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Credit: Creativecommons/Dean Thorpe

Oct
2013
Wednesday 2nd
posted by Peter Corcoran in Features

The right-wing propaganda machine is not invincible, writes PAUL DONOVAN


The government has carefully used what has become known as the "austerity agenda" to dump on working people.

A crisis that began five years ago with the reckless behaviour of the banks has effectively been used to cut and privatise public services, reduce wages and slash benefits.

Workers' rights have been reduced, in the common media parlance, "to enable British business to be more competitive in world markets."

Put another way, the austerity agenda has benefited only bad employers by making it that much easier to exploit workers.

The austerity approach has resulted in foodbanks having to feed over 300,000 people over the past year, the disabled being denied benefits and left more than one million 16 to 24-year-olds languishing in unemployment.

The whole process was nicely summarised by the late author Iain Banks who said: "Your society's broken, so who should we blame? Should we blame the rich, powerful people who caused it?

"No, let's blame the people with no power and no money and these immigrants who don't even have the vote - yeah, it must be their fucking fault."

The crisis has effectively been used to once again reconfigure capitalism so that workers have to work harder for less while those who own capital take ever greater profits.

Data from the Office for National Statistics confirms the trend, showing that between 1977 and 2008 the wage share fell from 59 per cent of national income to 53 per cent, while the share of profits rose from 25 per cent to 29 per cent.

The way in which the crisis has been handled, targeting the public sector and welfare for the poor, confirms the intent to restructure capitalism still further in favour of the rich.

The Public and Commercial Services Union has asked how £30 billion of welfare and tax credit cuts can be necessary when there is £30bn to be given back to businesses in tax breaks.

"If university fees have to be trebled, then why is Trident replacement essential?" PCS general secretary Mark Serwotka says.

"Why does the government spend huge resources on £1.2bn of benefit fraud, while £120bn of tax is avoided, evaded or uncollected?"

This is not to mention the £37bn already expended on the war in Afghanistan or the "legitimate" subsidies to low-paying corporations in the form of benefits to make up the shortfall in employees' wages.

The deficit could be reduced in a whole number of different ways, including higher taxes on high-earning individuals and companies.

So the austerity agenda has a direct political intent, which is to make working people pay for the behaviour of the banks.

 

What makes the trick of selling this con all the more impressive is that in economic terms the austerity approach has failed.

Economist and academic David Blanchflower points out that GDP per capita is now around 7 per cent below where it was five years ago.

"Sixty-six months in, the UK economy is still approximately 3 per cent below its 2007 peak.

"This compares with the recessions of the 1920s and 1930s when at a similar point GDP was just under 7 per cent higher.

"GDP after the shallow recession of the 1990s was 10 per cent higher," said Blanchflower.

"The UK has grown 1.8 per cent since 2010 but this is markedly slower than the United States, Canada, Australia and Germany."

Jonathan Portes, the director of the National Institute of Economic and Social Research and former chief economist at the Cabinet Office, points out that in June 2010 the Office of Budget Responsibility predicted that by now the economy would be about 7 per cent larger, driven by a sharp rise in business investment and exports, while the deficit would have fallen by two-thirds.

"What has actually happened? In fact, GDP has grown at less than a third of that rate, business investment has fallen, and the path of deficit reduction bears no resemblance at all to the original projections," says Portes, who claims that "without austerity, UK real output would now be steadily climbing above its 2007 peak, rather than being stuck 2 per cent below."

Yet despite the clear failure of austerity as an economic strategy, the narrative still holds good with the public.

This no doubt has much to do with the way it is sold in the media.

In the early stages of the recession the press first likened the crisis to the inter-war crash and then switched to blaming it all on the last Labour government.

Carys Afoko of the New Economics Foundation (NEF) says that the austerity story is "well-framed, well-crafted and often repeated, which is how it has become "the dominant political narrative in Britain today."

"It shapes how most of us think and talk about the economy.

"It has convinced most of the country of the need for huge public spending cuts and presents a coherent vision for the kind of society we should live in," says Afoko, who points out how "vivid images" and "emotional metaphors" have been used to sell the austerity narrative.

The central themes are that dangerous public debt has been caused by excessive public spending ("Britain is broke," "Austerity is a necessary evil") and that benefit claimants are weak, reckless, undeserving and addicted to handouts. The story clearly sticks with people.

"Polling data shows that month on month, no matter what people think about the coalition, they continue to believe their spending cuts are necessary for the economy," says Afoko.

"Attitudes to welfare have hardened over time so that half the country believe the unemployed choose to stay out of work.

"Evidence indicates that more people may blame Labour for the economic situation we are in now than did three years ago."

The effectiveness of selling the austerity story through the media has now set the scene for the final act, which is that "the medicine worked" and those promoting austerity were right all along.

The Chancellor has begun this process with the news that the economy grew 0.6 per cent in the last quarter. This has been heralded as a great success, "turning the corner" and vindicating his policies.

This view is also resonating with the parts of the public because the austerity story has been so well received.

The lowering of expectations when mixed with a helping of historical amnesia mean that this tiny upward turn in growth can be trumpeted as a success, when as Blanchflower and Portas have pointed out nothing could be further from the truth.

Britain is way behind the recovery in other countries that took a different approach to the economic crash.

What is needed is a new alternative vision that can be communicated effectively to counter the austerity narrative.

The NEF suggests creating a counter-version with powerful themes, such as the "casino economy" and "big, bad banks."

Or the theme of treading water, stagnation and not moving on as a nation. Some of these themes were picked up by Labour at its recent conference.

But there is much to be done if the austerity lies are to be truly exposed and replaced by another approach that seeks to make those who created the crisis in the first place pay the price of recovery.

 

For more of Paul Donovan's writing visit www.paulfdonovan.blogspot.com




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