Do Labour really want to claim that their alternative to malicious and incompetent
"austerity" is basically just borrowing cash to pay people to dig holes?
I recently came across an interesting article on a left-leaning, Labour supporting website which called on the government to take advantage of all-time low government borrowing rates in order to invest in a number of projects such as a "national restoration scheme", to massively boost the number of apprentice schemes and to stimulate the house building sector. In general I agree with the argument but the author badly let herself down with the statement that "It doesn’t matter too much what we build, but it matters very much that we start to build something. And soon".
In the comments section I presented the case that it really does matter what is built. That what is needed is
investment in the kinds of projects that can create proven social and
economic returns (strong fiscal multipliers). I tried to explain that "building for the sake of building" is no good and that you might as well pay
people to dig holes and fill them back in again if that is your argument.
The author responded to my point by saying that "the great irony is that paying people to dig holes then fill them back in again would work too". Whilst I admit that employing people to essentially do nothing can boost aggregate
demand in the short term (via wages and increased consumer spending, lowered welfare costs), it would be foolish to create the impression that your policy is to just chuck money around willy-nilly. Indiscriminate spending would be just as irrational as the Tory policy of mindlessly cutting spending for the sake of cutting spending, even when the cuts being made are obvious false economies.
It is wrong to fund economic
activity that generates fewer long term economic, social and
environmental benefits than it actually costs. Firstly because there is already plenty of
evidence to show that sustained investment in the construction of social
housing (for example) reliably creates significantly more economic (and
social) benefits than initial investment costs. And secondly because "paying people to dig holes" or funding activities with low fiscal
multiplication values (such as tax give-aways for the super-rich or funding absurd vanity projects) is just creating a debt for future generations to cover, that
is larger than the short-term boost in aggregate demand.
No politician in their right mind should
be arguing in favour of wasteful spending at the expense of future
generations, it just provides ammunition to the opposition and more than that, it is morally wrong to expect future generations to foot the bill for our short-term economic gains. The moral bankruptcy of shafting future generations for short term political gains is a lesson that should already have been well and truly learnt from the reckless creation of hundreds of billions of pounds worth of toxic PFI debt legacies.
Don't get me wrong, I'm wholly in favour of fiscal stimulus but there
really should be more research into the most effective multipliers, so
that proponents of state investment can adopt an evidence based approach
to stimulating the economy. Allowing them to create strong factual arguments in favour of funding projects that have
been proven to be more likely to provide long-term economic, social and
environmental benefits.
If a more reasoned, scientific approach is taken, increases in
spending on projects such as social housing, public transport
infrastructure, research and development, education and high-tech
industries can be presented as a short-term stimulus to boost the economy now, that will also improve
economic prosperity for future generations, with an evidence base to
support the assertions.
It would be far from easy to define an acceptable methodology, with a great deal of work needed to properly define how net benefit is calculated. The economic returns on investment must be considered but not at the expense of externalities such as social cohesion or the destruction of non-renewable resources.
To give a very brief (and over-simplified) example of what I mean: If a scenic rural railway line is re-opened, the combined boost in short term aggregate demand during the redevelopment process and the long-term revenues on the line may never cover the investment cost, but if the economic benefit to the local economy (increased viability of small local businesses, increased tourist appeal, etc) and the environmental benefits (a few hundred people using the train to commute instead of making long individual car journeys) are considered, the benefits may begin to outweigh the negative economic returns than the functioning of the line is considered in isolation.
As an economic recovery strategy austerity is not working. Defenders of the "orthodox neoliberal" response to the ongoing economic crisis often demand to know what the alternatives are to their favoured cut-now think later strategies. In this series I'm going to explore what some of these economic alternatives could be.
Decades of orthodox neoliberal politics meant that huge sectors
of the UK economy went to ruin for lack of state intervention,
however when the neoliberal financial sector elite got into trouble
the state immediately tore up the neoliberal rule book to provide the
biggest state subsidies in UK history to their financial sector mates.
The UK economy is stagnating in the wake of the neoliberal economic meltdown because corporate banks are too busy deleveraging and gambling on the unregulated derivatives market to make loans to people and businesses in the "real economy". Without finance, small and medium sized businesses are unable to expand and create employment, while many larger businesses are being forced to downsize due to lack of credit and the weakness of the wider economy.
