Coalition Multiplies the Damage

Background

Despite the IMF warning the UK government that its austerity measures are causing significant economic damage, George Osborne today announced a further round of spending cuts. Recently the IMF (International Monetary Fund) posted a paper noting that the British government had significantly underestimated the impact of the ‘Fiscal Multiplier’ which has caused even greater damage to the economy as they have pursued their ‘Austerity’ policies. The thing is I don’t think the Coalition did anything of the kind. I think they knew exactly what they were doing, but since this idea is not simple to understand, they thought they could get away with it.

The multiplier is a complicated and very wordy economic idea, and for that reason this news has largely missed the British public’s attention. However, this is the ‘smoking gun’ that proves that coalition policies are pre-designed to further their ideology of shrinking public services at any cost – and the costs are immense.

 Here I’ll try to take you step-by-step through the reality of what the IMF have said, and the real reasons for and effects of current government policies.

 What is the ‘Fiscal Multiplier’?

Imagine an economy of a government and only four people. One person is a hunter and the other three are unemployed. Right now all we have is a hunter hunting for themselves, and so the other three people are starving.

The government spends £1 training an unemployed person to be a builder, which he receives in wages, so that the economy is now worth £1. He spends the wages on meat, paying his £1 to the hunter. The hunter realises he needs help to hunt the extra animals and so employs one of the other unemployed people to help him hunt, paying them 50p to do so. The hunter has 50p profit which he spends on having a new roof built. From the helper’s 50p wages he spends 25p on the final unemployed person asking him to gather some vegetables, and the other 25p on building a new wall. So now, our economy is no longer worthless and no one is unemployed. The £1 spent by the government has caused much more than £1 of economic activity. The total value of the economy is:

£1 spent by government

£1 spent by the builder on meat

£0.50 spent by the hunter on building a new roof

£0.25 spent by the hunter on vegetables

£0.25 spent by the helper on a new wall

£3 Total economic activity

Thus, the £1 government spending has been increased by the fiscal multiplier of 3 to become £3. No one is now unemployed, and no one is starving. Instead of just having a hunter hunting meat for themselves, we now have more meat, vegetables and buildings.

*For a more precise and developed discussion of the Fiscal Multiplier please see this internal document from the very right-wing IMF which discusses it in more depth.

 

The Ideology of the Right

Economic growth, is the main economic aim of the government which is why it is such a problem for the government when the media report that the country is in recession (negative economic growth) as this means the economy is shrinking, or as in our earlier example; fewer people working, more people starving and the economy is worth less. However, the government have not told you how they have contributed to low and negative economic growth over the past three years.

Our Coalition government is dominated by Conservatives, who do not believe in government spending to help the economy or its people, and for this reason they have been cutting things. Some of the cuts include £6.2bn within the first 100 days of this government’s reign and have continued for example with plan to reduce spending on the NHS of £20bn by 2015 and £50bn by 2020. For some this is still not enough, with many prominent Tory cabinet members stating that further cuts should be made here.

In total the number of public sector jobs is expected to fall by over one million, but the misery continues for those who are the victims of these policies. If either you become unemployed, or your income is reduced because of these things you cannot expect much of a safety net. The government plan to cut over £23bn per year from the welfare budget meaning those on lower incomes will suffer. Indeed, over 7million working families are expected to see their incomes reduce as a result.

This is the result of having a government dominated by millionaires who do not need these services, and feel no obligation or desire to help those less fortunate than themselves. Think about it, if you have private health insurance would you be worried about the fact that the government has just removed its obligation to treat people’s health concerns equally, if at all. Similarly, if your child attends Eton, why would you be concerned that state schools are being turned into de-humanising exam factories?

Unfortunately though, these cuts (and they go far further than I have described) have a larger impact beyond the direct effects to your services. Austerity itself creates a need for further austerity which means the things we have lost so far are barely the tip of the iceberg.

 

The Fiscal Multiplier Effect

The UK government estimated that the multiplier effect was 0.5. This means that they thought that for every £1 they cut from the economy, only £0.50 of economic activity would be lost. The paper that I mentioned at the beginning of this article outlines that this was wrong, and states that the multiplier was likely to be 1.5. Some speculate it could even have been as high as 3, meaning that for every £1 cut from government spending £3 of economic activity was lost. This is what has caused the UK’s slow economic growth, and the consequent unemployment, fall in wages and fall in living standards that have accompanied it.

The UK government got it wrong! Or did they? When we consider the multiplier effect in reverse, we have to include the figure that is being cut. So, in our earlier example, the cutting of £1 led to a fall in economic activity of £3 including the money that the government originally spent, so a multiplier of 3. As we have to include the money that the government cut, it is very difficult for the multiplier to be less than 1. E.g.. Government cuts £1 from the economy, even if no further money is lost, the economy still shrinks by £1 because we count government spending in the size of the economy. Therefore, the minimum the multiplier can be is 1. The Coalition were telling us that they were in effect going to cut £1 from the economy, but that the economy would only get smaller by 50p. My A-level students could tell you that this doesn’t make sense!

Admittedly, George Osborne’s lack of economics training could be responsible for his mistake, but how did this get past the other 1,459 treasury employees,  Osborne’s four special advisors who are qualified or the nine members of the Monetary Policy Committee who effectively run our economy from the Bank of England? If you accept that such an obvious flaw cannot have escaped everyone’s attention, then we have to begin looking for other explanations of why this could have happened.

Remember, the incoming Governor of the Bank of England has stated that the UK is an economy in crisis. It has been estimated that the government cuts have contributed to this costing an additional £76bn, and this is a conservative estimate. The entire justification for this programme of cuts was to close the fiscal deficit, and yet because of the “miscalculation” of the multiplier effect, this has not happened. Thus, 4,800 nurses have lost their jobs for no reason, among 25,000 other NHS staff. This phenomenon is not particular to the NHS, as I stated earlier, over 1million public sector jobs are being axed.

 

The Rationale

Public sector workers are those who have chosen to accept lower pay to work in the interests of the public good. These people are being sacked through no fault of their own, not to do with their performance or their competence but because someone in a Whitehall tower decided it would be better if they weren’t paid by the state.

Why? I hear you scream. I could take you through the history of the Conservative party as an organisation of the financial elite. The land-owning aristocracy and the post Thatcher corporate glitterati. I could discuss how this party stood against the formation of the NHS and the welfare state at its inception and has attacked it ever since. I could talk about the number of Tory MP’s and Peers who stand to profit from the privatisation of the NHS, but it might be much easier just to follow the money…

The money previously earmarked for all of us through the public sector has been used to finance tax cuts for the already wealthy, and for large businesses that often currently do not pay their full taxes anyway. The TUC estimate that £25bn is lost annually from the treasury (more than the entire annual savings that the government expects to make from cuts to the welfare budget) in this manner, and while this is at the lower end of the estimates nothing is being done by the government to prevent it. Similarly nothing is being done to curtail the activities of the banks that gambled our way into this mess in the first place, and these are just a couple of small examples without referencing the estimated £20bn on offer in corporate profits from the widely discredited carve up of the NHS.

