privatisation
Cambridge Analytica-linked firm running NHS data signs deal to help Israel against Gaza
CEO signs ‘strategic’ battlefield AI deal, flies board to Israel in ‘show of solidarity’ in middle of genocide
Palantir – the firm linked to Cambridge Analytica’s use of Facebook data and with close ties to Israel but still awarded a £330m contract, in the middle of the Gaza genocide – to process sensitive NHS patient data despite protests from doctors and civil liberties groups – has signed a ‘strategic’ deal to provide ‘battlefield AI’ and other ‘battle tech’ to Israel, according to Bloomberg:
Israel is currently engaged in mass slaughter of Palestinian civilians Gaza that has killed more than 30,000 civilians, mostly women and children, is facing a genocide case at the International Court of Justice brought against it by South Africa and has been accused of multiple other war crimes against the people of Gaza, including forcible transfer of the population and the targeting of hospitals, schools, journalists, homes and civilian infrastructure.
Despite this, the firm’s CEO last week flew the company’s board to Israel in a ‘show of solidarity’ with the regime:
The firm seems curiously reticent about its close ties with the Israeli regime, however. It’s press release page, which contains announcements going back to 2018, does not mention Israel.
Palantir’s activities have been so troubling that even the Murdoch Times has asked whether the UK government is “handing our health data to Big Brother”.
The Palantir deal is not the only example of the UK government promoting and rewarding companies with close ties to Israel during the Gaza genocide. Sunak’s crew has also awarded cash to UK universities, as the world clamours for an academic boycott, to promote closer ties with Israeli universities.
The UK Establishment clearly values cash and commerce above the lives of Palestinian civilians, above justice and above peace.
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Stranded
Privatisation and austerity don’t cut costs: they just pass them on to us.
By George Monbiot, published in the Guardian 12th January 2024
The weather was worse than forecast. By the time I reached Bristol, at 5pm, all trains to the south-west had been cancelled, because of rising flood waters. It was no one’s fault – just one of life’s vicissitudes. What happened next was a different matter. I believe I’m still suffering the effects of it: I think privatisation has made me sick. In various ways, it has sickened the whole country.
Hundreds of people travelling to Somerset, Devon and Cornwall were ejected from my train at Bristol Temple Meads. In the information office, we were sorted into groups of four. Each group was issued with a code written in ballpoint on a slip of paper. This, we were told, could be handed to a taxi driver outside the station, who would take us to a station near home. It seemed an extravagant way for the company, GWR, to discharge its legal duty to provide either alternative transport or accommodation.
Outside, my group of four joined a queue that soon swelled, I reckoned, to more than 1,000. Most of us had no shelter. We stood in the rain, waiting – and waiting. At any one time, there were about 20 taxis on the forecourt, but scarcely any picked up people in the queue. On average, one group of four was finding a ride roughly every 10 minutes. At that rate, it would take two days and two nights to clear the existing queue, let alone deal with the new trainloads arriving. I began to feel pretty rough: I must have been starting a cold.
Few of us wore the kind of clothes required to resist a steady downpour. In the queue were elderly people, young children and babies – I was by no means the most vulnerable. Even so, the longer I stood, the worse I felt. I managed to speak to one of the hard-pressed station attendants trying to negotiate with the taxi drivers. Why were they using taxis, not replacement buses? “We tried the coach companies, but no one’s answering the phone.” Had this happened before? “Oh yes, it happens a lot.” Why weren’t the taxis taking people? “Most of them don’t want to do the distance. They’re getting to the end of their shifts, or they’re working part-time, or because of the conditions on the roads.” So how were we going to get home? “We’re doing our best.”
None of this was the fault of the workers, who were trying to achieve the impossible. But anyone could see that the numbers didn’t add up. Even if every taxi arriving at the rank had been available, there wasn’t enough capacity. Surely GWR wouldn’t just leave us there? After an hour and a half, during which our group moved forward only five metres and no alternatives were offered or announcements made, I realised I was going nowhere. I phoned a friend in Bristol, who kindly agreed to put me up for the night. By the time I reached his house, soaked to the skin, my cold had developed into a rattling fever.
The following morning, the trains were running again. Masked and drugged (though testing negative for Covid), I shivered through the journey. One of the passengers asked the ticket inspector whether she could reclaim the cost of her accommodation from GWR. He said he didn’t know. This triggered a lively discussion: most of those near me turned out to have been stranded the night before.
Some had waited till almost midnight, sometimes for six or seven hours, in one case coming dangerously close to hypothermia, before giving up and trying to find somewhere to sleep. At no point, they told me, did anyone inform them they were unlikely to get a ride, or offer an alternative to waiting for a nonexistent taxi. If someone with a health condition had died as a result of exposure, it wouldn’t have surprised me. Perhaps some people subsequently did.
