Sunday, 26 August 2012

Loving the big society... from a distance

On both sides of the Atlantic politicians want to see the state cut back and society take over its responsibilities. In the US Vice Presidential nominee Paul Ryan dreams of a wizened rump of a federal government. Ryan’s economic plans involve the near evisceration of the state, except  - somewhat inevitably for a Republican – the amount it spends on defence. Ryan’s plans include cutting Medicaid by $800 billion. In the UK the Coalition government is busy shrinking back the state. For example, on average government departments are facing cuts of 19%. In the US and the UK right wing politicians hope that charities and volunteers will fill the gap left by a diminishing government.

As Andrew Sullivan writes:

“A critical element in the GOP's attempt to unravel the 20th century's welfare state is the argument that individual charity will step in to help those in need… This is also behind David Cameron's much more modest attempt to move from Big Government to what he has called Big Society.”

Sullivan assesses how much Paul Ryan has given in charity and the difference between how much he and Barack Obama gives. In 2010 Paul Ryan gave 1.2% of his income to charity whereas Obama gave 14.2%. It is also worth pointing out that those in the lowest fifth of incomes bracket gave an average of 4.3% of their incomes to charities. Andrew Sullivan points out:

“But it's Ryan who is the most prominent advocate of replacing state care with private charity. It's just that others will have to supply the charity. Judging by his past, he sure won't.”

I think Ryan’s economic policies are callous, but it’s even more disgusting when he personally doesn’t do that much to help those he is going to screw with his governmental cutbacks.

In the UK we don’t have neo liberals of the Ayn Rand maximum madness variety teetering on the brink of power. Instead we have David Cameron and the Coalition government who claim that it’s the necessity of destroying debt that’s driving them to slice back the government. You might be tempted to believe that isn’t the sole reason considering so many of them worship at the altar of Thatcher, the deity of shrinking the state.

The Conservatives have put forward their vision of a country in which the state does less work but society does more. The Big Society is the idea that the British public volunteer their time to charitable causes. Volunteering and charities are undeniably important and do brilliant work, but I do not think we can expect them to take over many of the responsibilities the state is giving up. This is especially the case when a large bulk of the finances of charities are made up of grants from the government.

The problem for proponents of the Big Society is that their own actions betray its weaknesses. A study by the website shows that, of those who replied, only 8% of Coalition MPs do voluntary work. As the website tartly remarks, ‘Are we really all in this together? Only time will tell.’

When people on both sides of the Atlantic cut the state and hope to see society pick up the pieces you would expect them to do as much as they can to volunteer and help charities. Instead we see people loving the big society, but from a distance…

Correction: Originally I wrote that Ryan donated 1.3% of his income to charity and Obama donated 14.3% of his income to charity. In fact the figures are 1.2% and 14.2% respectively.

An opportunity for change: part two

It is always easier to criticise and condemn rather than paint a picture of how to do things differently. In my previous post I argued that Britain needs a new long term plan for our economy and at this moment in time the population are more likely to be seeking one. In this post I will explore ways we can change our economic society whilst ensuring it gains enough support from the British public and media.

Since international finance collapsed and had to be rescued by the state, the right has taken numerous blunderbuss shots to their pride. However it still cannot be underestimated. The most popular newspapers in the country are The Sun and the Daily Mail. Based on current polling figures the Conservative Party and UKIP votes combined are at 40%. Undoubtedly, there is still a powerful contingent within our society who believe a mix of free markets, deregulation and a small state is the correct remedy to the world’s ills. Thus, those proposing a different future will have to put forward persuasive alternatives and win support from the public.

Ways of changing our economy and getting support to do so come in different forms. One example of the economy being made fairer is the grass roots approach spearheaded by Citizens UK. One of the many superb things about the recent Olympics was the fact that all workers were paid a living wage. If more and more organisations are pressed into paying their workforces a living wage, then not only are individual lives improved, but a societal norm is created. This societal norm would emphasise that all people deserve to be paid at least enough money for the necessities of life. This will then better enable a government to take legislative action to ensure living wages for all.

Another opportunity for change is to kindle an understanding of the effectiveness of a state that takes an active role in the economy.  As the economist Lord Skidelsky explains, ‘nothing is more upsetting to the conventional wisdom than the thought of government “picking winners”. Yet governments have been picking winners all over the world, notably in east Asia.’ Skidelsky proposes a national investment bank, which can be used to ‘to secure Britain a significant presence in cutting-edge technologies like mechatronics, optics, new materials and nanotechnology, and to invest in such green energy sources as wind power, solar power, hydropower and biomass.’ Skidelsky argues that the investment bank can be funded through the government investing £10 billion of capital and also ensuring the bank itself is able to borrow. In recent decades British industrial policy was left to the gusty winds of the free market, and the economy became overly dependent on the services sector. A new more active role for the state is an important way forward.

