Death to Neoliberalism

Posted on November 10, 2011

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written by Robert Pollard

Every now and then an opportunity arises to make seismic changes to the social, economic and political landscape. The last time this truly happened in Britain was when Thatcher strode into power, where, after years of economic hardship, she decided that the way to deliver prosperity was to deregulate our banks, giving free rein to those working in the finance sector. The ideology was simple. Thatcher did not mind those at the very top becoming super rich because it meant that money would trickle down to the rest of society and Britain would be wealthy once again. By rolling back the state, lowering taxes for the rich, privatising  government-owned enterprises and deregulating the markets, she set in motion the economic approach we still see today. At the same time, Ronald Reagan was implementing the same economic paradigm across the Atlantic. It became known as the neoliberal agenda and it has dominated British and American politics ever since. Tony Blair was a strong advocate of this approach. He had more of a social conscience than Thatcher, and invested more heavily in education, health and other public services, but on the whole he followed the neoliberal agenda meticulously. His close advisor, Peter Mandelson, once famously said he was ‘very comfortable with some people becoming filthy rich’. That statement sums up neoliberalism as well as the direction of the Labour Party under Blair.

Despite some clear benefits of the system which saw living standards improve, there have been many ugly side effects. The gap between rich and poor has widened incomprehensibly and the ‘winner takes all’ mentality so prevalent across business has seeped into society. Money is now so important that people will behave any which way they have to in order to earn and spend it, whilst endless consumerist messages are shovelled down our throats urging us to spend. The inequality of wealth distribution remains, for many, the biggest source of frustration, with the top 1% of earners incredibly rich compared to the bottom 50%. This unrest was already bubbling under before the coalition government exacerbated the situation with a series of unfair cuts which have hurt some of the most vulnerable people in our society. What sort of message is being sent out when government forces honest, hardworking people who have little excess cash to clear up an economic mess they did not create? It’s a disgrace and large numbers of people are clicking on.

Anybody in need of statistical evidence to really highlight the effects of the neoliberal agenda should look no further than George Monibot’s recent Guardian article; an article in which he questions the existence of skill in the financial sector. He writes that…

“Between 1947 and 1979, productivity in the US rose by 119%, while the income of the bottom fifth of the population rose by 122%. But from 1979 to 2009, productivity rose by 80%, while the income of the bottom fifth fell by 4%. In roughly the same period, the income of the top 1% rose by 270%.

In the UK, the money earned by the poorest tenth fell by 12% between 1999 and 2009, while the money made by the richest 10th rose by 37%. The Gini coefficient, which measures income inequality, climbed in this country from 26 in 1979 to 40 in 2009”. 

There are people gathered outside St Paul’s Cathedral in London as I write this. They have been described as ‘anti-capitalist protesters’ which, in many ways, they are, but their grievances are far more nuanced than that descriptor suggests. Their campaign is linked to the government’s austerity package, pension reform, neoliberalism and ethics in business. It seems a new coalition may well be developing; a social coalition of trade unions, public sector workers, women’s groups and students, all people who have been targeted by this government as the ones who should pay for our economic woes. If the Labour Party can also be bold enough to join in and add political weight to the campaign, which Ed Miliband has done to some degree this week, the chances of change would be significantly increased. Not only is the right thing to do, but it is an opportunity for Labour to redefine themselves and they must exploit it. The reaction from those in power has been quite revealing. In the US, President Obama welcomed and embraced the ‘Occupy Wall Street’ movement, while David Cameron and Theresa May have openly condemned those outside St. Paul’s. May’s derision was made clear on her recent appearance on Question Time, with the downright disregard she showed towards the protesters rather uncomfortable to watch and rightly pounced on by Ed Balls, the Labour Shadow Chancellor.

They may have been derided in some quarters but these protestors represent the thoughts and feelings of many disaffected people, alienated by neoliberal politics and the emergence of the super rich. The Tories can try to write them off as insignificant all they like, it will only increase the perception that their party is totally out of touch with the thoughts and feelings of the majority. It is in the Tories’ best interests to protect the status quo. The majority of them, certainly the cabinet ministers, are very, very rich people, and neoliberalism has served them and their families wonderfully well. Why would they seek to change something that has provided them with a life of luxury?

There are, of course, strong arguments that suggest capitalism is the best economic paradigm in that it encourages each individual to reach their full potential, meaning we make more medical, technological and, ultimately, social advances under capitalist rule. There are also those who believe that alternative systems are proven failures, and that capitalism is the only one which can lay claim to being a success, however, since the spectacular collapse of the banking system, which raised serious question marks about the longevity and fairness of capitalism, this argument has subsided somewhat. Clear alternatives are yet to emerge but what is evident is that change has to come, in some form or another. Extreme capitalist excesses must be curbed and the hardworking people who make this country successful must be rewarded for their endeavours. Statistics such as those presented above make depressing reading and surely cannot be pushed any further.

So, if you hear someone try to dismiss the protestors as riders of a bandwagon, or members of the loony left, then think of me – someone who agrees wholeheartedly with their concerns but hasn’t got the balls to leave my comfortable existence and join those outside St Paul’s. They are representing countless people like me across this country and deserve great credit for their stoicism and the determination in their belief that they can encourage change. This may well be the latest opportunity for us to implement significant alterations to a system badly in need of reform.

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Posted in: Politics