True ‘austerity’ would require those at the top to shoulder a much greater burden

Rather than making society’s most vulnerable members carry the can, true 'austerity' would require those at the top to bear the much greater burden, in order to bring down increasingly obscene levels of unequal wealth.

Simon Ravenscroft is a PhD student at the University of Cambridge, working on the social theory of Ivan Illich

Under the coalition government, ‘austerity’ has become a by-word for a set of policies combining swingeing cuts to benefits and public services, as well as tax rises for the majority, with tax cuts for corporations and some of the richest in society.

It is a stunning ideological sleight of hand for the coalition to have been able to combine these various measures so openly without more people kicking up a fuss. They have managed to pass them off, not as the product of neoliberal dogma (which they are), but as the result of cool economic pragmatism and market-based realism (which they are not: witness the relatively different response in Washington, for instance).

Sadly, the paucity of the reply from a political left still in rehab after the New Labour years has only served to make this wool-pulling exercise a much easier task than it should have been.

Here I want to contrast ‘austerity’ as it’s currently understood in our public discourse with a more traditional definition, proposed by the late radical social theorist, Ivan Illich. Illich felt that much of the inertia of modern political life, our inability to bring about positive social change, was because of the way our imaginations were stifled by the guiding assumptions of our dominant institutions and discourses.

Maybe by examining his alternative definition of ‘austerity’, we might in some small way be able to break out of this imaginative ghetto to envisage a different kind of ‘austerity agenda’ that changes the terms of debate from those currently in play.

In his book Tools For Conviviality, published in 1973, Illich acknowledges that in modern speech, ‘austerity’ has taken on a bitter meaning. Drawing on Aristotle and Aquinas, however, he points out that traditionally ‘austerity’ was understood very differently: as a relational virtue which priorities the common good, the foundation of friendship and social harmony.

For Aquinas, he says, pursuing austerity as a virtue did not mean foregoing all enjoyments, but only those that are destructive of ‘personal relatedness’. In other words, if austerity is to be virtuous, it is because it will stop us from becoming alienated from one another, because it will help us to live better together as a community that prioritises common over individual goods.

Contrast this picture with that that has developed under the coalition government. Despite claims that we are ‘all in it together’, austerity has become an excuse to drive a wedge between rich and poor, employed and unemployed, the young and the old, the able and the disabled.

We have been told that because we are in an age of austerity, it is now high time to cut away those benefit-seeking scroungers on the edges of society that are dragging us all down, guilty of a ‘culture of entitlement’. At the same time, we are told that it is necessary to cut taxes for the richest because they’re the ‘drivers of growth’, and will pull us all up with them.

In short, we have allowed a ruling elite to tell us that this ‘culture of entitlement’ is at the bottom of society, and not with the wealth-inheriting, Eton-going career politicians at the top (at least Thatcher, by contrast, was state-schooled), or with the casino-banking fat cats in the City, who were handed billions in bailout money by the state just so they wouldn’t take us all down with them when their stock market fruit machines finally stopped paying out.

Buying into this lie, we let the need for austerity become an excuse to target the most vulnerable in our society.

If, however, following Illich and Aquinas, we prioritised social solidarity in constructing an austerity agenda more faithful to the traditional meaning of that word, how would things look different?

It is now well known that one of the most destructive trends for a healthy society is growing levels of inequality (see Wilkinson and Pickett’s The Spirit Level, for instance). If we were seeking to build a stronger national community, and understood ‘austerity’ as towards that end, this should be the first priority. Rather than making society’s most vulnerable members carry the can, true ‘austerity’ would require those at the top to bear the much greater burden, in order to bring down increasingly obscene levels of unequal wealth.

“Oh, but this will impact on growth”, they say. Well, first, under the current set of policies: what growth?. And second, maybe growth that only benefits a minority at the top of society is precisely one of those ‘enjoyments’ that virtuous austerity would call us to forgo in order to build a better community. Economic growth that only deepens existing levels of inequality, further enriching the wealthy at the expense of the poor, is of no social benefit whatsoever.

Now is the time for those on the left to stand up and be counted on this question of austerity: to imagine the possibility that, defined differently, austerity could – nay must – be for the benefit of society as a whole.