And then it struck me: by issuing those taxi chits, the train company, GWR, had discharged its duty to provide us, as the rules insist, “with alternative means of travel to your destination”. Both government regulations and GWR’s pledges are clear: either they must get you home or they must provide you with accommodation. The Rail Delivery Group, which represents all the train companies, promises “if the last train of the day is cancelled, we won’t leave you stranded”. Technically, GWR did not leave us stranded: it gave us a scrap of torn notepaper that would have procured a taxi, had taxis been available. What seemed like extravagance when the chits were handed out now looks to me like a highly effective means of reducing liabilities.
When I described my experience on social media, people replied that similar things had happened to them, at the hands of different train companies. When I asked GWR how it justified its response, it told me: “No one was left stranded at Bristol Temple Meads overnight, and we were proactive in trying to help people complete their journeys in difficult circumstances … we are not aware of anyone who required overnight accommodation, or was not able to get a taxi.”
My cold turned into an upper respiratory tract infection, from which I haven’t fully recovered, five weeks later. I’ve had to cancel quite a lot of work. I can’t prove that it was caused by standing in the rain for so long on 4 December. But it can’t have helped. As usual with privatisation and austerity, costs have not been cut, just transferred from one place to another. They are always transferred in the same direction: from corporations or the state to individuals.
Similar things happen throughout our depleted public sector, whether it’s run by private companies or the tattered remains of the state. By letting flood defences crumble, the government’s balance sheet looks better, but much greater costs are passed to households and their insurers. By triggering, through austerity, a crisis in special educational needs provision, the Tories dump untold misery on families, in some cases forcing parents to give up their jobs to care for their children. By allowing the water companies to cut corners, the government ensures that swimmers and surfers are poisoned and tourism and hospitality businesses go under.
There are no savings from austerity and privatisation, just a wholesale shifting of costs. The rich pay less tax and the public service companies in which they own shares make greater profits. The rest of us pick up the bill.
Exclusive: smeared ex-Lab member Siddiqi ‘planning to stand vs Streeting’
Victim of repeated smears and even a discredited prosecution is planning a bid at the next Ilford North parliamentary election, say locals
Syed Siddiqi, the former Labour member repeatedly abused, harassed and smeared by right-wing Labour figures in Ilford in north London, is planning to stand against right-winger Wes Streeting in the next Ilford North parliamentary election, according to local sources.
Siddiqi has faced constant harassment by the party right, including a failed attempt to prosecute him that ended in all charges being dropped – reminiscent of the disgraced hatchet job against neighbouring left-wing Muslim MP Apsana Begum.
The party’s hounding of Siddiqi even went as low as suspending him for more than three years after he was the victim of a foul, late-night Islamophobic tirade by a local right-winger, despite the whole incident being recorded. His abuser was quickly reinstated so that he could stand for Labour in local elections.
Siddiqi was revealed to have been targeted by Streeting’s office and others, by the leaked party report into abuse by the party right:
Labour has a long and appalling record of Islamophobia and of protecting abusive right-wingers. Local council leader Jas Athwal was selected as the party’s candidate in Ilford South, after complaints of ‘serious sexual assault’ were dismissed by a committee of Labour national executive members – against the advice of the party’s barrister. He won the selection vote when six hundred postal votes ‘turned up’ late in proceedings, while supporters of his opponent, incumbent MP Sam Tarry, were denied entry to the selection meeting. Labour general secretary David Evans dismissed the evidence as ‘irrelevant to the result.
The party has reason to fear the challenge. Last year, Lutfur Rahman ousted Labour to win the executive mayor’s position in nearby Tower Hamlets last year and voters there kicked out Labour at the last local elections in a landslide for Rahman’s new Aspire party. In neighbouring East End borough Newham, Newham Independents leader Mehmood Mirza hammered an imposed Labour candidate in May – and his colleague Sophia Naqvi then trounced Labour in November’s by-election in Newham Plaistow North.
With discontent spreading in the area and Black councillor Shanell Johnson quitting Labour in Redbridge, which covers both Ilford seats, in disgust at the local and national party’s conduct, few would be surprised to see similar developments threatening Labour’s complacency there too; particularly with an incumbent MP as dislikeable as Streeting, Starmer’s pro-privatisation health spokesman who has accepted donations from private health interests and who triggered protests outside his office – and a boycott by students – for his part in Starmer’s support for Israeli war crimes.
In 2018, Streeting also launched a ‘disgraceful’ and ‘disgusting’ tirade in the face of Diane Abbott, Britain’s first Black woman MP, leaving Abbott ‘shell-shocked’. If he stands, Syed Siddiqi can expect considerable support from outraged former Labour supporters around the country who would be delighted to see Streeting ejected.
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The Unequal Effects of Globalization – review
In The Unequal Effects of Globalization, Pinelopi Koujianou Goldberg looks at globalisation’s effect on inequality, emphasising regional frictions, rising corporate profits and multilateralism as focal points and arguing for new, “place-based” policies in response. Though Goldberg provides a sharp analysis of global trade, Ivan Radanović questions whether her proposals can effectively tackle critical issues from poverty to climate change.
