Wednesday, 11 February 2015

Nicola Sturgeon: another voice raised for a (moderately) radical approach to our problems

Nicola Sturgeon, leader of the Scottish Nationalist Party, speaking in London today, called for an end to austerity policies and described their continuation as “morally unjustifiable and economically unsustainable.”

Nicola Sturgeon of the SNP:
A radicalism so mild it's barely radical. But it's still refreshing to hear
Consensus is attractive when the alternative is conflict, but much less so when it just means conformity. Especially when what we’re conforming to is principally a matter of fashion.

It has been fashionable in the leading economies since the 1970s or 1980s, to proclaim belief in the working of free markets with minimal regulation. That view tended to come in tandem with faith in trickle-down economics: a free market will allow highly entrepreneurial individuals to make a great deal of money; when they spend it, the resultant wealth will trickle down to the rest of society.

Many of the measures that had been put in place to control, in particular, the financial sector were dropped during the time of Thatcher and Reagan. Unleashed, the banks took increasing risks in order to amass unprecedented fortunes, until they took a risk too many and came unstuck in 2008. At which point, people who had spent decades decrying state intervention, turned to the state – more precisely to all taxpayers, including the poorest – to rescue them from the disaster they’d brought down on themselves.

Unfortunately, holding out their hands to the state didn’t mean that these leaders of economic thinking were prepared to dump the ideology which, particularly in its trickle down aspect, had made them inconceivably rich over a generation.

The success of trickle-down was measured by their wealth; its failure by the impoverishment of everyone else. As Will Hutton argues in his insightful piece in today’s Guardian, “wages have fallen, in real terms, by the greatest degree in more than half a century, inequality of income and wealth have risen to desperately high levels that may soon metastasise into a serious economic and social cancer.”

Sadly, in Europe we’ve been driven since the 2008 crash by such carcinogenic thinking. The consensus claims that austerity is the only way out of this crisis: reduce government deficits and debt by slashing public spending, and we shall cure our problems. As Hutton points out, all this is achieving is to create a society in which “millions of workers struggle in a harsh demimonde of temporary jobs and zero-hour contracts.”

And yet these ideas, the new fashion, merely replaced economic thinking which could really explain our problems. The theories of John Maynard Keynes showed that it isn’t by reducing expenditure that a government gets out of economic difficulty, but by making investments. That provides employment which increases the tax take from workers, and it stimulates the economy to grow by increasing demand – which also increases the tax take. So paradoxically, the government may well get its deficit down more quickly by spending more, not less.

But we’ve been living the Reagan-Thatcher consensus. Keynes is out. Austerity and trickle-down are in. And, sadly, conformity to that credo has extended way beyond the traditional conservative parties. Many in the Labour Party, not least Tony Blair and his one-time voice piece Peter Mandelson, who famously – infamously – once declared himself “intensely relaxed about people getting filthy rich.”

Well, I’d be relaxed about it too, if getting filthy rich didn’t always happen on the backs of a lot of poor people getting a great deal poorer.

To stand for a different set of ideas, for Keynesian ideas, is regarded by the proponents of austerity as a dangerous reversion to old-style, wildly left-wing socialism. Which is odd, since whatever Keynes was, he wasn’t a socialist. He wanted capitalism better managed, as does Hutton.

Calling for better management of our capitalist economy is dangerously radical? 


Keynes: hardly a left-wing firebrand
But we need his approach back, and that has to come from the Left
Fortunately the conformity to this dire consensus hasn’t been total. Every now and then a voice speaks out against these failed and failing views. And, recently, sometimes those voices have been heard.

I spoke yesterday about Alexis Tsipras in Greece. Succeed or fail, at least he’s trying a different approach in a country driven to despair by the previous policy of austerity.

Now Nicola Sturgeon has also spoken out. She, like many of us, feels there’s nothing tremendously inspiring about a Labour Party promising to do the same as the Tories, but a bit less, and a bit less fast.

And yet what she’s proposing isn’t that radical: an increase in spending of £180bn over five years of a parliament. That represents less than two years of running the English NHS, spread over five. Not exactly revolutionary: like Hutton, like Keynes, she just wants capitalism to behave more fairly.

But compared to everyone else calling for more cuts, isn’t it refreshing?

How sad that it has to come from a party whose main aim is the independence of Scotland. That the great party of the left in England, the Labour Party, didn’t beat her to it.

Ed Milliband, Ed Balls: come on, if Sturgeon can do it, surely you too can speak out for a real alternative to the failed policies of the Tories?


Faith A. Colburn said...

Yeah Scots! Did I mention some of my forebears came from Scotland?

David Beeson said...

Hi Faith - I think you did - and today's Scotland certainly justifies your pride...