Another Tory budget demonstrates the poverty of neoliberal thinking

I've posted many times on the blog about the current neoliberal paradigm, and the 'free' market fanatics who espouse it. Yesterday we saw a classic neoliberal budget, entirely one dimensional and doomed to failure in terms of doing what the country needs - creating jobs, greening the economy and lowering economic inequality. Its important to understand that if we had a Labour or purely Liberal Democrat government, we wouldn't have seen much difference. All three main parties subscribe to the same 'economic' philosophy - the market must rule - even though its clearly been shown recently that the unregulated market causes boom and bust which only the state can rectify.

Neoliberalism is more akin to a religious cult than a political philosophy and all its adherents, from Blair to Clegg to Cameron to Sarkosy and even Sarah Palin subscribe to the same narrow orthodoxy; only the market can be allowed to do anything. The role of governments is simply to make the market supreme, they are not allowed to intervene, take initiatives, engage in economic planning, or invest in society through public services.

This means that the only economic measures we are allowed to pursue are ones that (big) businesses want - lower taxes and cutting 'red tape'. This is similar to the policy that was followed by Western governments during the last great economic crisis in the 1920s and 1930s - we are going backwards rather than forwards. Suffice to say these policies failed then and they will fail now, leading to at least another decade of economic stagnation, mass unemployment and increasing poverty. The irony then was that it took a world war and massive government spending in the USA, which was the powerhouse of the world economy, to lift the world out of depression and into post-war prosperity.

The neoliberals only have only three economic levers to pull: lower taxes, cutting 'red tape' and labour market flexibility (bashing the workers). These fetishes have already demonstrably failed to make the West more prosperous in the past thirty years. All they have succeeded in doing is making the rich much wealthier and the rest of us poorer. The cunning plan is supposed to be that if you cut taxes on corporations and the rich they will invest more - thus creating more wealth for all of us. Unfortunately the evidence is that this doesn't work. The rich pocket the money and corporations pass it on to their shareholders. Large corporations just don't create jobs anymore, or if they do they invest in low wage economies like China. The wealthy invest in property or financial schemes which bring a bigger return.

We need government investment in our economy. The Green Party has an economic programme which would have cut the deficit by £70 billion over 4 years, created one million jobs and protected the public sector and the welfare state - see our manifesto. Yes, we would have raised taxes but to the same level they were during the Thatcher government - about 43% of GDP. Higher taxes benefit the economy and ordinary people. The public sector generates wealth by investing in society and stimulating private sector growth.

The irony in all this is that the greatest period of wealth and economic equality we had in our history was at a time when we had a mixed economy, strong trade unions, high taxes and a strong public sector. The neoliberal approach only benefits the rich and corporations. The question is - how long can this go on before the penny drops with the majority and there is a real drive for political change? I suspect that we are all going to have to get a lot poorer before the tide is turned.

One law for the rich and another for the rest of us

I've been blogging since last May about how this is essentially a class war government. Tory governments usually are. The Tories have always had a very sharp sense of who their friends are and where their interests lie. They always look after the interests of their class by bashing workers, defending property rights, increasing privatisation and lowering taxes. These are all things which benefit the rich at the expense of the rest of us. They are of direct advantage to people like Cameron and Osborne.

These things are usually done under the guise of economic necessity, to "stimulate growth" or to appease "the market". If people really understood how unfair this all really is and how feather-bedded and protected the rich are the Tories would probably never get elected again - but so far they have got away with it by pretending there is a level playing field.

However, the Tories have recently made it quite clear that if you are rich - you get special treatment. No hint of a pretence of equality here. In the new immigration rules, announced this week, you can't come into the UK if you are poor, but if you are rich we'll now welcome you with open arms. If you have the odd £5 million you can stay here permanently after three years, if you have £10 million it only takes two years.

Apparently, estate agents in London are already getting interest in this cunning ruse from wealthy foreigners. Now we can expect a flood of immigrants, most of who will probably be escaping the dodgy dictatorships where they made their gains. But where will all these people be accommodated? Don't worry. The government's changes to housing benefit rules will ensure that the poor are socially cleansed from inner London, making room for this new influx. Once again, in their historic mission to benefit the rich, and increase inequality and social division, the Tories have triumphed.

Nuclear power is a 'pig in a poke'

The recent terrible events caused by the Japanese earthquake and tsunami disaster have once again thrown the dangers of nuclear power into a sharp focus. I posted about this issue nearly three years ago, and in the meantime the evidence that nuclear power is not the solution to our energy problems has been growing.

For those who don't know - a 'pig in a poke' is a confidence trick - see here. The explosions and release of radiation at the Fukushima nuclear reactors in Japan proves that they weren't safe - they were supposed to built to withstand an earthquake and they didn't - despite the fact that the pro-nuclear lobby is scrambling to re-write history - yes it was a powerful quake, yes there was a tsunami - but the point is that the reactors were supposed to be able to withstand these events and they didn't.

