The problem with austerity

Let's think again - in the coming UK election is neo-liberalism really the dominant global disease?

Politics in Britain is widely recognised as having veered to the left under Corbyn's leadership of Labour and to the right under Johnson’s Tory leadership. Whilst Labour has focused on social and economic issues, the Tories have blandly focused on Brexit. There has been little debate between the two narratives. Whilst the Libdems probably offer the best option in this election, their equally bland message to keep Britain in the European Union might still account for their apparent waning fortunes. The essentials of the debate are thus:

* Tories - if we can do our own British thing free of European Union shackles we can trade freely and profitably with the world world and build a more prosperous society. This is the neoliberal stance.

* Labour - If we scrap austerity, increase government spending on social services, take back state control of essential utilities, and get the rich and corporations to pay more tax, we can improve the lot of the socially disadvantaged. This is the socialist stance.

* Libdems - If we stay in the EU we can redirect the huge Brexit divorce bill to more generative investment in infrastructure and social services - but we need a broader tax base to balance the books of government expenditure. This is an economic middle ground stance.

* Greens - Similar to the Libdems but with a greater focus on ecological issues and human rights. This probably tends towards socialism.

* SNP - similar to Labour's socialist stance but with a focus on staying in the EU and striving for Scottish independence.

Meanwhile, noted economist, Joseph Stiglitz, has recently offered a stinging critique of neoliberalism, so some might yet wonder whether Corbyn's form of socialism could be the answer. I will argue that the hoary old capitalist/socialist debate has essentially become sterile - we need a radical change of perspective.

Communism - a discredited ideology?

Let's start with the socialist economic ideology. I have been struck by how communism has quietly slipped off the global political agenda - even, it seems, in China. Recently, at a political event in Manchester, I reminded those present that this was the place where the conversation between Marx and Engels has birthed communism. My intention was not to advocate the socialist agenda, but rather to show how generative conversation could give rise to radical news ideas that could potentially transform the political landscape. It was clear from the facial expression of some of those present that they did not welcome the reminder - even through the event was about political renewal - see: https://www.dhirubhai.net/pulse/lets-transform-dysfunctional-british-politics-claudius-van-wyk/

So whilst after the collapse of East European communism, it has largely been discredited as a political and economic ideology, the frustration with free-market neoliberalism continues to mount. Here in the West particularly, but not exclusively from the left, neoliberalism is increasingly considered to be the key source of global evil. I want to explore this anomaly as we consider our election options - see: https://www.dhirubhai.net/pulse/politics-crisis-how-vote-claudius-van-wyk/.

A political epiphany

In July 2011 my wife and I attended the 90 anniversary of the founding of the South African Communist Party in Johannesburg. Justice Albie Sachs, a former communist anti-apartheid struggle veteran, spoke at the event. He had survived a letter bomb from apartheid agents but lost his arm. Now a lapsed member of the South African Communist Party, Sachs recounted an event in his youth which would serve to change his direction; a life-changing epiphany. He recounted attending a lecture on the political, economic, and social principles and policies advocated by Marx on the theory and practice of socialism. The labour theory of value, the economics of dialectical materialism, the class struggle, and the ultimate dictatorship of the proletariat until the establishment of a classless society, struck him deeply. Suddenly, he said, everything fell into place. The communist ideal explained all the human issues and addressed all the solutions. “Everyone should have a moment like that!” he declared wistfully.

Moscow's influence in South Africa

During South Africa's anti-apartheid struggle where Albie Sachs was an active participant, Moscow-led communism was the acknowledged strategic driver behind the ANC which finally brought Nelson Mandela to power. In President Zuma's post-Mandela era, the tension between private sector profit-seeking, and a form of African socialist state ownership based on political cadre deployment, led to the corrupt exploitation of national resources by both sides. This included rampant exploitation under the banner of broad-based black economic empowerment. This period ultimately reduced the economy to its current categorisation as 'junk status'. Now again President Cyril Ramaphosa is pressured by the private sector and global institutions to reduce the government deficit, cut state expenditure (austerity) and essentially return to neoliberal economic principles.

The case for and against 'austerity'

Following the financial crisis of 2008 many governments followed a policy of financial prudence - taking measures to cut back on government spending to reduce national debt and address the critical issue of fiscal deficit which demanded more borrowing and increased government debt. This policy came to be known as austerity.

Now the 'wise one’s' have always warned us of the prudence of borrowing only for the purpose of creating a more sustainable future - like investing in education, an own home, or a farm tractor, or a more functional computer. But, they have insisted, it is not prudent to borrow in order to buy non-essential; like luxury cars or other commodities that lose their value. That makes sense. The trouble is however, that the modern economy actually runs on debt. Consumers, including governments, are encouraged to borrow from our future labour (credit) to spend on goods and services in the present. In fact debt interest is the major source of income for the financial industry. That in turn has become a rich medium for speculative investment. And that turnover, including debt, is further seen as a measure of economic growth - of GDP. So those with capital to invest thrive on our debt. Then this is interpreted into national economic success - Catch 22.

