Saturday, January 12, 2013

Dear David and Gideon...

Dear David & Gideon,

I hope you are having a nice day. Actually I don't care. Fuck the niceties, I'll just get to the point.

What a lot of people are wondering is whether you are completely out of touch with ordinary working people, or that you don't care about them. I believe that it is both.

The Toxic Blend: Two Types Of Tory
First, let's look your backgrounds. You are millionaires; as such it is natural that you would want to protect your assets. There are broadly two kinds of Tory. Those like yourselves are so privileged that you have never had any need of the welfare state. You've never had to survive on £71 a week Jobseeker's Allowance, a chunk of which must go towards paying the rent because Housing benefits doesn't cover it. Even with the most imaginative forms of sympathy, you just have no idea what it is like. Sympathy can never be empathy. The other kind of Tory are those like William Hague and David Davis, self-made men from working class backgrounds. Hague and Davis do know what it is like to be poor; however, their ability to empathise is compromised by a tendency to universalise their experience. They are unusual; most people are not highly intelligent, hyper-motivated over-achievers like them, but they don't seem to realise this. Like Margaret Thatcher and Norman Tebbit, the classic working class Tory thinks to themselves “If I did it, why can't everyone else?”. Like the chronic optimist puzzled by the clinically depressed, they just can't relate to the poor and the benefits claimants. These two kinds of Tory form a toxic blend; a class of people who are opposed to the welfare state because they cannot relate to the people it is their to protect.

The 'Big Lie'
The budget provided ammunition to those who argue that you are not uncaring but out of touch. By increasing VAT, a tax that hits the poorest hardest, slashing benefits while simultaneously cutting taxes for the very richest, you rewarded your class whilst punishing the poorest so brazenly that for most people it defied belief. It doesn't take a public relations guru to tell you that this looks bad. Even if there was a possible world in which it was the right thing to do, (there isn't) it looked so bad that only the most myopic would fail to see that it was a suicidal move. But the counter-argument here, from those who argue that you just don't care, is that you were working on the principle of the Big Lie. The idea here is that people would think “Christ, that is so intuitively awful, so crassly wrong, that you MUST know exactly what you are doing. You must be an economic genius who knows something we don't, and this decision is so crucially important for the future of our country that you are prepared to look like an arrogant thieving toe-rag in order to get it done”. The give-away is your use of weasel words like “wealth creators” and “job creators” instead of “the rich”. You use those words because you know how useful they are. This brings us into the real battle ground, the real area in desperate need of scrutiny – the realm of ideology, and the biggest single achievement of this coalition government so far: successfully blaming a crisis of capitalism on the Left.

Myths And Mantras Of The New Hegemony
I've got to hand it to you – you've done an amazing job. With the help of your delivery boys in the media and a Labour opposition too scared to fight back, you've managed to convince virtually the whole country that the economic state we are in is because Labour Spent Too Much. The Right has never had a problem of pandering to the lowest common denominator, never been afraid of underestimating the intelligence of the public, while the historical mistake of the Left has been thinking it could win if only it could get people to follow the logic of its arguments. The Right has a genius for emotive and populist propaganda; this has been it's crowning intellectual and psychological achievement. The following mantras have been so comprehensively tattooed onto the brains of the public that even many with Leftish sensibilities believe them. They are as follows:

The debt crisis is because Labour spent too much; there have to be some cuts, we are all in this together. We are in a debt crisis, and paying back the debt is the number one priority.

As a proportion of GDP, Britain’s national debt has been higher than it is now for 200 of the past 250 years. From 1918 to 1961 the UK national debt was over 100% of GDP. During that period the government introduced the welfare state, the NHS, state pensions, comprehensive education, built millions of council houses, and nationalised a range of industries. The public sector grew and there was economic growth.

Now you want to turn back the clock by dismantling the NHS, comprehensive education and the welfare state.Your are not doing this because the country is on the verge of economic collapse, you are doing it because you are ideologically opposed to public services and the welfare state, and committed to handing over more of our public assets to big business.
Before the 2008 crisis, Labour's spending plans had been matched by the Tories. The sudden huge increase in government debt was caused by the necessity of bailing out the banks; if Gordon Brown hadn't done this, there would have been no money in cash machines. His plan of action was copied by countries the world over. The cause was a crisis of capitalism, due to a poorly regulated global banking industry.