Proposing the government spends money, especially on something which will inevitably take risks with taxpayer’s money, during a time when the dogma of austerity is paramount, could be painted as the mad frivolous actions of spendthrift left-wingers. However, there is already a growing realisation that it is unclear how Britain is going to pay its way in the future and that the market itself is geared towards the short term. This creates space for proposing a national investment bank as one answer to our economic predicaments. This will allow politicians to make comparisons with countries which successfully used the state to kick-start particular industries, and also to inspire the public with a vision of Britain in which, instead of relying on the magicians of the city, we develop the power of industry.

Another opportunity for change is in regards to taxation. In a recent article John Kampfner explains the prevalent attitude of New Labour to tax avoidance:

‘I lose track of the number of times I argued with ministers in the Blair and Brown governments about the social dislocation, not to mention the financial damage, caused by there being one rule for the very rich and one for the rest. They would shrug their shoulders, with their “he’ll grow up one day” look about them, arguing that any money that was accrued from these borderless global folk was helping to build schools and hospitals and children’s clubs.’

As Kampfner remarks, ‘the mood has shifted.’ Even our Chancellor of the Exchequer has admitted that he is shocked by the scale of tax avoidance in the UK. The sentiment that the money someone makes is all and entirely down to their own brilliance and tax is nothing but the thieving machinations of wasteful statists has been driven to the fringes of contemporary conservatism (at least publicly). It’s not unpopular to be against tax avoidance at the moment. But, how do we seize this feeling and ensure everyone pays their fair share of taxes?

Well firstly by continuing to name and shame those people who are paying tiny amounts of tax on very large incomes. There need not be red eyed loathing of the rich, but most people are amenable to the argument that the richest should at least do what everyone else has to do. Emphasising how lost tax revenue means poorer schools, hospitals and services demonstrates that tax avoidance isn’t simply a matter of figures. Highly popular and successful individuals, such as JK Rowling, who does pay her fair share of taxes, should be used as models of behaviour in public relations campaigns.   It is important that politicians and the media keep the spotlight on this issue, because this will help make it a more significant electoral issue. Imagine at a future leaders debate if each of the party leaders were vying over who would be the person best placed to raise revenue in this way!

These are just a few of the ways that Britain can change its economic order and find support in doing so. Although there are undoubtedly further changes and shifts in thinking needed, it is the case that there are positive signs that we need not continue to be constrained by the past.

This post was written for the politics blog Shifting Grounds and can be found here

An opportunity for change: part one

Reading Steve Richards’ Whatever it takes: the real story of Gordon Brown and New Labour I was struck by the extent to which New Labour felt constrained by British political culture. Even though New Labour surged into power with a staggering majority, they were nervous of how far they could travel from the policies and values of the previous eighteen years of Conservative hegemony. Would a powerful right wing media demonise them? What would the public think?

Today, Britain is at a point in time when it desperately needs to move beyond the failed assumptions and policies of recent decades. The questions New Labour faced are still with us, but this time we have to find different answers.

New Labour’s worries about British political culture explain why one of their most redistributionist policies – tax credits – was barely sold as a political achievement. New Labour presented a lot of vague guff as feats of towering achievement, but one of their most significant policies was presented with significantly less fanfare.
As Richards writes of the March 1998 budget,

‘The Chancellor managed to redistribute a fair amount of cash to families on lower income without uttering the word ‘redistribution’, which he considered rightly to be a term that alarmed many voters who feared their money was being recklessly spent on those who did not necessarily deserve it.’

However it is important to point out that such ‘stealthy radicalism’ has its drawbacks:

‘Robin Cook highlighted the problem with stealthy radicalism when he argued in a series of speeches during Labour’s first term that many of his poorer constituents thought that the tax credits were a technical change introduced by the Inland Revenue. They had no idea that their additional money had any connection with government.’

These passages indicate the sense that Britain would not tolerate any government that appeared frighteningly socialist. The New Labour project itself was testament to this fear. After four successive election defeats and eighteen years in which a particularly ideologically potent Conservative party was supreme, traditional Labour policies were viewed as irrelevant and unelectable. New Labour decided to largely accept the economic framework they inherited. They were happy with individuals becoming ‘filthy rich’.

New Labour were not simply conservatives in red rosettes, as some have painted them. They did a lot of things that Conservative governments would have done, but they also did a lot of things Conservative governments would never have done. Sure Start centres, tax credits, civil partnerships and Scottish devolution is a short selection of a longer list.

However, it is true New Labour never radically changed the economic world. The super-rich became massively wealthier and those at the bottom of society endured wages that didn’t much improve. The welfare services spent on were reliant on revenues from a banking sector that, unknown at the time, was cruising to disaster. Even when they did pursue policies which advanced the cause of the least well-off, they were nervous about how this would be viewed by the media and public at large.