 

The Consequences

Let’s assume that the IMF is now correct in its assumption that the multiplier is 1.5 (Many suspect it is significantly higher than this). For every £1 that is cut from government spending, £1.50 disappears from the economy. As nurses, teachers, police officers and other employees are sacked as part of this policy, not only do we lose our services, but we also lose spending power from the economy.

Unemployed police officers spend an awful lot less on tax, reducing the money coming into the treasury for further spending. They also then claim unemployment benefit, increasing the money going out of the treasury. This means even less money left to pay for our schools, hospitals, fire-brigades and all the rest. It also means that the newly unemployed reduce their consumer spending, they have to spend less on everything including food, cars, entertainment electronics – everything.

This means that businesses suffer as they cannot sell things to people who do not have any money to buy them. Sales fall and as a result, profits fall. This means that business have to cut costs or go out of business. Thus, businesses have to let employees go, meaning that these employees have lower income and can spend less which forces the process to repeat itself, and compounds the entire problem. Sooner or later this lack of spending in the economy and consequent fall in business sales results in those businesses closing down.

Fundamentally, austerity is a policy of the wealthy for the short-term benefit of the wealthy, and everyone else will have to suffer the consequences. Austerity is the economics that can and will cause another great depression, just as it has before. When it does, we will all suffer but it will be the poorest and most vulnerable who will suffer first and suffer most.

We are beginning to see the first signs of this with growing demand for food banks, high unemployment and falling wages, but it’s going to get much, much worse. For every Police Officer, Nurse, Doctor, Fireman, Teacher or other Public employee that Osborne shows the door, not only are you less safe for them not being there but the threat to your job or your business grows.

Austerity is a nasty policy designed to transfer money from the poor to the rich, it is a threat to your job, your standard of living and potentially to your very life!

Does the Government Represent You?

Government of the people, for the people and by the people is the ideal of democratic nations, as Laid down by Abraham Lincoln in the Gettysburg Address (I haven’t seen the film yet honest…). Our democracy is older than that of the USA but the sentiment remains valid, a point Winston Churchill made when he echoed it in his famous “We will fight them on the beaches…” speech. I wonder though whether or not the UKs modern Conservative and Liberal Democrat coalition government has ever bothered to consider the broader spirit of the words because it seems to me that their make-up and their policies fall short in every area.

Two thirds of the cabinet  – the crux of government – are millionaires. Does anyone really believe they understand what it is to have been made redundant and be struggling to pay the mortgage? To have a disability? To have a low paid job and struggle to pay the bills? Have they ever been in a position where they have had to choose between heating and food, and are they ever likely to be? If not, then how can they represent those elements of society? 2,700 pensioers die each year because they cannot afford to heat their homes. According to the UK government’s own figures over 13m working people exist on less that 60% of the average income, and more than 7m people (again in work) in 3.6m households live in extreme financial stress unable to feed themselves and their families at the end of each month.

We have 2.6m unemployed people in this country, and according to the Office for national statistics one in four employed people want to work more hours than they currently do. In fact the number of these people has increased by 1million people in the last four years. Why do they want to work more hours? Because they cannot afford to support themselves and their families on their meagre wages. The Tory aim to increase labour market flexibility has meant that many have had to take part-time jobs because there are no full time positions available. These people do not sound like the benefit seeking scroungers that our government would have us believe they are, and yet the war on the welfare state continues.

Meanwhile we have a cabinet worth £70m pounds collectively, led by a Prime Minister of the rich who tells us “We’re all in it together” while cutting tax on the richest in the economy. The richest 1000 people in the country (according to the Guardian) have increased their wealth by £155bn while the rest of us suffer recession after recession and cut after cut. Why does he defend the priviledged so staunchly? Could it be anything to do with his net (largely inherited) £3.8m fortune? How does he get away with it? This is depressingly easy to answer. The telegraph estimates that there are 280,000 millionaires in the UK, or roughly 0.4% of the population and yet 67% of the cabinet are millionaires. It appears we do not have a government of the people, we are governed by the rich and as the old saying predicts: “Power corrupts”.

Does this government have a mandate from the people to do the things it is doing? On a seemingly constant basis the PM and those in both coalition parties tell us that they have to take unpopular decisions. That they are the ones with the strength to make difficult choices regardless of how unpopular they might be. This is wrong. The government of the UK is a representative body, they should be acting in accordance with the wishes of the electorate and doing nothing more. Clearly this is not what is happening, but if you’re not sure consider these points as examples and note that there are many, many more:

a.       Effective Privatisation of the NHS

This policy was so predictably unpopular that the Conservatives “forgot” to mention it during their electoral campaign. They did tell us that there would be no top-down reorganisation of the NHS, but I’m not sure that this statement really covers their policy of using the NHS as a franchise logo for private businesses that use your ailments to make a profit. Unsurprisingly the early signs predict disaster, with vast cuts in available treatments, privatisation of NHS trusts and individual hospitals and warnings from doctors, nurses and professionals throughout the organisation that there will be fewer treatments, more waste, less efficiency and a higher cost.

 

b.      Cuts to the welfare state

Most people take this to mean cuts to job-seekers allowance but it’s much more than that. Child tax credits have recently been re-structured in the least fair way that anyone can imagine. Being fair is not really this government’s priority though, for example the changes to child tax credits will save up to £1.5bn by depriving working families of that money, but the Tories gave this away by cutting the top rate of income tax and costing the country over £3bn. That’s a pretty tough pill to swallow for anyone who has been told that their allowances are being cut to help pay off the debts caused by rich investment bankers who will pay significantly less tax on their astonishingly large bonuses-for-failure in future. Nonetheless, the government has taken no direct action to tackle the banks or bankers and instead focussed on selling your healthcare to businesses that are trying everything to avoid paying tax at all.

 

c.       Reduction of your employment rights

In short, this government wants to make it easier and cheaper to sack you when business is poor. This may not be your fault, you may have served the organisation faithfully and successfully for years but as far as the government is concerned, the business owes you no loyalty. According to the Office for National Statistics there are 29.6million employees in the UK, and 2.6million job-seekersin a potential workforce of 34.1million people. This means that over 95% of people in the UK are employees or potential employees and the government is eroding their rights. In addition to this, cuts to the economy and the ensuing economic effects have meant that average pay increases have been 1.9%, considerably below the inflation rate which has been hovering close to 3%. This means not only are employees losing their rights, but they are also effectively taking a pay cut.

 

d.      I could go on…. And on…. I don’t want to over-egg the omelette though, so perhaps people could add other government policies since 2010 that have hurt the majority of the country to the comments (below).

It is clear that we do not have a government of the people, for the people or by the people. These people do not represent you, this is a collection of career politicians that are making decisions that benefit only the richest people at the top of the largest organisations in the country. A collection of people that pretend their decisions were difficult and have the temerity to tell you that they are acting in your best interests. We do need strong politicians that are capable of making difficult decisions, but those decisions are very different to the ones that are being made. We need politicians with real experience of life’s difficulties who are prepared to stand up to the tyranny of corporations and protect their people from the life-destroying effects of poverty and inequality.

