Self defeating austerity

"Self defeating austerity"

A beautiful turn of phrase used to sum up the idiotic neoliberal response to the crisis of neoliberalism in just 3 words used by the Italian economist Riccardo Bellafiori in a Guardian article entitled A Crisis of Capitalism.
 
Their political dogma of more privatisation, more deregulation, more attacks on state productivity and more transference of wealth to the uber-rich, show neoliberal politicians and economists up to be either mad (Insanity: doing the same thing over and over again and expecting different results - Einstein) or evil (damaging the entire "real economy" of the world by engaging in a deliberate war on the wealth and living standards of the majority of ordinary working people in order to sustain the extravogance of the establishment elite).

The successfully tested alternative to this neoliberal madness in 4 words:

"Restore the mixed economy"

 If you enjoyed reading this post, maybe you could buy me a beer? £1 would get me a can of cheap lager whilst £3 would get me a lovely pint of real ale.

Nick Clegg and the great Lib-Dem betrayal.

Lib-Dem leader, Nick Clegg's pledges,
not worth the paper they are written on.

When the 2011 Alternative Vote referendum was defeated, most progressive thinkers in Britain saw it as a defeat that signalled an end to their dream of any kind of fair or proportional Parliamentary electoral system in their lifetimes, resigning themselves to the idea that political reform is dead, mainly thanks to the Liberal Democrats.

For those of you that don't know, the Liberal Democrats were a fairly popular political party that campaigned tirelessly on two key issues. The first being their opposition to fees for university education and the second being the need for wide ranging political reform to our anachronistic and undemocratic political system.

When there was no overall winner in the 2010 General Election the moment had come for the Liberal Democrats, they were the kingmakers. They had three main options,

1. Let the Conservatives form a minority government and win plaudits by shooting down every bit of unpopular and barkingly right wing "Nasty Party" legislation.
2. Formed a rainbow coalition government with Labour and some other "minor parties", that may not have had a majority, but could have formed a larger voting block than the Conservatives.
3. Formed a coalition with the extremely unpopular Conservatives.

Choosing the third option was a huge gamble, the Tories had been out of power for a political generation and the actions that had put them into the political wilderness (Union busting, industry destroying, Poll Tax raising, rail privatisating, scapegoat bashing, coddling of the rich) made them one of the most reviled parties in British political history.

In thirteen years of opposition the Tories had shown absolutely no signs of softening of their far-right neoliberal agenda other than some transparently misleading and inept "hug a hoodie" style rubbish to pretend that they had given up on the Thatcherite "no such thing as society", "greed-is-a-virtue" attitudes that had made them so unpopular.

Despite 13 long years of exactly the same kind of transparently neoliberal governance (that had made the Tories so unpopular) from the supposedly socialist Labour government, combined with their tendency to score repeated own goals (Iraq, National ID Database, Mandelson, Blunkett, Cash for honours implications, Fuel protests, Foot and Mouth) the Tories were still so unpopular that they were unable to deliver a majority of the MPs in the 2010 election.

The sight of Nick Clegg and David Cameron laughing it up
in the Downing Street garden was enough to make hundreds of thousands
of Lib-Dem voters vow to never vote for them again.

The British electoral system is so anachronistic and so unrepresentative that even though the Conservatives had only gained on 36% of the vote (23% of the registered electorate) the system handed them 47% of the MPs and put them within spitting distance of power. In 2005 the imbalance of the system was even more pronounced with Tony Blair's Neo-Labour party securing a strong majority (54.6% of MPs) with the votes of only 21% of the registered electorate.

The 2010 hung parliament was the Liberal Democrats' golden opportunity to undo this imbalance that had been created by decades of successive Tory and Labour governments rigging the system in their favour, but they squandered it terribly.

A coherent Liberal Democrat strategy would have been to draw some very clear red lines on political reform, tying them into the huge public anger at the expenses scandal. The lines should have been made on a few very clear subjects. My picks would have been:

1. A fully elected house of Lords.
2. Right of recall for corrupt or compromised MPs.
3. A modern proportional balloting system.

The Tories would certainly have rejected a democratic House of Lords and Proportional Representation, leaving the Liberal Democrats to take the moral high ground and either forge a rainbow coalition with Labour and others, or allow the Conservatives to form a minority government.

Many people have repeated the claim that the Tories would have called another snap election, then won it outright. However it is my opinion that this would have been a very dangerous strategy for a party that had just failed to secure a majority government then turned down a coalition out of entrenched opposition to progressive electoral reform.

The Liberal Democrats could have made enormous political capital out of the refusal. Appealing strongly to anyone with a progressive bone in their bodies by repeating the line that "we are the party of political reform, Labour wasted 13 years of majority government in which they could have brought in reform and now the Tories have shown that they are fundamentally opposed to reform of this anachronistic, undemocratic and corrupt system". No doubt the Labour party would also have gained extra political capital by painting the Tories as a bunch of regressive reactionaries too.

The idea that the Tories were somehow a shoe in for victory in a re-run of the 2010 election is absolute fantasy, and the fact that it is repeated so often by Liberal Democrat supporters to justify their role in the coalition shambles just illustrates how low their estimations of their own party have become.