The Household Budget Analogy
A crucial part of the idealogical war that the Right is winning, is the propagation of the Household Budget Analogy. By comparing the UK economy to a household budget you've terrified everyone into going along with austerity. Household debt can be terrifying. But households are not like economies. In an economy, you're spending is my income, and my spending is your income. It is a two sided relationship; a household is one-sided. Economies are dependent on two types of spending; private spending and public (government) spending. As we are in a recession, private businesses don't want to spend; they are wary of investing, they hold onto their money. If governments do not step in and spend, the recession continues. The Right always argues that if government shrinks away, the private sector will automatically fill in the gap, providing the services. This hasn't happened, isn't happening, and hasn't happened historically. What got us out of previous depressions was government spending. During World War II the USA's national debt soared to 120% of GDP – nearly twice the size of today’s US debt. The New Deal spending plan not only got them out of the Great Depression but set the stage for a prolonged period of sustained economic growth in the 50s and 60s. Massive investments were made in science and technology, American workers were re-trained and re-employed, private investment was encouraged, and consumer purchasing power was increased. That 25-year post-war economic boom, with the most rapid increase in living standards in our history, would not have happened without government stimulus.

There are plenty of excellent commentaries by celebrated economists such as the Noble Prize winner Paul Krugman of the New York Times and Martin Woolf of the Financial Times – hardly what you would call Left-wingers - who are able to debunk the myths you propagate. (See Appendix below). Some would argue that you should study their works. But I believe that you already know them; you instead choose to exploit people's ignorance with simplistic but powerful ideological mantras.

Disaster Capitalism Comes To Britain
So why, if you know that the way out of a recession is government spending, and that a scorched earth austerity policy will create a double-dip (now ensuing triple-dip) recession and massive unemployment, why did you go ahead with it? The answer is that you have used a crisis of capitalism to further your ideological agenda. You oppose the welfare state, and you have used this crisis to engineer popular consent for its dismantling. This is a perfect example of the historical technique of 'Disaster Capitalism” brilliantly analysed in Naomi Klein's The Shock Doctrine, arguing that sudden crises are intentionally manipulated to push through extreme free market policies that were otherwise not politically possible. In the name of promoting “freedom and democracy”, a shady partnership between the CIA and Chicago School Friedmanite economists succeeded in organising military coups to topple democratically elected, stable, popularly supported centre-Left Developmentalist governments in South America and beyond in order to strip the publicly owned and tax-payer funded assets so they could be sold to foreign multi-nationals at bargain prices. In this tsunami of Corporatism, worker's rights, minimum wage and labor laws were dismantled, dissenters rounded up, tortured and disappeared in their thousands, while a tiny few made a killing. The destruction it wreaked was huge, the economic, political and human costs were staggering but clearly quantified in Klein's forensic analysis.
Now, you guys won't get away with mass incarceration and torture, but you don't need to – the financial crisis was a massive blessing for you. The language of belt-tightening, the household budget analogy, 'clearing up Labour's mess','we're all in this together'; these have worked brilliantly in convincing the people that this is all necessary. And like the unreconstructed Marxists who insist that the Stalinist atrocities and poverty of the Soviet experiment can't be evidence against the feasibility of central planning because it wasn't 'true Communism', and the the Chicago School economists who explained away the chaos their policies created by saying that they were somehow thwarted from implementing the truly earth-scorching policies that would have resulted in their vindication, the triple-dip recession we are entering is just seen as evidence that we need yet more austerity. Like the scientists who held onto their theory of the non-existent Phlogiston in the face of the overwhelming evidence in favour of Oxygen through continual ad-hoc readjustments to their theory, where every piece of counter-evidence is selectively reinterpreted to fit with their convictions, your propaganda for re-election will be along the lines of “yes, it's tough, but we've got this far, it's not long now, you can't change the Commander in the middle of a war – stick with us and you'll see we're right – don't let Labour undo all the progress we've made”.

Divide & Conquer: Benefit Fraud Vs The Tax Gap
You believe in low taxes and looking after your own. You believe that the private sector will provide where the public sector is cut back, because that is what suits your economic interests. And if the private sector fails to provide the public services, for you that's just the free market indicating the such services are not required. And you've nothing to lose there anyway; you don't want those services and if you're stuck in a corner you can just blame the previous government. You have pioneered a divide and conquer strategy, turning working people against one another by smearing benefit claimants as scroungers whilst saying and doing nothing about the tax gap, even though benefit fraud is less than 1% of the tax gap – the £25 billion in tax lost through tax avoidance, £70 billion in tax evasion and £26 billion in tax uncollected. (And there is that £6 billion that you wrote off for your pals at Vodafone). In total that's £120 billion - more than three-quarters of the annual deficit. 

