Neoliberal agenda must be brought to an end

They hope this could be the turning point that sees Europe finally take a look at alternatives to neoliberalism.

There's clearly reticence in Britain around the potential for a general strike. But there's a clear mandate among trade union members to take action against the government's austerity measures, and the cross-European resistance seen this week could provide momentum for greater change in Britain.

The realignment of power and privilege at the summit of British politics may continue to delight and enrich City bankers and corporate financiers, but austerity - neoliberalism's economic arm - is simply not working.

Millions of families have been pushed into the debt trap. Hardly surprising amid soaring energy bills, increased travel costs, rising food prices, unemployment, benefit and tax credit cuts, VAT increases, falling wages and increased pension contributions.

Despite growing by 1 per cent in the third quarter of 2012 the fact remains that the UK economy has flatlined since 2010. It's 4 per cent smaller than it was in 2008 and is now 16 per cent smaller than it would have been if the modest rate of growth from 1980 to 2007 had been maintained.

Undoubtedly millions of families are heading for a long period of declining living standards unless we ensure that growth and wealth are more fairly redistributed over the next decade.

Even with a return to growth it's now entirely possible that living standards for low and middle-income households will be no higher by 2020 than they were in 2000.

The Commission on Living Standards calculates that household income in 2020 will be 15 per cent lower than in 2008, a return to 1993 income levels.

Economists rarely agree but there does seem to have been an outbreak of consent recently - that the plan to tackle the fiscal deficit through deregulation, privatisation and massive public-spending cuts has failed.

After almost three years of low or no growth the government's hostility to easing the austerity programme has led even the IMF to recognise the blindingly obvious - that we urgently need policies that will stimulate growth. In fact the IMF has now acknowledged that every £1 in tax rises and spending cuts takes between 90p and £1.70 off GDP.

Moreover, growth and jobs need to be allied to a serious attempt to make the rich stump up their fair share of tax. The mass of wealth sitting out of the reach of tax authorities is so great that the true gap between rich and poor remains hidden.

Recent calculations show that £6.3 trillion of assets is owned by just 92,000 people worldwide, or 0.001 per cent of the world's population.

Closing tax loopholes exploited by multinationals and the rapacious rich is vital if we are to rebalance the economy.

The government needs to focus on ways of stimulating growth rather than squeezing the economy to the point of suffocation with cuts, pay freezes and tax rises for the 99 per cent of people not rich enough to avoid paying tax.

There needs to be proper investment in HMRC if we want to close the £120 billion tax gap.

A financial transactions tax would also raise revenues to pay back debt and deter financiers from speculating on the market.

We need to invest in new infrastructure, such as new social housing for the two million families on council-house waiting lists.

We need to invest in creating new jobs in renewable energy rather than speculating on food prices to profit from starvation. And we need to invest in new businesses and ideas, rather than see windfall dividends and bonuses for a few from mergers and laying off staff.

Nevertheless, despite near universal approbation for the growth agenda the government remains resolutely against reason.

It plans to make another £80bn in spending cuts over the next three years. The elite has shown cunning and guile in manipulating the national deficit to make public-spending cuts the defining political mantra.

The Establishment has turned a global financial crisis caused by private-sector greed and incompetence into a virulent attack on public services.

Journalist Naomi Klein, in her book The Shock Doctrine, convincingly exposed this strategy of turning "crises" - perceived or otherwise - into profit-making opportunities for the rich.

What we're seeing right now is the temporary triumph of corporate political action. The public relations industry has become a powerful tool in the struggle to subordinate political decision-making and public policy to corporate rule.

Government is simply seen as a mechanism for allocating resources to business. The bailout of the banks was the supreme example.

But there's never been a better time to challenge this philosophy. As unemployment soars and job insecurity increases deficit reduction is not the priority its proponents claim.

Austerity is not a matter of economic necessity but of political choice. There are alternatives.

Latin America was a laboratory for neoliberal austerity 20 years ago - but through popular struggle it has now become the leading region for growth-based alternatives.

Events are moving fast. From a situation in which nothing seemed to be happening suddenly everything is possible. It's up to us now.

• Enrico Tortolano is head of national bargaining for civil servants' union PCS and writes this in a personal capacity. His essay No Way To Run An Economy is published in the journal Federation Viewpoint, available from the Institute of Employment Rights. Morning Star readers can quote discount code MS141112 for a reduced price.