Credibility Gap

Yesterday we were treated to lectures from our trusted leaders on the proper management of our economy. This was their response to the sizeable protests in London against the government’s savage attack on public services. A government spokeswoman (I forget her name – it doesn’t matter, they’re all pretty much the same) appeared on TV to argue that those leading yesterday’s protest – the trade union movement – had not proposed any alternative to the government’s spending cuts. This was a modern re-working of Thatcher’s infamous There-Is-No-Alternative lecture from yesteryear. That illustrious tool of the British establishment, The Times newspaper, said more or less the same thing in one of their typically supercilious editorials:

“A credible alternative political prospectus is also absent from the Opposition’s critique,” the unnamed writer sneers.

The key word in that sentence is “credible”. Who gets to decide what is or is not “credible”? No doubt The Times and the government would each claim that only they have the necessary combination of wisdom and responsibility to make that judgement. They would be partially right: they do indeed have some wisdom – but only because they ensure the vast majority of the population are kept in such darkness and ignorance that true understanding of our situation is all but impossible for them; and The Times and the government both have the responsibility that comes with the power of their positions – but responsibility to who?

Very few ordinary people understand much about economics, which is exactly the way The Times and our government like it. People don’t understand it not because of any great complexity in the subject, but simply because the very few truths and very considerable lies of “credible” economic theory are never taught and explained at non-elite schools. If they were taught The Times would have a very much harder job of convincing us about the “credibility” of “Opposition critique”.

There are two very simple truths about the prevailing economic theory.

1. Prevailing economic theory – that which has been imposed on most of the planet – is designed and built by elites for elites. It isn’t so much that it’s designed to intentionally harm the vast majority of humanity, the environment and all other living creatures, it’s simply that those issues are irrelevant to it – unless they can be used in some way to profit elites. In other words, the ONLY interests served by prevailing economic theory are those of elites.

2. Prevailing economic theory is utterly devoid of humanity. The only thing that matters to it is having MORE. Its core ethic was perfectly encapsulated by Andy Grove, one time CEO of Intel and therefore one of its leading exponents. According to Mr Grove, the whole purpose of capitalism is “shooting the wounded”.

No doubt Mr Grove’s opinion would be deemed “credible” by The Times and government alike, as indeed it obviously is – given the economic condition of the planet. But is it right? I suggest it isn’t.

Without trying to present an exhaustive proof for why Mr Grove’s views are wrong, I shall quote Paul Bairoch who, as a professor of economic history, knows a thing or two about the subject. Prof. Bairoch wrote:

If I had to summarize the essence of what economic history can bring to economic science it would be that there is no “law” or rule in economics that is valid for every period of history or for every economic structure.

In other words, there simply is no absolute truth about whether or not a particular economic theory is ‘right’. There are only points of view; and one person’s point of view could be pretty much as “credible” as anyone else’s. So let’s try making a start with a view that’s the exact opposite of Mr Grove’s. Let’s say that ‘right’ economic theory is one that helps the wounded; then let’s go a stage further and say that such a theory should not be based on having MORE, but having ENOUGH; and that it should be founded on humanity and happiness, not inhumanity and misery.

The good people of The Times together with our trusted leaders would no doubt react with hysterical laughter or apoplectic outrage and shout that such an opinion has no “credibility”. They would be wrong. It is entirely credible, it’s simply the complete opposite of what they want.

But let’s consider a couple of basic economic principles.

Possibly the most important elements of economic theory are Demand and Supply. Economic harmony must surely prevail when supply equals demand. But this point of equilibrium is never fixed – for any individual or any society.

Next let’s concentrate on the word ‘Supply’. Supply of what?

I think Supply could be divided quite neatly into two components: necessities and desires; or needs and wants.

Then we should consider the role of government which, in my view, is obliged to ensure that needs or necessities are provided. Wants and desires should be provided by private enterprise. Once again there’s no clear division between wants and needs. Government is responsible for ensuring people’s needs are met, but can only supply the needs it’s capable of paying for: a rich government could provide a considerable variety of needs, but a poor one couldn’t and would have a far shorter list of needs for which it is responsible.

Now our existing inhuman economic theory claims to believe that government shouldn’t ‘interfere’ with the economy at all, that ‘market forces’ should run things. It’s an egregious lie because a) big corporations (which are the main players in our economy) wholly depend on governments they can manipulate to their ends, and b) ordinary people wholly depend on governments to protect them, which includes protection from corporations, which have a long-established history of psychotic brutality – such as “shooting the wounded.”