The Unequal Effects of Globalization. Pinelopi Koujianou Goldberg (with Greg Larson). MIT Press. 2023.
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Glancing at the megalopolis on the left and abandoned building on the right side оf the book cover, I made an assumption about its narration: from the 1980s onwards, trade unions and states were blamed for rising inflation and unemployment. Fiscal cuts, deregulation and privatisation replaced public interest with private ones: maximising profit, firms outsourcing manufacture. What at first went alongside and later instead of promised economic efficiency was wealth accumulation at the top and the surge of corporate profits. As workers’ real wages fell behind, inequality grew.
As an academic specialising in applied microeconomics, Goldberg investigates globalisation’s many dimensions and complex interactions, from early trade globalisation to the rise of China, from western deindustrialisation to its effects on global poverty, inequality, labour markets and firm dynamics.
I was wrong. As an academic specialising in applied microeconomics, Goldberg investigates globalisation’s many dimensions and complex interactions, from early trade globalisation to the rise of China, from western deindustrialisation to its effects on global poverty, inequality, labour markets and firm dynamics. The book does concur with my assumption, but it engages with it in a more unique way.
According to Goldberg, the increase in global trade is due to developing countries’ entry into international trade since the 1990s.
Starting from an economic definition of globalisation, the author emphasises the lowest ever levels of (measurable) trade barriers and, consequently, the highest global trade volumes. According to Goldberg, the increase in global trade is due to developing countries’ entry into international trade since the 1990s. It is inseparable from global value chains (GVCs), complex production processes that – from raw material to product design – take place in different countries. The author argues that “the increasing importance of developing countries in world trade reflects their participation in GVCs” (6). That is the creation story of hyperglobalisation. For Goldberg, it is observable by the total export share in global GDP: “being fairly constant in the nineteenth and early twentieth centuries, it began rising after World War II and accelerated dramatically in the 1990s and early 2000s.” That is exactly when the World Trade Organization (WTO) was founded, and many multilateral trade agreements were signed. The key was trade policy.
But not everyone agreed. Some economists, including Land Pritchett and Andrew Rose, contended the growth was not due to trade, but the development of technology and fall of transportation costs. Goldberg rejects this argument, pointing out that technology was developing long before. Hyperglobalisation started because trade policies encouraged multilateralism; “Trade policy – especially the creation of a predictably stable global trading environment – was at least as important as technological development“ (17).
Since international trade is largely about distributional gains and losses, the key question is whether the recent tensions and protectionism – such as Brexit, Trumpism and American trade war with China, to name the most visible examples – are just blips in irreversible globalisation, or signs of deglobalisation.
This is important because international trade is a perennial source of discontent within globalisation, and exploring its causes is the primary focus of this book. Since international trade is largely about distributional gains and losses, the key question is whether the recent tensions and protectionism – such as Brexit, Trumpism and American trade war with China, to name the most visible examples – are just blips in irreversible globalisation, or signs of deglobalisation. It depends on policy choices.
In the second half of the book, Goldberg turns to inequality and differentiates it into global inequality and intra-country inequality. From the global perspective, the author points out two major contributions. The famous “elephant curve“ developed by Lakner and Milanovic (2016, p. 31) showed very high income growth rates for world’s poorer groups from 1980 to 2013. This primary observation is accompanied, however, by the almost stagnant income of the middle classes in developed countries (the bottom of elephant’s trunk) and high rates of growth for the world’s top one percent (its top). But how high? The answer came five years later, when Thomas Piketty and colleagues concluded (2018, p. 13) this elite group captured 27 per cent of global income growth between 1980 and 2016.
Analysing internal inequalities, Goldberg states that globalisation affects people twofold: as workers and as consumers.
This still does not refute that income rose for all groups, remarkably reducing poverty. But what about inequalities? Goldberg further investigates whether there is a trade-off between global inequality and within-country inequality. Analysing internal inequalities, Goldberg states that globalisation affects people twofold: as workers and as consumers. These effects are well-researched in developed countries like the USA, where trade liberalisation with China since the late 1990s brought multi-million job losses. Citing scholars such as David Autor, Gordon Hanson, David Dorn, and Kaveh Majlesi, Goldberg finds this trend disturbing for ordinary citizens. One could suppose that although jobs were lost, this was compensated by lower consumer prices which benefitted everyone. However, that’s exactly what did not happen in the US. Firms took almost all benefits, which meant that greater trade did not reduce consumer inequality. Crucially, even if it had, it would not compensate for the negative effects on the labour market. Therefore, as Deaton and Case argued, it is no surprise that the millions of jobless, low-educated Americans whose quality of life and even life expectancy is in decline oppose globalisation.