Britain is at a point in history when it needs a different economic settlement. The country requires a new long-term plan for the economy which ensures people live lives off less insecurity, in which they are safer, healthier, have enjoyed a good education and are financially better off. The economic settlement we have is beset by difficulties. It has not only been hampered by crisis, but relative to more equal countries, we endure more crime, worse health, shorter lives and greater unhappiness.

Britain’s new economic settlement must not concentrate so much power and reliance on a narrow section of the economy. As Ed Miliband argues, ‘we need a more responsible capitalism, a new approach to our economy and our society.’ Britain also needs to envisage new ways of paying for public services. If the Coalition’s cuts have proved anything, it is how many of our public services are deeply valued.

The question is whether British culture is ready for a different economic order. Can a government redistribute wealth and alter our economy without voters, clasping Daily Mails to their chests, flocking to the voting booths and ticking the box next to the words ‘Conservative Party’?

Britain is more ready than it has been for a very long time. There has been a growing cacophony of voices demanding that George Osborne’s hilarious, tragically ironic claim that ‘we are all in this together’ is actually enacted in reality. Skyrocketing bonuses and the continuing revelations of very rich people hiding their incomes from HMRC fuels outrage and a powerful desire to see Britain run differently. Now that wallets have significantly less money within, and prized local services are vanishing from communities, people are more likely to question whether things can be done differently.

Although Britain is at a point in which free market fundamentalism is at the weakest it has been for a long time, we still need a movement to galvanise change. In my next post I will explore ways that the public can unite to improve and change our economy.

This post was written for the politics blog Shifting Grounds and can be found here

Monday, 20 August 2012

Patriotism needs progressives

For some, the outbreak of vocal patriotism that has met the colour, splendour and British success at the 2012 London Olympics has been a nauseating and worrying phenomenon. Those on the left have always struggled with patriotism. George Bernard Shaw declared that patriotism is ‘a pernicious, psychopathic form of idiocy’ whilst, in contrast, George Orwell admired the ‘devotion to a particular place and a particular way of life.’

For generations those who desperately want to see a different Britain have been caught in an intellectual and moral bind. Does the fact we want to change our country mean that we do not love it or does the desire to change our country blossom from our love for it?

One problem with patriotism is that it is a largely emotional, almost spiritual, concept. The strong attachment someone feels to his or her country cannot always be decanted into rationalistic terms. There is no logic behind cheering and chanting for your country. Indeed it can be questioned whether patriotism is simply a dangerous and easily manipulated mass emotion offering no hope to progressives.

The fact that humanity feels emotions which cannot be explained in rational terms is not really a problem. The issue at hand is whether patriotism can be beneficial to a country?

George Orwell described Britain as ‘a family with the wrong members in control’. For most people patriotism does not spring from any particular adoration for those who have ruled us. Similarly it isn’t the monarchy or English tea that can sustain patriotism. It is also thankfully the case that we are no longer in the days when a population’s patriotism was in direct proportion to the size of its navy or empire.

Orwell’s understanding of Britain as a ‘family’ is insightful. There are good reasons for a special affinity between citizens.  If you live, travel, work, study and pay your taxes in a country it is good to have a degree of fellow feeling for the people you will be spending your life with. It is also important to recognise that the Brits have admirable characteristics: tolerance, a sense of fair play and strength of character through national crisis to name a few.

The sight of people destroying their local communities during the riots was a sign of the negation of affinity and community. It was the soul destroying opposite of patriotism. The rays of hope during the riots were the men and women who came together to mend their communities. They understood that it was not the establishment or capitalism or any other of the alleged targets of the rioters that were damaged by those days of carnage. It was ordinary men and women whose homes were reduced to rubble and whose livelihoods burned away. The actions of those who came together to rebuild their communities is symbolic of a much needed wider fraternal rebirth.

One example of this fraternal rebirth is the way that we need patriotism for the benefit of the welfare state. I wonder if the wealthy men and women who hide their finances from the tax collector would do the same if they felt a greater allegiance to the country that had helped them get rich. It is inescapably saddening that people who have reaped the benefits of Britain refuse to help the country in the form of paying their fair share of taxes. It is important to say that tax avoiding is not only ‘morally repugnant’ but also unpatriotic.

The British people deserved better from the rioters and they have long deserved better from our politicians and our institutions. Politics is not a sport, but it is a golden opportunity to improve the lives of your fellow citizens. It is only patriotism that can improve our country.

