Honey, I shrunk the economy

Benedict Brogan argues in his Telegraph blog:

Persistent doubts about the men at the top distract us from assessing the more subtle work of this Government, and from answering the most vital question: what will Britain look like by the time Mr Cameron submits himself for re-election in 2015?

By “persistent doubts”, Brogan means the idea people have got that David Cameron and George Osborne and the rest of the Cabinet of millionaires are “arrogant dilettantes with too much money and no idea of what the squeezed middle is going through”. You know, the kind of men who have never had to think twice about the cost of a dozen grand cru wines and who never lunched by buying a hot pasty and eating it on the run. The kind of men who expect to spend £40,000 a year on their son’s secondary school education regard it as a feature, not a bug, that university education means students whose parents weren’t rich enough to afford Eton will leave university £60,000 in debt.

It’s easy to mock the pasty tax and the granny tax. The headlines write themselves. We know NHS and welfare “reform” is a serious problem. But surrounding it all in one great disastrous frame is the economy.

(Reuters) Britain’s economy shrank by more than expected in the last three months of 2011 than previously thought, driven down by a weaker services sector, official data showed on Wednesday.
The Office for National Statistics said the economy contracted by 0.3 percent between October and December last year, taking the annual rate of growth to 0.5 percent.

The Reuters headline describes this as “unexpected”, but unexpected by whom? (There’s a consortium of economists giving their views at the Guardian.) The basic figures for unemployment were already out for 2011 Q4: 8.4%. One out of every 12 people who wants to be working isn’t: an Osborne’s dozen.

For the economy, high unemployment is bad.

For a person on jobseeker’s allowance, or whatever name the small amount being given you so that you don’t actually starve is called, the world shrinks. You don’t go out, because you can’t afford to buy a drink for yourself, let alone stand your round. The price of a one-day bus pass is 6.6% of your weekly income – as extravagant as someone on a median salary spending £30 on a taxi. Buying a good pair of shoes will cost you your whole week’s money, and you need that to live on, but you need good shoes for job interviews. Buying a good interview outfit will be another week’s money at least (and you need that to live on) and a stain or a tear is a disaster. What it amounts to is: if you can possibly manage not to, you don’t buy anything you don’t need, and you think carefully about whether you really really need it before you actually lay out the money. You walk round eight shops (if you’re lucky and there still are eight shops to choose between, not a desert of supermarkets) because bread is cheaper at one, milk is cheaper at the other, you try to get to the third just when they’re usually clearing the shelves of the food that’s just at its sell-by date. Everything becomes more complicated in the fight to spend as little as possible and sometimes you have to admit at the till “I miscalculated, I can’t buy that, I don’t have the money.”

A person who has a job is not just earning and therefore paying tax and thus boosting the economy: they’re also spending. Suddenly you can afford to do recklessly extravagant things like buy new clothes, and go out to the pub, and spend a bit more on food, and replace that broken telly, and get a new mobile phone, and buy computer games. A person who has a job becomes a fountain of benefit for the economy. Not just more income tax – HMRC taxes unemployed people at a higher rate than anyone else, but there’s not very much to get from someone whose income is so small – but VAT on what we buy and everything we buy creates more jobs and more spending and more tax and a lower deficit and a healthier economy.

If our current government wanted to boost the economy, their goal would have been to keep people in work. Even though ideologically the Conservatives object to the public sector, if they wanted a strong economy, they would not have thrown so many thousands on to the dole with the savage cuts that Osborne has been implementing each year, triggering what we see now: an economy slowly collapsing. (If you’re optimistic, a “recovery that’s a lot weaker“.)

For cheap-work conservatives, high unemployment isn’t a bug: it’s a feature:

The more desperately you need a job, the cheaper you’ll work, and the more power those “corporate lords” have over you. If you are a wealthy elite – or a “wannabe” like most dittoheads – your wealth, power and privilege is enhanced by a labour pool, forced to work cheap.

