bonuses and dividends increase. Austerity is not about economic recovery, but is an integral part of neo-liberal economics, the de facto economic belief of most Governments today.
Radical Soapbox has previously looked at the economics of neo-liberalism, and compared them with the economics of fascism, commenting that privatisation is at the heart of both. The word has its root in the German word reprivatisierung (denationalisation) and it is this economic relationship between the State and corporate power that makes neo-liberalism so chillingly terrifying.
Much of privatisation is outsourcing, and the idea is sold to the public on the basis of the projected ‘saving’ of taxpayers’ money by using efficient and competition-driven private enterprise. Radical Soapbox has looked at outsourcing companiessuch as G4S, Serco and Capita, and found that the shareholders are often the same large finance companies.
How can this provide genuine competition between companies who are tendering for Central and Local Government contracts? It doesn’t. In fact, it looks more like an auction ring, where the successful bidder is determined in the pub in advance of the auction. Now the Institute for Government tells us that the UK taxpayer is paying $10 billion a year to just 20 outsourcing companies!!2
Right now, the corporations are lobbying hard for the world’s governments to conclude Free Trade Agreements. Not surprisingly, these agreements will give the corporations unfettered control of trade on their own monopolistic terms, including over Genetically Modified Organisms (GMOs). The treaty being negotiated between the EU and the US is called the Transatlantic Trade and Investment Partnership (TTIP) and one of its many detrimental effects on the UK would be to finally dismantle the NHS completely. It is a treaty made in hell.
Privatisation and outsourcing have reduced the size of the State but, paradoxically, the power of the State has actually increased. In the economic and financial hurricane of neo-liberalism, workers’ rights have been dramatically reduced; trade unions emasculated and both have fewer rights than over a hundred years ago! So much for progress!
This has been accompanied by a reduction in the right to protest, so that it’s much harder to oppose the lie of austerity. This, frighteningly, is in line with Goebbels’ comment that the state has to use its powers to repress dissent, so as to be able to maintain the lie.
The relationship between the state and corporate power can be clearly seen in the collection of tax – or, rather, non-collection of tax, especially by the large corporates such as Amazon & Google, who purport not to sell anything in Britain!
Any government has to try to balance income and expenditure, but the idea that this can be done by austerity alone is palpable nonsense! Her Majesty’s Revenue and Customs (HMRC) told the House of Commons Public Accounts Committee (PAC) in Dec 2013 that the UK’s ‘tax gap’ (uncollected tax) was £35 billion. But the chair of the PAC, Margaret Hodge, believes this is just the ‘tip of the iceberg’.3
It is quite obvious to anyone with half a brain that if this money – just the £35 billion – was collected, there would then be no need for austerity. Therefore, choosing austerity rather than collecting tax is a purely political decision.
The question that must be asked is why are so many large companies, especially high profile multinationals, allowed to pay so little tax? This is not about the rate of tax, but about the avoidance of paying any real amount of tax by the use of artificial schemes.
Do the politicians really believe that neo-liberal economics will deliver a prosperity that will trickle down to everyone? Or is it just that they don’t notice the food banks and the widening inequality in our society? Or maybe they do notice, but they’re not bothered about it, since they arrogantly believe our resistance is broken and we are too weak and badly organised to fight back?
Whatever the reason, it’s clear that there’s no political will to end austerity, or to collect tax from the corporations.
The challenge for the 99% of us is to bring the lie of austerity into the public domain. Then, perhaps a real fight-back can begin. Or is it already too late?