But the advent of trade with China cannot fully explain this issue. There are severe labour mobility frictions that prevent people from moving to another town, county or state to find a better job. That is an American trademark since, as Goldberg suggests, “Europe normalized their trade with China much earlier and in a much more gradual manner“ (55). In other words – a policy problem needs policy solution.
[Trade’s] adverse effects, such as the exceptionally high benefit claimed by the top one percent and the stagnation of the middle class in the Global North, cannot be attributed to trade per se, but to a lack of policies that absorb disruptions.
Goldberg is an optimist: poverty has fallen throughout the world, pulling hundreds of millions out of extreme poverty (defined living on or below 1.9 international dollars per day) particularly in countries that plugged themselves into GVCs. Trade, therefore, played a positive role. This implies that its adverse effects, such as the exceptionally high benefit claimed by the top one percent and the stagnation of the middle class in the Global North, cannot be attributed to trade per se, but to a lack of policies that absorb disruptions. More than tariffs, this includes workforce development, social protection, corporate taxation, and other policies that protect people from unregulated market forces. This is where real improvement lies, with broad and sincere international cooperation.
[Goldberg] seems to suggest that the global economy is functional; it just requires a little fix here and there in order to fight climate change as one of the ‘challenges of tomorrow’
The author writes from a “middle position“, so neutral that there is no mention of the word “capitalism“ in the whole book. Goldberg is aware of inequalities, but still emphasises dynamic poverty reduction. She seems to suggest that the global economy is functional; it just requires a little fix here and there in order to fight climate change as one of the “challenges of tomorrow“ (90). (This might be ok if climate change was a challenge of tomorrow – but it is not.) The evidence has been mounting for decades: polar ice caps melting, rising sea levels, deforestation and biodiversity loss, desertification and soil depletion, plastic pollution and fishery collapse. Our world is dying today, and the consequences are fierce and unequal. While the common poverty-reduction argument based on $1.9 a day is severely disputed, economic equality is highly correlated with desired outcomes including higher longevity rates, political participation, better mental health and life satisfaction.
This position, which one could view as reinforcing a profit-centred status quo from the former chief economist of the World Bank does not surprise. Her monograph has certain strong points, namely its neutral overview, its in-depth analysis of trade and and its insight into new, relevant literature. But writing about globalisation today demands more. To confirm that a problem exists is not enough. We need immediate action.
This post gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics and Political Science. The LSE RB blog may receive a small commission if you choose to make a purchase through the above Amazon affiliate link. This is entirely independent of the coverage of the book on LSE Review of Books.
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Abby Innes introduces Late Soviet Britain: Why Materialist Utopias Fail
In an excerpt from the introduction to her new book, Late Soviet Britain: Why Materialist Utopias Fail, Associate Professor of Political Economy at LSE’s European Institute Abby Innes considers how factors including the rise of neoliberalism have destabilised Britain’s governing institutions.
Late Soviet Britain: Why Materialist Utopias Fail. Abby Innes. Cambridge University Press. 2023.
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Why has Great Britain, historically one of the strongest democracies in the world, become so unstable? What changed? This book demonstrates that a major part of the answer lies in the transformation of its state. It shows how Britain championed radical economic liberalisation only to weaken and ultimately break its own governing institutions. This history has direct parallels not just in the United States but across all the advanced capitalist economies that adopted neoliberal reforms. The shattering of the British state over the last forty years was driven by the idea that markets are always more efficient than the state: the private sector morally and functionally superior to the public sector. But as this book shows, this claim was ill-founded, based as it was on the most abstract materialist utopia of the twentieth century. The neoliberal revolution in Great Britain and Northern Ireland – the United Kingdom – has failed accordingly, and we are living with the systemic consequences of that failure.
Britain championed radical economic liberalisation only to weaken and ultimately break its own governing institutions.
The rise of nationalist populism in some of the world’s richest countries has brought forward many urgent analyses of contemporary capitalism. What this book offers, by contrast, is the explanation of a dark historical joke. It explores for the first time how the Leninist and neoliberal revolutions fail for many of the same reasons. Leninism and neoliberalism may have been utterly opposed in their political values, but when we grasp the kinship between their forms of economic argument and their practical strategies for government, we may better understand the causes of state failure in both systems, as well as their calamitous results.
Comparing the neoclassical and Soviet economic utopias, [w]hat emerges are mirror images – two visions of a perfectly efficient economy and an essentially stateless future.
Britain’s neoliberal policies have their roots in neoclassical economics, and Part I begins by comparing the neoclassical and Soviet economic utopias. What emerges are mirror images – two visions of a perfectly efficient economy and an essentially stateless future. These affinities are rooted in their common dependence on a machine model of the political economy and hence, by necessity, the shared adoption of a hyper-rational conception of human motivation: a perfect utilitarian rationality versus a perfect social rationality. As the later policy chapters demonstrate, these theoretical similarities produce real institutional effects: a clear institutional isomorphism between neoliberal systems of government and Soviet central planning.