For decades the UK political establishment concentrated on turning the UK into a London centric financial services based economy, leaving large sectors of the real productive economy (manufacturing, mining, steel, ships, train building, HGV production) to decline and ruination for the lack of government support. What makes this neglect so much worse is that when their beloved neoliberal financial sector experiment collapsed under a landslide of debt, the Neo-Labour government of the day piled in to save the financial sector elite with the largest state subsidies in British history (90%+ of GDP on bank bailouts and the nationalisation of debt riddled institutions). After sitting on their hands and allowing British industry to fall into desperate decline in compliance with the neoliberal mantra that "state intervention is bad", they immediately ditched the principle in order to bail out the financial sector temples of neoliberalism that had so enthusiastically supported the government's destructive hands off economic approach.
The financial sector lapped up the government cash, took hundreds of billions more in secretive ultra low interest loans from the Bank of England and the US Federal Reserve and another £325 billion in freshly printed quantitative easing cash from the Bank of England, yet virtually all of this cash was simply used to pay down their extraordinary gambling debts (deleveraging), with little of it filtering through to the "real economy". Any money that did filter through to the "real economy" came in the form of loans with interest rates way above the minimalist rates of the secretive central bank loans. It is quite clear that the financial sector simply set about profiteering with their bailout funds rather than using them for the best interests of the wider economy.
It is a widely accepted economic theory that at times of economic crisis the government (and central bank) need to stimulate the economy, however in the wake of the neoliberal economic meltdown, virtually all of the economic stimuli have been gobbled up by the very same financial institutions that caused the crisis in the first place. What is worse is that the ideologically driven Conservatives have spent the last two years extracting the cost of these stimuli from the genuinely productive economy in the form of austerity measures and welfare cuts, using the great neoliberal lie that welfare spending rather than financial sector incompetence caused the economic crisis as their justification.
It is quite clear that these policies of economic stimuli for private financial sector institutions and austerity for the wider economy have resulted in stagflation and economic chaos. The policy needs to be reversed, economic stimuli should go to the "real economy" and the financial sector that created the crisis should suffer the austerity measures.
The state owns an 84% stake in RBS
and subsidiaries such as NatWest. This infrastructure
could be used to establish a National Investment Bank.
The state should should step in to provide economic support to the "real economy" and with the nationalisation of several debt stricken financial institutions during the financial sector meltdown the United Kingdom government has already acquired the infrastructure to operate a National Investment Bank.
The role of the National Investment Bank should be to make low interest loans to projects that further the national economic interests. If corporate banks are too busy deleveraging and gambling on the unregulated derivatives market to make economically beneficial loans, the National Investment Bank should step in to finance entrepreneurs, wealth creators, research and development, employment providers, economically valuable public services (healthy & educated workers are productive workers) and infrastructure development.
The National Investment Bank should also invest in affordable housing construction and provide low interest finance to hard working families, lowering the absurd cost of housing in the UK and creating a stream of disposable income to stimulate the economy.
The National Investment Bank could also be used as a tool to counter the economically destructive practices of tax dodging by making sure that any recipients of low interest NIB loans pass a financial fair play assessment by demonstrating that they avoid using offshore tax avoidance structures or non-dom statuses. If companies and individuals are not prepared to pay their fair share of UK tax, they should not be allowed to access the benefits of low interest NIB loans.
Imagine how much better the economic outlook could have been if the £325 billion in quantitative easing cash and £1 trillion in financial sector bailouts had gone directly to the real economy of jobs, manufacturing, education, research and services instead of being used just to prop up the debt riddled, tax dodging, derivatives gambling, financial sector elite.
After over a year in the job, Labour leader Ed Miliband doesn't seem to
have formed any kind of coherent alternative to defunct neoliberal dogma.
It is the eve of the 2011 Labour party conference in Liverpool and I am getting heartily sick of reading columns by Labour politicians and Labour supporting columnists talking up the Labour alternative to Osborne's "self defeating austerity".
These columns feature plenty of party approved soundbytes ("Cutting too hard, too fast") conjecture ("if Britain slides into another recession, the next election ought to be Labour's to lose") and Miliband eulogies (the "breathtaking boldness" of his new strategy for the Labour party) but they are dreadfully thin on actual alternative policy.
