How we Afford a Better Society – and How to Recognise it
When someone asks you , “How can we afford to spend more on our public services”, the simple answer is, “We can’t afford not to.”
Every day we see the effects of austerity policies, from boarded-up, depressing High Streets, poverty, and hungry children to decimated public services. We can’t go on like this.
Austerity was always a political ploy, unnecessary, and intentionally cruel, and it is a policy which propels us further in a downward gloomy spiral. No one really benefits, no one is really happy in an increasingly divided society, where the only solution is to blame one another, where in reality we are all missing out, from what society could be.
And the only way out of this is to invest in our society towards better lives for us all.
We are not short of labour, resources or land in order to invest in a society in which we can thrive, where people can live fulfilled lives. But people are without jobs, land and property is underused, held back by those in power, because it suits the Tory, capitalist philosophy, where it creates division, competition, greed – and ultimately war and hate too. And rich pickings for the very few.
We just need the political will to rebuild, to build a better society.
The government has the ability – and responsibility – to release money into the economy right now to get our economy moving efficiently again.
As a sovereign state, the UK government controls its own currency, and can release as much as it needs, and so it should. It’s not like a household budget waiting for payday. I imagine the flow of currency like running a bath, you can run as much as you need, then turn off the tap when you’ve enough. And rather like a bath with an overflow, excess funds can be drawn off – and that’s where taxation comes in, preventing inflation, but in a fair, balanced way so that everyone is benefitting from the investment in the new and better society, and everyone is that bit happier.
The state’s currency is indeed the People’s money, but not ‘taxpayer’s’ because we don’t need to pay tax to use it. It’s there already. Money can be created by a computer keyboard whenever the government chooses to. Tax is not needed to pay for resources, because tax results from previous government spending, and is a way of ensuring a fair distribution.
When adequate money is circulating in the economy it doesn’t stay hidden away. People spend, and so it means more jobs, and so what comes around, is shared around. Like cycles in nature, water or carbon cycles, money circulates as it makes things happen. In a successful economy, no person or place is left behind. Poverty is unacceptable, and it is avoidable.
A better society is one which puts people first, is sustainable, where every person can reach their potential, to learn, to enjoy leisure time, to enjoy good health and a good home.
We can envisage a society where everyone is caring for one another, everyone can contribute and participate, rather than blaming one another for the ills of a society caused by a flawed economy, backed only by the myth that funds are non existent. And this vision can be realised by a Labour government, determined to ensure an economy which really works for the many, not the few.
This was realised by the 1945 Labour government after the war, when despite the ravages of war, and rationing, there was investment in people, providing an NHS, homes for all and the welfare state, providing a safety net for all of us in times of misfortune. It was possible then because people came together with a strong will to build a better society. The people had seen the effects of divided people, greed, and mistrust. People came together by a united will for peace. And it worked. A whole generation benefitted from opportunities never seen before in their families.
The right wing media frequently use a Shock Doctrine to keep people fearful and divided. Deprivation and fear can mean people look to blame each other rather than see it is caused by the flawed and unjust system and so hold back from change . This is why scare tactics are used by the wealthy establishment, reinforced by the right wing media who repeat the same adages so often they believe them to be true.
But as we have seen, out of adversity, out of fear and desperation, comes a determination to change society for the better for us all. We cannot afford to carry on with an economy which is leaving people homeless, dying on our streets, leaving children hungry. We cannot afford an economy which benefits the few, and not the many.
At Labour Party Conference 2017, Naomi Klein said:
“Moments of crisis do not have to go the Shock Doctrine route – they do not need to become opportunities for the already obscenely wealthy to grab still more.
They can also go the opposite way.
They can be moments when we find our best selves….. when we locate reserves of strength and focus we never knew we had.
We see it at the grassroots level every time disaster strikes.
We all witnessed it in the aftermath of the Grenfell Tower catastrophe.”
When we witness the potential of humanity, of hope and determination, we know we can achieve a better society. We can afford a better society, and to make better use resources at our disposal.