But it's not only the events a Fukushima which should give us cause for concern. All the issues that I highlighted in my previous post on nuclear power are still pertinent and still relevant to our current situation. Add to this the fact that nuclear is patently uneconomic, and that new reactors would never be built without massive subsidy from the taxpayer and underwriting of the costs of nuclear waste disposal - to which there is still no solution in the UK.

Then we have the debacle of the building of the Finnish reactor at Olkiluoto. This is one of the modern generation of reactors which is now three years behind schedule and though projected to cost £3 billion - has an overrun of £1.5 billion! Worryingly, the delays have been caused by faults including cracks in the reactor.

Nuclear power is not a green option, it never has been. We can meet our carbon reduction targets in the UK with a mix of renewables and energy efficiency. The drive to build nuclear is really coming from giant energy corporations which intend to be feasting on generous taxpayer subsidies and guaranteed profits. The plain fact is that if the market alone cannot provide these facilities and the taxpayer can't afford them either. The risk, and the cost, is too great.

The Libyan revolution needs our support

The situation in Libya is deteriorating. Gaddafi's forces are making gains and Libyans are being tortured and murdered on an appalling scale. There are dangers if western powers intervene. Gaddafi will be able to claim that this is old fashioned colonialism. But while the world dithers Libyans are dying.

There's no time to lose. We need a no fly zone and support for the revolutionaries as soon as possible. We should be supplying the revolution with arms and medical supplies. This is something we can do now. I've blogged in previous posts against western interference in Arab countries. It is the cause of much of the misery that exists is the Middle East, but now we need to intervene to save the revolution before a brutal dictator regains control.

Commodify thy neighbour

I've been meaning to post for sometime about the phenomenon of the 'social' right. By that I mean right wingers who claim to be er..... well a bit lefty, having a social conscience and all that. Although that seems like a bit of a contradiction it can't just simply be dismissed by socialists. Do these people, like Phillip Blond, who is an advocate of 'Red Toryism', have a useful contribution to make to solving social problems?

The basic idea seems to be to make capitalism work for the poor and to enable the poor to build up assets making them wealthier and active participants in a capitalist economy. Like the neo-liberals these right wingers decry the welfare state which they claim only induces dependency in the recipients. But how are the poor going to build up assets? Blond offers some possible solutions but in a capitalist world nobody is going to willingly transfer assets to the poor. The idea of giving the poor vouchers so they can invest in shares doesn't deserve a serious response. His recipe for making the poor into social entrepreneurs sounds superficially seductive but it won't work.

Welfare dependency is a problem. But it is a problem created by years of economic failure of right wing economic policy in the UK which has depended solely on the market to create jobs and wealth. Since the Thatcher years we have had communities blighted by unemployment with generations living on the dole. What the right seek to do, as usual, is blame the victims of this economic failure for their own dependency. The welfare state was only ever intended to be a temporary support for people between jobs, but because of economic failures it has become a way of life for some. It is not the poor who are responsible for this state of affairs but the rich.

The fundamental problem is the inequitable distribution of wealth that is created by capitalism. Workers create wealth, and if they were to receive a fair share of the wealth they created there would be no poor and no rich either! There is a fundamental flaw in all this social conservative thinking, well meaning though it may be. Capitalism is a great big economic engine which drives the inequality in society. It cannot be used to create social and economic equality. This is what Blair and Brown claimed to be trying to do, using the 'free' market to make the poor better off. All they succeeded in doing was increasing inequality in the UK.

The answer to all this is collective provision, such as the NHS, supported, but not necessarily controlled, by the state. This is what provides people with the security and stability that they need in their lives. Only the state in a democratic society can marshall the forces to get us out of this economic mess and that's how it should be. We need more intervention not less. The problem for the right is that collective provision is anathema to them. Everything has to be mediated by personal gain and money - commodify thy neighbour. If the market cannot create jobs and wealth, and it has demonstrably failed to do so, the state must step in and provide people not just with meaningful work, but the means to establish social enterprises (i.e. co-operatives). This can be done initially by grants backed up by long term loans at low rates if interest. I have discussed these ideas in other posts.

Just one final point. People like Blond appear to assume that we can all become 'Dragon's Den' entrepreneurs thus lifting ourselves out of poverty. Even if this were possible it is probably undesirable. Someone has to do the work and empty the dustbins. People need doctors, teachers, nurses, firemen and even bank clerks. Why should all these people who aren't 'wealth creators' live in relative poverty whilst the dragons cream off the wealth? (don't believe the neoliberal hype - those people are wealth creators) Every working person deserves to have a decent living wage. If that happened, combined with what I've suggested above, there wouldn't be any poverty.