The best Ed Balls could come up with in terms of "policy" in his piece was "I believe we can only win public trust by making the case for a credible and compelling plan that will revive growth, get unemployment falling, take the tough decisions to tackle the deficit in a balanced way, and transform our economy for the long term." Nothing but vague generalised guff masquerading as an alternative strategy, with absolutely no substantive policy ideas at all. In her piece Angela Eagle just criticised the neoliberal status quo without mentioning a single policy (radical, populist or anything at all) and the best Andrew Rawnsley could come up with in his Labour puff piece was a mention of Labour's latest pitiful attempt at populist strategy, a plan to undercut the ridiculous Tory "aspiration tax" on university education from £9,000 to £6,000, which is still double the fees Labour introduced over the course of their thirteen years in power and would do absolutely nothing to counter the grotesque commodification of higher education.
Three articles in two days and the sum total of concrete alternative policies is a single pathetically misguided and reactionary attempt at a populist appeal to students, most of whom loathe the Labour party for having introduced the "aspiration charges" in the first place. If after a whole year in the job, this cack handed attempt at populism is the best "headline policy" Ed can come up with, Labour are not an alternative, they are a sad joke.
Ed should be pointing out that there are successfully tried and tested alternatives to the socially destructive "slash and burn" policies favoured by the Tories out of their refusal to abandon their clearly defunct neoliberal dogma. Ed can point to Roosevelt's "new deal", to the prosperous years of the Post-War Consensus & more recently the astonishing post-neoliberal Argentine Economic Recovery.
Labour need to quickly and loudly apologise for their passionate embrace with neoliberalism and the financial sector elite and begin setting out clear and distinct alternatives. This radical new approach should be structured around policies such as ensuring that any further fiscal stimuli are used to improve state infrastructure, invest in education, research, the sciences and to make low interest loans to high-tech and green industries rather than just handing the cash over to the financial sector to pour into their black holes of debt or for them to lend on to the "real economy" at a huge mark-up.
Labour need to set out clear policies on how they are going to clamp down on corporate profiteering, punish inherently risky business practices and get tough on corporate and personal tax dodging. They also need to demonstrate that there is no harm in raising taxes if they are properly targeted at unearned wealth (such as a Land Value Tax) and on profits from risky and unproductive financial sector practices.
Labour need to promote measures to increase the discretionary income of the masses in order to get people spending again and they need to explain how policies like artificially low interest rates, austerity and quantitative easing combine to create a stagflationary effect that harshly punishes careful people such as families that have tried hard to live within their means, careful savers and pensions investors, in order to protect the reckless gamblers that borrowed way beyond their means and wrecked the economy in the process. They need to demonstrate that Coalition policies punish the self disciplined in order to protect people that lied on their (ridiculous) self-assessment mortgage applications, the buy-to-let parasites that borrowed vast sums in order to hoard property and exploit ordinary working people, stoking house price inflation in the process and the banks that carelessly lent so much money to these people, as well as engaging in their own over-leveraged debt fuelled speculative activities.
Labour need to reform the property market to ensure that hard working people can once again access decent affordable housing and to prevent the inflation of another dangerously unsustainable speculative property bubble. They should remind people that the principle function of a house is as a home, not as a commodity to be traded or as part of an exploitative get rich quick scheme. Labour politicians need to remember there are many more potential voters to have experienced exploitation at the hands of unregulated buy-to-let landlords than there are venal something-for-nothing slumlords (who are more than likely to vote Tory anyway).
Labour should consider what the neoliberals consider to be "the unthinkable", the renationalisation of failing private sector industries. Everyone knows that the privatised railways are an absolute shambles. The privatised rail network soaks away far more in government subsidies than the entire system cost to operate in 1994, line operator Network Rail is a disorganised and unaccountable botch-job that has created vast debt legacies, train franchises are nothing more than anti-competitive oligopolies at best and absolute monopolies at worst, franchisees have been allowed to cost the taxpayer £hundreds of millions by walking away from contracts that they don't like (East Coast mainline) without suffering punishment and rail passangers have been hit with above inflation fare hikes year, after year, after year.
Possibly the most heart wrenching effect of rail privatisation is the catastrophic effect on the UK train building industry. In the 1970s and 1980s Britain was second only to Japan in the development of high speed trains, nowadays the last (Canadian owned) train manufacturer based in the UK is on it's last legs. Not only have thousands of jobs and valuable skills been erased, Britain has also completely lost the immense prestige of being global railway pioneers.
Miliband should openly engage with the concept of renationalising the railways, a move that would be extremely popular with the left, and if the EU try to obstruct the idea he should stand up to them and assert British sovereignty, a move that would be hugely popular across the political spectrum.
