2011 was a year in which I read a lot. I have had the time because I have had very little work – austerity bites! I’ve had the inclination, spurred by a sense that something is going on that I need to understand:
“The first duty of the activist is to understand how the world works and how the institutions that oppress us function.”[1]
The newly (non) elected coalition government have been promoting their world of austerity and public spending cuts. Hiding behind all the technical jargon about the economy lies a serious ideological intent to destroy what’s left of the welfare state and to cast us out onto a sea of market forces with only individual responsibility as our lifeboat. They are using the financial crisis as the opportunity to make a fundamental change of direction in British politics in the face of little or weak opposition. Who still thinks that economics is a pure science divorced from politics and values?
I want to challenge all that. This means hanging out on the street, in cold dark tents and squats with the Occupy movement. It also means educating myself and testing my understanding by entering into discussion and learning with others. I’ve made a start by developing participatory learning materials which I’ve called ‘Everyday Economics’. The following books are all really readable. They all share the intent to equip us to struggle for economic and social justice.
1. There is a small group of rich and powerful people who are profiting from chaos. Disaster capitalism gives them the power to create a world in their image that works for their interests. Information is shock resistance. Arm yourself.
'The Shock Doctrine.' Naomi Klein
If I could have 100 copies of a book of my choice to giveaway at bus stops and supermarkets, then I would choose the Shock Doctrine. But I would say to people – don’t read this book on your own. It is an extremely readable and chilling account of how a small band of powerful ‘shock doctors’ have organised themselves to shape the world in their own interests – wealth and profit. There are three strands to their strategy: 1) Shock/disaster/chaos; 2) radical free market economic transformation; 3) repression and coercion of citizens. Not only do they cash in on chaos, but given half a chance they will deliberately manufacture it.
These global profiteers are crusaders for what is known as the ‘neo-liberal’ project. A recipe for international global profit. The ingredients are simple:
- · Liberalise the markets;
- · Deregulate the economy, especially the financial sector;
- · Privatise state assets
- · Lower taxes
- · Lowest possible state spending
Use shock, chaos and bloodshed to create the conditions in which these ingredients can be presented as the only remedy for economic recovery.
Naomi Klein details the brutal examples of Chile and Argentina; the more subtle manipulations that followed the tsunami in Sri Lanka and Hurricane Katrina in New Orleans; she sets out the fiendish post 9/11 privatization of the American military machine and the hollowing out of the American government to the private security industry.
We can see it happening right now in front of our eyes in Greece, Spain and Italy. Democratically elected governments are being replaced by technocrats at the bequest of ‘the market’. George Osborne says he is administering the shock to the British people himself in order to protect us from a similar fate – a pre-emptive strike. The shock doctrine gives us the lenses with which to see that the medicine administered in the name of economic recovery has been deliberately concocted to promote the health and wealth of the few at the expense of the many.
2. The realm of economics promotes competition, inequality and individualism as inevitable and natural. We must reclaim the debate based on political and social values. We must rediscover how to talk about change and how to imagine different arrangements.
‘Ill Fares the Land’ Tony Judt
This is the final book written by Tony Judt, the historian who died in 2010 after a two year struggle with motor neuron disease. He sets out to address young people on both sides of the Atlantic. “How should we begin to make amends for raising a generation obsessed with the pursuit of material wealth and indifferent to so much else? Perhaps we might start by reminding ourselves and our children that it wasn’t always thus. Thinking “economistically,” as we have done now for thirty years, is not intrinsic to humans. There was a time when we ordered our lives differently.”
He challenges us to return to an ethically informed public conversation but laments the fact that we no longer have the language that we need to do this. We have lost our way and need to find our voice. The traditional politics of the left no longer inspire us with a sense of alternatives. Economics has taken over from politics. We have become individuals and consumers. The value of public space and collective affairs has been obscured by our drift into materialism and selfishness. The private has triumphed over the public.
Globalisation and international markets operate on the basis that we accept that they are inevitable and that economic relationships are laid down by nature. If we can see them for what they are and understand them as the result of human choices then we can begin to have confidence that there is an alternative. We must articulate what we stand for and how we shall organize ourselves for the common benefit.
To me, this says we must move the conversation about economics out of the realm of technicality and into the realm of political philosophy and debate. In order to do that we need to de-mystify the economistic jargon so that we can challenge it. “In the arena of economic policy we have been advised to leave it to the experts – enforced by the obscure language of the discipline”
Austerity is not about the technicalities of inflation, interest rates etc. Austerity is about destroying our sense of shared social responsibility and commitment to collective identity of which state provided services are a vital expression. By losing our voice in the face of this we are in danger of losing the fabric of economic and social justice that holds us together.
