The authors examine the secret agenda behind austerity in Britain and the horrendous consequences it is having for much of the populace, especially for the vulnerable.
Vickie Cooper is Lecturer in Social Policy and Criminology at The Open University and researcher in housing, homelessness and austerity. David Whyte is Professor of Socio-legal Studies at The University of Liverpool. Together they edited the book “The Violence of Austerity” (Published by Pluto Press), which will be reviewed in BRAVE NEW EUROPE on October 9th.
A decade after the Global Financial Crisis (GFC) and seven years since the Coalition government in Britain first rolled out a suite of public sector cuts it described as austerity measures, we are now seeing the effects materialise. The people most affected by ‘austerity’ are not only struggling under the financial strain; but they are becoming ill, physically and emotionally, and many are dying. It is, in essence, a violent political project that not only generates monumental levels of social inequality and injustice, but also harmful and violent conditions for those most affected.
Austerity is now widely recognised as a significant factor in suicide and suicidal thoughts as it shames, harasses, stigmatises and depresses the most vulnerable members of society. For the first time in the history of our welfare state we are seeing a distinct pattern of death and physical injury resulting from cuts to welfare provision. Death by suicide is rapidly becoming the norm, as is death caused by existing health conditions, exacerbated by welfare institutions and their stress inducing practices. Another distinct pattern of death emerging is the rise in mortality among the elderly, who are dying prematurely at a time when the provision of social care is in steep decline. One report released earlier this year, for example, showed that 30,000 people are dying unnecessarily every year because of the cuts to the National Health Service and to local authority social care budgets. Indeed, the scale of disruption felt by people at the sharp end of benefit reforms is enormous; around 600 suicides are likely to have been caused by a tough regime of work capability assessments which test claimants’ ‘fitness for work’. Many more have died as a result of benefit sanctions which have had fatal impacts on existing health conditions, such as diabetes and heart disease. Never before has the relationship between social inequality and its violent effects been so axiomatic.
And yet there can be little doubt that the political reasoning behind all of the suicide and premature death, the suffering and pain is based on a spectacular historic deception. Indeed, austerity should be regarded as one of the greatest political frauds perpetrated against the polity in living memory. Austerity, was sold to the British public as the only possible economic strategy available to us. It was sold as a credible and necessary policy of expansionary fiscal discipline, whereby only extreme pain can restore economic growth. Austerity is based on nothing more than a crude version of supply-side or ‘trickle-down’ economics: strangle the public sector to enable the private sector to flourish. This view is way out of step with the dominant view of mainstream economists, including those at the IMF and the World Bank. But rather than listening to the persuasive body of mainstream economists, the UK’s political leaders shutdown all counter opinion and continued to push the line that austerity is a necessary evil.
Here are three major claims that underpin this deceptive logic of austerity:
1) We all played a part in the crisis
In a key speech as opposition leader in 2008, David Cameron set out his explanation of the causes of the financial crisis:
“The economic assumptions that Gordon Brown made in the last decade now lie in ruins. His assumption that a government could preserve stability while running a budget deficit in a boom … His assumption that we could permanently spend more than our income and build an economy on debt.”
Thus began a consistent theme in political discourse that has endured for a decade following the GFC: that austerity can be understood as a rational response to soaring levels of both personal and public debt, which in turn have resulted from a combination of reckless government spending and debt-fuelled personal consumption.
The key problem is not that ‘we maxed out our credit card’ but there was a global financial crisis we couldn’t control. To accept this means accepting that the problem wasn’t an internal government or ‘public’ failure but that it was located in the global financial system. This is not to say that governments had nothing to do with this problem. The causes of the GFC can be found in constituent elements of neoliberal capitalism that the leading governments designed and shaped.
Regardless of whoever you believe was responsible for the GFC, it is the general public who have paid the price. It was not long before the financial crisis quickly became ‘our’ problem. Governments began appealing not to the banks but to the general public to tighten their belts and pull together in order to get us through these difficult times. This deception was aimed straight at the heart of the welfare state and reignited the government’s vitriolic attack on welfare recipients and the welfare state for causing the budget deficit.