French protest against Macron

That is why the wise ones encouraged us to avoid the debt trap - especially where we can no longer afford the interest payment. This issue has become core to the debate about any government's fiscal policy. The current protest in France about President Macron’s intention to review the generous state pension shows how sensitive governments have become to the demands of the electorate - even in the face of mounting government debt. Here in the UK, all parties promise massive increases in spending for public services - not only on essential infrastructure (with the well-intentioned desire to build ‘green’ infrastructure), but also on social services. The hard question is this: How should governments respond to demands for increased public service spending when costs continue to rise incrementally and outstrip government revenue?

From the neo-liberal perspective the word ‘austerity’ refers to prudence in public finances - "Fix the roof whilst the sun is shining" George Osbourne declared; avoid passing on the debt burden to future generations. The current Tory 'volte face' on this principle with election promises of massive spending is quite astounding. From the socialist perspective austerity is simplistically characterised as a cruel strategy to keep the disadvantaged depressed whilst creating an open playing field for the privileged. Consequently austerity has become synonymous with heartless neo-liberalism.

Neoliberal argument

The neoliberal argument seems to go something like this: Don’t overburden the private sector, or successful individuals, with heavier taxes in order to provide unnecessary social services. This will only serve to drive away investors and stifle free-market entrepreneurship. Rather enable citizens to pay for the services they use. Don’t overtax the private sector in order to finance the state's capacity to deliver infrastructure and utilities - let the private sector build the infrastructure and provide those services to the people. But let it do so profitably.

If, they claim, you let business flourish (the Tory argument), with the anticipated economic growth, the trickle-down effect will result in the greater employment of people, and then they will be better able to afford to purchase what they need. The government will stay out of debt, businesses will make a profit, the economy will grow - and the people will be in a better position to exercise free choice in purchasing what they want from the market - even in respect of healthcare.

Neoliberal fallacies

Sceptics however point out the many fallacies in the neoliberal argument. There is clear evidence of the widening income gap, the hoarding of resources, exploitative speculation, and tax dodging. Furthermore they show that with reduced tax receipts government's responsibility will be compromised in providing essential services to needy folks - especially in areas where the private sector would find the provision of such services to be unprofitable. But particularly distasteful is the evidence of massive tax avoidance by multinational mega-corporations in off-shore tax havens. This further undermines government revenue. Unfettered capitalism, it is argued, only works for those privileged people who are well-place to ‘play the game’.

Ecological crisis

The even more compellingly case against neoliberalism, is the dire effect of unbridled profit-seeking through wasteful consumerism on the global ecology. And the industrial food system is identified as being at the heart of the ecological crisis. So can we conclude that neoliberalism is indeed evil? And might austerity, as claimed by the 'left', be the evidence of the 'right's' selfish heartlessness?

Evolutionary economics

I suggest that neoliberalism is one contemporary economic expression of an evolutionary stage in the expression of human values. In the Graves bio-psychosocial model of emergent human values, level three Big-Apple 'power', considers it natural that the spoils go to the victor. This accords with the neo-Darwinian dictum of the 'survival of the fittest'. We can identify that in exploitative capitalism. Level four 'ideological' values emerge to control the ensuing social disruption and human exploitation and bring order through state control of the economy - centrally-controlled socialism/communism. But, as it turned out, that bureaucratic central control has been shown to be simply unable to cope with the dynamics of a complexifying world - and especially with the fickle whims and unpredictable trends of human subjectivity studies in complexity theory.

Entrepreneurship

Level five ‘entrepreneurial' values proposes a win-win form of capitalism. Improve the spending power of the masses, they suggest, and so improve business opportunity. By credit extension its focus on material possession as a measure of achievement can be broadened. The apparent success of on-going growth, still the dominant theme of global business today, however produces the consumer society that has inadvertently polluted the world with toxic waste and widened the gap between the proprietors of smart technology and consumers. Ultimately, supported by slick advertising, and coupled to easy credit extension, the professional investment speculators are able to exploit the manipulated ego needs of ordinary folks who have become caught up in this dehumanising materialistic trap.

Green humanistic solution?

Level six 'humanistic' values economic thinking follows. For example the European social market system is intent on maintaining entrepreneurship to ensure lively and innovative economic activity whilst providing a catch-net for the financially vulnerable. At the same time it attempts to contain environmental degradation. Following the general global collapse of the socialist ideal, this idealistic humanistic thinking strives to balance economic growth with a focus on equality, dignity, and sustainability. However, it seethes in frustration at its inability to provide a viable economic alternative to internationally deeply institutionalised neoliberalism. So it remains caught up in protest - now quite rightly, focused on ecological issues.