When it comes to the mechanics of government, both systems justify a near identical methodology of quantification, forecasting, target setting and output-planning, albeit administrative and service output-planning in the neoliberal case and economy-wide outputs in the Soviet. Since the world in practice is dynamic and synergistic, however, it follows that the state’s increasing reliance on methods that presume rational calculation within an unvarying underlying universal order can only lead to a continuous misfit between governmental theory and reality. These techniques will tend to fail around any task characterised by uncertainty, intricacy, interdependence and evolution, which are precisely the qualities of most of the tasks uploaded to the modern democratic state.
In neoliberalism, the state has been more gradually stripped of its capacity for economic government
The Soviet and neoliberal conceptions of the political economy as a mechanism ruled by predetermined laws of economic behaviour were used to promote pure systems of economic coordination, be that by the state or the market. Leninism, as it evolved into Stalinist command planning, dictated the near-complete subordination of markets to the central plan. In neoliberalism, the state has been more gradually stripped of its capacity for economic government and, over time, for prudential, strategic action, as its offices, authority and revenues are subordinated to market-like mechanisms. Both Soviet and neoliberal political elites proved wildly over-optimistic about the integrity of their doctrines, even as they demonised the alternatives.
For all their political antipathy, what binds Leninists and neoliberals together is their shared fantasy of an infallible ‘governing science’ – of scientific management writ large. The result is that Britain has reproduced Soviet governmental failures, only now in capitalist form. When we understand the isomorphism between Soviet and neoliberal statecraft, we can see more clearly why their states share pathologies that span from administrative rigidity to rising costs, from rent-seeking enterprises to corporate state capture, from their flawed analytical monocultures to the demoralisation of the state’s personnel and, ultimately, a crisis in the legitimacy of the governing system itself. This time around, however, the crisis is of liberal democracy.
The book’s policy chapters in Part II explore how the neoliberal revolution has transformed the British state’s core functions in the political economy: in administration, welfare, tax and regulation and the management of future public risk.
After setting out the philosophical foundations of these ideologies, the book’s policy chapters in Part II explore how the neoliberal revolution has transformed the British state’s core functions in the political economy: in administration, welfare, tax and regulation and the management of future public risk. In Part III I examine the political consequences of these changes, and demonstrate how Britain’s exit from the European Union has played out as an institutionally fatal confrontation between economic libertarianism and reality. The final chapter considers how the neoliberal revolution, like its Leninist counterpart, has failed within the terms by which it was justified and instead induced a profound crisis not only of political and economic development but also of political culture.
Under ‘late’ neoliberalism we can see a similar moment of political hiatus, as neoliberal governments likewise resort to nationalism and the politics of cultural reaction to forestall public disillusionment and a shift in paradigm.
I use different periods of Soviet history as an analytical benchmark throughout the book, but the Brezhnev years (1964–1982) were those of the fullest systemic entropy: the period of ossification, self-dealing and directionless political churn. Under ‘late’ neoliberalism we can see a similar moment of political hiatus, as neoliberal governments likewise resort to nationalism and the politics of cultural reaction to forestall public disillusionment and a shift in paradigm. I use the United Kingdom as the case study because it was both a pioneer of these reforms and, in many respects, has gone furthest with them. If neoliberalism as a doctrine had been analytically well-founded, it was in the United Kingdom, with its comparatively long and strong liberal traditions, that we should have seen its most positive outcomes.
By the early 2020s the Conservative government of Boris Johnson had sought to criminalise peaceful protest, to constrain media independence and to insulate the political executive from parliamentary and public scrutiny.
To be clear, Britain’s neoliberals were never totalitarians of the Soviet variety. They never used revolutionary violence to create a one-party state, deployed ubiquitous intelligence agencies to enforce repression or used systems of mass incarceration and murder for political ends. Britain’s neoliberal consensus has nevertheless favoured a one-doctrine state, and the violent suppression of specific, typically economy-related, protests has been a periodic feature of its politics since 1979. Britain’s neoliberal governments have also developed an increasingly callous attitude to social hardship and suffering. Most troubling of all is that the more neoliberalism has been implemented, the more the country has been driven to the end of its democratic road. By the early 2020s the Conservative government of Boris Johnson had sought to criminalise peaceful protest, to constrain media independence and to insulate the political executive from parliamentary and public scrutiny. In short, it had abused its authority to disable legitimate political opposition. What I hope to explain is why any regime that commits itself to neoliberal economics must travel in this direction or abandon this ideology.