There is so much potential in the people of Britain, and of the wider world.
We can’t afford not to use it. We can’t afford to waste any more lives.
Can we please drop the nonsense of ‘tax payer’s money’? The phrase is just political advertising, intended to manipulate us in to accepting cuts and constraints which are not good for us or the economy. (Christopher Bacon explains why it’s a nonsense in his article ‘The Myth of Tax Payer’s money’ which is copied below.)
However, like all successful advertising slogans, the phrase ‘tax-payer’s money’ invokes what psychologists call a schema…. a whole body of emotions, experiences and knowledge which mediate our response.
Hence, ‘Tax payer’s money’ is intended to create a direct link between government spending and the individual. You are invited to visualise your hard-earned pennies being frittered away unwisely ……. which is hugely convenient for a politician intent on running down public services, so that they can be privatised. Also implicit in the schema is the threat that if the government spends more, you’ll have to pay out, depleting even more of your income.
And like so much of neoliberal-speak, it is contaminated by deliberately confusing government spending with household spending. The phrase ‘tax-payer’s money’ comes from the same stable as ‘maxing out the credit card’ or ‘mending the roof when the sun is shining’. It is bunkum. Government is not like a household.
And of course, you know that really, when you actually think about it …. Government spending is nothing like our own. But as Drew Weston wrote in ‘The Political Brain: The Role of Emotion in Deciding the Fate of the Nation’, …..‘the nature of political campaigns are where “rational minds collide with irrational thinking”
Drawing from the fields of psychology and cognitive neuroscience, Weston, a clinical psychologist and political strategist, demonstrated the extent to which candidates’ speeches and political ads, are emotionally laden with words and images designed to provoke strong feelings…. And by re-writing the actual speeches using alternative wording, he was able to illicit a very different set of responses.
Weston explains that these messages activate networks in the brain and become the avenues down which true or false political messages travel, connecting to the unconscious emotions of the voter in a nano-second and involuntarily triggering us to react emotionally and without ‘thinking’.
So let’s keep ‘thinking’ and not allow the Right to infect our minds with their manipulative false analogies…. and can we please drop the nonsense of ‘tax payer’s money’.
We are told, time and time again, that the government should spend taxpayer money wisely, efficiently, and sustainably. Often these pronouncements are followed by promises to use taxpayer money well by cutting government spending and making efficiency improvements. There is an assumption behind these statements that is utterly inaccurate and dishonest, however. Namely, that there is such a thing as “taxpayer money.”
Not only is there no such thing as taxpayer money, it is not the case – ipso facto – that the government spends taxpayer money. To see how this is so, assume that taxpayer money exists and assume that the government spends it. As we shall see, these assumptions actually lead to a paradox.
In this world, where the government spends taxpayer money, the following situation holds. The government invokes a tax on the population – say, an income tax. This income tax takes money from the people who qualify and adds it to the Treasury account. The Treasury, then, takes that money and spends it on whatever the government wants to buy: a new hospital, school, submarine, or whatever.
Where does this money come from, assuming God does not randomly drop it from the sky? Well, it is “taxpayer” money. So the money, presumably, belongs to the taxpayers – so it must come from them (i.e. the taxpayers must issue/print it). Well, that is all well and good, but it does not represent this world. Taxpayers, in the UK, do not print pound sterling. That would, of course, be a criminal offense.This creates the paradox: if taxpayers do not print “taxpayer money,” and the government needs to get “taxpayer money” before it can spend, then how can the government spend (where does it get the money from?) and how can taxpayers pay their taxes (where do they get the money from?)? This is an important point to mull over.
In order to tax someone, there must be something there to tax. Since taxpayers do not print their own money, there is nothing there to tax. And in order for the government to spend, the government must first tax. But since there is nothing there to tax, the government will never collect tax and so will never spend.
Clearly, this description is not one of our world. In this world, the government does spend, and taxpayers do pay their taxes. Something has to give – our initial assumptions must be wrong: there is no such thing as taxpayer money and/or governments do not require taxes to spend.