If Miliband and the Labour party don't soon come up with a coherent set of socioeconomic strategies and some actual concrete policies of their own, they must start agitating for a return to the Post-War Consensus mixed economy that created 28 consecutive years of budget surpluses and reduced the national debt from 237% in the aftermath of WWII down to 43% when the Neo-Tories tore it up in 1979. Didn't the Tories have an election campaign based on the phrase "you've never had it so good" during the Post-War Consensus years? In 1957 didn't Tory Prime Minister Harold Macmillan say "go round the country, go to the industrial towns, go to the farms and you will see a state of prosperity such as we have never had in my lifetime – nor indeed in the history of this country"? Doesn't the mixed economy approach have a wonderful track record of reducing the national debt? Hasn't the Post-War Consensus era been repeatedly referred to as the "golden age of capitalism"?
Most importantly of all, Ed needs to make sure that the party never again forgets that the role of Labour is to represent the interests of the hard working, law abiding, tax paying, working people of this country, above all other interests.
The SlutWalk movement began in Canada in 2011 and has rapidly spread across the world, I think it is brilliant. Co-founders Sonya Barnett and Heather Jarvis started the campaign after Constable Michael Sanguinetti told students at a crime prevention seminar that "women should avoid dressing like sluts in order not to be victimized".
The idea that women that dress in a particular way are "asking to be raped" is as old as the hills and it is disgusting, not only because it seeks to shift blame from the perpetrator to the victims of sexual assault but also because it relies on the attitude that all men are "potential rapists" who will attack if the victim acts or dresses provocatively enough.
Fighting back against the entrenched caveman mentality that allowed a Canadian high court judge to let a convicted rapist go free with the justification that he was just a "clumsy Don Juan" who had succumbed to "inviting circumstances" is a good thing but it is not the main reason I like the SlutWalk movement.
The main reason is that it SlutWalking is a bold assertion by ordinary women that female sexuality actually belongs to women. Men and the male dominated media have been allowed to control and commodify female sexuality for their own purposes, from male advertising executives who appeal to male audiences by draping images of scantily clad females all over the product they are endorsing, to the male dominated pornography industry and it's predominantly male audience.
The SlutWalk movement is an attempt to reclaim female sexuality through the appropriation of the word "slut", to mean "sexually empowered female" in the same way as the once derogatory word "queer" has been appropriated by the gay community to mean "homosexual and proud of it".
As a Quaker and an egalitarian, I'm a default feminist because I believe in equality of opportunity for everyone. I sometimes hesitate to use the word feminist to describe myself because I feel it has been misappropriated and tainted by a vocal minority of man-hating, female supremacists. It is almost impossible to hold a public discourse on gender politics without one or many of these sad "victim complex" sufferers monopolising the conversation with their shouty "all men are evil", "blame the patriarchy" rhetoric and completely undermining the causes of legitimate feminism.
For the purposes of clarity I'm going to refer to these shouty man-haters as "feminazis" and people who believe in gender equality as "feminists". However SlutWalk doesn't really fall into either category, SlutWalkers are not protesting because they hate men, neither are they protesting for full female equality, they are protesting on the specific subject of female sexual liberation, the right to look beautiful, sexy or even completely slutty without the implication that they are "asking to be raped".
SlutWalk has been heavily criticised by a number of "traditional feminists" but they should be seriously concerned that the baritone in their chorus of criticism is Rod Liddle (a man who described his ex-wife and the mother of two of his kids as a "total slut and slattern" and made vulgar Auschwitz jokes on the Millwall FC website) who compared women dressing provocatively to leaving a window open and your valuables on display when you pop out to buy a packet of cigarettes. The idea that being brutaly violated is in any way comparable to having your laptop nicked if you were silly enough to leave it on display is disproportionate at best and misogynistic at worst. Feminists should really think hard about whether they want to join in with people like Liddle and a host of rabid misogynists (see the comments beneath the Youtube vid at the top of the page) in putting the boot into a female empowerment movement.
For all of their gender politics terminology and lofty anti-patriarchy sentiments, I find it hard to see beyond my impression that these "academic feminists" are opposed to SlutWalk simply because they see it as direct competition. They don't want ordinary women to express views on rape and female sexuality in their own terms because it threatens the authority of feminist academia.