Our current government however is simply a collection of weak politicians who are selling your rights, your health, wealth and your services. And they expect you to be grateful!

Getting-Rid of Unemployed Scroungers

Labour proposed today to guarantee a job or a training scheme for anyone that has been unemployed for two years or more. This seems reasonable until you consider that people will lose benefits if they turn down what is offered. To many this is still not unreasonable, however it is dangerously similar to the failing and widely discredited “Workfare” programme of the Conservatives which has been likened to slavery.

Whatever you choose to call it there is an awful lot of stick and very little carrot here, and once more we can only assume that any resulting jobs will have been heavily subsidised by the state (expected costs are £1.5bn) meaning that private companies can recruit extremely cheap employees and will therefore offer fewer jobs at ordinary wage rates. This means that once more real wages will fall and all employees will suffer in the long term.

The issue here is one of emphasis. Politicians are still placing the emphasis of their policies on beating the poor into poorly paid low skilled jobs with a large stick to make the employment market work. Perhaps Labour do not go as far as the Conservatives who by capping increases in unemployment benefit to make work look more attractive, might as well be saying they will make food look more attractive by starving people. But by not offering a genuinely different approach they strengthen the misguided and simplistic argument that the unemployed don’t have jobs because they are lazy.

In the 1980’s the Conservative government of the time wanted wages to be determined by the market. This means that wages are determined at the wage level where the number of people willing to work (S) equals the number of people that employers needed (D), and so anyone who is not attracted to the labour market at the current wage levels remains unemployed.

Thatcher and her party knew this when they championed the policy, they wanted to reduce wage rates by ending the focus on full employment as a political priority, and they were successful. It is however somewhat hypocritical to then complain about those who have looked at the market and chosen not to sell their efforts at the current rate, since this was exactly the point of the policy that they implemented.

I am not suggesting that unemployment is not a problem, quite the reverse. Not only does it lead to higher costs for the state and worse outcomes for the unemployed themselves, but it also causes a myriad of social problems for both the long term unemployed and society at large. However, the market alone will always leave some people unemployed. The government is trying to correct this by reducing everyone’s real wage rates (although they don't put it like this in interviews, they say "increase labour market flexibility") to encourage businesses to employ more people. Unfortunately with lower wages we can't buy as much and so the amount a business can sell falls and so the amount of profit a businesses can make falls. As a consequence of falling sales, employers have to cut costs to try to maintain profits and they usually do this by sacrificing employees (which incidentally the government would like to make easier), and so the policy actually results in higher unemployement.

The argument for using this approach is that if we can achieve full employment through it (we can’t), employers would be forced to compete on wage rates and so in the long term wages would be higher. Make no mistake, anyone on the right of the political spectrum not only expects some unemployment but they desire it since this keeps costs lower for the businesses that sponsor their political campaigns. If we really want to solve the problem of unemployment and the other issues that this causes then we need a different approach.

The market cannot solve the problem of unemployment on its own. All the market does is moderate the price of wages. More specifically, if there is some unemployment in the economy, the market keeps wages low. The Conservative workfare programme and Labour’s new proposals seek to solve this problem by subsidising the cost of employees and forcing people into work but this will not work since it does not encourage employers to demand more employees, they will just employ the same number but at a lower cost and make more profit as a result. The only way to solve this problem is to increase the demand for employees so that wage rates increase and therefore attract more people into the jobs market.

Since time immemorial this is the way that civilisations have solved this problem. Egypt built the Pyramids, Rome built the Colosseum and Britain built the NHS. The current approach to solving our problems in contrast, is to strip down and sell off everything we have achieved as a nation and pretend that our previous projects failed, and it will not work. What we need to do is engage in more ambitious programmes like the NHS which employ people, both to construct them and to run them.

 

By doing this more people are required to work which pushes up wage levels and makes us all better off immediately since employers now have to compete for our services by offerring higher wages. It also creates more jobs so that people can contribute to the economy. Once people are employed they spend the money they earn in the local community, in shops, bars and restaurants boosting our economy even further. This activity even creates an increase in the tax that government receives and a reduction in unemployment costs, and therefore allows us to pay for the projects by simply starting them.

Let’s build more schools, more hospitals, more housing. Let’s expand our science and space programmes and fund university research into projects like developing clean energy that both serve us as a community but just as importantly provide jobs and prospects. Let’s stop vilifying the unemployed as we sell the jobs that they could have done to cheaper countries and then criticise people for not working. Yes there are other issues, inflation for one and the cost of the projects for another. However, the nation's debt situation was far worse when we built the NHS than it is today, and although inflation can be a huge problem, as long as we ensure wages keep up with prices then we will find that the real cost of living falls as our mortgages and other daily costs become more affordable.

Our problems are not insurmountable, they aren’t even new and nor are the answers. Keynes suggested this approach in the 1930’s and we used it to build the welfare state. The answers are older than that even, they have been used by great civilisations for thousands of years by building better states for the benefit of everyone. China is following this model as we speak and they will soon become the largest economy in the world due to the continued economic growth that they have experienced as a result.

Let’s stop playing this hypocritical and self-defeating blame game and start doing the things that will benefit our economy by benefitting us all. That's how we get rid of the "Unemployed Scroungers"!

Does Britain Need a New Party?

Background
To discuss this I’m going to need to take you through the short term future of politics in Britain. Here is a (subjective) diagram which highlights where our main political parties stand on the political spectrum at the moment. Just a quick glance demonstrates how the parties and so our political discourse has become bunched together on the right-wing. This is dangerous and disenfranchising since it allows politicians to make the frankly absurd claim that there is only one solution to any given problem, safe in the knowledge that their competitors will not stray too far from their dogma. It also limits the debate around political and economic issues that can take place since no one is presenting an alternative to the 'Big-Business-is-Best' argument that currently prevails.

NB.. I use the word capitalism in the diagram to denote an emphasis on free markets.

Labour
Clearly there should be something of an appetite among the electorate for more socialist policies in 2015, given the effective privatisation of the NHS and the further erosion of rights and services by the coalition. For this reason, Labour will engage in a great deal of rhetoric as a veneer for not very much policy. The issue is this, Labour do not need to be left of centre to win an election. The poorest people in Britain who benefit most from socialist policies, have fairly set voting patterns in that they tend to be either staunchly Labour or staunchly Conservative. Thus even though they are the clear majority in the country they will not determine the outcome of an election. Therefore Labour only need to be to the left (or seen to be to the left) of the Conservative party to compete, and so they will continue to target their policies at Middle England and London where the majority of the floating voters are located. They will frame themselves as the alternative to the unpopular right-wing policies of the Tories without actually offering a real alternative.  Because of this, most of their campaigning will be negative and focus on the bad things that the Coalition has done during their time in office. Labour's position is also likely to harden with the potential loss of Scotland from the Union as the Scots constitute a part of their traditional left-leaning base. Labour will therefore have to place even more emphasis on luring traditional Tory voters and so their creep to the right which began in earnest under Blair, will continue and accelerate.