2) Austerity is necessary
We were told that only fiscal pain can lead to economic recovery. In other words, it is only by accepting some harsh measures that we will get the economy back on its feet: there is no choice, no alternative; only austerity will lead to economic recovery.
Austerity, then, had been sold to the British public as the only game in town: as a credible and necessary fiscal policy where only public sector cuts will restore economic order. This view was way out of step with the dominant view of mainstream economists. Just as there is a consensus of economists who point to internal economic causes of the GFC, there emerged a consensus of economists who appealed for a Keynesian approach that would maintain high levels of public spending to ride out the crisis.But successive UK governments have rejected any such proposals that challenge the fiscal consolidation mode.
Yet the UK government has failed to consider any alternative economic strategies, ridiculing anyone that dared to suggest it might. George Osborne continually warned that the UK was ‘on the brink of bankruptcy’ and international investors would turn away from the UK if strict fiscal measures were not implemented.
This political trope is difficult to square with the real, lived experiences of austerity and the effects it is having on targeted groups. Austere fiscal policies have been designed in such a way that target the most vulnerable and marginal groups in society, hitting them harder than any other income group.
Austerity is a class project that disproportionately targets and affects working class households and communities and, in so doing, protects concentrations of elite wealth and power. The policies levelled at working class households have barely touched the elite.
In stark contrast, we have seen a consolidation of wealth amongst the top income earners; the UK’s richest 1000 people saw their wealth increase by £138 billion between 2009 and 2013. As austerity policies were being rolled out, the Coalition government made sure that high income earners would be least affected and lowered tax rates for people earning over £150,000 fro 50 per cent to 45 per cent.
Ultimately, the purpose of the violence of austerity is not simply to stabalise the economic system in the aftermath of the financial crisis but to stabalise it in a particular form that enables the rich to sustain opportunities for wealth generation. As Mark Blyth puts it, “Austerity is not just the price of saving the banks. It’s the price that the banks want somebody else to pay.” And this ‘somebody’ is pretty much certain to be poor or working class. The fiscal consolidation policies implemented in the period following the 2007/08 crash have ensured even greater levels of inequality, ideologically supported by a crude trickle-down rationale.
The sophistication of the austerity narrative, then, is that it enables a kind of smash and grab politics to be supported by a deeply moral and ideological set of principles. Austerity is about class domination, but it is also about providing a narrative that is more apparently plausible and more complex than class domination; a narrative that brings us all together around a common sense: we maxed out our credit card; we are all in this together; and we all stand to gain after the dust has cleared.
Twenty-first-century austerity policies in the UK cannot be defended on grounds of economic efficiency or necessity. However, in being able to see the real aims and desires of the political elite, and how those aims and desires are connected intimately to the interests of the financial and business elites, we begin to understand austerity as little more than a cruel and violent strategy of class domination.
More and more people can now relate first-hand experiences about how spiralling levels of inequality and injustice triggered by austerity, have resulted in the death of loved-ones and community members. People are now painfully aware that the cumulative effects of austerity not only induce stress, but that stress is the trigger of psychological pain and serious mental health issues.
Austerity is a violent political project because by its very design, it is achieved through dismantling social protection. The crisis we face in social care is precipitated by cuts to local authority funding. In the first 5 years of austerity, local authorities had their main grant cut by 40%, amounting to an estimated £18bn cut in care provision. A decade of cuts, when added up, also means that some key agencies that protect us, such as the Health and Safety Executive and the Environment Agency will have been decimated by over 40% of funding cuts. Scaling back on an already paltry funding in these critical areas of regulation will lead to a rise in pollution related illness and disease and will fail to ensure people are safe at work.
