I thought this comment from Ivan Horrocks in response to my blog post from earlier today to be found here was too good not to share more widely:
I do wonder if part of the issue you and many other commentators have with Osborne and co is that you/we are ascribing to them a primary economic policy aim which is in fact not their primary aim. We assume that Osborne and co's primary concern (aim) is to get the economy growing again. And to be fair, this is the impression that Osborne and co promote.
But what if their primary aim is in fact to (try to) fundamentally restructure economic (and social) relations in this country (and beyond if they can) and that their belief is that to do that “austerity” is an essential tool. It can be argued that this is similar to the approach Thatcher employed between 1979-83. For example, under the cover of “austerity” we are witnessing a massive fire sale of public assets, planning laws are being relaxed, the NHS is being “restructured”, and so on and on, all to the considerable benefit not to the “big society” but to big business and big finance.
My conclusion would be that the “austerity” approach — and the narrative that's been developed to support it — will not be dropped, regardless of any arguments put by the IMF, UN, you, Martin Wolf or anyone else — or the production of data that shows how dire the economic situation of this country is — until Osborne and his supporters are confident that their primary policy aim is sufficiently entrenched to withstand efforts to stop or undo it. Again, we see this approach reflected in the behaviour of Thatcher's first government. And, furthermore, it resonates with the reported view of senior/influential Tory thinkers, that the first Blair government wasted their first two years in power. In summary then, we could argue that Osborne and co have simply been very good at learning from history.
It's a depressing thought with a horrible resonance that makes it appear all too plausible.
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Yes, I’ve thought this (as no doubt have others) for quite a while.
It’s all about degovernance: http://pinkpolitika.com/tag/degovernance/ and perhaps also about a few Tory politicians making their personal mark in history: http://pinkpolitika.com/2011/04/04/zeroing-the-deficit-zoom-zoom-essentially-a-grim-vanity-project/.
The comments above seem to sum up the whole grim scenario rather nicely!
I agree. It’s a difficult concept for many of us to come to terms with, but people like Cameron, Osborne et al will not suddenly start taking the public interest seriously just because they’ve been elected to a position of responsibility over it. Distressingly, that’s not how their minds work: where ethical human beings see responsibility, they see naked opportunity.
Shades of Naomi Klein’s “the shock doctrine”… where the approach is to create the conditions to impose the real agenda, economic reforms that would make Milton Friedman proud. Very plausible. In New Zealand, the same approach is being tried. The Tories (aka National party) have learnt that Milton Friedman style economic “reforms” are unpalateble to the electorate after an unsuccessful attempt in the 80’s and 90’s, and another bid for power by a far-right party leader earlier in the last decade, but the idealogy remains, and so they are attempting to pursue the agenda in a stealthy manner, by using the global financial crisis, the christchuch earthquakes, and anything else that will serve their purpose to implement the monetarist reforms they believe are vital. Sad really, how an economic ideology has become a religion.
Absolutely agree with you that what we are witnessing is the shock therapy that Naomi so brilliantly analysed in her book. Actually I had a letter printed in the Guardian on 2nd July 2010 in which I used a quote from her book that ‘the bottom line was that Chicago -style shock therapy just wasn’t possible in a democracy like the UK.’ She was discussing Thatcher’s attitude to Chilean style economic reforms and as you may recall Thatcher admired Pinochet. My letter concluded that that ‘the UK is scheduled to experience its own version of shock therapy advocated by the coaltion government to shore up the discredited neoliberal economic model’. This now appears to be happening and we have the LibDems to thank for that because without their support these policies would be impossible. Authoritarian autocratic dictatorships are not the only political regimes to pursue policies contrary to the interests of the majority of the population.
I’ve noted you’ve mentioned Naomi Klien’s book before, Teresa. I agree, it’s brilliant. I also happen to know that the core principles of ‘disaster capitalism’ are still advocated in some universities, much as they were in the 1970s and 80s, albeit with care taken to mask their pedigree.
Doubtless George Osborne has read ‘Age of Austerity,1945-1951,’ Michael Sissons and Philip French.Austerity consigned Labour to 13 years in opposition.The tories are not stupid.
Well if stupid means ‘not wise’ I profoundly disagree with you, as ever
Isn’t this a move to asset-strip and privatise the commons as a way to grow the capitalists’ wealth now that all other means have failed?
It’s worth bearing in mind that the economics of contraction are going to be totally different from the economics of growth.
This dysfunctional political strategy isn’t isolated to the UK. In fact, it may have been inspired by the US Republican Party.
Remember John Le Carre’s phrase ‘planned penury’?
I did say some time ago we weren’t witnessing incompetence from Osborne, rather it was malevolence. I’m glad I’m finally seeing some support in my view. Mind, this doesn’t help us stop what’s happening. Illegality and violence would seem to be our only refuge, seeing how this lot, already arguably with no mandate, make law without due process and to suit themselves. So long law’n’order, we hardly knew ya. Burn, baby burn.
BB
Couldn’t agree more that it’s NOT incompetence at all: http://pinkpolitika.com/2011/01/11/incompetent-conservative-government-or-de-government/
Almost all current opposition to Osborne and co is based on a fundamental misreading of what they are doing. We faff about re ‘policy’ whilst they are ruthlessly removing the mechanisms to deliver policies of any sort.
The only mechanism they intend to leave in place is the market.
In other words, this is a drive for Anarchocapitalism.
Just a few things I’d add to my previous comment.
From the headline report in The Guardian, today: ‘George Osborne insisted that the government would stick unwaveringly to its austerity plans, despite admitting that the long-term damage caused to the economy by the credit crunch was forcing him to revise down estimates for growth that were already weak.