What follows is an argument about the collapse of the empiricist political centre and its replacement by utopian radicalism. Specifically, this is a story of how the pioneering and socially progressive philosophy of liberalism is being discredited by utopian economics and the practically clientelist methods of government that follow from it, just as the politics of social solidarity essential to a civilised world was undermined by the violence and corruption of the Soviet experiment. As the old Soviet joke had it, ‘Capitalism is the exploitation of man by man. Communism is its exact opposite.’ There are, of course, many challenges distinct to neoliberalism and I pay attention to them, but my purpose here is to see what we can learn about the political economy of the neoliberal state when we look at it through the lens of comparative materialist utopias.
Note: This excerpt from the introduction to Late Soviet Britain: Why Materialist Utopias Fail by Abby Innes is copyrighted to Cambridge University Press and the author, and is reproduced here with their permission.
This post gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics and Political Science. The LSE RB blog may receive a small commission if you choose to make a purchase through the above Amazon affiliate link. This is entirely independent of the coverage of the book on LSE Review of Books.
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Economic delusions cannot save us from the climate crisis and societal decay
“Never forget that the economy is a wholly owned subsidiary of nature”.
Global Boiling – Kate Mackenzie and Tim Sahay
Image: Paul Walker/Flickr. Creative Commons 2.0 License
Many of us have grown up with the story of an arrogant ruler King Cnut, who placed his throne on the banks of the Thames, waiting for the tide to come in. As it did so he held out his hand and demanded that it recede. Predictably, it didn’t. What most of us don’t know, however, is rather than telling of a King’s hubris, it celebrates something quite different. An acknowledgement from Cnut that ‘All the inhabitants of the world should know that the power of kings is vain and trivial’. Whilst Cnut recognises a holy power, we might in these very different times acknowledge that far from humans controlling their environment, as we have the arrogance to imagine, it is instead the power of nature that dictates responses to our behaviour.
This arrogance is displayed daily by our politicians who seem to think they can put off action on climate change, citing economic credibility over scientific facts or putting the profits of the oil and gas producers above those of the health of the planet.
On the one hand, we have Sunak granting permits for more oil and gas drilling (whilst the industry continues to rake in huge profits), on the crazy basis that home-grown is better for the environment, which actually is not the case, as discussed in this Channel 4 Fact Check.
And on the other, Keir Starmer, fixated on household budget economics, reportedly thinks that ‘the hard grind of rebuilding economic credibility must come first, as opposed to Labour spending “vast sums of money”’. ‘Growth, investment and wealth creation will be, he said ‘the only show in town’ if Labour is to build a prosperous country with strong public services for the long term.”
At the same time, Rachel Reeves has postponed Labour’s green plan, and a few weeks ago also rejected the call to ditch the Tory imposed two-child benefit cap because, apparently, the ‘dire public finances’ means there will not be enough money to go around. Not only is the shadow chancellor intent on denying some of the poorest in our society the means to live decent lives, but also putting on hold urgent action on climate change. Here we have yet again, the eternal circus of blame which politicians indulge in (remember Liam Byrne) but which has nothing to do with monetary reality.
This is a neoliberal, monetarist pile of crock at a time of existential climate crisis and societal decay. Both the consequences of a destructive economic system which treats people and the planet as objects to exploit for profit.
We have a party opposition leader (and his shadow chancellor) dedicated not only to further economic decline, decay of public infrastructure and harm to citizens, who clearly thinks he can hold back the tide of ecological overshoot and climate change until the public finances are in good order.
Predictably King Cnut failed to hold back the tide, and now our own politicians seem to think that they can put off action because heaven forbid that we interfere with the profit streams of polluting industries or the god-like market. They talk about the economy as if it were separate from the sphere of people’s existence or the planet’s ability to sustain human activity. And with astonishing arrogance imagine that the great arrow of human progress will provide the solutions in the form of technology that is scarcely off the drawing board, or growing millions of trees (important though that is) and will save the day at some unspecified time in the future. Both questionable propositions and time is not on our side.
It surely is disturbing to be a witness to the fact that the emperor has no clothes and yet the entire political establishment fauns daily over a toxic economic system which has created vast poverty and inequity across the planet and is bringing an end to the world as we know it, to keep the consumption truck running and the profits flowing.
Then, at the same time as the media reports on the scientific evidence for climate change, and as we are witnessing the increasing incidence of damaging weather events from heat domes to drought, fire and floods which affect humans, destroy vital natural habitats and impact on food production, in the next breath is allowing politicians, government institutions, think tanks and its own journalists to reinforce the household budget narratives of how government spends.
We need a frank, public conversation about the future. As an article published in The Conversation makes clear, ‘The only way to keep humanity safe is immediate and sustained radical cuts to greenhouse emissions in a socially just way.’ The last part is key, not just from a domestic point of view but also how we address the vast western created inequity that exists in the Global South, and the ecological destruction and pillage of real resources that has occurred to serve Western consumption and reinforce the power politics of empire.
As it also points out, ‘Current net zero policies will not keep warming to within 1.5C because they were never intended to. They were and still are driven by a need to protect business not the climate’. In those few words, today’s reality is confirmed through government’s political priorities. It is time to see through the game and challenge those ideologically driven preferences.
