On Wednesday, March 16, Chancellor George Osborne announced the budget. Yet again, he declared further austerity, with spending falling to less than 37% of GDP by 2020 through new cuts of £3.5bn. Not that anybody was expecting any diversion from the government in this respect. Last year’s budget, which took place in the context of an election being fought over the issue of austerity and the rights of all, thoroughly represented the continuing austerity agenda and was widely criticised as an attempt to mislead. The Autumn Statement and Spending Review in November likewise reflected a determination to press ahead with austerity in the face of growing and developing opposition.
Amongst the measures, it was announced that, by 2022, every school in England is to be converted into an Academy, the current favoured form to further the role of private interests in the education system. There is to be continued backing for controversial infrastructure projects as demanded by big capital, such as the HS3 rail line. And much coverage is currently be given to the £4bn cuts to disability benefits that contributing to disarray within the Conservative Party itself, such as Friday’s resignation of Work and Pensions Secretary Iain Duncan Smith.
This year, the arguments for further austerity given by the Chancellor have centred on uncertainty over the global economy. The tone has been to create fear that the situation is getting ever more fragile. In his budget speech, Osborne repeated over and over the phrase: “act now so we don’t pay later”.
“The British economy is resilient because whatever the challenge, however strong the headwinds, we have held to the course we set out. I must tell the House that we face such a challenge now. Financial markets are turbulent. Productivity growth across the west is too low. And the outlook for the global economy is weak. It makes for a dangerous cocktail of risks. But one that Britain is well-prepared to handle, if we act now so we don’t pay later.”
“Five years ago we set out on a long term plan. Because we wanted to make sure that Britain never again was powerless in the face of global storms. We said then that we would do the hard work to take control of our destiny and put our own house in order. Five years later our economy is strong, but the storm clouds are gathering again. Our response to this new challenge is clear. We act now so we don’t pay later.”
For all the talk of a “long term plan”, this is a world apart from one where human beings have conscious control of the the economy. The picture is one of untamed weather, where the best one can do is hunker down. As for the “plan”, Osborne had to admit to failure even on his own terms, having been unable to deliver the promised reduction in the national debt as a proportion of GDP, despite the massive cuts. Specifically, though the debt is projected to be £9bn this financial year, as a fraction of GDP its forecast has been revised upwards to 82.6% next financial year and remaining around 80% for the following three years. Borrowing predictions have also been revised upwards.
In the face of uncertainty, some kind of decision-making is needed. Then the issue is who decides and what perspective and what theory guides the decisions. In whose interests is the economy being run? What is the measure of success? Osborne cannot answer such questions. Firstly, because of the need to obscure that the government represents the interests of the monopolies; and secondly, because these interests are themselves the problem. The monopolies, in accord with their private empire-building aims, demand the ability to accumulate vast reservoirs of wealth to offset the law of a falling rate of profit. They refuse to even recognise this law, which leaves them with no theory: their outlook is fundamentally anti-conscious. They are overwhelmed by the markets that they themselves dominate. They have no power of prediction beyond the saying, “red sky in the morning, shepherd’s warning”.
The alternative is based on a pro-social, human-centred perspective of the economy, where the economy is run to satisfy the needs of human beings. It should be pro-worker, and the working class and social programmes should have first claim on the economy. The economy should be planned on this basis with control over prices, etc. Arrangements should be put in place with that aim.
The budget was announced in this period leading up to the EU referendum. This is the other aspect of the fear-mongering, which is being carried out from all quarters at present. Osborne used his speech to promote the Office of Budget Responsibility’s less-than-subtle intervention by quoting them directly: “a vote to leave in the forthcoming referendum could usher in an extended period of uncertainty regarding the precise terms of the UK’s future relationship with the EU. This could have negative implications for activity via business and consumer confidence and might result in greater volatility in financial and other asset markets.” Even here, he was selectively quoting to suit his case.
How could the EU with its neo-liberal aims change the situation? It is diametrically opposed to sovereign control over the economy. Rather, leaving the EU of the monopolies is a precondition for people having the control over the economy required to empower their alternative, human-centred perspective. Such an economy can then trade with other countries on the basis of mutual benefit. The solution to economic problems and uncertainty is neither further austerity nor being tied to an empire-building project, whether that be the British, European or US empire-building project.
The need is to make a break with this whole direction. Economic problems and “gathering storms” are problems for solution, to be dealt with in the course of building an economy that favours the people’s interests. Besides sowing fear, the government is trying to defraud the population that it is taking less out of the economy by “cutting costs”. Instead, people need the mechanisms to restrict the actions of the monopolies, who take more out of the economy than is put in and do not pay for the social programmes on which they critically rely. People need to discuss how the economy can be brought under conscious control, how to organise its operation so that all value is accounted for, bringing a stop to attempts to enforce monopoly will over economic laws, with all of the havoc this activity creates.