Raising fresh concerns that the UK is slipping towards a double-dip recession, the chancellor said Britain’s broken economic model meant there could be no return to “business as usual” and signalled that he would resist growing domestic and international pressure to boost activity by cutting taxes or slowing the pace of public spending cuts.’
Insofar as the primary policy goal being fundamenal economic and social restructuring note the reference to a ‘broken’ economy.
Also, with regard to this being a transatlantic project, note the distinct similarities between Osborne and co’s approach and that of Republican Presidential hopeful, Mitt Romney. I quote: ‘Mitt Romney, in Las Vegas today, proposed an alternative approach to Obama in which economic revival would be left to the private sector rather than the federal government.
In a 160-page book setting out proposals for getting people back to work, Romney advocates keeping taxes low and even reducing some, while cutting federal regulation and scrapping Obama’s healthcare reforms.’
I have no doubt whatsoever that there has been, and still is, a considerable degree of information exchange and policy coordination going on here.
I agree with Ivan and raised this issue this week with Heiner Flassbeck, the leader of the team that wrote the UNCTAD report.
Dr Flassbeck’s presentation on the report assumed an aim of general welfare, both in the report’s proposals for stimulus (and recommendations for a wages policy), but also in the austerity approaches that the report criticises.
So – an assumption in the report that general welfare is the aim of those that are getting it ‘wrong’, too.
And a lot of people, perhaps the majority, do find it hard to believe that government may not be acting in their interests.
So there is an underlying issue, even deeper than how to get out of economic crisis – about who is doing what for what ends – as is the point of this discussion.
It is clear that one major aim of those making policy is to rebalance the power of capital and labour in favour of capital and to bring workers to their knees even in Western countries, and this is now coming to effect.
Labour, what is happening to labour, and what directions are being pushed to affect labour and labour relations are a much bigger issue than much of the economics debate allows. (The UNCTAD report recognises it, in recommending wages policy.)
I have repeatedly described the central measure that is being used for this aim, the creation of a reserve army of labour via labour liberalisation, parallel to the strategy of shifting work around the world to cheap labour areas. It is being facilitated in hard and fast EU and international trade rules.
I have communicated this not in terms of abstract Leftie ideological terms, but in real, investigated factual information, much of which has been hitherto kept secret, and with real Left analysis.
It is a major phenomenonen and this too cannot be left out of any ‘economics’ discussion that is wants to be productive.
When this divergence of aims is recognised, then its obvious that this is war, in fact a class war. You can’t fight a war with one arm tied behind back or with big blindspots. You have to work with full intelligence and disseminate real information widely.
I’m not an economist but it has long looked like an asset stripping process to me … the proceeds presumably going into safe tax havens, ready to be brought forth when there are the right opportunities to ‘make a killing’.
I am very interested in the findings of Linda Kaucher .. presumably Mandelson was party to this world vision in his negotiations for DOHA.
This is truly the global power elite fighting back… the real Class War.
Mandelson, as EU Trade Commissioner, set up all the trade agreements that the EU is currently negotiating. So he knows for instance about the huge Mode 4 element – allowing transnational firms to bring in cheap labour, effectively permanent concessions particularly aimed at the UK. He hasnt told the UK public.
When he came back into UK politics to a very top position indeed, as Secretary of State for the business dept (the name of the department keeps changing – previously DTI, then BERR, now BIS) the media, too lazy to engage with the trade agenda, made no connection between his EU role and his role back here. Obviously he was doing the same job here.
While he was in the S or S role, there was turbulence in the car industry here, while the EU/S Korea Free Trade Agreement was being finalised. Vehicles are obviously an element in this agreement, although it involves much more, yet Mandelson failed to mention the Agreement, or the implications for the UK. (This agreement has never been explored in the UK media. The Trade Commission publicly stated their intention to keep it all pretty dark until the European Parliament had formally ‘given assent’).
But Cameron, Cable, Clegg, Lucas (Greens), UKIP have all maintained the secrecy on the big free trade agreement going through now, too, the EU/India FTA, wherein Mode 4, and its effects on UK workers if pivotal.
These 2 articles cut through the secrecy, the first about labour liberalisation and the second a more general explanation of some key terms.
http://www.politics.co.uk/comment-analysis/2011/09/01/comment-the-secret-immigration-policy-they-tr
http://www.politics.co.uk/comment-analysis/2011/09/08/comment-arming-yourself-with-economics
Thanks for the reply. I now understand why Mandelson was trying to negotiate this for Doha which I read about on your guest piece on Richard’s blog. These references are also relevant to the ones that you have posted:
http://www.neweconomics.org/blog/2011/08/22/“plutonomy”-guaranteed-by-the-tax-payer
http://rwer.wordpress.com/2011/08/14/“plutonomy”-update/
‘In short, when the day comes where the rest of the industrialized world falls into the same trap asGreece, the middle class will be pushed down into the lower class, and a global socio-economic plutonomy will emerge. The middle class cannot survive the perfect storm of fiscal austerity, increased interest rates, inflation and ‘Structural Adjustment.’ We are entering a global age of austerity, where our political leaders commit social genocide for the benefit of the global banks, and at the behest of the institutions that represent them. The IMF and other supranational institutions increase their own powers and authority in order to punish and impoverish large populations. What has been done to the ‘Third World’ — the ‘Global South’ — over the past several decades is now being done to us, in the industrialized North.’
In a nutshell, then, conspiracy theory is right.
BB
Man, I thought everybody knew that. Seem to remember tweeting this at you a couple of months ago: http://twitter.com/#!/CdrFuzz/status/84189785744359424
[…] Which does support the theory that he’s actually trying to wreck the economy — and that the recession is all part of his plan to do so. […]