Conservatives

In contrast, the Conservatives are masters at selling the unsellable and having set out their stall on the far right during this term, they cannot backtrack without looking weak – political suicide. They have masterminded the right's high-jacking of the agenda over the last four decades using the media to mobilise the poor to vote against their own interests. They have also been remarkably successful at using propaganda to link socialism with communist experiments in other parts of the world. Sobriquets such as the “Loony Left” have forced left and centre parties to the right, creating a climate where dialogue around alternative economic models has been impossible and so all major parties now attempt to use the same tools to achieve only slightly different ends. In ideological terms there is no realistic electoral threat from the left and on the right the Conservatives will have no serious concerns about UKIP’s relatively modest vote share.
They will be conscious of the damage to their image among Middle England voters from their ‘austerity’ and ‘squeeze the middle’ policies and so they will play to the patriotism of the British, most likely by attempting to provoke another war with Argentina in the run up to the election – the scrapping of naval assets has virtually been an open invitation to the Argies to attack the Falklands. Of course this will bring with it expense and therefore a further mandate for austerity after the 2015 election. Nonetheless, they will not communicate a commitment to further austerity until after the 2015 election since it will certainly be a vote loser. They will attempt to force the coalition to collapse about a year to eighteen months before the contest, and then roll up the most politically damaging policies and hang them around the necks of the Lib Dems - they do not need to be completely successful in this endeavour, they merely need to create some doubt concerning their percieved 'nasty party' antics. They will follow this by embarking on a charm offensive based on spun statistics of what is likely to be a jobless recovery much like that in the US. - More manufacturing and technical jobs will quietly move  to cheaper countries overseas while the vacuum continues to be only partially filled by low paying 'flexible' service sector jobs which will allow the Tories to claim unemployment is being reduced. Money is likely to be pumped into the real economy (instead of into the banks) for a short while roughly eighteen months to a year ahead of the election to create something of a feel good factor, but this will only be spent on short term projects that can be ditched without drama, after the election.

A Note on Patriotism in Politics
Digressing briefly on the subject of patriotism since I mentioned it above, politicians speak of it conveniently when it suits their interests. Threats to our freedom, Terrorism, the Axis of Evil, and malcontents who want to hold the country to ransom all figure prominently in their hyperbole. No real reference to patriotism as a love for your country and fellow citizens is ever made though. It can’t be, otherwise we would have the contrasting relief to see how treacherous our leaders and their financial backers really are. Our politicians should take a leaf out of Hollande’s book who notes that the wealthiest should pay higher taxes in France since it is their patriotic duty to contribute to the welfare and prosperity of the nation; to help the people whose efforts have provided their wealth. Unfortunately that can’t happen in Britain since we still equate patriotism with the glory of the Crown.  With an outdated imperialist vision that sees us line the streets as our young people die in wars that they don’t understand and ignore the fact that many people profit from their deaths. Regardless of the questionable motives for war in Iraq, who do you think profits when embargos are lifted as a result of Saddam’s passing and the free flowing oil that results? Who profits from the government’s purchase of weapons to fight an extended war in Afghanistan or incursions into the Middle East? Whether or not you believe in the moral or legal cases for these military campaigns, no-one can ignore the money trail. Meanwhile the donors to all political parties and the lobbyists and politicians who have supported the conflicts, auctioned our public services and sold our rights, store the proceeds off shore and avoid even contributing a small portion of their blood money to the cause of the public good. Talk of patriotism is a smokescreen, a front to manipulate the easily led and poorly informed to think, act and vote as will be required to enrich the rich and impoverish the poor.

Liberal Democrats (although I’m not sure there’s much point…)
As far as the Lib Dems are concerned, they are fighting a losing battle to the point where it’s hardly worth wasting a paragraph. Their unpopularity as a result of their sheepish, whipped  support for Tory policies is irreversible whether or not they now terminate the association. Clegg knows this and I would guess his escape route is already assured, probably as a conservative MEP or some ‘non-partisan’ figurehead position such as taking over from Chris Patten at the BBC. The Lib Dems will try to present a new Clegg-less face of hope and leftward reform. This will not wash however, and the Libs vote share will be halved at best, making them even more irrelevant than they have been in coalition. Because everyone knows this, they will struggle to garner the corporate sponsorship that is now a pre-requisite for election success in that it is the basis for the expensive smearing campaigns that are now a necessity.

The corporate donor issue will also cripple any idealistic plans Labour might have too. As much as many MP’s and party members will champion a movement to the left, the leadership will be well aware that they need to get elected first and foremost, so they will have to chase funding from the super-rich corporations and donors that this government is creating with its current and its historic Public Sector “reforms”. Promises will clearly have to be given about 'favours' to be delivered in return, for such is the nature of politics in a corporate fascist democracy. Not buying it? Ed Miliband acknowledged this recently, stating in a speech that no political party can afford to be anti-big-business.

General Election 2015
In reality then, little will change in the run up to 2015. The Conservatives will stay ultra-right and attempt a PR coup to maintain power. They will have a vague manifesto and a plan to shade the election and continue their policies to make the rich richer and the poor and disadvantaged work harder for their scraps. Labour will decide that all they need to do to beat the Tories, is to not be the Tories (not being Bush won Obama a Nobel prize remember), and so their policies too will be vague and effectively they will maintain the status quo if they attain office. For Labour – and because the public will always equate them with the left no matter how misguided this is - it means a slow drift ever further rightward which will contribute to the on-going reduction of confidence in the party and a strengthening of the belief that the only way is the Tory way. Fundamentally, this means the only choice we have is a faster or slower movement to the right now, and an unavoidable accelerating movement right as we head further into the future.

An Alternative?
There is another way however. If another party were created and supported, if a modern party of nationalisation, employment rights and responsibility for all were to emerge. A number of things would change. Yes there is the threat that the left would be divided, but this is only a concern to those who seriously believe we still have a party of the left. A new party would offer the potential for a wider popular movement which could then begin to seriously discuss equality and rights in the public domain. More importantly though, it would put pressure on the Labour party - precisely because their vote share would be threatened. They would be faced with the choice of committing to the left or holding the moderate right. No longer would they be able to coast into elections without real convictions and values beyond stopping the Tories. No longer would they hold their position as the major opposition to Conservative rule, by promising only to not be as bad as the Tories. If they hold the centre-right they will condemn the Lib Dems to long term extinction, and if they move left they begin to provide a real alternative to the corporate fascism that we currently endure, as was their function in the early 1900’s. The Tories too would need to respond, they would need to renew their message that capitalism can be socially responsible, and in all likelihood they would commit to promises of greater regulation (probably in the financial sector) since this is the cheapest guarantee (both in terms of spending and their own private interests in large corporations) that they can give in the near-term. Again, this would put pressure on the Labour party to move further left to differentiate themselves and thus go some way to putting social and economic justice back on the agenda. Unfortunately though, the emergence of a new party at this late stage is somewhere between unlikely and the second-coming. This has to be the long term plan, in the immediate future we must seek to limit the damage.