So in order to establish the proper roles of government and private enterprise let’s now return to the basic principle of demand and supply. Let’s say that government and private enterprise should take responsibility for two distinct areas of demand and supply; that government should ensure the demand and supply of needs and necessities are met, and that private enterprise is responsible for the demand and supply of wants and desires. This surely is a “credible” economic model?

The inevitable conflict this would provoke, of course, are agreeing definitions of wants and needs, but of these two it’s more important to obtain an understanding of what comprises government’s responsibility – that of supplying needs.

For this we need to begin with an ethical position i.e. what rights could an individual properly expect her government to provide? The UN Declaration of Human Rights is a pretty good place to start. From this we could state that any individual has a natural right to the following:

a. Security
b. Nutritious food
c. Potable water
d. Health care

These basic needs should be met by any government anywhere in the world for any individual, no questions asked: they are all basic human rights. The degree, amount or quality of those basic needs depend on what any particular government can afford, which brings us to the next issue: how could a government pay for the needs it is required to supply?

There are two obvious sources. The first is familiar to everyone: taxation. The second is not so familiar: organised labour.

Every individual should have the rights listed above. But… every individual of working age should also accept that those rights are conditional upon their acceptance of a duty to work. This arrangement is partially applied in any first world country with a welfare system. However, the work available for them to do is controlled by private enterprise and, when it’s available at all, is invariably onerous, or poorly rewarded, or dangerous, or degrading or soul-destroying. This is a natural feature of our existing economic model whose purpose is to instill fear into workers and to keep low-paid workers permanently low paid by maintaining a permanent pool of desperate unemployed people.

So, how should a government organise things differently?

If we return to my key concept of having government take responsibility for supplying the needs of individual people – rather than the corporations which have long been the main recipients of government largesse – we could also suggest that it’s government’s responsibility for providing the labour that supplies those needs – some of which need not be paid for in wages, but in kind. In other words, those who cannot pay for food, water and shelter, say, should be able to turn to the government for immediate help – in return for doing a few hours work for the government. This commitment should never be onerous or degrading – such as workhouses were. Any individual of working age should be guaranteed a week’s secure accommodation, good food etc in return for about twenty hours work – for the government, NEVER for private enterprise. And this is important. Private enterprise exists to make a profit – and there’s nothing wrong with that – but it must never be allowed to profit from government’s duty to provide essential needs to ordinary people. Private enterprise may make all the profits it likes from supplying wants and desires (for which there will always be demand), and good luck to it – but I repeat, it must NEVER be allowed to profit from supplying needs. People should be free to work for private enterprise if they choose to – but should never be totally dependent on it.

Here then is a credible economic theory that is diametrically opposed to our existing inhuman economic theory. It is founded on helping the wounded – as opposed to shooting them; it proposes supplying ENOUGH for needs whilst providing the means to have more – as opposed to ignoring needs altogether whilst supplying the wants of those who can afford them; it provides for all those who want to have meaningful work (helping their fellow citizen) to have it – as opposed to providing no work at all; it provides for people to be happy – as opposed to deliberately keeping them fearful and miserable.

Of course The Times and its many friends in government and the elite establishment that rules us would find nothing at all credible about this model. I suggest they would be wrong.

John is a writer and political activist based in England. He can be contacted through his website. His main contribution comprises three free-to-use works-in-progress: The People’s Constitution, The School of Kindness, and EnMo Economics . Read other articles by John.

7 comments on this article so far ...

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  1. Vic Anderson said on March 28th, 2011 at 10:16am #

    TAX. THE. WEALTH.

  2. MichaelKenny said on March 28th, 2011 at 1:55pm #

    What struck me most about the British demonstrations was how they symbolise the ongoing integration of Europe at ground level. I’m old enough to remember when Britain had no culture of demonstations. Unlike continental, particularly sourthen, Europe, “marches” were isolated historical oddities in Britain (Jarrow, Oswald Mosely, that huge anti-Vietnam demonstration at the US Embassy, Aldermaston etc.). The idea of people marching up and down the street was considered vulgar! Since 1973, the British unions have been working with their counterparts in other EU Member States and they’ve learned a lot. They’ve also taught a lot.