Clegg was an idiot not to see that he was getting so much of his traction from the pre-election reform politics rhetoric, it's a shame it was just hollow political spin. If only he'd stuck by it they could either have made themselves even more popular by shooting down every bit of regressive right wing policy from the Tories or in the case of a snap-election they could have gone into the re-election campaign with even more people saying "I agree with Nick",winning an increased share of the vote and an even more powerful position to act as kingmaker in return for real political reform.

Instead all they managed to negotiate out of the Conservatives was a national referendum on an alternative voting system unimaginatively called Alternative Vote. The fact that Liberal Democrat leader Nick Clegg had previously described the Alternative Vote system as a "miserable little compromise" demonstrated their pitiful negotiation skills. Not only was Alternative Vote absolutely nothing like a properly proportional voting system (little more than an absurd multiple vote recounting system), the referendum was doomed to failure because rich establishment Tories launched an expensive NO2AV campaign with Nick Clegg as the poster boy. Their campaign consisted of little more than advising people to vote no to AV in order to give "sell-out Nick" a good kicking, backed up with a load of misinformation and outright lies. The fact that Tory supporters were bankrolling a demonisation campaign against Nick Clegg for the act of forming a coalition with their own party was incredibly brazen, but it worked and the the Liberal Democrats' "miserably compromised" dream of progressive political reform was comprehensively defeated.

One of the main reasons Clegg had become such a hate figure with the public was the incredible Liberal Democrat U-turn on tuition fees. The party had spent more than a decade building up their student vote with a principled opposition to the commodification of university education and student fees. Before the election, every single Liberal Democrat MP, including Clegg held signed large signed pledges, which read "I pledge to vote against any increase in student fees". Within months they ditched their pledges in order to vote through the highest university fees in the world for English (but not Scottish or Welsh) students. Meaning that millions of low-mid income (£21,000-43,000) English graduates will be lumbered with a lifelong negative equity "aspiration tax" that they will continue to pay for their entire working lives.

The defeat for Nick Clegg's hopelessly compromised electoral reform was not the end of political reform in the United Kingdom, the Tories had a number of extremely regressive and anti-democratic political reforms up their sleeves and absolutely no intention of bringing them to a public vote.

Instead of a fair and proportional voting system the Tories decided to launch a gerrymander scheme that looks to further entrench the two main parties (both adherents of orthodox militant neoliberal dogma) by reducing the number of Parliamentary seats to 600, even further diminishing the likelihood that alternative parties will be able to obtain fair representation. Not only that, but the Tories decided to disenfranchise up to 10 million voters by replacing mandatory electoral registration with a more complex voluntary scheme designed to permanently scare off young people and the politically disengaged, a plan to erase millions of people from political participation.

Just like with tuition fees, the Lib-Dems have feebly enabled the Tories to deliver exactly the opposite of what the vast majority of their voters actually voted Lib-Dem for. Their voters overwhelmingly opposed the further commodification of higher education and desperately wanted to see progressive electoral reform.

The Lib-Dems meekly handed them the opposite, the highest fees in the World to attend public universities, and some disgustingly regressive, anti-democratic reforms to the voting system, that would resemble a political Coup d'etat if it weren't being carried out by the incumbent government.

A large proportion of Liberal Democrat voters wanted them to do well in the election so that they could open the door to proper political reform. In the wake of the expenses scandal and bankers' bailouts the timing couldn't have been better. Instead of seizing the moment to rejuvenate British politics by battling tirelessly for fair representation and an end to conflicts-of-interest and corruption, they have actually helped the Tories nailing shut the door of reform forever.

The only problem for the Lib-Dems is that they are so clueless that they haven't even realised that they are on the other side of the door, nailing themselves outside the corridors of power with the other minor parties whilst "the Nasty Party" and the Neo-Labour party are on the inside laughing at their stupidity.

Recent events like the Neoliberal Economic Crash and the Expenses scandal handed Britain the greatest opportunity ever to reform her anachronistic political system, to stamp out corruption and undemocratic practices and take the levers of power back from the bunch of crazy "greed-is-good" morons that have been running the show for 30 years, however the ball fell to the Lib-Dems and instead of running with it they meekly handed it over to the Tories to bury in a million tons of concrete.

Not only have the Liberal Democrats ruined any real chance of progressive political reform for the foreseeable future, they have created the impression (through inductive logic) that any minor party campaigning on a platform of political reform in the future will probably just be clueless and immoral liars like the Lib-Dems, searching for the breadcrumbs of power.

If this had been a deliberate plan to completely destroy the Liberal Democrat party from the inside, further entrench militant neoliberalism as orthodox political dogma in the UK and kick the prospect of progressive political reform at least 50 years in the future, Clegg and the Lib-Dem leadership couldn't have executed it better.

See Also

Do you hate Nick Clegg?

The Great Neoliberal Lie

No new ideas, just more Tory cuts

Austerity and the Double-Dip

My view on SlutWalk

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.

See Also

The Mensch Fallacy

The Sentient Concept fallacy

The Occupy Wall Street movement

The contrasting fates of Alan Turing and Lord Sempill

Neo-Labour legacies

Occasional cartoon series
(Hit F11 to view in full screen)

 

Neo-Labour legacies           (11 Sept 2011)

Inspired by an accusation that I am a "partisan Labour supporter" on an internet forum. 