What Now?
So then, either the Tories get re-elected, or Labour edge it without making any 'risky' ideological changes. Even in the latter scenario Labour merely keep the government benches warm until the Conservatives return at the following election. And return they will, with a reinforced argument to criticise their most obvious competitors on the basis of their limited achievements during that period, and continue their looting of our country. Once we strip away the PR, the spin and the mainstream-media smokescreen, modern politics is not about patriotism, policy, conviction, ideology or representation. It is about one thing and one thing only – career politicians getting elected! This means that manifestos will get progressively more vague, rhetoric ever louder and real debate ever marginalised until something changes, or something is changed. Until as a populace we create a viable conviction based leftward challenge that represents real political plurality. Until then we have only the choice between staying right or moving further right, and that means a smaller Public Sector, the eventual complete loss of free healthcare, education and the police. The gradual disappearance of employment rights, corporate regulation, our progressive tax system and the abolition of our already diluted democracy. In concise terms we as a nation will head further into the neo-liberal wilderness as the wealthy become the overlords of a post-modern feudalist state. As people, our status as resources will be solidified and our ability to protest or force change irrevocably compromised for another generation at least.

Summary
We need a new political movement to make change - real change - because the truth of the matter is that the Labour Movement has fizzled out. Either it has been infiltrated by the more priviledged classes or its political leaders, like the pigs in Animal Farm, have fallen pray to the spoils on offer in our society for the wealthy and well connected. They are now themselves part of the top 1%, and too many of them will have too much to lose by implementing the policies that would really help the majority in our country. In 2015 we all need to vote anywhere but Tory; to vote for the person standing against the Conservative candidate with the best chance of beating them (best to avoid BNP though). Not just to protect the poor, but because we all deserve a stronger, fairer and happier society where we value each other as free individuals rather than inanimate factors of production.

But after 2015: Yes, Britain does need a new political movement and a new political party. We need them because in the long-term, we will have to create our own alternative to resurrect our democracy.

The Secret British Coup

Do you ever wonder who really runs our country?

In a speech this week Nick Boles MP outlined his vision for a leaner Public Sector. In his view the Public Sector should only be a mechanism for the advancement of the productivity of the country as a whole. Thereby demonstrating his ambivalence for anyone who cannot or does not produce. The BBC quote him thus:

“…only those tax and spending policies that can explicitly be seen to increase competitiveness of the UK workforce should be supported.”

If I were feeling pedantic I could discuss the comment he made about us all wanting further spending in the Public Sector on NewsNight the previous evening. If I were in this mood I might reference the cheering in the House of Commons from MPs which greeted the latest round of cuts as evidence that this is not the case. I could also mention that with proper taxation and tax collection from the wealthiest individuals and organisations, this is more than possible since it would more than wipe out our national deb. However such arguments would be tantamount to an ethical debate over the design painted on a nuclear missile. The debate should not surround individual policies, terminology or spin, but must focus upon the ideology that is being adopted among our political representatives as the basis for their actions.

I use the word “representatives” quite deliberately. It is the basis of our democracy in that it would be rather awkward to have a functioning government of 64million people each shouting to be heard. For this reason we each elect a spokesperson from our residential areas to put forth our views in Parliament. I would contend however that this no longer occurs, if it ever did. Instead huge corporately funded political parties use their financial muscle to dominate the list of candidates. The candidates then differentiate themselves based upon vague ‘promises’ that bear little resemblance to what they actually plan to do. These people expect us to trust their judgement as they write laws and formulate policies, despite the fact that we have no idea what they plan to do, and therefore no guarantee that the actions that are taken are actually in our interests as the electorate at large. In short, we do not have democracy if we have no idea what we are voting for. How many people would have voted Conservative had they known prior to the 2010 election that the party were already paying for advice from a company on how to carve up and sell the NHS? Some perhaps, but I suspect considerably less than actually did. If there had been enough popular support for the plan it would have appeared in the manifesto rather than the somewhat contradictory words “no top-down reorganisation of the NHS”. Once again I could be pedantic and ask what could be more top down than changing the actual owners of services? But this is not the point I wish to make.

Here I want to take a closer look at the ideology (and where it comes from) that is the basis for our government’s approach to running our country. Much has been written about cuts, welfare reform and privatisation (not least by me), and the financial case that has been set out for these actions have already been completely discredited – despite the fact that our media chooses not to report this on many occasions. Since they have been advocating the policies that the coalition is implementing for far longer than anyone else has been discussing them, I shall look to the Tax Payer’s Alliance as the source of the ideology we are following, and here’s why.

“…frontbench Conservatives and business leaders [have been] flocking to the TPA, and at the Tory conference policy after policy seemed to bear the TPA's stamp.” (Guardian)

Indeed, TPA Chief Executive Matthew Elliott has commented that the Tory Party have moved on to their agenda. This however is not a surprise given that many leading associates of the Tory party are also have associations with the TPA. Liam Fox MP, David Davies MP and Eric Pickles MP have recently spoken at TPA events. Other supporters include various large Tory donors including Sir Anthony Bamford (who has donated over £1m to the conservative party), Stuart Wheeler (who has donated £5m to the Conservative party, a range of Conservative MPS and even David Cameron’s former Chief of Staff Alex Deane. Further they are chaired by Stephan Shakespeare who also runs the ConservativeHome website. The Telegraph also reports that No.10 have had discussions about making Matthew Elliott (Chief Executive and Founder of the TPA) Senior Policy Advisor to the government. Nonetheless,  Elliott maintains they are not a front for the Conservative party, and I would heartily agree. Research suggests that the Conservative party are a front for the Tax Payers Alliance since many of the policies that are being pursued by the government are those of the TPA. The Guardian reports:

“George Osborne's public sector pay freeze was recommended by the TPA last month and Elliott, who describes himself as "a free-market libertarian", said he had been "banging on about" the idea that no public worker should earn more than the prime minister without the chancellor's approval long before Osborne announced it”

Indeed, the TPA have a running commentary on their website about the progress that this government have made toward TPA objectives:

“In tax and spending the Government has introduced a 2-year public sector pay freeze (3/5) and cut middle class welfare (3/5) but has not matched benefit reform with better tax policy (2/5)…”

The Tax Payer’s Alliance however are a difficult organisation to research, despite their insistence on Public Sector Transparency they refuse to hold to the same lofty ideals. This is an organisation which depending on what you believe either has huge influence within the government or has wholly infiltrated it. Yet beyond its claim to have 60,000 members (it doesn’t have any members since it is a corporation, it has this many on its mailing list), it refuses to give information on the identity of either its donors or its members. Since they are a corporation rather than a political party they are under no obligation to reveal this information. Fundamentally this means that within our democracy we have no idea who is formulating the strategies that our country is following. And we are following them – the Guardian again:

“The TPA's proposals include scrapping the secondary school building programme, child benefit and Sure Start centres for the youngest children.”

Sound familiar? I bet it does to Nick Boles. The BBC note:

“Conservative MP Nick Boles is also urging a significant further scaling back of tax credits and housing benefit, and a re-examination of the "lazy sentimentalism" of the Sure Start programme of children's centres.”

