In July 1944, the soon-to-be victorious powers of the Second World War met in Bretton Woods, New Hampshire. Their mission: to lay down the architecture of the post-War global political and economic systems. They stated that their new idea – neoliberalism – would free the world from fascism forever. In reality, they built the foundations for a new fascism, corporate fascism – and modern austerity is merely a vehicle to deliver it.
Austerity is not a short-term disruption to balance the books. It is the controlled demolition of the welfare state – transforming Britain from a social democracy into a corporate state. We are witnessing the end, and not the beginning, of a process set in train at Bretton Woods.
It began as ‘Structural Adjustment’, eviscerating the economies and societies of countries in the so-called ‘developing world’; now, austerity is feasting on the European and North American continents.
Austerity has been presented as necessary, constructive and temporary by governments across the world, Britain included. In reality, ‘Austerity’ is unnecessary, destructive and intended as a permanent break with the traditions of social democracy.
The pillars of social democracy – Law and Justice, Employment Rights, Civil Liberties and Human Rights, and The Welfare State – are being bulldozed, one after the other, under the guise of ‘Austerity’.
In education, successive governments have dissolved the model of state-owned schools, staffed by public-sector employees. Today, our children largely attend privately owned schools, where the majority of services in the schools are delivered by private-sector staff. The results have seen costs soar and quality plummet.
A similar model has been used in Health. The Health System is being gutted by endless and costly reorganizations, rampant commercialization and outsourcing, and unaffordable private finance initiative (PFI) contracts.
The latest major reorganization of the National Health Service (NHS), under the Health and Social Care Act, will suck another £4 billion ($6.1 billion) out of the health service. This comes on the back of the £780 million ($1.2 million) blown by New Labour on 70 reorganizations in just 4 years between 2005 and 2009. Anyone experienced in change management can tell you that this level of change, which does not allow for new systems and processes to bed in or for their benefits to be measured, is simply madness.
The underpinning of any social democracy is a generous welfare state that ensures citizens finding themselves unable to work through involuntary unemployment, sickness, disability or age receive enough to live in dignity. Our pensioners, our disabled people, our working and jobless poor – all have fallen towards a promised safety net only to find it has been replaced by a bed of nails.
Private companies like G4S have been allowed, by successive governments, to quietly buy up large tracts of our formerly public police, security and justice sector.
It is increasingly likely that if someone commits a crime in Britain they will be arrested by a G4S-provided officer, detained in a G4S cell and transported to court by a G4S van driven by G4S officers. The court will be staffed by G4S security officers, they will be sent to a G4S prison, and released into the G4S probation service to live in a G4S-run halfway house. All run at a profit, all unaccountable to the public, all free from scrutiny through Freedom of Information requests.
The government also cut £220 million ($335 million) from Legal Aid provision, which amounts to slashing the £1 billion ($1.5 billion) budget by almost a quarter. The cut was combined with punitive changes to the rules, making it almost impossible for regular citizens to challenge the privatized justice system. Leading Law and Justice bodies warn it will transform the much-lauded British justice system into something no better than a ‘banana republic’.
A raft of restrictions on the right to protest, assemble and express dissent has also hobbled the public’s ability to respond forcefully to such egregious changes.
Meanwhile, the fortunes of the FTSE100 companies is at record highs, Chief Executives are seeing 23-per-cent pay rises, taxes are being reduced for or simply not collected from the wealthiest individuals and corporations, MP expenses rose 25-per cent last year and the Queen received a £5-million ($7.6-million) pay rise from the public purse.
This is not a case of poor people suffering austerity while the wealthiest live large. It is a case of poor people suffering austerity in order that the wealthy live large. It is time to reject outright the politics and the economics of austerity – and instead work together to build a world that works for everyone.
Kerry-anne Mendoza is the author of Austerity: The Demolition of the Welfare State and the Rise of the Zombie Economy, published by New Internationalist.
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