The Blog

How to Challenge the Myths of Austerity

The truth is that a robust welfare system accompanied with a better distribution of wealth actually helps an economy, contrary to what you may have been told. By providing a strong safety net in case of difficult times, welfare actually encourages individuals to start up their own businesses or to change profession, as they know they will be protected if it all goes wrong.

It is hardly surprising that the public mood is shifting so inexorably towards disillusionment with state spending and a robust welfare service: the perfect cocktail of misinformation, faulty reasoning, 'poverty porn' and insidious government rhetoric has conspired for us to have less of a debate about and more of a lynching of the welfare state. Public support for increasing money spent on the welfare state has declined from 61% in 1989 to just 27% as of 2009. It is important to note the years: whilst Conservative rhetoric has certainly done a good job of demonising the poor, public attitudes began to sour towards them long before Cameron took office. To combat this downward turn in opinion towards state spending and the poor, it is not enough to lambast the Tories: a coherent narrative that lays out both the logical and the emotional justification for the welfare state is crucial.

Margaret Thatcher, in that now infamous speech, was able to so confidently declare that there was no such thing as society because she knew her party would do all it could to destroy the idea of it in the minds of every man, woman and child in Britain. Conservative ideology is all about the individual: this means when something goes wrong it is the individual that is to blame, meaning the solution must come from them too. Inevitably, this means big government needs to get out of the way- cue privatisation, deregulation and reduced state spending. Rather than the modernising, necessary force that it has been painted as, austerity is instead an ideological extension of a project the Tories have been committed to since their inception. It sees regulation as a nuisance, state ownership as an absurdity and welfare as a drug.

Unfortunately theirs is a view that was slowly absorbed by other prominent political parties, and eventually many of the assumptions have passed into folklore. Psychologist Drew Westen talks of 'one dimensionally' reading opinion polls, and this is what many parties have been doing around welfare and state spending for too long, afraid to tackle the issue because supporting such ideas are perceived as 'electoral suicide'.

Polls read one-dimensionally tell us that welfare is unpopular with the British public. Yet those more nuanced pollsters will know that pitches to voters that centre on investment and education go down well. More people are willing to pay extra in taxes to keep the NHS going than to let it fail. And whilst it's true that support for higher spending is lower than previously, it still dwarfs reducing spending (like the Tories propose), with less than 1 in 10 supporting such a move (see the above link for stats).

It is so crucial that we make these arguments too, because although they have rhetoric and big money on their side, the Conservatives do not have the evidence. There is not a single scrap of psychological or economic evidence that clearly shows that welfare creates any form of dependency. It is important to allow this statement to settle in. The cornerstone of Ian Duncan Smith's 'reforms' and Conservative ideology is predicated on a vague assumption completely bereft of evidence or reason, and they've now won two consecutive elections based off it. Whilst this tells us a lot about the Tories, it should tell us even more about those that have stood against them and lost.

There are people that are dependant on welfare, but it is not the welfare that has caused the dependency. Rather it is lack of stable employment, more unemployed than there are jobs, poverty paying bosses and extortionate landlords that force people to have to depend upon welfare. We know also that less than 1% of benefits are claimed fraudulently, and indeed that more benefits go unclaimed than are wrongfully taken. The problem is, to deal with these more nuanced issues, you need to allow the state some power- not on the table for idealistic Tories or their one dimensional opponents.

What about broader state spending? Well, even the International Monetary Fund, an organisation that must have originally been so delighted that Britain voluntarily embraced a set of policies it has spent the last several decades bullying other countries into, has admitted that austerity in a time of recession is pretty stupid. The only real way out of a recession is to give people the confidence to spend again: precisely the opposite of what cutting the incomes of some of the poorest in society does.

The truth is that a robust welfare system accompanied with a better distribution of wealth actually helps an economy, contrary to what you may have been told. By providing a strong safety net in case of difficult times, welfare actually encourages individuals to start up their own businesses or to change profession, as they know they will be protected if it all goes wrong. Lower income families spend a larger share of their income, particularly on staple goods in local economies, whereas the rich tend to hoard, or invest in low-liquidity objects such as mansions and yachts. Inequality has been shown to have held our economy back some 20% over the past several decades.

Austerity has been held aloft as a solution to the financial crisis, whilst deregulation and privatisation have been offered as free market panaceas. Not only are they often disastrous themselves, but they are dangerous because they distract us from the real solutions. Better scrutiny of the financial 'tools' that we allow the financial sector to use along with a financial transactions tax, a mandatory living wage, and a taxation system that is truly progressive, targeting large business over small, rich individuals over middle-income families are great, but we need to get over our fear of being branded as 'spenders'.

Those that trot out a comparison to household and government spending, flawed an analogy as it is, confuse me. They seem to be suggesting that a household would never spend money they don't have- that they'd never be in debt. Have they not heard of mortgages? Credit cards? Bank loans? They surely must have heard of tuition fees, they tripled them after all. Borrowing money to invest in the future is a common aspect of modern life- why should it be different for a government? A willingness for government to invest in infrastructure, education and culture- these are the things that are needed, not a mean, narrow state that counts every penny and tells it citizens that we can't achieve a better society together.

The Left need to learn new ways of talking about government that recognises the justified fears of a cumbersome, inept and at times overbearing state. Implicitly some of us may get it, but we need to say it to people if we are to gain support: government should not be a big scary thing that other people do, it should be me and you, working together to improve society. Government should be about collective empowerment, not top-down authoritarianism. If we wish to save what's left of the state and the crucial role it plays we need to speak of collective investments for the betterment of society, and be unashamed of advocating them. The Left needs to find its voice again, but make sure it uses it to speak to people, rather than at them, and to widen the debate, not narrow it.

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