More reasons not to vote Labour and an article about  Gordon Brown's economic alchemy schemes.

More cartoons

Gideon's Folly

Occasional cartoon series
(Hit F11 to view in full screen)

Gideon's Folly           (10 Sept 2011)

Inspired by Chancellor of the Exchequer, George Osborne 
describing his ideologically driven and irrational 
"Deficit Reduction Plan" as "a rock of stability upon which out economy is built". 

More about George Osborne's "rock of stability metaphor"

More cartoons

 If you enjoyed this cartoon, maybe you could buy me a beer? £1 would get me a can of cheap lager whilst £3 would get me a lovely pint of real ale.

George Osborne's "rock of stability"

On 9 September 2011 George Osborne, the man in charge of the UK economy, made a speech at Chatham House in London alongside the newly appointed IMF boss Christine Lagarde in which he made some astonishingly facile statements about the UK economy. The most notable of which was his absurd description of his ideologically driven "austerity agenda" as the foundation of Britain's economic stability. Here it is in his own words:

"We will stick to the deficit reduction plan we have set out. It is the rock of stability on which our economy is built."

It saddens me that anybody could consider using such a glib and inane metaphor in a serious discussion about economics (we must assume he wasn't joking) but that such a misguided economic sentiment could be uttered by the Chancellor of the Exchequer is quite astonishing, although perhaps explained by the fact that he is not an economist, his degree is in History!

I don't have a degree in Economics either but I've worked out for myself that the foundation of economic stability is something a little more fundamental to the system than some ideologically driven government "austerity" scheme.

If he'd read it out this absurd conflation of a fluid political process and an economic foundation, nonchalantly or absent mindedly whilst delivering a long and poorly written speech that he'd only had time to skim read before delivering, we could perhaps forgive him. However this crass and senseless metaphor is actually one of Osborne's carefully selected and oft repeated economic soundbytes, part of the simplistic economic narrative he uses to explain the economy to us "thickwits" in the general population. It seems as if the Tories believe that their economic rhetoric doesn't even have to make any kind of sense, even at the most basic level, it just needs to contain the right balance of reassuring words and economic jargon in order to placate the masses.

How on earth could the Tories have considered using such an incoherent metaphor which relies on the fundamental confusion of processes and a foundations to "explain" their harebrained economic methodology? It's just idiotic.

As a former construction worker I tend to think of processes (like economic policies) as things that take place within structures, which in turn are built upon foundations, not as the foundations themselves. Foundations would tend to be fundamental things without which the rest of the edifice could not even exist. So if we are going to use simplistic metaphors to explain complex economic ideas perhaps we could say that productivity is the foundation of the economy, trade is the structure, and the economic establishment  are the construction workers. This leaves short term ideologically driven government fiscal policies like "Osborne's Austerity" as the builders' tools. In fact it would be fair to say that "Osbourne's deficit reduction plan is a sledgehammer" is a much better metaphor than the fantasy that his ideologically driven plan is some kind of bedrock of economic stability.

I've chosen to use productivity as the foundation of my economic metaphor because without economic production there would be nothing to trade. Human society would soon degenerate back towards the kind of seasonal hunter-gatherer society it originated from if nobody produced any goods or services.

To make a crude distinction, there are two kinds of productivity; private productivity and state productivity. The problem with Mr Osborne's simplistic worldview is that he believes the militant neoliberal economic dogma that state productivity is basically "waste" until it is commodified via privatisation. The Deficit Reduction Plan he describes as a "rock of stability" is actually a mechanism for selling off or simply shutting down state productivity, a sledgehammer that he is using to smash lumps off the economic foundation of productivity, undermining the wider UK economy.

Some people have such a simplistic anti-public sector mentality that they don't even seem to understand that the state services that are under attack are intricately linked with private sector productivity. Without a fit and healthy workforce productivity falls, without adequate policing, crime and soaring insurance costs undermine productivity and without hefty investment in scientific research and higher education, the high-tech industries of the future will look elsewhere to set up production.

Osborne's "slash and burn" austerity policy is riddled with false economies and is reliant on the Great Neoliberal Lie (that immediate deficit reduction is the first and overriding economic priority). It is absolutely no surprise at all that Osborne's economic policies won praise from Christine Lagarde, the head of the IMF.

Many commentators have picked up on lagarde's comments about the need for ministers to retain "flexibility" and used them to claim that she was somehow contradicting Osborne's monetary policies, however as a Chicago school trained economist and the leader of the most powerful neoliberal organisation in the world, it seems much more likely that she is asking Osborne to consider another round of massive financial sector bailouts and more conjouring cash out of thin air through quantitative easing, than asking him to keep an open mind about a return to a stable Keynesian style mixed economy.

Returning to Osborne's idea that his "cuts agenda" is some kind of defence against the collapse of the UK economy, perhaps we should consider that this statement came about because Osborne and the Tories know something that they are refusing to share with us "dimwits" in the general public. Perhaps this "missing information" is that the bankers that provide more than 50% of Tory party political donations have made it absolutely clear to George that they intend to have their overleveraged banks recapitalised by the state, and that ordinary working taxpayers are the ones that are going to have to pay for it, through wage freezes, slashed services and economic deflation.

It seems obvious that Osborne has been warned by the financial sector that they will inflict severe economic sanctions (downgraded credit ratings, refusal to lend to British businesses, vulture capitalism) on the UK government if they let up on the policy of bleeding the real economy dry in order to recapitalise their financial institutions. The fact that most of these "austerity" policies fit snugly with George Osborne's personal faith in militant neoliberal dogma means that there is effectively no chance that these policies will be halted, no matter the scale of the damage they inflict on the UK economy.

Dreadful economic growth, borrowing and unemployment figures for 2011 show that the UK economy is slipping back into recession, which would create a shrinking tax take and immediately eliminate many of Osborne's "austerity savings" through reduced government income. None of this matters though, if Osborne continues refusing to even admit that there is an alternative to militant neoliberal economic vandalism.

It is quite clear that there are alternative methods for reducing government borrowing; we only have to look back a few decades to what preceded neoliberalism. The post war consensus mixed economy created 28 consecutive years of budget surpluses (1948-1975), reduced the national debt from 247% of GDP down to just 43% and improved standards of living across the nation. In the subsequent 31 years of unbroken neoliberal economic policy, governments returned budget deficits in 17 of them and the wealth gap has increased faster than ever before. Since the Neoliberal Economic Crisis really kicked in, government debt (including bailouts) has risen from 36% of GDP (2007) to 150% of GDP (2011).

Another more recent example of a nation state breaking with IMF approved neoliberal heterodoxy in order to power their way out of recession can be seen in Argentina. As the neoliberal economic crisis in Argentina preceded the wider Global Neoliberal Economic Crisis, a comprehensive understanding of Argentine Recovery Economics should be a staple for any government intent on using whatever means possible to drag their nation out of recesion.

With "Osborne's austerity recession" on the doorstep and a new round of economically destructive Quantitative Easing looming, these frighteningly poor government debt figures only look set to worsen, yet virtually nobody in mainsteam politics or economics is prepared to admit that militant neoliberal dogma has been shown up as little more than dysfunctional and amoral economic alchemy, least of all our Chancellor Geogre Osborne.

 If you enjoyed reading this post, maybe you could buy me a beer? £1 would get me a can of cheap lager whilst £3 would get me a lovely pint of real ale.

The post-IMF Argentine economic recovery

If the European debt crisis continues to escalate
Spain may have to look to her former colony Argentina
for an escape strategy.

The European debt crisis had caused a number of economists to consider the future of the single European currency.

A couple of years ago, had anyone stated that Greece should bail out of the European single currency in order to save their economy they would have been derided by mainstream commentators. However the view that Greece could jump ship has become increasingly popular.

Anyone that tries to claim that European monetary union is not dysfunctional in the light of 27% interest on Greek government debt, 45% youth unemployment in Spain, an €85 billion (€13,700 per citizen) bailout to Ireland and hundreds of billions of Euros worth of repossessed and stockpiled Spanish, Greek & Irish property assets on the balance sheets of European banks is clearly in denial.

Opinions range from those that claim that the only way to save the Euro is through rapid monetary union with the United Kingdom to others who imply that it is only a matter of time before countries start unilaterally withdrawing from the Euro.

The fact that people are beginning to openly discuss the potential withdrawal of smaller European nations may be quite alarming for the citizens of Greece and Spain but there is a positive case to be made for withdrawal. Argentina is the best recent economic case study for the smaller European nations and lessons should be learned from their catastrophic economic collapse (1999-2002) and their phoenix like recovery over the last decade (2002-2011) despite the post credit crunch chaos in the wider global economy and the extremely high cost of Argentine government borrowing.

The Argentine debt crisis was caused by strict adherence to hardline neoliberal dogma, lack of monetary autonomy (de facto monetary union between the Argentine Peso and the US$) and the massive scale of capital flight.

The crisis was resolved by tearing up the small-state, free-market, IMF textbook of neoliberal pseudo-economic dogma, boosting the economy by restoring monetary autonomy (breaking the monetary union with the US Dollar), direct government investment (in infrastructure, housebuilding, social security, industry) and cooling capital flight through targeted taxation (to fund the investment projects).

Throughout the 1990s Carlos "innombrable" Menem's Argentine regime were considered IMF poster boys because of the enthusiastic manner in which they implemented hardline neoliberal economic reforms such as deregulation of the financial sector (creating a fertile environment for massive corruption and tax evasion), privatisation of almost everything (into ownership of foreign multinationals, speculators and asset strippers), lack of monetary autonomy, low taxes for the rich and low government spending on infrastructure and services for everyone else. After a decade of this zealous neoliberal experiment the Argentine economy imploded spectacularly with four consecutive years of economic contraction between 1999 and 2002 with painful bouts of hyperinflation eventually resulting in the biggest national debt default in economic history.

The IMF revisionist story is that Argentina's neoliberal reforms were not undertaken properly, but at the time the IMF and World Bank had no complains about the technical implementation of the reforms.

"On the second semester of 1998 Argentina was considered in Washington the most successful economy among the ones that had restructurated its debt within the Brady's Plan framework. None of the Washington Consensus' sponsors were interested in pointing out that the Argentine economic reforms had differences with its 10 recommendations. On the contrary, Argentina was considered the best pupil of the IMF, the World Bank and the USA government."

