Austerity UK

By Mark Featherstone

Two news stories caught my attention over the last couple of days – first, a report from the House of Commons Library, which showed that wages in the UK have fallen sharply since 2010, and second, an article focused on the Shadow Health Secretary, Andy Burnham, and his view that Labour needs to ‘put its cards on the table’ in order to offer voters a viable alternative to the Conservatives in the next general election.

Reading the first piece we learn that UK wages have experienced the fourth largest fall in the EU (5.5%) and that only Greek, Portuguese, and Dutch workers have seen a greater decrease in their real wages since 2010. Given that German and French workers wages rose (2.7% and 0.4%) over the same period, and that the overall average decline in wages across the EU was 0.7%, it seems clear that in the UK, the workforce has been asked to carry the can for the crash in 2008. In light of this, it seemed strange to read an article concerned with the problem of Labour politics. In the BBC report, we learn that Burnham thinks that Labour needs to capture the electorate’s imagination now, and offer an alternative to the Coalition. I agree - what is strange, however, is that this has not happened already. Why is this the case? Why is it that austerity, and the commitment to reduced public spending, has such a strong hold over the political, and perhaps more importantly, popular imagination in the UK?

If we consult recent sociology on austerity, such as Stuckler and Basu’s ‘The Body Economic’, the problem of austerity becomes very clear. In periods of recession it makes little sense to cut public spending because this simply reduces consumer confidence and destroys any potential for growth. The result of this is that the economy gets caught in a kind of downward spiral. According to more humanistic measures, we might argue that under conditions of mass unemployment it is not a good idea to dismantle the social safety net, which can help to stabilise society, because this will simply exacerbate the problems caused by economic stress – i.e., depression, alcoholism, and ultimately suicide. This, of course, supposes that a government cares about the health of the people. However, Stuckler and Basu take the view that the health of the people matters and paint a bleak picture of Europe in the age of austerity. They show that in countries where the social safety net has been attacked as bloated and wasteful the health and welfare of people has suffered. This much would seem clear – surely in a society where the economy contracts and people suffer from unemployment and other stresses, society should ‘bail them out’ and support them? This is, after all, what happened to the banks.

As I have explained on many occasion on this blog, austerity makes no sense, and has been proven to fail in the case of the Great Depression of the 1930s, unless its aim is to restructure the industrial or post-industrial base of a society, and make it more competitive by slashing public spending, driving wages down, introducing more flexible contracts, and generally providing a retrofit to the economy. This is largely what I think we see taking place today – the aim of austerity is not simply to reduce the national debt, but also to reduce the cost of labour, and the responsibility of the state, in order to make the national economy more competitive in a global market, where competition may come from China and India. In these new industrial powers labour is cheap and the state has little responsibility for supporting the body of the people. Of course, this means that they are perhaps the most competitive economic powers in the world, save for the US, where the worker is similarly expected to weather whatever economic storm hits. However, even in the US, Obama understood that the way out of recession was taxation and social spending, rather than wage reduction and social austerity. The result of this decision is that America has emerged from recession much quicker than the UK.

We will, of course, eventually escape recession and austerity in the UK, but the problem will be that this will happen on very different terms than we entered this dark period. Under the new austerity landscape growth will take place on the basis of low-wage labour, contracts that offer little protection for workers, and a minimal social safety net. In sociological terms, the kind of society that we may find ourselves living in will be very friendly towards business, but less favourable for the lives of people. And here is the main point of my blog today – much of what I have written is well known, and we have read work by Naomi Klein and Zygmunt Bauman, which explains the problems of disaster capitalism and austerity. However, what I think the current period of history demands that we do, and this is especially important for students and young people, is to start to think about the kind of society they want to live in.

What is it that matters in life? Is it most important to have a society organised around profit, where competition is everything, and life is precarious? Or should society forsake profit, and make economic value subordinate to other life goods – such as health and welfare? What is it that makes a good society? This is what I think Labour really need to do. They need to open up a debate about what matters to people. Are commodities the be-all and end-all? Are people prepared to accept precariousness to make more money? Are they happy to accept vast inequalities in society? Is it acceptable to have children going hungry because their parents do not have enough money to feed them? It strikes me that the very fact that politics is not the normal debate about these kinds of fundamental questions, and that a senior politician has to talk about the need for an alternative to austerity, is enormously problematic. I think this illustrates our deep lack of social and political imagination and shows how far our political elites have fallen and / or leapt into bed with business where the only good that matters is the bottom line.

We must escape from the grip of this law of the bottom line - currently we are still caught under the spell of what we might call the fetishism of economic growth, growth at all costs, growth even if it kills people. I think that we need to escape from the fantasy of this idea. As Marx taught us over a century ago, the economy is not more important than people. The market is not a living thing and it is the height of stupidity and brutality to sacrifice people to a machine that produces nothing that can rival the value of human life.