As Jason Hickel, author of ‘The Divide; A Brief Guide to Inequality and its Solutions’ tweeted recently, ‘As climate-related damages hit, remember that this crisis is not due to generic “human activity”. Excess emissions are due overwhelmingly to the core states of the global North, and the ruling classes that control the systems of production, energy and national legislation.’
The time is now to deal with ecological overshoot and climate change in a socially just way. As GIMMS emphasises endlessly, the only way we can do that is to reject an economic system built on growth and endless consumption which benefits fewer and fewer people and destroys life, not to mention being at the heart of exceeding the planet’s ecological boundaries.
While politicians continue to count the pennies as in Labour’s abandonment of its commitment to a timeframe for spending the promised £28bn on a green transition, citing as it does the worsening financial situation, we are closing our eyes to the urgent nature of the challenge.
The question is not how we pay for it. The real challenge is to decide what our priorities are, draw up a strategic plan for achieving them and using the dual supports of legislation and tax policy to free up the real resources it will need to carry out those plans. Money in itself is never the consideration but politicians on both sides want us to believe it is. Truth is that we pay for it by spending the money. The only constraints to spending are real resources and decisions about how and to whom they are distributed.
We pay for it by spending the money - By Alan Hutchison
We need to start altering the discourse and the first candidates for change should be the phrases ‘taxpayers’ money’ and ‘government borrowing’. Taxpayers are not and never have been the source of currency. Similarly, government doesn’t borrow when it issues bonds; instead, it provides a safe place for us to store our savings.
The flat earthers need a lesson in monetary reality, to stop putting people’s lives on the line for a lie. In short, the government is the currency issuer. It spends the money into existence first, then taxes and plays the smoke and mirrors game it calls ‘borrowing’. Up until now, it has been the failsafe mechanism to keep the troops compliant and under control.
Whatever the future holds, it should be about our values which include respect for a life-giving planet and its inhabitants. Instead, and in reality, we have psychopaths in charge, prosecuting endless wars, advocating growth at any cost and, at the same time, proposing austerity (but not for the richest).
What we need now in these uncertain and unstable times is global cooperation, not a myopic focus on keeping the status quo in place for a lie, or to maintain the reins of global power.
Whilst what we face is a global challenge, we also can’t ignore what is happening at home to our own citizens as a result of short-sighted, market-driven solutions and the household budget economics that drives spending and policy.
Two articles in the Guardian in recent months report on the shocking exploitation of foreign care workers brought to the UK to plug the gaps caused by decades of government neglect, outsourcing and privatisation, and austerity in the form of public sector spending cuts. Shockingly, in the past year, the number of modern slavery cases reported within the UK care industry had more than doubled. Failures in duty of care has facilitated organised crime to exploit unfortunate victims who were desperate to find a better life but instead found slave-like conditions, long hours and below subsistence wages.
The solution is not to steal the valuable resources of poorer countries, but to bring social care back into public hands, invest more in social care provision and training, along with secure employment rights and fair terms and conditions and wages. The solution is for the nation to decide what its priorities are – more of the same contempt for citizens by its leaders, or something better.
Here, predictably we see again an economic ideology that puts private over public provision, all justified by the claim that we can’t afford better public services, or quality care for those who need it. An economic system which has taken precedence and is not fit for purpose, unless we mean the enrichment of those who benefit from government spending policy. All the government is actually doing is papering over the cracks it has caused, and the victims are both those using social care services and those persuaded that the good life awaits if they sign on the dotted line.
Again, the only constraints faced by government are related to how real resources are distributed and who benefits from that distribution. A stable and healthy society relies on government laying the foundations. However, successive governments have abdicated their responsibility and have increasingly shifted it to the corporate estate, along with public money. Whether it is the NHS, social care or indeed the many other vital public services which support citizens, all have been subjected to this false belief that there is no money, and that the private sector is more efficient.
Last week, the health minister Maria Caulfield defended Steven Barclay’s plans to use the private healthcare sector to deal with the long post-covid waiting lists, on the basis that it would provide good value for money for the taxpayer. If there are long waiting lists, this is not a new phenomenon. Prior to the pandemic in February 2020, there were 4.43 million people on a waiting list for care. The latest figures for May 2023 show that around 7.47 million people were waiting for treatment.
The fact is that the private sector is already operating in the NHS, taking public money to run health services with profit in mind. We now have a fragmented service where the word national is in name only and the NHS logo hides a myriad of private healthcare companies. From a publicly paid-for, managed, and delivered service to one that is now serving the needs of the corporate estate, where publicly paid-for means corporate welfare. If the NHS is broken, it broke as a result of the decades of reshaping it through the pursuit of an ideology that serves the neoliberal tenets of faith in markets and privatisation. When Blair said last month that ‘there should be complete cooperation between the public and private sector’, and Starmer in the Observer that we need to prioritise ‘radical reform of public services over reckless spending promises,’ the only thing to note is that they are all in it together. Blair and Thatcher’s legacy lives on.