—Domingo Cavallo, former Argentine Minister of Economy (1991–1996).

The IMF approved neoliberal agenda delivered four years of painful economic contraction, hyperinflation and the accumulation of vast government debts. The IMF opposed recovery strategy that Argentina eventually embarked upon created economic growth of 9% a year for nearly a decade, and resulted in the dramatic reduction of government debt despite the extremely poor economic performance of the wider global economy and  the extremely high cost of government borrowing.

Another IMF post hoc cop out is their revisionist criticism of the Peso-Dollar fixed exchange rate, in which they described as "idiosyncratic" "increasingly uncompetitive" and "a constraint on fiscal policy control". However at the actual time, the neoliberal technocrats at the IMF were too busy patting the Argentine regime on the back for their militant neoliberal reforms to bother voicing any concern over monetary autonomy. 

Even now the IMF are utterly unwilling to use the same pejorative terminology to describe the European Single Currency, despite the fact that it is based on the exactly the same convertability principle. The only difference being that actual coins and notes of the Eurozone nations are the same, (save for the slightly differing designs depending on the country of origin), rather than taking the form of monetary union based on the retention of two (or many) distinct currencies with identical values.

Another IMF "arse covering" strategy is to try and imply that Argentina's spectacular recovery has nothing to do with them having torn up the IMF textbook of neoliberal dogma, paid off their IMF debts as soon as possible and expelled the IMF from the country. The IMF would have anyone that is stupid enough to take their explanation at face value believe that Argentina recovered solely on the back of  "a fortuitous boom in prices of primary commodities, leaving open issues of longer-term sustainability".

I'm fairly sure that had Argentina stuck with the IMF approved formula since 2002, their economy would have continued to stagnate, as rampant corruption and a lack of targeted taxation would have allowed the vast majority of this "boom" in primary commodities wealth to have simply evaporated away into the profits of foreign multinationals and into the Swiss bank accounts of the big landowners, rather than being used to lower Argentine government debt (and interest repayments), improve infrastructure and provide the poor with half-decent houses and jobs instead of unsanitary slums and unemployment.

The late Argentine President Néstor Kirchner -
no fan of the IMF approved economic dogma

Exactly the same causal factors that created the Argentine crisis can be seen in Spain and Greece (IMF approved neoliberal economic dogma, lack of monetary autonomy and capital flight) but instead of taking a radical course of action to restructure their economies in order to restore economic growth (a step that has been proven successful in the short and medium term by Argentina), the Spanish & Greek governments are being pressurised by the European Central Bank and the IMF to intensify the neoliberal privatisation agenda and maintain the Euro. Strategies that remove their monetary autonomy, limit their fiscal autonomy and hinder any effort to prevent capital flight.

Spain and Greece are learning the lesson that Argentina learned a decade ago, that globalised neoliberalism is a bankrupt ideology. The astonishing thing is that these smaller European nations choose to ignore the lessons of the past, choose to remain in the Euro, choose to follow outdated IMF dogma and choose to let their citizens suffer the terrible economic consequences. How long before they decide to cut their losses and jump ship?

Whatever they decide to do, it would be wise for European leaders to heed the words of the late Argentine President Néstor Kirchner: "The IMF has transformed itself from being a lender for development to a creditor demanding privileges".

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Scotland, Independence and North Sea oil.

SNP leader Alec Salmond is a canny political operator,
who looks set to allow the Tories to incentivise Scots
to leave the Union with their neoliberal "austerity" agenda.

After the Scottish National Party formed the first ever majority government in the history of the Scottish Parliament in May 2011, the reactionary English media responded with a slew of misleading anti-Scottish stories, prompting many amongst the English online commentariat to start making angry statements like:

Where is the Independence referendum?

Alec Salmond clearly has no bottle.

The English are now sick of the parasite in the North, we want full Scottish Independence now!            -Anooki (Comment is Free, 7 September 2011)

The SNP is committed to Scottish independence and have declared that they will hold a referendum on independence. However their leader Alec Salmond is a pragmatic man who has decided to play the waiting game.

It will only take a few more years of  divisive, rabid, free-market, small-state, greed-is-good, militant neoliberal orthodoxy from the Tories (and their twofaced yellow sicekicks) leading to the further ruination of what remains of the UK economy (and society in general) to ensure that the Scottish people are absolutely desperate to get rid of the poisonous Tory influence over their country for once and for all.

The SNP and Salmond have many faults, but when the dividing line is drawn I know I'd rather be on the side of the border where healthcare remains free at the point of delivery, university education doesn't cost many times more than what your parents borrowed to buy the house you grew up in and the Conservative party are relegated to political oblivion.

Still, enough people south of the border seem to actually deserve the eternity of Tory hell that Scottish independence would create for them, given the unthinking rubbish they write about Scotland being parasites.

If the Tories hadn't squandered all the Scottish oil revenue on trying to create the illusion that the the small-state low-tax, free market experiment was actually working and handing out huge tax breaks to their corporatist mates in the city of London, Scotland could have been sitting on an oil fund like Norway's which is now the World's largest sovereign wealth fund (worth $525 billion). Not bad for a country with a population of only 4.9 million (smaller than Scotland).

With an estimated 30 billion barrels of oil remaining in Scottish waters (relying on a very conservative assumption that oil prices will remain at around $100 per barrel for the next few decades) Scotland is sitting on oil reserves worth at least $3 trillion (£1.855 trillion) or 1,325% of current Scottish GDP.

To look at it another way, Scotland has oil reserves worth an astonishing £355,228 per resident of Scotland, which would surely be enough to provide a Scandinavian level of economic prosperity, whilst the vast majority of ordinary working English people would be left to rot in the neoliberal wilderness they idiotically keep on voting for.

Important note - The author of this document is English.

The 40% golden rule and "Prudence" Brown's neoliberal debt legacies.

Gordon "prudence" Brown's PFI debt legacies
will haunt the UK economy for decades.

When the subject of government debt arises some commentators still point to Gordon Brown's era of "fiscal prudence" as an example of good economic policy. The fact that Gordon Brown was lauded for his stupid and arbitrary 40% "golden rule" is part of the debt problem, because the Labour party openly subverted their own arbitrary system by not counting their PFI debt legacies in official government debt calculations.

In setting a strict limit on normal government borrowing but leaving a backdoor that involves the secretive neoliberal privatisation of state infrastructure and the accumulation of an estimated £240 billion of debts, Gordon Brown was undermining his own "prudence" through the reckless incentivisation of neoliberal economic alchemy schemes.

The effect of "Gordon's PFI backdoor" is that the state finds itself tied into growing numbers of rigid and overpriced contracts with private sector operators that expect 30 years of profiteering at the expense of the state, even if the state can find no way of using the infrastructure efficiently. In August 2011 the Parliamentary Treasury Select Committee finally got around to admitting that PFI is as an "extremely inefficient method of financing [public infrastructure] projects".

The fact that the arbitrary 40% rule was used as a mechanism to divert ever increasing flows of state funds through inefficient and inflexible neoliberal investment vehicles become even more infuriating when Brown & Darling decided to tear up their golden rule overnight to pour an estimated 91% of GDP into the banker's black holes of debt in the form of bailouts and nationalisations, another tranche of government borrowing (that like PFI is misleadingly excluded from government debt calculations).

Of course the banks that Neo-Labour smashed their 40% golden rule to nationalise (and save from ruin) have huge investments in these PFI schemes that are designed to leech on government funds, meaning that whenever the government owned banks provide finance to new PFI projects, they are totally undermining the stated justification for PFI (that the private sector would raise additional infrastructure investment funds and bear the burden of risk). If the government backed banks provide the investment and shoulder the burden of risk, the risk is transferred back to the state and done so via a methodology that politicians have finally begun to admit is grotesquely inefficient.

Neo-Labour were a deceptive bunch, as evidenced by their lies and distortions over the stated reasons for the Iraq invasion. Over Iraq they were badly found out, however on PFI they won an enormous yet almost entirely unpublicised victory for economic neoliberalism. It was apparent from the beginning, that schemes built via expensive private borrowing and reliant upon staggeringly complex and expensively negotiated agreements would struggle to compete against inexpensive direct government borrowing. The whole justification was based on the myth of private sector efficiency, when the lesson should have been learnt from the botched and increasingly expensive rail privatisation; that offloading infrastructure to the private sector is not by definition more efficient than direct state operation.

It is incredible that the Labour party were allowed to launch so many of these inefficient privatisation by stealth projects, given that the majority of their funding came from the trade unions and a hefty proportion of their core voters fundamentally opposed privatisation. Their only mandate for their prioritisation of these neoliberal economic alchemy schemes seemed to be an astonishing level of public ignorance, something for which the mainstream media must be considered culpable for, if not complicit in.

Much of the right wing media opposed the Labour party but remained silent on the subject of PFI as it is exactly the kind of neoliberal economic policy they approved of. The reason the comparatively tiny left wing media remained silent on the issue is much more difficult to fathom, they either didn't even understand what was going on, or they refused to criticise it out of fear of rocking the New Labour boat.

Huge credit must go to Private Eye and editor Ian Hislop
for their relentless criticism of PFI inefficiancy.

The only media organisation that refused to remain silent on the great PFI ripoff was Private Eye, who remained fiercely critical of PFI inefficiency and the spurious justifications used to defend it. It is amazing that one small circulation fortnightly magazine was the lone voice of protest in the media for over a decade.

It was almost as if the editors of the mainstream UK media thought that PFI was too boring and complicated for us ordinary cretins to even understand and that allowing the politicians to get away with siphoning away £billions in taxpayers' money for so long would be in their best interests because had they chosen to criticise the policy, they may have experienced a tiny drop in sales as people too dim to understand the scam started buying dumbed down crap like the Daily Express instead.

I am often amazed by the public level of PFI ignorance, most people don't even know what PFI means and many of those that do recognise the term, treat it as if it is a subject of mind bogglingly complexity such as quantum mechanics or neuroscience. In fact PFI is not that complex, if it is possible to satirise, it must be possible for people to understand the basics.

Returning to the original theme: The PFI scandal should be seen as an absolute refutation of Gordon Brown's "prudent economic policy". His 40% golden rule served to massively increase the amount of government funds being siphoned into secretive and economically inefficient privatisation deals based on the construction of long term debt legacies that are far more expensive than direct government borrowing in order to artificially reduce short term government borrowing figures.

