Dismantling welfarism

British Chancellor George Osborne this week announced massive cuts of £ 25 billion after 2015. This included further welfare cuts of £12bn. Osbourne said that 2014 would be a year of hard truths. He claimed that his economic policies were working, but admitted that the bad news is there's still a long way to go.

He warned of more years of cuts to public services and the public sector by saying £ 25bn would be axed over two years after 2015, in addition to £17bn cuts this year and £ 20bn next year. Osbourne argued that government is going to have to be permanently smaller and so too is the welfare system.

When he says ‘welfare system’ does he also include cutting back the massive handouts given to the arms industry, for example, which amounts to £ 890 million per year according to the Campaign Against the Arms Trade, or the billions given to the private sector via the ‘corporate dole office’, the Department of Trade and Industry (now called the Department for Business Innovation and Skills)? Or does he exclude such types of welfare dependency?

What is interesting about this attack on the public sector by millionaire Osbourne and the rest of the millionaires in the British Cabinet is that the mantra that such cuts are necessary has been repeated endlessly over the past few years to the point that many of the public believe it’s true. But it’s not. It is ideology wrapped up in neo-liberal economic dogma that masquerades as ‘truth’. But it’s a big lie. It’s secular theology that the mainstream media never challenges and simply perpetuates.

Britain’s problems are not the result of spending on public services. In 1945, the debt was bigger than today, but Britain created the welfare state. In the 1960s, during an era of full employment, the debt was also bigger than now. In 2006, before the crisis, Britain spent more on public services than now, but there was no talk of cutting back the public sector.

The roots of the crisis (across Western economies) lie not in public sector spending but in a process that has seen the shifting balance of political and economic power towards elite interests. In the 1980s, much of Britain’s manufacturing industry was outsourced, run down or automated, the union movement was decimated and wages have been depressed or have fallen in real terms over a number of years. To compensate for falling wages and increasing underemployment, credit became the short-term remedy for stimulating demand. While profits during the last decade were higher than in the three previous decades, unemployment and underemployment have become a fact of life for millions. But that is the consequence of the type of globalization we have been witnessing.  

Consequences of crisis

The economic crisis is not due to lavish spending on public services, but the shattering of the post-war Keynesian consensus based on notions of fairness as well as low demand and over investment, neo-liberal (low taxation) economic policies and the massive bail out to prop up the banking sector. It is also a result of speculation, the criminal use of hedge funds and credit derivatives and all manner of secretive dodgy dealings that burst the bubbles they were intended to sustain. But ordinary folk are now being saddled with the consequences.

But mention the word ‘crisis’ and propaganda about the public sector being the root of all evil is sold to the masses by most politicians and the media.

Osbourne would never mention that the top 1,000 of Britain’s wealthiest people had an aggregate wealth of £ 333 bn in 2009. The national debt was half that. In 2009, they increased their wealth by a third. It doesn’t take a genius to see how the debt could be addressed. But Osbourne says: “There is no point in pretending that there is some magic wand that the Chancellor can wave to make the whole country feel richer than it actually is.”  

The priority of Osbourne and his millionaire cronies in the British government is not the lives of ordinary people, but to maintain levels of massive profit and keep wages and ‘costs’ (money spent of the public sector) down. British Communist Party general secretary Rob Griffiths urges taxes on the rich and big business, plus public ownership of energy and public transport. The Unite union general secretary Len McCluskey accuses Osborne of "continuing an unprecedented ideological attack on the state, with Britain's young people in the front line."

General union GMB general secretary Paul Kenny is also reported as demanding that big corporations must be made to pay their fair share of tax, bringing in billions of extra income. What is happening is a continuation of what Thatcher did in the 1980s, with attacks on ordinary working people in order to allow an ever increasing concentration of wealth at the top. To try to help achieve this, we are witnessing the dismantling of the welfare state.

Mick McGahey, vice president of the National Union of Mineworkers 1972-87 once stated that back in the eighties he understood the Conservative government's determination to use the state machine against his union, but in order to dismember the welfare state, they had to break the trade union movement and they needed to break the miners first.

McGahey was correct. The current Conservative-LibDem coalition is going further than Thatcher ever did. Osbourne and his cronies in government are mouthpieces for their powerful backers in the City of London. As Labour MP Dennis Skinner rightly observes: “Osborne is busy lining the pockets of the people at the top of the pile.”