What we have is a very small number of extremely wealthy people attempting to reduce their own tax burden and that of the organisations that they own which have contributed to their fortunes. They have no concern for the public good, the welfare of children, of the disabled or living standards of the elderly. Nick Boles mirrors this perfectly when he suggests such ideas as cutting benefits for elderly pensioners, notice he is extremely vague on where the line is to be drawn. Since this is floated as a money saving exercise you can be sure he isn’t talking only about millionaires, more likely his idea will consist only of reduced payments to those already in poverty and none to anyone else. Beyond this headline however what Boles is advocating is complete destruction of the welfare state and the Public Sector as we know it in order to make us a harder working and more productive country. The old Conservative maxim of “you make the rich work harder by making them richer, and the poor work harder by making them poorer” is back, and the ideas to live up to it clearly come from the TPA.

I would comment this on Nick Boles’ plans. Our country is not a business, we are not and never should be UK PLC. Our goal should never be to increase the wealth of the minority at the expense of the majority. There is a name for this kind of system, it is called slavery! When we no longer take care of our children, elderly and disabled. When our goals shift from providing the greatest quality of life to the greatest number, not only do we not have democracy, we do not have freedom. We must proceed with care because this hidden lurch to the right signifies the transformation of people into commodities who’s value, who’s only reason for existence is to provide greater wealth to those lucky enough to be born into privileged circumstances. Yes, the TPA/Tory plan is about forcing people to work harder, longer and hitting them with the starvation stick if they refuse. More than that though, the new ideology is not one of individual endeavour rewarded, it is one where the wealthy are absolved of their responsibilities as contributing parts of a larger society. An ideology where the poor are cast adrift as the rich wrestle an ever tightening grip on resources, education, government and the law. This is a grab for a position of total power and zero responsibility.

The fact that the TPA are hidden within our government tells us two things. First, they are not acting in the best interests of the majority. If they were, they would be electable on their own account and would thus form a political party with their not inconsiderable means and implement their ideas directly. Secondly however, it tells us that they have achieved a position of unelected power. Given that we as an electorate have not given a mandate to any party to govern, have never been consulted about the nature and severity of the policies that are being followed and have no powers to hold the TPA accountable to any degree, we must conclude that there has been a coup d’etat. Our government has been replaced by a corporation, a range of corporations who are governing purely in their own short-term self interest. They have no responsibility to the electorate and no incentive to care about the lives of the individuals within it.

The UK no longer has a government of the people, for the people, by the people. The fact that it is so difficult to say exactly what we do have tells us that. Whatever it is though, it does not value you or me or anyone outside of the wealthiest circles. What we have is a system where  you don’t matter beyond your work and your spending. A system where you have few rights and are only as valuable as the things you produce.

How comfortable are you with that?

The Slippery Slope to Fascism?

The NHS has been opened up to competition, the modern parlance for privatisation. Mr. Gove, the education secretary, expects the majority of schools to become Academies and given the figure is roughly 40% now, he is clearly not mistaken. Academies are the effective privatisation of education where millions of pounds of public assets are given away to private organisations. Welfare reforms are likely to mean that those under the age of twenty-five are not entitled to housing benefit, and since as a group they are significantly more likely to suffer from unemployment, they have been condemned to destitution. If a person is in this situation, they are then told they must work for free in order to receive any financial assistance at all. So the young people of Britain have the following to look forward to: a life with few prospects since their school will be an Academy, teaching pointless courses in order to make their results look good, while the government bring in a qualification which is not open to them and is the only thing that employers and education providers will take seriously; they will have vastly reduced healthcare should they need it since private companies will not provide that which is not profitable (don’t believe me? 225 previously widely available treatments have already been rationed or withdrawn since the passing of the Health and Social Care Bill due to cost-effectiveness); they will have to live with their parents (or on the streets) until they are at least 25 since housing prices have been inflated by the irresponsible financial sector and they no longer qualify for any kind of help; But more than that, since they don’t qualify for the elitest vision of education or employment on offer they will be forced to work for free. Although, perhaps or government will develop some sort of compund where they can stay and contribute to society? "Work Camps" perhaps?

All of this is apparently justified by our flagging economy which is only flagging because bankers, who did have access to these benefits, wrote too many cheques they couldn’t cash. They created money that didn’t exist and lent it to people that couldn’t pay it back. Why? Because they wanted to improve their share prices and increase their already monstrous bonuses. Our government decided that the banks who had been allowed to grow to gargantuan sizes in a rush of de-regulation since 1979 were so big that their failure would damage our economy beyond repair. Money was poured in to save the ailing institutions (the government has so far borrowed £124bn according to the Guardian) and it is the poor who will be footing the bill. Schemes like Jimmy Carr’s K2 and non-domicile status favoured by Tory donors costs HMRC £70bn annually according to the New Statesman.  Meanwhile the increase in ‘stealth taxes’, such as VAT and duty, hit the poorest disproportionately hard since the extra money on the things they pay for make up a larger percentage of their income. For the same reason it is this group who will be hit hardest by cuts to public services since if they were more affluent they would be able to demand the higher quality provisions on offer to the wealthy few. But even these figures are a distraction, a smoke screen to obscure the true intentions of our ruling elites. Ideologically they are opposed to the idea of a public sector. They are now doing whatever they can to ensure that money that has been earmarked to ensure we all have a minimum basic standard of living ends up in the hands of the wealthy few.

So, what is the economic case for these cuts? Those few will tell us that they are necessary for the prosperity of our nation, and that the prosperity of our nation benefits all of us. The Tories will tell us that the growth of business is critical to kick-starting our stalled economy. Well let’s examine that idea. I have talked in the past about the US where 93% of economic growth feeds only the wealthiest 1% of the population, and indeed record corporate profits of $1.97tn were accompanied by real wage falls and rising unemployment during the third quarter of 2011. In Britain there has been a 21% increase in corporate profits since the third quarter of 2009. “But what about the trickle-down effect?”I hear you say. Frankly, it no longer exists, if it ever did. Unemployment here too has been steadily rising although this is a side issue in that employee compensation only accounts for 54% of GDP (down from 65% in the mid 1970’s) with the rest going to you-know-where. In short, although the situation is getting worse for employees in that their real pay has fallen by approximately 2% since mid 2010 according to the TUC, they haven’t been getting a fair deal since the 70s. Still we are given platitudes, small business growth - the endeavours of entrepreneurs - will save us. Sadly small businesses are currently in decline too, with over 50 failing every day according to the Mail on-line, this is strictly a corporate zone. If the government were genuinely serious about encouraging growth in small businesses it would be using a progressive taxation system where larger businesses pay a higher percentage of tax on their profits so that smaller businesses have more income to invest and develop, instead of the flat rate corporation tax currently in place. This flat rate system benefits the larger organisations - who already have advantages in terms of large scale efficiencies - because of their ability to transfer money beyond the tax system. Some even manage broker deals to avoid paying at all. Vodafone for example, which according to Forbes saw UK profits grow from £1.2bn to £1.3bn while it’s tax bill fell from £140m to zero in the same period.