If we jettison the second assumption, then it turns out that the government must spend before it collects taxes. This is because if it does not spend, then there will be nothing to collect – remember, taxpayers do not print their own money and it does not magically fall from the sky. Spending precedes taxation, by necessity. Now that we can see the money in circulation is government money – money issued by the government – it follows that taxpayers do not own it; so the first assumption is jettisoned. Therefore, the notion “taxpayer money” ceases to have any content.
A letter to the Chancellor of the Exchequer from Prue Plumridge
I feel I must write to you in response to your speech at the Conservative Conference in which you referred to the medium-term challenge of dealing with the public finances so as not to burden future generations.
Aside from the fact that your government has been promising to deal with the public finances for the past seven years whilst regularly moving the goal posts for achieving it, failed Tory promises show astonishing ignorance about how the state finances work in practice.
Or, is it, perhaps, that you do know but prefer to keep the public in the dark with fake messages about household budgets, living within our financial means, paying down our debts and saving for a rainy day.
You (and George Osborne before you) have abused the trust of the public with your myths and lies about maxing out the credit card and going broke. Neither of which can happen in a sovereign currency issuing state. I’m sure you know that really. In truth, this has suited the pernicious ideology of the Tory government which claimed that Labour overspent and austerity was unavoidable. Neither was true. But, as a result, seven years of cuts to public spending have led to rising poverty and inequality through the redrawing of welfare provision and the decimation of public services not to mention the on-going attacks on employment rights and the rise of insecure working and the gig economy.
And, all the time, while you tell us that there is no money for those services upon which we all depend from the NHS, to public infrastructure and services and local government we are witnessing the ongoing transfer of wealth into ever fewer hands and public money being poured into corporate pockets.
Admit it, Chancellor, this exercise has never been about necessity. It has always been about ideology which can be best expressed in the words of the former head of John Lewis who said recently ‘the only way to provide good public services is to ensure a vibrant business economy’ …… which is not only neoliberal bunkum trading on the lie of discredited ‘trickle down’ but shows how this false narrative dominates the mainstream and infects public understanding. To quote Richard Murphy from Tax Research on the NHS (and whilst he doesn’t mention it, public services too)
“there is no reason why we should not have health care in thirty years’ time, whatever that care might be…… All we have to do is decide we want it. Then we can pay for it. It will not be a matter of not affording it. It’s just a matter of setting priorities. “
Moving on to your claim that borrowing takes money from the pockets of future tax payers is plain wrong to put it bluntly.
As the economist Professor Bill Mitchell notes “Each generation chooses its own tax rates and that means that the mix of public and private sector involvement in the economy is a political choice”
In this case yours. Government spending in the form of deficits (assuming of course a government that takes seriously its responsibility for the well-being of the nation) can work on behalf of citizens to create a healthy economy and a fairer distribution of wealth. This not only helps today’s citizens but also creates investment in public education, public health and other infrastructure which benefits both current and future generations. Or, of course, it can, as in the case of the Tories and already noted, represent wealth transfer to the already rich and public money leaching into private corporate pockets. And just to be clear as I can hear you whispering but what about the printing presses, inflation and Zimbabwe I am not suggesting that deficits don’t matter – they do but not in the way you tell us they do. The fact is that whilst governments are never revenue constrained spending will always be limited by available productive capacity and resources. And that is what has to be managed. It should never be about balanced budgets rather it should be about creating a balanced economy.
So, Chancellor, in conclusion, I will finish by saying that a time is coming when you will no longer be able to fool the public into believing your household budget version of the state finances which has claimed that we can’t afford public services, the NHS and the welfare safety net. They will then understand that you made a choice to deny them the public infrastructure that ensures a healthy economy and the well-being of their families. They will understand that you played with their lives and their survival.
It is to be hoped that in the near future you will indeed have plenty of time as a shadow minister in her majesty’s government to reflect on where the Tory party went wrong but then again you probably won’t.