As well as the creation of £240 billion worth of overpriced debts, PFI creates another legacy problem because any attempts to subject PFI deals to the cuts being imposed on directly financed government infrastructure via "austerity measures" would trigger punitive compensation clauses in the PFI contracts. This means that PFI schemes are likely to be protected from spending reductions, forcing even greater cutbacks in state funded infrastructure, even if it is demonstrably cheaper, more efficient and more flexible than PFI legacies in the same sector.

I find people that maintain the fiction that Gordon Brown was "prudent" as infuriating as those that claim that the economic crisis is a result of the Labour party's left-wing policies. The fact that Gordon Brown's economic rules incentivised state financing of inefficient neoliberal PFI privatisations demonstrates that he was both economically incompetent and an adherent of dangerously far-right economic policy.

Neo-Victorianism, nostalgia or revisionism

During his McTaggart lecture Google chairman Eric Schmidt joined
the growing number of people who openly romanticise the Victorian Era.

In recent years it has become a regular feature of British life to hear vague Neo-Victorian sentiments from political and economic leaders. Several prominent Conservatives have called for a return to "Victorian values", their nauseating education minister Michael Gove went as far as to claim that "I don't think there has been a better time in our history". During the annual McTaggart lecture in August 2011 the American chairman of Google advised the UK to "look back to glory days of Victorian era" during his devastating critique of contemporary British educational standards.

You would hope that in romanticising the Victorian era these people are not pining for the return of child labour, unregulated, dangerous and polluting industries, low pay, horrible working conditions, a class system built on foundations of economic discrimination, racism, sexism and homophobia. An era of disgusting and poorly sanitised slums for the masses with pockets of staggering wealth for the economic elite with a political system that disenfranchised women and all but a tiny minority of landed gentlemen.

Thanks to numerous television programmes, on the subject many people are
aware of the magnificent engineering achievements of the Victorian era,
including Brunel's magnificent Clifton Suspension Bridge.

I hope what inspires people to idealise Victorian standards and values are the magnificent engineering achievements of the age, the "protestant work ethic" that powered so many world leading industries, the philanthropism of the Victorian super-rich, the pioneering introduction of many fundamental social reforms, the grandiose buildings and the national pride at being empire builders and world leaders in so many fields of human endeavour.

In my opinion this much romanticised "Great British" age stretches far beyond the lengthy reign of Queen Victoria, after all it would be absurd to think that an epoch could begin and end with the rule of one woman. To take a modern example, no matter how much they try to disguise it these days with their talk of the "big society" and "social mobility", Thatcherism is still at the heart of modern Conservative party policy more than two decades after the great witch herself was deposed.

In my opinion the beginning of the most progressive period in British history can be traced back much further than the coronation of Queen Victoria in 1837. There are a number of credible origins for the narrative of this enterprising and pioneering spirit, the elimination of Catholic heterodoxy in the mid sixteenth century is one plausible starting point however I'm going to fast forward to the birth of the industrial revolution and the development of modern capitalism.

Many of the pioneering capitalist enterprises were brought about under states of overt state oppression. Followers of nonconformist religions were tolerated by the Church of England based elite, but they were barred from the establishment, barred from attending university and from working in legal professions, they were barred from sitting as MPs, prevented from trading in Corporation towns and regularly imprisoned for refusing to pay tithes to the establishment church.

Followers of many of these dissident faiths found their access to the traditional sources of wealth blocked by the state, so as persecuted minorities have done throughout the ages, they turned to their resourcefulness and their sense of community to create their own wealth. The Religious Society of Friends (Quakers) were amongst these early industrial pioneers, playing important roles in the development and financing of nascent technologies such as the iron casting process and steam powered factories and transportation, technologies that went on to become fundamental components of the industrial revolution.

The Quakers and many of the other non-conformist religions insisted upon conducting their business in an ethically motivated manner, meaning that they became the leading social reformers of the age. Their convictions led them to provide decent housing and less exploitative working conditions for their employees as well as pioneering the provision of workers' welfare such as education, healthcare and pensions for the communities they founded to populate their factories.

It was in the mid 19th Century that the establishment finally began to practice serious religious toleration, the English universities finally began admitting Quakers and John Dalton became the first Quaker MP in 1830. Eventually the huge social benefit of the non-conformist welfare schemes became undeniable to the socio-political elite who gradually began to use the state to provide social welfare instead of leaving it up to the personal disposition of the factory owners. One of the great pioneering social reforms enacted by government was the 1870 Universal Education Act, which came into force against a background of working class enlightenment through the provision of public libraries and countless literary and philosophical societies.

The work of pioneering social reformers like Robert Owen helped
make the Victorian era great, modern day reactionaries tend to consider
the whole topic of strategic social reform with contempt.

Religious conviction was by no means the only inspiration for social reform, the great Robert Owen of the unincorporated town of Manchester honed his egalitarian ideals alongside religious non-conformists such as the great Quaker scientist John Dalton and the Congregationalist minister Joseph Whitworth at the Manchester Literary and Philosophical Society, he shared egalitarian ideals with the non-conformists and used Quaker businessmen such as William Allen to fund his early business ventures but despite all of this he remained a vocal critic of organised religion until his unexpected conversion to spititualism shortly before his death.