As further rebuttal to the justifications for austerity , the UK is currently in debt to the tune of 66% of GDP. This sounds a lot until you consider the fact that our national debt was over 100% of GDP [continuously] between 1912 and 1961, a period which saw the birth of our welfare state. Indeed for only 50 of the last 300 years has our national debt been lower as a percentage of GDP than it is today. So then, we are being asked to sacrifice critical services and social mobility in the name of economic problems and promised progress which are at best ill-considered and at worst outright lies. Very quickly we have to start cutting through the spin and propaganda. If your life chances are determined by the economic situation of your parents, you are not free. If you are forced to work for nothing and a company profits from that, you are not free. If the actions of an unelected government acting without a mandate and outside of the written promises upon which its election campaign was based can destroy your life without consultation or remorse, then you are a slave to their whim. This is not hyperbole; 32 people die every week in our country having been declared fit to work. They die from cancer, from heart disease and from any other number of illnesses that our government’s system routinely ignores since it views its citizens only in the light of their value to the economy.

Culturally we are unwilling or unable to oppose this tyranny.  Not because we think it’s fair, and not because we are happy about it. But because we have a proud sense of responsibility and a strong moral compass. Teachers will say they don’t want to harm the prospects of their students, doctors will say any action they take will hurt patients. Private sector employees will not want to harm the companies they work for, and the media will tell us industrial action won’t work because this is the only way out of our economic mess. In response to that I would argue how quickly alternative ideas are generated when the wealth of the elite is threatened, as has been the case in the past. Teachers, your students will be better served by the creation of a fairer society within which they can both contribute and benefit through hard work, rather than being locked out on the day of their birth. Doctors and nurses, how many more people will suffer and die as a result of the stripping of the NHS, one of the most efficient healthcare systems in the world? If we do not do something, that is if we allow this pattern to continue, how many more rights will we lose? How much more will our real wages fall as corporate profits continue to rise? How long will we accept being second class citizens in a society that profits from our toil, before we demand the right to guaranteed reasonable living standards and the opportunity to affect our own futures? How long before we demand to be free and equal members of a democratic society again?

Fascism is defined by the Oxford Dictionary as:

“extreme right-wing, authoritarian, or intolerant views or practices”

This regime is right-wing, authoritarian and intolerant of the needs of the vast majority of our populace. We are clearly short of anything seen in Nazi Germany, but if we do nothing, how long will it take for this creeping elitism to morph into fully fledged fascism. And will we ever manage to change it back?

Exposing the Myth of Economic Growth

Economic growth does not work for the vast majority of us! Yep, you read the right, the fabled solution to all of our problems, our government’s plan to get us out of this mess, leads only to more problems. Never has our economy been so large and yet most people are facing real wage cuts, privatisation of basic tax-payer owned services and unemployment. In the US over the last 15 years, 93% of economic growth has been gorged by less than 1% of the population. Economic growth is a lie foisted upon us to force us to make the sacrifices needed to feed wealthy bank accounts. To really follow this argument you have to accept that money isn’t real. Of course we really have some notes and some coins, but it is worth only the amount of goods or service that we agree it is worth. We have to learn to think of it as separate from the items we buy with it, in that people would still produce things if we decided to change the way that money works.

 There is something called the Philips Curve which demonstrates the relationship between unemployment and inflation. You spend money to curb unemployment and this causes inflation. When prices go up two things happen. Firstly it disproportionately affects the rich, since the proceeds of their ventures are worth less in real terms. However, it immediately affects the poor as prices rise meaning living standards decrease and the poorest do not have the savings to insulate them. Since developed countries will not tolerate hunger and deprivation where it is clear and blameless, we have mechanisms in place to ensure that workers can unite to force their masters to share the spoils of the ever growing cake. This is what happened throughout the 60’s and 70’s, after a massive boom caused by revolutionary public spending where all our living standards improved, the economy came to a juddering halt. Workers, realising that employment was better than low inflation battled for the right to work and refused to accept any attacks on this. When inflation kicked in they battled for higher pay to keep pace or stay ahead and if they didn’t get what they considered a fair deal they downed tools and stopped producing the wealth that fed their financial superiors. Obviously such a course could not be tolerated by the wealthy and so the Philips Curve was disproved (no it wasn’t, but that was the story).

You see, the Philips curve had to be disproved since while that relationship was held to exist, no government would ever be elected by the masses, that favoured policies which threatened employment. Even now, when we talk about changing our system to make sure people can be sacked more easily by their super-rich over-lords we call it “making the labour market more flexible”. The terms here demonstrate how working people have been turned into a commodity, this is backed up if we consider titles such as “Human Resources”. People are bought and sold, but markets take the blame. However, that relationship between unemployment and inflation still very much exists, it has not been disproved but merely hidden. For example, there were over 20 changes to the way that unemployment has been counted between 1979 and 2000. All but one of these has served to reduce the published figure of unemployment. The way we measure inflation too has been altered, the new count (CPI) is disgned to produce a lower figure than its predecessor (RPI). If we still used the 1979 system, unemployment would be considerably over 4,000,000 people, and inflation heading toward double figures. We now count the amount of unemployed in this country not by counting those who claim unemployment benefit, or those that suddenly stop paying income tax or some other sensible method. No, we use a system which is much more simple to manipulate, a survey (seriously, who really believes a survey is going to accurately predict this?). But, this had to be done, you cannot justify rich individuals and organisations treating workers as resources if they are seen to be suffering. You have to demonise the working poor, to hoodwink those lucky enough to have a job into thinking the unemployed are the ones responsible for life’s difficulties. Well, I have never known an unemployed person close an outlet and fire all of its it employees just because they wanted to join a trade union, McDonalds on the other hand…  Nor have I ever known an unemployed person cut tax for the highest earners while indirectly increasing it for the lowest, our government however…  “Benefit cheats” cost us around £1b per year according to even the most ascerbic estimates, while anything between £60b and £100b is lost from the tax avoidance or tax aversion by the richest in our society.

It’s worse than that though, we have actually given the right to some companies to print money! Ladies and gentlemen, I give you then banks. The popular assumption is that a bank receives deposits from savers and then lends that money out, keeping some in reserve to ensure savers can withdraw money if they want to. This is wrong. Criminally wrong. While the rest of us scrape by and deal with job insecurity, pay freezes, loss of rights and loss of democracy, the banks create their own wealth. They do not actually lend out money that has been deposited, in this digital age there is no legal requirement for them to be able to guarantee their debts. Hold on, I’ll walk you through it. If I go into a bank and deposit £2 in a new account, the bank is then legally allowed to create £100 and lend it out. They hold on to my £2 as they have to hold 2% of whatever they lend, but the £100 is new money. Notes and coins are produced by the government, and when they are created the government charges interest to the banks. However in our digital age only 2.4% of money in our economy is actually paper and coin, the rest is numbers in a computer. Banks are free to add these numbers to the computer whenever someone walks in with a deposit, and they are allowed to add 50times the value of that deposit. Incidentally, this is what really caused the financial meltdown. The banks can only create this money if they have someone to lend it to, and so the search was on for ever more lending opportunities until the only way to continue to grow was to lend to people who couldn’t pay it back.