Such a vision would refuse to continue vilifying the poorest and most vulnerable in society, and instead demand that those elites in business and government who use their power to perpetuate chronic levels of inequality, to the detriment of the social body, should make the greater sacrifice.

Perhaps then ‘austerity’ could be restored to its original meaning, as a virtue that works for, and not against, the common good.

15 Responses to “True ‘austerity’ would require those at the top to shoulder a much greater burden”

  1. LB

    For someone with an education you are remarkably ill informed.

    The state has 1,200 bn of borrowing

    It has 5,300 bn of inflation linked pension debts.

    It’s got PFI, guarantees are other liabilties.

    Only the borrowing is on the books.

    The state is bankrupt. Wake up, smell the coffee.

    It has 7 trillion of debt. The net wealth of everyone in the UK is only 7 trillion. So unless you take 100% of the assets, and 100% of the income [quite what people eat under that regime], you can’t pay the debts.

    So it doesn’t matter if the rich pay more, the state is still bust.

    e.g Take all of Branson’s wealth. 3 bn. Now that just plugs the deficit for just over a week. Who next? You will find very quickly you run out of billionaires.

    Between 2005 and 2010, the pensions debt was going up at 734 billion a year. You need to create and rob of their entire wealth 244 Bransons each and every year.

    The state is bankrupt.

    That means that the state can’t pay.

  2. LB

    who were handed billions in bailout money by the state

    ==============

    Now you are onto the lying.

    The bailout was with loans at penal rates of interest. They were not handed billions.

    Of those loans the vast majority have been paid back. So far the state has profited from the deal.

    Again you are showing your ignorance.

  3. Paul Oliver

    Cuts? The government is increasing, not decreasing, public spending, just like every other government that ever existed. Apparently, Osborne is going to borrow more in 5 years than Brown and Balls did in 13.

  4. S Ravenscroft

    Clearly not saying there should be no austerity / that the deficit shouldn’t come down. Saying priorities should change. High (and increasing) levels of inequality) as damaging to society as deficit / negative growth.

  5. S Ravenscroft

    Those poor bankers… and lucky us!!

  6. S Ravenscroft

    True. And in the service of the current plutocracy. Cuts to plenty though, as we all know.

  7. LB

    Of course its going to damage people. However, which bit of being bankrupt do you not understand?

    For example, lets take the growth mantra. How does growth help. Lets see. People produce more, and that makes them richer. Except that isn’t what you mean by growth is it? When you and Milliband say growth you mean that you take more money from people. It’s growth in taxation. With no more money coming in spending has to come down. So by growth you mean taking more money.

    Next question. By how much does the tax take have to increase to deal with the deficit? its easy to work out. Tax take is 600 bn. Spending 722 bn. Hmm, to get that extra 122 bn means taxes have to go up by 20%. Why aren’t you telling people you are going to take another chunk of their earnings?

    On top, that deficit ignores the real issue, which is a Ponzi pension system. The debts there are increasing by 734 bn a year (2005-2010). So you need to tax 734+722 bn a year, just to stay even.

    The problem is that that is 50 bn short of the total GDP.

    So the end result is that the poor are going to get screwed. Total wealth will come down, even for the rich. The state has screwed people in the UK.

    Now its possible to quantify by how much.

    If we take a 26K a year worker. That is median wage. 40 years ago that was 700 a year. Lets ask the question, what if they NI had gone into the risky FTSE 100. Since its risky, the chances are they would have lots lots of money by doing this? The state must offer them more, redistribution etc.

    Well after 40 years, that worker would have had a fund of 627K, with excessive 0.75% charges per year.

    The state pension costs less than 152K.

    475K of that median worker’s pension has been redistributed making them poor. On welfare in fact.

    That 475 has gone in charges {DWP costs 5% per year of the money it administers), on redistribution (the Philpots etc), and on not getting compound interest, and because its been diverted to other things (effectively taxing them).

    So the state has made people unequal. The state has created the deficit by spending more than it earns. The state is committing a fraud by hiding the debts.

  8. S Ravenscroft

    Don’t get me wrong, I’m no uncritical advocate of growth. One has the broader systemic questions of the way modern economies function, and a growth imperative is part of that, and that has its own problems. But one would have to restructure the entire economy…

    Then one has smaller pragmatic questions. Within the sphere of action available to an elected government, what is preferable?

