A May Day Crisis

If the left celebrates Labour Day will it be accused of class warfare? Does the left dare to re-assert the importance it places on mutual support for one another and collective reasoning above petty individualism? Individualism has failed as an economic model and it fails also on humanitarian grounds. Its worsens economic and political prosperity and threatens national security. Beggar-me-neighbour is nothing to celebrate!

Not unlike the Hillsborough football fans Jeremy Corbyn finds himself under attack from every bastion of the establishment. This has been true ever since he was resoundingly elected by the party with a clear mandate for radical change. Since then he has been thrown into the lion’s den. He has actually responded better than many might have expected humanly possible. He is obviously a lot tougher than he looks!

So what strengths does he have that brought him, nay, forced him, almost against his will, to this point? The Party membership were looking for a spokesperson through which to express their dissatisfaction with the status quo.

Corbyn does not have all the answers, but he is prepared to do the hard work to think about bringing effective, radical change to the way we have been doing things in recent decades. Whether he will succeed in achieving these goals is another question. The need, however, runs very deep. Scandals of self-serving opportunism, skating very close to illegal activity, are everywhere, because, the prevailing principle of governance has been based, since Thatcher came to power, on the notion of personal greed and the trickle-down effect.

In this time the lesson to be learnt is that greed  does not build a strong economy, it bleeds the country dry. It does not lead to investment, merely to short-term asset-stripping (see BHS). It does not plan for the future (see TATA steel). It does not promote environmental or regional development, because these are long-term goals that the market handles very poorly.

Greed promotes a grotesque foreign policy based not on security and fairness and  decency, but on, well, greed. How can all this be changed? It can only be done by challenging the principles of neoliberalism – the false ideology that pretends that the so-called ‘free’ market is making sensible, rational decisions, through the workings of the ‘invisible hand’. This false ideology that says inequality is a good thing, because it augments incentives for hard work, investment and growth, and rewards people for what they are ‘worth’, for what they ‘contribute’.

As it turns out gross inequality is bad for growth, bad for demand, bad for investment, bad for productivity. Gross inequality creates a plutocratic economy in which lobbying parliament is as effective in raising profits as being inventive or industrious. Furthermore, the neoliberal model ends up rewarding the wrong people for the wrong things. Of course we don’t start with a level playing field, so we definitely don’t reward the ‘best’ in society, only the ‘luckiest’! Neoliberals hate taxes because they lessen incentives and distort price signals. They  don’t see that collective goods need to be collectively funded.

Tax-dodging might even get counted as a good thing to the neoliberals. The richer you are the more effectively you can dodge, so the poor pay a higher percentage of their incomes and wealth in tax than the rich do. Most decent people would find this outcome obscenely perverse. Public services decline when tax revenues are short, and as this happens equality of opportunity becomes ever more elusive as social mobility declines. We have seen all these outcomes  in today’s society. We observe rising homelessness, housing squalor, rising mental illness as working conditions deteriorate. There is a widening gap between the life expectancy of the poor and the rich. All this has followed from the neoliberal ideology.

In many ways it all amounts to a question of what kind of society do we want to live in. Whichever end of the social scale you happen to be on, isn’t it right to ask ‘can’t we do better than this’? We don’t have to do things this way, we don’t have to put up with these outcomes. There is an alternative to greed as a model. It is simply a theory and a failed one, that says neoliberal economics is the best we have to offer.

 An alternative model says that capitalism, like democracy, is a good system but not a perfect system. Both capitalism and democracy need careful attention at all times to make sure they are working well. Otherwise the system gets out of hand and defeats its purpose. So it is not wrong to intervene in the market (we do it all the time anyway), we must simply intervene for good, openly and transparently, rather than intervening on behalf of special interest groups that lobby behind closed doors for personal gain from measures that may turn out to be against the public interest.

Good democracy requires governments to be prepared to raise the level of political and economic literacy, rather than exhibiting nothing but contempt for the will of the people. The good people in Hillsborough knew this. The footballers and their families were not nor hooligans, nor drunkards responsible for their own demise. Those in power ruled only in their own interests, on fat salaries, protecting each other in a cocktail of lies. The community took up arms against them in the courts and succeeded, seemingly against all odds.

Mrs Thatcher broke the unions, strengthened the police, and enlisted the press to spin her neoliberal agenda. This is what has brought us to where we are today. Blair’s grotesque failure was to do the Tory’s dirty work for them, making himself very rich in the process. We all were led to thinking, ‘why not, success is being rewarded, good men get rich, nothing wrong with that, he must be doing a good job, the unions had to be stopped, we now have a better, stronger, growing economy, but a kinder ‘lefter’ one than with Tony at the helm, to think otherwise is the small-minded politics of envy’.

Those who bought this argument were wrong. Economic growth was based on the excessive greed of a sneaky, self-serving banking sector that broke the rules and regulations, laundered money for disreputable people across the globe, fuelled property speculation and underinvested outside of the city. Short-term, easy, profiteering was what it was all about, that,  and the massive growth of the UK weapons industry. All issues today more or less stem from this period, from trying to outdo the Tory’s at their own game.

We let it happen because we had faith that neoliberalism would work, although we did not have a name for it, in common parlance, at that time. Now we know that neoliberalism does not work: it does not generate real investment, higher productivity or sustainable economic growth. Austerity does not work either. Bleeding the economy dry will not raise the taxes to repay the debt, at least not until the economy ‘bottoms out’ at a low-level equilibrium.

Take the case of Greece! Austerity measures have ground the economy into the ground, with 30% unemployment among those under thirty. Some might think it was their own fault, however most economists today agree that the fault was, at least in large part, the collapse of the world economy brought on by the credit crisis, itself brought on by risky, unscrupulous, profiteering in the global banking sector.

Even the IMF is arguing for a less stringent neoliberal austerity programme for the Greek economy than that forced upon it by the EU. Greece did nothing very different from any other economy. Yes, there were mistakes, but  if they were so apparent why did the lenders advance the credit? The answer is ‘to make a profit’ and now the lenders want more profit, by squeezing the people dry and throwing away the pips! In this equation lives, justice, fairness, simply don’t matter, they don’t feature at all.

Crisis, what crisis? Happy May Day!

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