I think that this threat to academic feminism is a great thing. For far too long feminism has been the preserve of bookish academics and self-interested careerist businesswomen hoping to break into male dominated company boardrooms or political parties. So many high profile feminists are so badly out of touch with real women's issues that their pontifications on the subject belittle the whole concept of feminism. A classic example of out-of-touch feminism is former leader of the UK Labour party Harriet Harman, who was utterly preoccupied with things that wouldn't make a jot of difference to the vast majority of ordinary women, stuff like complaining about the glass-ceiling for high flying businesswomen and re-balancing the number of female MPs in Parliament using undemocratic measures like all-female shortlists. The vast majority of actually oppressed women wouldn't give a damn about whether a complete stranger was overlooked for a place on the board of directors at Acme Inc or worry over the percentage of highly paid politicians that have a penis, but like the rest of the Neo-Labour party, Harman was so surrounded with privilege that she began to believe that feminism would be best imposed from the top echelons of society downwards.
Feminists that actually care about the really important issues that effect millions of women around the world should be much more concerned with opposing religious organisations that attempt to restrict access to contraception or engage in child genital mutilation, demanding equal pay for equal work, helping to protect women from domestic violence and fighting to eradicate cavemen mentalities about what women should be allowed to do or wear.
One of the recurring criticisms of SlutWalk from traditional "academic feminists" and high profile politicians is that "slut" is such a pejorative term it should never be used by anyone. They claim that by using the word "slut", SlutWalk contributes to the "pornification" of everything, "puts pressure pressure on young girls to look like Barbie dolls" and according to the dreadful Tory MP Louise Mensch "lionises promiscuity".
I'd argue that SlutWalk does not do any of these things. SlutWalk is an attempt to take back ownership of female sexuality from the pornographers of the world. It doesn't pressurise anyone to dress sexy, it simply defends their right to dress as they like. If that means little girls can dress in the way that they enjoy without criticism, that's fine, and if feminists really care about little girls dressing like Barbies, perhaps Mattel Inc (the producers of Barbie) would be a more appropriate target for their criticism than a parallel feminist movement.
As for Mensch's "lionising promiscuity" complaint, this says a hell of a lot more about her inability to grasp the basics of the subject than it does about the number of sexual partners the average SlutWalker would deem appropriate. Even if the SlutWalk movement was about fighting for a woman's right to have as many sexual partners as she liked, Mensch would still be wrong, it would be better for everyone if puritanical Victorian moralists like Mensch who deem the private sexual preferences of others to be "harmful" would just keep their outdated opinions to themselves.
I think that feminists that are considering public criticism of SlutWalk should carefully consider what it is that SlutWalkers are actually protesting about. To me it is the concept of "rapeability", the idea that a woman should consider how "rapeable" she looks before she goes out of the house. Surely any objection to the use of the word "slut" or concerns that the SlutWalker hasn't properly understood "feminism" should be secondary to the protest against the normalisation of the concept of "rapeability", based on the scaremongering, absolute worst case scenario assumption that all men are potential rapists.
It is easy to see how the primitive "women are asking for it" mentality is harmful to women, but it is also harmful to men. It assumes that we are all rapists at heart, and that sexual assault is something that can be mitigated by "provocation". The majority of men are quite capable of restraining their sexual desires and behaving in an appropriate manner most of the time. It doesn't matter how scantly clad a woman is, or how beautiful he finds her body, the normal bloke doesn't consider rape as a viable option. Tarring all men with the crimes of a tiny minority of rapists is as wrong as binning the whole concept of feminism because of the witless shouting of a few man-hating "feminazis".
Many societies accept this bogus "men can't control themselves and are therefore potential rapists" reasoning as a truism about human nature. Some Islamic cultures end up forcing women to dress in oppressive clothing like the Burqa in case their hair, their lips, the curve of their shoulder or the shape of their legs "force" men that are not their husbands to sexually assault them. I'm much happier living in a free and liberal society where women can expose their breasts on the beach without fear that they are going to be gang raped by a hoard of sexual predators or lynched by a bunch of religious puritans. The advantages of topless sunbathing are numerous, women don't end up with silly strap lines on their skin, men on the beach learn to control their basic sexual urges and everyone gets to enjoy the beauty of the female body in a non-sexualised, non-pornographic environment.
Not only has the assumption that all men are "potential rapists" been the foundation of oppressive cultural practices it is also one of the principle weapons in the "feminazi" armoury. Just as the misogynist uses the word "slut" as a pejorative term to imply that the woman is asking to be raped, the misandrist uses the word "creep" to imply that the man is a potential rapist.
It is interesting to compare the fact that extremists at either end of the women's rights spectrum rely on this "potential rapist" fallacy to support their warped ideologies, with the fact that misogynistic male journalists and academic feminists have queued up alongside one another to give the SlutWalk movement a public kicking.