3. Economics is elitist. It disempowers and silences the voices of non-experts. We all have valuable economic knowledge. The more we can recognize this and make up our own minds about economics, the more democratic our society will be.
'Economics for Everyone: A short guide to the economics of capitalism.' Jim Standford.
This book and the supporting website goes a long way to providing the demystification tool kit that I needed. Susan Williams at the Highlander Education Centre, introduced me to this as an essential tool. She had just ordered a crate full of copies to use in her popular education work.
“Dedicated to the hard-working people who produce the wealth – in hopes that by better understanding the economy, we can be more successful in changing it.” Jim is economist for the Canadian Auto Workers union. His book began as an on-line course in basic economics for union member which grew into an effort to reach into other trade union and social change settings.
By the end of the first page I was hooked – it showed me that I know about economics because I experience it in my daily life. So I have something to say about it as well. The block isn’t my ignorance but the attitude of professional economists who hide behind technical mumbo-jumbo in order to justify and defend capitalism – it is a political, value laden discipline that seeks to maintain the status quo. Whoa!
“A society in which ordinary people know more about economics, and recognize the often conflicting interests at stake in the economy, is a society in which more people will feel confident deciding for themselves what’s best – instead of trusting the experts. It will be a more democratic society.”
The book uses plain language to build a picture, an economic map. Starting from simple relationships within an individual company, moving on to the interaction between companies and then introducing the roles of environment, financial industry, government and globalization. These maps show the complexity of economic relationships in an accessible and entertaining way.
I am now going back to re-read the book – not everything I read has stayed with me. I would certainly struggle to explain it to someone else. But I’ve got the bare bones of the map in my mind as a peg on which to hang further learning. And more importantly, I have the confidence that the economic emperor indeed has no clothes:
“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.”[2]
4. You don’t have to be an expert on global financial transactions in order to see how international finance has been cheating and manipulating the system in order to concentrate extreme wealth in the hands of the few. International financial capital is the enemy of democracy.
'Treasure Islands' Nicholas Shaxson
I couldn’t follow all the twists and turns of the movement of financial capital, although the tales are well told. I could see that money that rightfully should be going into national exchequers is being spirited around the globe into the coffers of a financial elite. A tax haven (or secrecy jurisdiction) is “a place that seeks to attract business by offering politically stable facilities to help people or entities get around the rules, laws and regulations of jurisdictions elsewhere.”
This shadowy realm of tax evasion on a massive scale is a parallel universe of stateless money and power. Phoney companies are set up – one here to exploit low import taxes and one over there to cash in on low export taxes. It transcends and undermines national governments. Legislation is introduced and existing is overturned in order to attract international capital. Attempts at regulation are met with bullying and threats to take the money elsewhere. The City of London (itself an opaque and elitist body)is at the heart of this web of secrecy.
“The struggle against money power is a struggle for human freedom”[3]
5. We haven’t paid enough attention to the lessons of the financial crisis. We need to make the finance industry serve society, not predate on it. We need to move on to develop our ethical, political and ecological thinking about when enough is enough.
'Whoops.' John Lanchester
He starts from the same place as Jim Standford:
“It seems to me that there is a much bigger gap between the world of finance and that of the general public, and that there is a need to narrow that gap, if members of the financial industry are not to be a kind of priesthood, administering to their own mysteries, and feared and resented by the rest of us. Many bright, literate people have no ideas about all sort of economic basics, of a type that financial insiders take as elementary facts about how the world works……It’s important that we try to understand it, and begin to think about what’s next.”
“….in face of an economic crisis so systemic, we are no longer in control of crucial aspects of our lives. One way to reassert a degree of control is to try to understand what’s happened. It gives us back a sense of agency.”
Again, hard to follow some of the technicalities of the loan swaps, derivatives etc although wrapped up in a gripping yarn. But not hard to see that the economic tail is wagging the democratic dog. We need to reassert the distinction between capitalism and democracy – capitalism is an economic, not a political system. Economic thinking has come to dominate, resulting in the idea of value being replaced by that of price.
But we create systems and markets so we can change them. The world of finance has become a business; instead of money being a by product of industry it has become an end in itself. Capital should be the means to an end rather than a master in its own right. Like Tony Judt, he points to an ideological vacuum where the challenge to capitalism should be. Instead of the credit crunch leading to a re-structuring of financial systems, it has been hi-jacked to serve a political agenda that seeks to reduce the state by cutting public spending. Once again the many are paying the price for the few.
He ends by outlining the horizon we need to be looking towards. We need to wake up to the fact that resources are running out – we can’t continue to chase growth and profit. We have to recognize that we have sufficient . For those of us living in ‘advanced’ economies there’s not much that we need beyond what we already have. We need to move into the territory of identifying what is sustainable. What can prosperity without growth look like? We can't leave this up to the finance industry and global profiteers. There's too much at stake.