People’s everyday experiences of austerity are shaped directly by public sector organisations and private providers; the very sites through which highly political strategies, like austerity, are de-politicised and their harmful effect made to appear normal and mundane. It is for this reason that the violence of austerity is difficult to see, to bear witness to and gather evidence in the same way that we normally would with interpersonal violence. The violence of austerity is enforced through a detached system of administration and mundane institutional practices that are not always understood as violent; but they are. In front of the very obvious rogues gallery of politicians who designed this agenda, stand the armies of civil servants, government departments and Local Authorities. For example, amongst the more established techniques that the government has deployed to meet its austerity targets, it recently recruited 180 ‘presenting officers’ to fight on behalf of DWP to oppose benefit appeal claims. But in front of these ‘public officials’ also stand armies of private officials, working in companies like G4S and ATOS that are tasked with running our public services, but with minimal accountability. When, in 2015, it was revealed that A4e staff resorted to ‘tricking’ claimants into carrying out job-search activities that the claimants could not complete due to having learning difficulties, it became abundantly clear that private companies were also heavily involved in enforcing the violence of austerity.
One country that didn’t follow the austerity route was Iceland. Following the financial collapse in 2008, the Icelandic government initially developed a rescue plan to bailout the banks which involved compensating shareholders and foreign investors and putting the financial burden back onto taxpayers and the national bank. After several weeks of public protests, the government stepped down, the austerity package was abandoned and an alternative set of reforms were put on the table. In the end, Iceland did not bail out its banks, but allowed the losses of the financial crisis to fall more directly onto shareholders, foreign investors, bankers and the financial elite. Following two referenda in which the people rejected the IMF’s austerity package, Iceland began a new decade in bringing about economic stability using a model that was very different to the austerity one used here in the UK and in other countries. Although forced to implement some public spending cuts, Iceland managed to safeguard its welfare state, healthcare and education system and shift the burden of taxation on to the shoulders of higher income families. Proof that austerity is not the only road to economic recovery, Iceland’s economy has rebounded and it is now heralded as one of the first countries to surpass pre-crisis economic output. To put this in perspective, Iceland went from being one of ten economies critically spiralling into financial collapse, to being an exemplary model of economic recovery – all within a decade.
It is not beyond reason that the UK could have followed a similar route to recovery. The UK’s deficit is not especially large in relation to other economies. Indeed, if measured as a ratio of debt to GDP, the UK’s balance sheet was in a much stronger position than Iceland’s was following the crash. Its debt-to-GDP ratio is now comparable to France, slightly higher than Germany, around half the level of Japan and substantially lower than the US. Neither is it unusually large when placed in historical context. The UK’s 2013 debt to GDP ratio has been higher in a total of 200 out of the last 250 years
This spectacular political deception continues apace under the current Prime Minister Theresa May. On coming to power 14 months ago, she made a strategic decision not to use the word ‘austerity’: “you call it austerity; I call it living within our means.” However, the experience of countless thousands of people is precisely the opposite: people are actively being prevented from living within their means and are cut off from their most basic entitlement to housing, food, health care, social care and general protection from hardship.
Not only is austerity a violent programme, it makes no economic sense in the long term. Local authorities are, for example, now housing people in very expensive temporary accommodation because the government has disinvested in social housing. The crisis in homelessness has paradoxically led to a £400 million rise in benefit payments. The future costs of disinvesting in young people will be seismic.
And here we get to the heart of the matter. The fiscal discipline of austerity is not really about saving money, or even about balancing the books. Austerity has to be understood as a form of ‘discipline’ rather than anything that makes sense in fiscal terms. The purpose is to discipline the poor, and to restore the entitlement of the rich by dismantling the welfare state. Because it reclaims a significant part of the social wage from ordinary people, it both guarantees rising levels of inequality, and at the same time maintains the dominant position of elites. Austerity is a class project with the primary purpose not of balancing the books, but of using violence as a means of social ordering.
Finding a road to economic recovery means restoring our system of social protection and restoring the spending power of local authorities. It means taxing the rich, not punishing the poor in order to pay for a problem that has its roots in a global financial system that enriched the elite. Indeed, abandoning the literally suicidal course that we are currently on and finding real ways of addressing inequalities and the concentration of wealth is our only hope of protecting people against the coruscating violence that another economic crisis will certainly bring.