The scam goes deeper however, most people borrow money for big ticket items like houses which require a mortgage. Well, if banks decide they will lend more money in mortgages, despite the fact that there aren’t actually any extra houses all that happens is there is a bidding war which forces prices to go up. No one is materially better off since the money we can borrow is taken up by the inflated cost of living. Even if you choose not to buy a house, you still need somewhere to live and that most likely means renting. If your landlord is forced to borrow more and thus pay back more to secure the property it stands to reason that the rent is going to be higher. What actually happens is the banks create this money, which causes a boom in the economy in the same way that the public spending did after the Second World War. The difference is that the banks are the beneficiaries of the money they lend, since it is then paid into the bank of the person who sold the house, and that bank can now lend 50times what was deposited. But that’s fine because the value of the house will increase so we always have that. Wrong again. Sooner or later as the banks give ever riskier loans to produce the growth in their balance sheets that their shareholders demand, they lend to people who can’t pay it back. Oops, now the banks are in trouble and don’t have enough money to lend meaning house prices fall. Fortunately, they have a safety net in the lender of last resort, enter The Bank of England. Our government did not choose to bail out the banks, it was legally obliged to do so. The Bank of England guarantees all other banks, and thus the money printing, growth grabbing monsters of the private sector are effectively bankrolled by the public sector! We all put money into a pot which is used to guarantee profit making companies as they lend us thin air. We use this thin air to impoverish ourselves and guarantee that we will spend the rest of our lives paying for a home that should be a basic human right. The act of borrowing this thin air and using it to buy the things we need causes these organisations to lend more thin air meaning that more people have more thin air to compete against each other with. In reality there are the same number of houses so the people selling them can sell them for ever more deepening our debt, and deepening our servitude. Now all of a sudden we cannot afford to lose our jobs, and must work ever harder to avoid the arbitrary blade of the axe, since the axe represents the loss of everything we have spent our lives acquiring.

We are slaves. Slaves to a system that we finance and work within. Slaves to a system that we no longer even question. Slaves to a very small number of people with the knowledge and the organisational means to impoverish us if we refuse to bend to their will. Economic growth is an illusion that only tightens our chains. And when economic growth falters we must pay once again, with our jobs and our homes, to repair our crumbling prison.

The Frightening Reason Why We Shouldn’t Mourn the NHS

So, finally we bid goodbye to the NHS. 64 years of the world’s most progressive and egalitarian healthcare comes to an end. Public anger has been directed squarely at the Liberal Democrats, the Conservatives benefitting from a “we expect this from you” sort of attitude. This though begs a larger question, if we expect the rape of our most important public assets from the party who won most seats in the last General Election, just how did they win most seats in the last General Election? Many political commentators have already had their say on this one, “the country was tired of Labour” they utter between sips of brandy in the Commons bar, “With wars, expenses scandals and cronyism, it was time for a change”. This breathtakingly lazy journalism, while not technically incorrect it is irresponsibly incomplete especially since their competitors were just as guilty of these transgressions.

People are not just weary of Labour (although they are weary of Labour), they are weary of politics and politicians. The 2010 general election saw the first hung Parliament in the UK since 1974, but with a couple of crucial differences. In 1974 there was a turnout of almost 80%, by 2010 this had fallen to just over 65%. Additionally, there has been the stampede for the right among the main stream parties which seen them gradually merge in ideological terms. The most likely reasons for this can be found in the privatisation programmes of the 1980’s which let those who would place profit above all else break free of their leash. These companies are natural benefactors to the conservative party, donating money in the hope for further favourable reform and to prevent the other parties taking away all that they had already won. Political parties need funding to get elected, and the best prospect of increasing funding is through donations. Indeed, it has been estimated that the Conservative party is able to raise ten times as much as its nearest competitor. Labour in particular have had to look for other sources of revenue to compete, and not too many rich individuals or corporations want to donate to you if it states in your party rules that you are going to increase their income tax or nationalise their business at the first opportunity.

Regardless of the stance of the incumbent government, in past decades the effective privatisation of the NHS - the crown jewel of the world’s most progressive welfare state - would have been unthinkable. Why? Because fresh in people’s minds was the exploitation that occurred the last time political and economic power was concentrated in the hands of the wealthy. Times change and memories fade, eventually it becomes politically tenable to suggest that greed is good once more. Enough years have passed in the UK for society to forget the squalor and misery that the greed of a few had caused during the 19^th and early 20^th century. Already, we debate the costs of vaccines and medicines without giving thought to the fact that a lack of these once meant that 140 babies per 1000 born used to die at birth, the NHS era has helped this figure to fall to just 5.8 per 1000 babies born.  We now overlook the fact that the NHS era has seen life expectancy for both men and women increase by 75%. Your mind will no doubt be leaping to Andy Burnham’s recent speech by now and clinging to his promise to repeal the changes that the government have made. Sorry, that is not what he said. He actually said that he will repeal as many of the changes as he can without having to go through another costly reorganisation of the NHS. Subtly different perhaps, but politicians do subtle very well. Do you remember Cameron’s promise of no more top down reorganisation of the NHS? Or his pledge to cut the deficit not the NHS? (OK, actually that second one just looks like a lie).What Andy Burnham said is Political short hand for “Actually I’m glad the Tories and the Lib Dems are going to take the fall on this one, for my part I shall do my best to look heroic without ever promising to do anything different”. And nothing different he will do, since by the time of the next election the Labour party will be trying to cultivate the donations of the new breed of firms growing quickly in the health sector.

The Health and Social Care Bill is a document the size of a telephone directory and consequently it is difficult to predict the exact shape of what is to come now that the Bill is to become law. The model the government will probably use is to provide some sort of poor patient premium to make sure patients in disadvantaged areas get the same level of care as their more affluent counter-parts. This will mean that the very well paid will have access to excellent healthcare (since they pay their own premium), and the very poor will have access to healthcare (since the taxpayer will pay their premium) but the larger number in the middle will have to make do with the second rate services that are left (since they will be no-ones priority) or scrape together the money to go private? Over time the number of people eligible for assistance will fall (just like legal aid did), as will the number of services available to people free of charge (just like the post offices and the trains). At every stage health companies will scream for greater subsidies since they cannot afford to keep providing treatments for free with the rising costs of drugs and medical procedures. As a result taxes will have to increase as someone has to pay for all of this, and the only real differences from how the system works now will be the lower standards of care available to the vast majority, and the huge sums of money leaving in profits.

Still, if you didn’t see this coming, don’t worry. Don’t lambast yourself if you voted Liberal Democrat or even conservative, it wasn’t your fault. Labour would have done the same as the coalition has in almost every area (compare their manifestoes if you have any doubts) and so had they retained their mandate Labour voters would be feeling just as bad right now. Just look at Labour’s proposed amendments to the ‘Workfair’ scheme: “guaranteed job, but no benefits if you don’t take it” just how is this materially different to what their rivals proposed? This then is why we shouldn’t mourn the NHS. Undoubtedly the changes will lead to the rich getting richer and everyone else getting less. Undoubtedly they will lead to many instances of poorer care, of death or incapacity. But the simple fact is that the changes to the NHS have only been possible because there is no credible practical alternative in our political system. In short, these changes have only been possible because democracy itself has already been privatised!