Idealistic factory towns like Robert Owen's New Lanark factory (the site of the first infant school in Britain), the Congregationalist mill at Saltaire, Bradford and the Quaker chocolate village at Bournville, Birmingham became places of pilgrimage for the social reformers and philanthropists of their day. Visitors included royal families, intellectuals, politicians and businessmen from around the globe, who realised the virtues of compassionate capitalism and set about instigating social reform in their own nations.

Many of the hard nosed establishment capitalists utilised the advanced production techniques developed by the non-conformist pioneers to undercut them by retaining traditional disgustingly exploitative working and living conditions and refusing to providing community welfare. However the ethically driven social reformers had clearly demonstrated that grotesque exploitation was not a fundamental part of industrialisation and eventually the benefits of employing a healthy, well educated and extremely loyal workforce became indisputable.

The Victorian enlightenment saw huge rises in living standards and literacy, providing a healthy and educated workforce capable of spreading English industrialism and social reform across the globe, most notably through the construction of railway infrastructure and the establishment of English schools. The pioneering social reforms of the Victorian era were followed by the introduction of the state pension in 1909 and cumulated in the post war consensus and the provision universal healthcare with the creation of the NHS in 1946.

Even though the era was famous for it's ethical social reformers and the mass enlightenment of ordinary people, the Victorian age was tainted by huge social problems and commonplace discrimination. Disgusting levels of urban poverty were as fundamental to the great works of Charles Dickens as they were to George Orwell's 1937 sociological investigations into the terrible poverty of the industrial north during the inter-war years, "Road to Wigan Pier" written 100 years after the coronation of Queen Victoria.

The Victorian era was also tainted by brutality and discrimination, corporal punishment in schools was nearly ubiquitous, for much of Queen Victoria's reign people convicted of minor offences were deported to Australia and sodomy was a capital offence. Even after the sodomy law was repealed in 1866 famous intellectuals such as Oscar Wilde were ruthlessly persecuted for their homosexuality. In the late nineteenth Century the newly founded Metropolitan Police employed agent provocateur's and planted evidence to undermine alternative political ideologies such as socialism and anarchism.

The Victorian democratic system was skewed towards the interests of the establishment elite, with only rich landed gentlemen allowed to vote in elections until the 1867 Reform Act, even then all women and huge numbers of working class men were excluded from political participation and the economic elite were compensated with multiple votes in order to maintain their grip on power and influence.

It is not surprising that people are inclined to romanticise the Victorian era for it's world leading industries and pioneering social reforms, despite the appalling living conditions of the masses. It is important to understand what this nation has lost in order that so many of us reminisce so fondly about an era that was so badly tainted by grinding poverty, illiteracy, low life expectancy and huge economic and political inequality. The British Empire has been replaced by neoconservative interventionism and neoliberal economic control, largely done through undemocratic American based institutions. Britain's Industrial power has been destroyed by elitist contempt for all forms of manual labour and establishment fears of an empowered working class. The social reforms that began in the nineteenth Century and cumulated in the post war consensus have been eroded away by 30 unbroken years of the neoliberal slash the state and privatise everything agenda.

The reactionary neoliberals that seem to make up the bulk of the modern day Conservative party could learn a lot from the Tories of the Victorian age. Instead of opposing much needed electoral reform of an anachronistic voting system for their own political benefit, Victorian Tories brought in the 1867 Reform Act which effectively gave the vote to swathes of the working class for the first time. Instead of allowing a parasitic slumlord rentier class to openly exploit the poor, Victorian Tories introduced powers to compel owners of slum dwelling to sell to local councils. Instead of cutting investment to universities and libraries and erecting more financial barriers to higher education, Victorians gave education to the masses through the Universal Education act. Instead of calling for the deregulation of industries for the benefit of corporate interests, several Victorian Tory governments introduced Factories Acts to limit corporate exploitation of the poor. Instead of commodifying justice in order to dissuade ordinary people from seeking legal redress, Victorian Tories introduced the first legislation to compel employers to compensate employees injured on the job.

Given the glee with which some leading Tories have been using "austerity measures" to undermine and destroy social provisions it is easy to imagine reactionary Tories fantasising about a return to the Dickensian levels of inequality. A time where the rich were only constrained by their own morality and there was no social safety net, meaning the truly desperate had to rely on the charity of faith organisations or the philanthropy of the economic elite in order to avoid ending up in the workhouse. The much hyped "Big Society" seems suspiciously like the Victorian reliance on individual charity and philanthropy instead of state intervention to address poverty, low educational standards and injustice. The Tory attacks on social services, the healthcare system and government funding for charitable projects as well as the defunding of universities, libraries and the arts contrast sharply with the many Victorian Era state interventions to improve the conditions of the poor and to raise educational standards.

Modern day Tory policies of opposing electoral reform, slashing investment in scientific research and education, commodifying justice and the undoing of social reforms in the name of "austerity" seem to be the polar opposite of the progressive social and economic policies that created such vast improvements in the living conditions of the masses. This contrast creates the suspicion that the Tory motivation for their calls for a return to "Victorian values" could actually be based on the desire to see the restoration of Dickensian levels of inequality, the renewal of Britain's discriminatory class hierarchy and it's elitist education system and the reawakening of unrestrained capitalism and all of its horrors.