MMT Verify: How We Can Staff the NHS Without Tax Rises - Neil WilsonSpending only happens if there was something to buy. If that spending is then deficit spending it has a lower inflationary impact than spending that is tax-matched.
Then as the Prime Minister seeks to blame striking NHS staff for record-high long waiting lists, this must surely be the final insult to a workforce that has been unfairly treated as a result of government policy and like many, struggling to manage the cost-of-living crisis on top of previous public sector pay squeezes. One minute we are being exhorted to clap for our dedicated nurses and doctors, and the next, government ministers are demonising them.
Neither health nor social care should be viewed as a business, and it certainly doesn’t involve being good value for the taxpayer, since taxes do not fund government spending. Let’s instead put the blame where it really lies. At the government’s door, resulting from a decade of cuts in real terms to spending (austerity), failure to train sufficient healthcare professionals, private sector for-profit involvement (which predates the Tories), and closure of hospitals, beds and even treatment options, all of which has been justified on the false premise of public sector unaffordability, and to push an ideological preference for private sector involvement. We can translate this as absolutely nothing to do with the state of the public finances, but rather as a political choice. The false narrative of monetary affordability constantly trumps delivery of public purpose, and when it comes to ethics, as in stealing the resources of poorer countries, as long as things can be done on the cheap, then it’s acceptable.
If we want better public services, health, and social care, it can only come through government which holds the power of the public purse. This is what we could have in a sane world where people matter more than a cruel ideology and profit. Instead, what we have is a shameless manipulation of a hapless public to justify what will be in effect more austerity, more ‘difficult decisions’ that can only cause more human distress and hardship, damage the life chances of our youngest citizens, and cause further decay of our public infrastructure.
And then, while the life-giving planet overheats because of human activity and the distribution of wealth becomes ever more unequal, last month the number crunchers at the OBR were ‘preparing to sound the alarm’ over the impact of rising interest rates on the public finances which, according to the Guardian, would ‘deliver a serious blow to the government’s scope for pre-election tax cuts.’ In its ‘Fiscal risks and sustainability report,’ it set out the impact of higher interest rates for the public purse. This would, it suggested, make it less likely that [the Chancellor] would meet one of its five key pledges – tackling Britain’s public debt. And no doubt such thinking will drive more damaging austerity thinking on both sides of the political spectrum.
Let’s be clear first, interest rates don’t hurt the public finances. Government as the currency issuer can always meet its liabilities. There are, instead, winners and losers in the private, non-government sector. The winners are savers, banks and holders of Treasury gilts, while the losers are those who will suffer the economic effects of higher interest rates which can filter through in higher unemployment and cause more pain for people struggling to pay higher rates on debt and mortgages.
Then in the same household budget vein, Chancellor Hunt, after checking thoroughly down the back of the sofa for a few stray quid, ordered his ministers to find £2bn savings for public sector pay rises. Not content with the nonsense claim that there is a threat of public sector wage spirals driving inflation, he then acts as if the government is short of money and must rob Peter’s pot to pay Paul’s.
What a choice! Taking steps to mitigate the human-induced existential threat of climate change, ecological overshoot, and growing poverty and inequality, or balancing the public accounts. While they tell the public about the hard choices and sacrifices to be made, there has been no problem finding the money for military support in Ukraine, £2.3bn in 2022 and the same for 2023, totalling an eyewatering £4.6bn.
There is no money for serving public purpose, helping people through these difficult times, feeding children or rebuilding our ailing public infrastructure, but there is an inexhaustible amount for waging war and killing people, bailing out banks, or contracts for dodgy PPE. Surely these contradictions must be hitting home by now, and the extraordinary con that is being practiced on citizens of this country with huge social and environmental costs.
The key to better public services, infrastructure, social security provision and a green transition is not growth, contrary to what politicians on both sides of the political spectrum would have you believe. It is, rather, something much simpler and direct, a political choice to deliver them.
Aside from the fact that taxes do not fund government spending (implicit in the belief in growth as the solution), faith in growth as a tool is misplaced in an uncertain, unstable and changing world in which we are currently in uncharted territory. We need action now. While politicians clearly have all had the ‘public finances are like a household budget’ briefing, and all sing from the same cruel hymnbook without question, aside from the human misery this narrative causes, it makes no economic or environmental sense.
Author Jason Hickle asked in 2021, ‘If our economic system actively destroys the biosphere *and* fails to meet most people’s basic needs, then what is actually the point?’
Time for the public to ask those same questions of the political class.
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The post Economic delusions cannot save us from the climate crisis and societal decay appeared first on The Gower Initiative for Modern Money Studies.