Integral solutions?

Now, especialy in the face of a highly disruptive digitally interconnected economic order, a level seven view of economics is beginning to emerge. Positive integrative systemic thinking, incorporating ecological design (like the circular economy concept), is considered better able to deal with economic complexity. This recognises economic activity, production, trade, consumption, as being inextricably interwoven with social order, governance and ecological sustainability - see:https://www.dhirubhai.net/pulse/post-brexit-vision-britain-claudius-van-wyk/

It recognises the potential power of decentralised self-organisation in intelligently enabled communities able to best optimise their local resources. Already, through the process of disintermediation (cutting out the rent-seeking middle men), ordinary folks are viewed as being potentially empowered with generous access open source IT-based technology. This can support community orientated ventures - with implicit novel and dynamic prospects for social enterprise.

Technology in wrong hands?

The trouble is that such integral thinking, when applied to general economic wellbeing, now races against the complexity enabled exploitative thinking of a new and equally greedy technocratic elite. Already there does appear to be a burgeoning post-truth cabal that informs and manipulates national political agendas. There might well be a global mafia apparently infiltrating political, social and economic activities on all levels, and all especially at the cost of individual privacy. So whilst it is these unfortunate excesses that have generally been apportioned to neoliberalism, we must also recognise that the economic system itself is but a manifestation of the evolution of human consciousness. Economic activity is ultimately collective human behaviour. The above-mentioned Joseph Stiglitz recently, in his criticism of unfettered neoliberals, reminded us of philosopher Karl Popper's insights in this regard.

Christian ethos and neo-Darwinianism?

At essence are two interrelated issues - one manifest at the organic level and one operative at the spiritual and ethical level. When Adam Smith wrote his famous ‘Wealth of Nations' the prevailing ethos in Britain was Christian . It was based on a societal injunction to respect and be compassionate with our fellow human beings. When that ethos gradually became discredited with the so-called scientific enlightenment, 'reality' became materialistic. The focus was now on the 'hard' material stuff. It followed that compassion and care for society ultimately became the responsibility of the state. And that, in turn, accounts for the emergence of the socialist alternative. Unfortunately Charles Darwin's amazing insights into the nature of evolution was also materially dumbed-down to a simplistic 'survival of the fittest' through propitious mutation enabling adaptation. Meanwhile too the marvel of bonding and synergism at the inorganic level of existence was eliminated from application to the social equation. The miracle of symbiosis and endosymbiosis, as essential to living system collaboration, was also replaced by some fortuitous mutation enabling the survival of the fittest. Thus the invisible ‘quintessence’ that binds living systems, the informing fields that we can call spirit, became 'unscientific'. And so emerged a mechanistic worldview which placed us on the exponential downward slope to economic, social and ecological perdition.

A new holistic spirituality

Thus neoliberalism, per se, is not the problem; neither is socialism the solution. The problem is the systematic de-spiritualisation of human society in the name of scientific progress. The problem is the systemic hollowing out of the human soul in the prevailing materialistic epistemology. And now, sadly, whilst both capitalism and socialism stand in the dock - those materialistic ideologies are still the essential choices presented to us in this election. Essentially the tragedy of this election is that we are still presented with those two opposing and equally unworkable choices, but are distracted by the noise around Brexit. And Brexit itself in turn violates the very principle of nature that points to evolution at all levels through collaboration and integration. The solution, as Rupert Sheldrake's book put it, is ‘A New Science of Life’. That science of life is the holistic view. Holism, in turn, was the gift to the world of Jan Christian Smuts, and therein ultimately lies our redemption; economically, politically, socially, ecologically and spiritually. It invites a fundamental transformation of the prevailing epistemology; of the way we view reality. It demands a metanoia (a change of philosophy, ethos and praxis) that will serve to relegate both materialistic neo-Darwinian capitalism and materialistic socialism (dialectical materialism) to a historically sad an painful experiment in human evolution.

Whatever the outcome of this election - we are still going to be left with a mess to clear up. That is why it seems clear that severe disruption might be exactly what we need - see: https://www.dhirubhai.net/pulse/weve-got-one-helluva-political-mess-clean-up-claudius-van-wyk/

Sir Laurens van der Post once said: "Tragedy is the language the universe uses when we will not learn the 'other way'. We need pain, we need suffering to open our eyes and open our ears."

The post-election political noise is going to continue to be immensely distracting - we urgently need a clear voice to articulate a new vision of possibility. Recently we have heard the concern of political elders, including former Prime Ministers on both sides of the spectrum, voicing their serious disquiet. We now look anxiously to elder statesmanship.