The Organisation for Economic Co-operation and Development (OECD) has discovered what most of us already knew: that income inequality actually stifles economic growth in some of the world’s wealthiest countries, whilst the redistribution of wealth via progressive taxation and benefits encourages growth.
The recent report from the OECD, a leading global think tank, shows basically that what creates and reverses growth is the exact opposite of what the current right-wing government are telling us, highlighting the truth of Miliband’s comments in his speech today – that the Tory austerity cuts are purely ideologically-driven, and not about effectively managing the economy at all. But again, many of us knew this was so.
The Labour Party’s economic plan, based on progressive taxation, equality and funding of public services is the best way forward for economic growth and social stability. The Conservatives have killed the potential for a sustainable economic recovery, and will continue to do so, because they promise endless austerity. This is rather akin to treating a disease with more disease.
Osborne’s economic policy is comparable with riding the fabled rubber bicycle.
We aren’t going anywhere.
The report showed evidence that the UK would have been at least 20 percent better off if the gap between the rich and poor hadn’t widened since the eighties under Thatcher, and successive Conservative administrations – the most recent having reversed the equality measures put in place by Blair. (Yes, he really did).
Prior to the global recession, the Tories said they would match the Labour government’s state spending and suggested they may even further it. However, when the global crash happened, a sudden opportunity presented for Tories to become fully-fledged… Tories, grinding their ideological axe, taking a neoliberal swing at the “bloated” public sector and at Labours’ public spending for the protection of public services and the most vulnerable citizens during the economic crisis.
It’s worth remembering that the Coalition has borrowed more in just 3 years than Labour did in 13. In fact Osborne has borrowed more than every Labour government since 1900 combined. And the current government have nothing to show for it, whereas the Labour government at least adequaltely funded public services and effectively sheltered the poorest citizens from the worst consequences of the global crisis.
Let us not forget that this feckless government inherited an economy that was in recovery. They destroyed that and caused a UK recession by imposing austerity, savagely cutting public spending and public services. Thatcher used the same basic strategy to redistribute public wealth to private bank accounts and create inequality, although she didn’t cut as deeply. It didn’t work back then either. She caused a deep recession, as did John Major – Tories being Tories.
Let us not forget that despite the finger-pointing blame game that the Conservatives indulge in – their perpetual attempts to undermine Labour’s economic credibility and bolster their own ineptitude – that it was Osborne that lost the triple A Fitch and Moody credit ratings, despite his pledge that he wouldn’t. We are regarded as an economic liability on an international level, which flies in the face of Osborne’s lies about economic growth and removes any credibility from his blustering, swaggering claims. I do wish the public more broadly would engage in some joined-up thinking, since many have believed that the cuts were inevitable, but Tory propaganda, in fairness, is designed to fragment the truth and disjoint rationality.
The truth is that Gordon Brown was right with his ideas about fiscal stimulation (rather than Osborne’s coercive fiscal contraction): it’s been a confirmed model over and over by economists and by the fact that we were out of recession in 2010. The Tories’ austerity measures have since damaged the economy profoundly.
But austerity was never about what works. Austerity is simply a front for policies that are entirely founded on Tory ideology, which is all about handouts to the wealthy that are funded by the poor.
Accumulation for the wealthy by dispossession of the poor.
The OECD report highlights the fact that Conservative economic rhetoric is based on utter nonsense: it isn’t remotely rational. Tory ideology is incoherent, vindictive towards the poorest and extremely damaging, socio-economically. It shows us that the sacrifices of austerity, which were cruelly imposed on those least able to carry that burden, were justified by a malicious lie dressed-up as a promise of economic growth. But that is precisely what the Tories are destroying.
We knew that the laissez faire capitalism of industrial capitalism and the more recent financial capitalism of post industrial neoliberalism extend inequality. How can such systems, founded on competitive individualism, not do so? But now we have the evidence that inequality damages rather than encourages economic growth.
I’ve said elsewhere that Conservatism is centred around the preservation of traditional social hierarchy and inequality. Tories see this, erroneously, as an essential element for expanding economic opportunity. But never equal opportunity.
Conservatives think that civilised society requires imposed order, top down control and clearly defined classes, with each person aware of their rigidly defined “place” in the social order. Conservatism is a gate-keeping exercise geared towards economic discrimination and preventing social mobility for the vast majority.
David Cameron’s Conservative party got into Office by riding on the shockwaves of the 2008 global banking crisis: by sheer opportunism, dishonesty and by extensively editing the narrative about cause of that crisis. The Conservatives shamefully blamed it on “the big state” and “too much state spending.”
They have raided and devastated the public services and social security that citizens have paid for via taxes and national insurance. Support provision for citizens is cut to the bone. And then unforgivably, they blamed the victims of those savage, ideologically-directed cuts for the suffering imposed on them by the Conservative Party, using the media to amplify their despicable, vicious scapegoating narratives.
Conservatives really do think that inequality is necessary, they think that our society ought to be divided and hierarchical. They are traditional rather than rational. They have an almost feudalist approach to economic policy, blended with a strong old boys network of corporocrats.
The Tories have long been advocates of the market society, which turns everyone and everything into a commodity. Neoliberalism is an invisible hand in an iron glove, with its whispered broken promise of a mythological “trickle down” as justification – now the new right neoliberals are officially a cult of vicious cranks.
Many thanks to Robert Livingstone @LivingstonePics