  3. mary said on March 28th, 2011 at 2:12pm #

    More of the usual slanted EU propaganda from Kenny. There is absolutely NO connection with the damnable EU and the protests. He conveniently forgets the 2 million + who marched in 2003 against Bliar’s war, the countless marches for Stop the War Coalition and the Palestine Solidarity Campaign against numerous Israeli atrocities thoughout the last decade and before.

    There was also the massive assembly in the City against the G20 in 2009 (the inquest for the man killed by the Metropolitan Police in that protest has opened today} and on the same day we marched from the American Embassy to Trafalgar Square againt the same G20 nonsense. Last year there were numerous protests against the ConDem education cuts. etc etc.

    I am sorry that comments are going but I will not miss the endless repetitive Kenny missives one iota. Wonder where will he go with them now?

  4. marklar said on March 28th, 2011 at 5:26pm #

    Although taxes may be an “obvious” source of revenue for providing basic needs taxes fall mostly upon labor rather than on capital. What you end up with therefore is a federal government that simply redistributes (some) of the wealth earned by labor back to labor while maintaining an authoritarian control over how your money is spent, and this is under the best of circumstances for such a scheme.

    On the other hand generating revenue via land rents as per the theories of Henry George and geonomics value which is generated by the commons is returned to the commons and the disparity in wealth is decreased. Not only could government be fully funded in this way but every citizen could receive a citizens dividend to make sure that they are able to provide for their own basic needs in the manner most suitable to their own individual circumstances rather than at the dictates of government.

    Geonomics has had great success whenever it has been tried but since it keeps the wealthy from deriving unnearned incomes (such as from land speculation) it remains one of economics deep dark secrets.

  5. siamdave said on March 29th, 2011 at 12:31am #

    Generally good ideas, but like so many people, the most fundamental tenet of economics goes unrecognized – who controls the money that all of this stuff revolves around? Think the first banker with really big ideas, a guy called Mayer Rothschild, and his quote – “Allow me to control a nation’s money, and I care not who makes her laws.”
    Allowing private businesses (banks), controlled by private, greedy, corrupt “businesspeople” (AKA more properly bigtime criminals) whose *only* desire is maximizing their own wealth and power by any means possible and to hell with the population at large – and the results are pretty predictable – look around.
    For a bit of a longer explication – What Happened? http://www.rudemacedon.ca/what-happened.html .

  6. John Andrews said on March 29th, 2011 at 4:31am #

    Thanks for comments everyone. I share with Mary my sorrow that DV is ending its Comments feature. I think it’s a really valuable and important aspect of DV. Hopefully they will restore it sometime in the future.

    Vic Anderson,
    Of course the rich should be taxed – but fairly not excessively. However, fair taxation is only half the solution; the other half is how tax is spent. Currently the very rich are hardly taxed at all and vast quantities of what taxes are collected are spent on making the rich even more rich.

    MichaelKenny,
    You would have to be very old indeed to recall any prolonged period of British history when there were no domestic demonstrations. The Brits have a long and proud history of revolt, from at least the time of the Peasants Revolt, through the civil war, the Diggers, Levellers, Chartists and Gordon Riots – all well before Jarrow.

    Mary,
    I probably disagree with you about Europe. I think the EU is our only hope for presenting some form of resistance to the empire (not that we do, of course). Britain (or any other single European country) is not up to the job on its own.

    Marklar,
    The destruction of Britain’s commons was devastating for the poor, and was actually responsible for creating ‘poor’ people. It’s a principle that I think should be restored somehow – something that allows people to do meaningful work to keep themselves and their families reasonably happy, independent and healthy. Our ruling elites would hate that because they would lose control of people’s labour.

    siamdave,
    I think you’re partly right. It’s true to say that a fundamental tenet of modern economics is all about who controls the supply of money – but trade existed a long time before money was invented, and a very long time before banking was invented. In other words control of money is not some universal absolute – it’s just a point of view. Money is a useful catalyst to trade – but must be controlled by government, which must itself be controlled by the people.

  7. PatrickSMcNally said on March 29th, 2011 at 6:53am #

    > Mayer Rothschild, and his quote

    That seems to be another faked quote which the person never said. There was a long tradition of making up fake quotes that goes at least as far back as Father Charles Coughlin in the 1930s. Fake Lenin quotes were all the rage among the John Birch Society. This alleged Rothschild quote appears to be another one, since no one has been able to identify an actual historical source for it.