This article was written for the blog Shifting Grounds and can be found here

Monday, 6 August 2012

David Cameron: Two Nation Conservative

If I had to be a Conservative (I’m imagining Tory HQ has my family hostage) I would be a One Nation Conservative. One Nation Conservatism began with Benjamin Disraeli and was in the ascendancy during the post-World War II governments of Churchill, Eden, Macmillan and Heath. One Nation Conservatism is marked by a concern with inequality and poverty, and the determination to bridge the divide between ‘two nations’ of rich and poor. The system of thought springs from Benjamin Disraeli’s novel Sybil and can be understood through one striking quote:

‘Two Nations between whom there is no intercourse and no sympathy; who are as ignorant of each other’s habits, thoughts, and feelings, as if they were dwellers in different zones, or inhabitants of different planets; who are formed by a different breeding, are fed by different food, are ordered by different manners, and are not governed by the same laws.’

Instead of viewing inequality as the natural consequence of idleness or sin, it is the task of government to ameliorate inequality and improve the condition of the poorest. Thus Disraeli instituted social reforms and post war Conservatives would not take a hatchet (at least until Mrs Thatcher) to the most equalising force in our country’s history: the welfare state begat by the Labour government of 1945 – 1951.

One reason why the Conservatives concerned themselves with inequality was because a party who did not raise the conditions of the working class would not win elections. But it was not simply electoral calculations that have driven One Nation Conservatives. In the case of Harold Macmillan, it was memories of being Member of Parliament for Stockton, which suffered terribly from high unemployment during the Great Depression, that caused his determination to accept the Keynesian consensus and to never pursue policies which would result in high unemployment. Even when Treasury ministers were urging him to follow monetarist policies Macmillan refused to break with the Keynesian settlement.

Another Old Etonian, our current Prime Minister, has claimed that he is a One Nation Conservative. He urges us all to believe that he has taken up the mantle of compassionate conservatism and is ready to unite a divided country. It is true that the early proclamations of general happiness throughout the land, delivered by a Conservative leadership smiling atop the wave of continuing Labour spending promises, was torpedoed by the general collapse of our economy. No previous One Nation Conservative has had to wrestle with the economic problems that the country currently faces.

However, even when a situation is grim and choices are difficult, and it is the case that we cannot live in a world of mounting inexorable debt, it is true there are enough options left to a government to demonstrate which political philosophy actually drives them. Is David Cameron a One Nation Conservative, or is this a self-proclaimed identity, one that melts away in reality?

Harold Macmillan’s era was a time of a very different consensus. During his period in office unemployment was tiny, whereas in recent decades, even when our economy isn’t being battered by Euro crises and credit crunches, an unemployment rate of 4.6% is considered the pinnacle of human achievement. Today even our railways stand pointlessly privatised whereas Macmillan presided over an economy that had nationalised rail, gas and electricity. It was also a world in which a Conservative Prime Minister presided over very high rates of upper end income tax.

Today, we live with the legacy of Thatcherism which has left us a fundamentally divided nation. Currently, the chief executives of the 100 biggest companies featured on the London Stock Exchange earn an average of £4.2 million which is 162 times greater than the average British wage. If ever there was a world in which Disraeli’s warnings of ‘two nations’ are relevant, it is today.

We live in a world in which two nations are the norm. Thus for David Cameron to be a true One Nation Conservative then he would have to try and rectify this gaping inequality, whilst ensuring that deficit reduction is not worsening the divide.

On all counts he seems to be failing. The reduction in the high rate of income tax to 45p is one hugely symbolic example in which the interests of the richest are placed ahead of the outrage of the population at large. However there are many other ways that the Prime Minister is not really achieving being a One Nation Conservative. Although the Coalition have attempted to improve the conditions of the poorest wage earners by raising the level at which people begin to pay income tax, the benefit of this policy has been harmed by the rise in VAT, inflation and reductions in benefits.

A truer One Nation response to this crisis would be to do whatever they can to raise taxes on the richest. There Is No Alternative is the creed of the unimaginative and the ideologically blinkered. There are many ways the Conservatives could raise revenue in a more compassionate way without wealth creators flocking to Switzerland or the Cayman Islands.

One example is to increase asset taxes. Britain is a country in which it seems accepted that property prices balloon and people get incredibly rich from this, often with very little merit. If the Exchequer is looking for a way to raise revenue without harming the poorest part of the nation then something like Vince Cable’s mansion tax would be one way forward.

But David Cameron would never countenance such a move. Instead his party is committed to slicing back our already diminished welfare state. The Conservatives obsess over ways to raise money in ways that will inevitably harm the most disadvantaged, such as through welfare reform. The recent revelations of ATOS and the way that the very sick have been called ‘fit for work’ is a clear demonstration of a government that seems determined to split this country apart.

Due to the fact that Britain is already so unequal, anyone who sees themselves as a One Nation Conservative should not look to Cameron’s Conservatives as the party that can pursue their philosophy. And anyone who is concerned about inequality in this country should surely recognise that this government is not the answer.

This was written for the politics blog Shifting Grounds and can be found here