Austerity and Sacrifice

With Britain now officially in the longest period of economic recession and stagnation in its history, this 1930s Labour poster is more relevant than ever.

Commenting on the 2010 Budget, Guardian columnist Seumas Milne referred to “[an] iconic Labour movement cartoon from the early 30s, when another coalition came to power in the wake of a financial crisis and slump”.

“As the depression-era cartoonist highlighted, the idea that there can be any equivalence in belt-tightening for rich and poor is a nonsense. Even if the different income groups were paying proportionate shares, or the wealthy were actually shouldering a heavier burden, as Osborne claimed, the impact would obviously be far greater for those struggling on benefits than for beneficiaries of the boardroom bonanza.”

Fast forward to 2013 and it is clear that austerity regimes have not worked in Britain, Portugal, Greece, Spain, or anywhere else in the world. Cuts in public spending and wages only result in reduced demand, further plunging the economy into recession. Martin Wolf of the Financial Times (25th February 2013) puts it bluntly:

The chancellor is locked in. He could tighten harder; but then he risks another recession. He can tighten more gently; but then he is open to the charge of abandoning his strategy. He will presumably stick doggedly to his plans and hope for the best. The best is, however, unlikely to be what he gets.

The figure are damning:

  • The British economy is still 3.4% smaller than in 2008
  • Predictions for growth have been reduced from earlier estimates of 1.2% for 2013 to only 0.6%
  • UK debt is predicted to increase from 75.9% of GDP in 2012-13 to 85.6% in 2016-17, compared to previous estimates of 79.9% by 2016-17 in last year’s budget
  • Budget deficit – the difference between government spending and government income from taxes, which must be balanced through government borrowing – has hardly changed from last year, hovering at around £120bn

Whilst ordinary people bear the brunt of the recession, with a fall in living standards unmatched since the 1920s, corporations had their taxes cut from 21% to 20%, with the Chancellor boasting that the UK now has “the lowest business tax of any major economy in the world”. A key figure conveniently unmentioned is the estimated £750bn that companies in the UK are sitting on, unwilling to invest due to lack of demand. With schools charging pupils for extracurricular activites, above-inflation rent rise for council tenants, and even frontline ambulance services compromised being just a few amongst the long list of sacrifices made in the name of austerity; it is clear that, once again, the economic system we live in and the government it has produced does not serve the interests of the majority of the population.

As an even earlier cartoon from an 1895 edition of Labour Leader shows, there’s nothing new in the current government’s attack on the poor. The inherent laws of capitalism inevitably lead to economic crises. (Learn more in the “Contradictions and Overproduction” section of this article.)

ILP washerwomen

These old cartoons are useful reminders that, in some ways at least, the working class as a whole still faces the same basic challenges it has since the birth of capitalism. Living standards are attacked as we are told to “tighten our belts”; whilst those responsible are getting along better than ever, despite repeated reassurance that “we are all in this together”.

Instead of us paying for the crisis created by capitalism, we should be advocating the nationalisation of the “commanding heights” of the economy – the big monopolies, banks and insurance companies – so that the economy can be planned and run in the interests of people and not profit. Our economy should be run not by unelected bureaucrats, but under democratic workers’ control and management. Only then can we rationally use the vast resources built up by working people for everyone’s benefit. Only then can we break this pattern of history and guarantee a real, prosperous future for all.

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One comment

  1. Fantastic Article! Well said.

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