    This piece addresses the second kind of question. But I am aware of the first kind. However, I get the sense you’re some kind of economic libertarian, in which case we’d have not too much to agree on anyway (although Illich himself was somewhere between a collectivist anarchist and a participatory socialist, so some of the criticisms might be similar).

  9. S Ravenscroft

    In essence, this kind of argument only sees half the picture.

  10. LB

    You avoided the major question.

    I’ve posted lots of evidence that its the state that has impoverished people, but you are advocating that the state impoverish more people to achieve some end, redistribution.

    You need to show how that median wage earner has been enriched by having their money redistributed to the Philpots of this world. They haven’t.

    I’m a bit libertarian, but not completely. I believe in forcing people to do certain things. For example, if we take the NI example, and the 475,000 pound loss to a 26K a year worker, I would put the following in place.

    1. Your NI has to be invested in your name. It’s your money. It isn’t the state’s. It isn’t the Philpots.

    2. You can’t touch it until your retire.

    3. Then you go into draw down. If and only if the money runs out, does anyone else help.

    4. If you die, and there is money in the fund, it goes to your heir’s fund. It’s not the states.

    All of this helps the poor. If a median wager earn is 475K better off, they are much richer that the state will ever make them.

    On top, all that money is invested, not spent on Philpotts etc. That means lots of jobs. If you control migration, then people on benefits will find more jobs. It’s a virtuous circle.

    However, by taxing them and spending it, the state makes them poor.

    What evidence do you have that paying people benefits makes them rich or better off?

    If we take the Philpots, they have cost us lots of money. Free education, free health care, no council tax, money to live off, … It’s huge. All paid for at the expense of other poor people. Now his brood were cheaper than 10 single parents each with a kid. Economies of scale.

    So you need to justify the impoverishment of lots of people to achieve your aims.

    And a hint on how you are going to pay a state debt of 15 times taxes.

  11. S Ravenscroft

    I simply disagree on your first point (state impoverishment). On a huge number of levels that I shan’t list here. If you wanted an *idea* as to why have a look at Karl Polanyi’s book ‘The Great Transformation’, particularly his double movement thesis.

    Thanks for engaging though.

  12. LB

    You are rare poster for interacting by the way.

    Now what evidence do you have that the state has enriched people?

    Are you disputing the 475K loss?

    You don’t make either clear.

    ==========
    who were handed billions in bailout money by the state just so they wouldn’t take us all down with them when their stock market fruit machines finally stopped paying out.

    ==========

    Even this is factually wrong.

    1. Look at the banks that failed and why, In the UK they were mortgage banks, and they failed because people didn’t pay their mortgages.

    2. Handed billions. They were lent money at penal rates of interest and it has all been paid back with interest

    [Bar the nationalised banks]

    You’ve built a huge edifice on the basis of false information.

    Hence just two examples above, can you provide evidence to back up your stance?

    You can’t.

  13. spkotzak

    Greek crisis and disorientation operations update

    http://failedevolution.blogspot.gr/2013/06/greek-crisis-and-disorientation.html

  14. S Ravenscroft

    The banks ‘failed’ because they stopped lending to each other; credit flows seized up. Situation arose due to crisis beginning in America based on sub-prime mortgage lending, itself the product of deregulation and improper lending practices based on maximising profits at the expense of clients. Speculation, bundling of dodgy financial products, and an amoral banking culture all contributed. All well known. For a more technical analysis of the contributory causes via bad assumptions within mainstream economics, see this by Cambridge economist Tony Lawson: http://cje.oxfordjournals.org/content/33/4/759.abstract

    You assume I’m an idiot. (Partially justified as I’m talking to you from the face of Sylvester the Cat, but still…).

    Anyway, I’m done with this exchange, so have a nice day 🙂

  15. LB

    Correct, they did stop lending to each other.

    Why did they do that?

    They stopped lending because they didn’t have the information about which banks had lost lots of money because people didn’t repay their mortgages.

    It’s all bank to people not paying their debts.

    Just as the big problem, dwarfing any banking issue, is the state hiding its debts off the books.

    Your share, as soon as you start paying tax, is 250,000 pounds going up faster than inflation. Same as that poor person on 26K.

    Are you going to be able to pay your fair share?

Leave a Reply