Cheap-work conservatives don’t want a booming economy and prosperity for all. Cheap-work conservatives are defenders of corporate power – whose fortunes depend on getting the rest of us to work cheap. That principle underpins everything David Cameron and the Tories are doing. The larger the number of unemployed, the cheaper it is to get people to work.

Don’t believe me. Well, let’s apply this principle, and see how many right-wing positions become instantly understandable.

  • Cheap-work conservatives don’t like social spending or our “safety net”. Why. Because when you’re unemployed and desperate, corporations can pay you whatever they feel like – which is inevitably next to nothing. You see, they want you “over a barrel” and in a position to “work cheap or starve”.
  • Cheap-work conservatives don’t like the minimum wage, or other improvements in wages and working conditions. Why. These reforms undo all of their efforts to keep you “over a barrel”.
  • Cheap-work conservatives like “free trade“, NAFTA, GATT, etc. Why. Because there is a huge supply of desperately poor people in the third world, who are “over a barrel”, and will work cheap.
  • Cheap-work conservatives oppose a woman’s right to choose. Why. Unwanted children are an economic burden that put poor women “over a barrel”, forcing them to work cheap.
  • Cheap-work conservatives don’t like unions. Why. Because when labour “sticks together”, wages go up. That’s why workers unionize. Seems workers don’t like being “over a barrel”.
  • Cheap-work conservatives constantly bray about “morality“, “virtue“, “respect for authority“, “hard work” and other “values”. Why. So they can blame your being “over a barrel” on your own “immorality”, lack of “values” and “poor choices”.
  • Cheap-work conservatives encourage racism, misogyny, homophobia and other forms of bigotry. Why? Bigotry among wage earners distracts them, and keeps them from recognizing their common interests as wage earners.

Yes, the economy is shrinking. Unemployment is rising. What will Britain – and especially England, unprotected from cheap-work conservativism by any form of devolution – look like by the 2015 election?

This is what Benedict Brogan envisages:

a cultural shift in how the state operates, by requiring it to let private and charitable bodies provide services alongside and in competition with the public sector. The consumer, in turn, will be given the same kind of protections in his dealings with the public sector that he enjoys when he buys a television set or books a holiday. Remarkably, the Lib Dems and the Cabinet have been squared on the principle. The next step is implementation.

If my house is burning down, I do not want to “choose” which fire department will come put it out.

If I’m burgled, beaten up, or otherwise in need of the police, I do not want to “choose” which private company will perform policing duties.

If I’m sick, I do not want to “choose” which healthcare provider I should be buying services from.

I don’t have children to “choose” a school for: I want to pay my taxes and ensure that all the children growing up who’ll be the generation that’s working when I retire (if I can) have the best possible education for their capacity. Giving their parents “choice” won’t help that – not unless their parents happen to be rich enough to “choose” between the local state school and a fine private school.

I am not a consumer of healthcare, police protection, fire and rescue services, public transport, education: I am a citizen and these services are the infrastructure of my country.

This is literally a return to Victorian values. When I take a crap, I do not want to “choose” which private sewage provider will be processing my turds. And as a matter of public health, I don’t want anyone else to have that choice either. Benedict Brogan may embrace the principle that his sewage is a matter for his own consumer choice to dispose of: for the rest of us, it stinks.

1 Comment

Filed under Economics, Poverty, Tuition fees

One response to “Honey, I shrunk the economy

  1. Nicely put.

    \When we wage war on the next Islamic Oil rich country, do we want to have to decide which private Army we should use?

    Why do we not get a choice on our provider of head of state services?

    Why can’t we choose our own weather providers, or wildlife providers?

    So far, every experiment in Britain on introducing choice through privatisation has been a disaster, and sensible people would learn by their mistakes. Likewise the economy – set on a single dogmatic neo-liberal course that theory and experience shows won’t work, Gideon is too stupid to change direction when the figures show he is wrong. And he is doing
    is to all of us, despite having no mandate in Scotland nor Wales, not the 6 counties.

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