Housing Benefits: No Social Housing Means Taxpayers Subsidise The Rich
You propagate myths about housing benefit: that it is a benefit for the unemployed, when in fact only one in eight claimants is
out of work (not a statistic that you'll find reported in most newspapers). The majority of those who claim housing benefit, including the under-25s, do so to compensate for paltry wages and extortionate rents. And because Housing Benefits, fixed at 90's rent prices by the faceless Rent Service (to whom there is no appeal process) so rarely cover the rent, the meagre Jobseeker's Allowance has to make up the shortfall. (In my case the shortfall was £65 a month; my rent at a very modest £315 a month, Housing Benefit only covered £250 of it). And because there is so little social housing, these rents go to private landlords. Housing benefit subsidises the wealthy while propagating low wages. That's right; the people who clean your streets earn so little, and are charged so much for their rent, that housing benefit has to top it up, and in an obscenely unjust cycle, the money is syphoned back to the rich via the private rental market when it could and should be going towards public housing. You aim to cut housing benefits, with no plans to build more affordable public housing. You talk about 'making work pay' and 'incentivising work'. You do this by making sure benefits are in insufficient to survive on, instead of making the minimum wage a realistic living wage. You protect the right of banks to pay bankers whatever they need to get the best talent; you thus recognise that higher pay is the incentive to work. Therefore you must realise that people will only work if it is worth them doing so. For many with children, the cost of child care that full time work necessitates undercuts any increase in earnings. What is the point of working if working people do not have enough to live on? The only just way out of this is to increase the minimum wage to a realistic Living Wage. But you won't do this, because it is not in the interest of your class, your financiers, your family, friends, your rich constituents in safe Tory seats.

Bring Forth The Guillotine
And here is where you may well run into trouble. I hope it doesn't come to this, but it might. If enough people lose their jobs, and find themselves trying to survive on benefits, and when the cuts in public services really kick in this year of 2013, you may find yourselves on the wrong side of the argument. The divide and conquer strategy only works if the worse off are in a small, hopeless and disenfranchised minority. If things get bad enough it will engender solidarity. People will question not just the logic of austerity, but more importantly, the Right-wing hegemony. This hegemony has been carefully crafted over the last few decades, and since 2008 it has gone into overdrive. It consists of a raft of beliefs – that benefit claimants are scroungers, that the ill and disabled are faking it, that public workers are pampered whiners, that trade unions hold the country to ransom, that the 'undeserving poor' are taking us all for a ride. But for every alleged free-rider at the bottom of society, there is a free-rider at the top, born into wealth, creating no jobs, manufacturing nothing, simply moving money around and avoiding taxation. But we don't hear about them, because the largely Right-wing press is run by and funded by such people.

Here, for you, is the rub: for all your hatred of the welfare state, it may be the only thing keeping you from the guillotine. In A History Of Modern Britain, Andrew Marr suggests that the reason Britain is one of the few European countries to have avoided revolution is because the welfare state has buffered the worst injustices of capitalism. When there was a powerful Left, a Keynsian market strategy and a welfare state were the necessary table scraps that kept the people sufficiently placated. Indeed, that is why many on the far-Left were opposed to the welfare state; it prevents the exploited from fully realising their exploitation; it prevents them from becoming class conscious. It may do you well to consider if they are right. If you dismantle the welfare state, there may be nothing standing between you and the jobless, baying mob. 2013 may be your Poll Tax moment. Bring it on, I say.

Goodnight and sweet dreams boys.

Addressing the ‘tax gap’ is a vital part of tackling the deficit. Figures produced for PCS by the Tax Justice Network show that £25 billion is lost annually in tax avoidance and a further £70 billion in tax evasion by large companies and wealthy individuals.
An additional £26 billion is going uncollected. Therefore PCS estimates the total annual tax gap at over £120 billion (more than three-quarters of the annual deficit!). It is not just PCS calculating this; leaked Treasury documents in 2006 estimated the tax gap at between £97 and £150 billion.

If we compare the PCS estimate of the tax gap with the DWP estimate of benefit fraud, we can see that benefit fraud is less than 1% of the total lost in the tax gap (see diagram above).


No comments: