Austerity or how to screw both the economy and the poor

 

 

While discussing with (economically) right-wing people, some of them confess to me that free-market capitalism without any State intervention can be quite detrimental to the life standards of the lower classes.

I commented on a tragic consequence of this which happened in Britain not long ago.

But they then go on saying that the alternative (the State stepping in to protect the welfare of people) is practically impossible because it allegedly leads to a collapse or a significant weakening of the economy. And this in turn would naturally also have dire repercussions on these poor people.

They then argue that laissez-faire capitalism is the best system for allowing mankind to flourish because any stronger regulations inevitably undermine the financial health of the country.

In spite of their natural selfishness and rapacity, business people are led by an invisible hand and thus without intending it, advance the interest of the society
Adam Smith: self-interest takes care of everything.

So according to this doctrine, an “invisible hand” emerging out of the actions of numerous selfish agents ends up producing the most optimal world given human nature.

Self-interest + competition = invisible hand
The Invisible hand at work.

That sounds really great (albeit saddening) in theory.

But how does that work out in practice?

British Chancellor of Exchequer George Osborne provides us with a nice counter-example.

We're going to continue to squeeze public spending well into the future, with cut after cut, even if we do meet our deficit.  Austerity for ever!
Austerity according to Osborne (or his detractors).

Comparisons with his more interventionist predecessors don’t look too flattering.

George Osborne has created more debt in four years than every single government in history combined...So why do so many people still rate the Tories as the most economically trustworthy party?
Osborne overcoming the debt?

I personally strongly doubt that Wild Capitalism (the economy takes care of everything) prevails because it is the best system for us all.

I think that it dominates our world because it creates the best conditions for a SMALL wealthy minority which holds humanity in its grip through oligarchical structures and an efficient manipulation of public opinion.

In a previous post, I have laid out the bases of Christian socialism. Regardless of your own worldview, if you sincerely care for justice and alleviating human suffering, I think you should start thinking more critically on the moral virtues of a world driven by the callous forces of stock market.

The fact that former communist dictatorships have atrociously failed  gives us absolutely no reason to think that people would not be much better off with a moderate Capitalism where the State intervenes to protect the well-being of defenseless people whenever they are threatened by the impersonal forces of trade.

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On upholding inhumanity and some ethical implications

A friend of mine called my attention to an article which made me shudder.

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David Clapson

‘The coroner said that when David Clapson died he had no food in his stomach.’ Photograph: Linda Nylind for the Guardian

The coroner said that when David Clapson died he had no food in his stomach. Clapson’s benefits had been stopped as a result of missing one meeting at the jobcentre. He was diabetic, and without the £71.70 a week from his jobseeker’s allowance he couldn’t afford to eat or put credit on his electricity card to keep the fridge where he kept his insulin working. Three weeks later Clapson died from diabetic ketoacidosis, caused by a severe lack of insulin. A pile of CVs was found next to his body.

I’ll resist calling Clapson’s death a tragedy. Tragedy suggests a one-off incident, a rarity that couldn’t be prevented. What was done to Clapson – and it was done, not something that simply happened – is a particularly horrific example of what has, almost silently, turned into a widespread crisis. More than a million people in this country have had their benefits stopped over the past year. Sanctions against chronically ill and disabled people have risen by 580% in a year. This is a system out of control.

A petition for an inquiry into benefit sanctions, started by Clapson’s sister, Gill Thompson, is now on the verge of its 200,000th signature. This Thursday there will be a day of action against benefit sanctions across the country. If inspiration is required, you need look no further than the latest Department for Work and Pensions pilot scheme launched last week. The unemployed are set to have their benefits stopped if they don’t sign in at a jobcentre in the morning and spend the whole day there, every day. Breach the rules once and you’ll lose four weeks’ worth of benefits; twice and you won’t be able to feed your kids for three months.

Yes, some reasons for sanctions are almost laughable: going to a job interview rather than a meeting at the jobcentre that it clashes with; not completing an assessment because you had a heart attack during it. But let’s not convince ourselves the rest are credible – punishment sensibly bestowed on the scrounging unemployed. A government that deems it a success to stop the money someone needs to eat is a government of the grotesque.

Sanctions are a product of an attitude towards benefit claimants that says they are not people struggling to find work but suspects: lazy, stupid and in need of a DWP-kick to get them out of bed. The lazy are going hungry. Eight in 10 Trussell Trust food banks report that benefit sanctions are causing more people to need emergency food parcels. This, I suppose, is what Conservatives call motivation.

It doesn’t matter that sanctions are disproportionately hitting the most vulnerable. Nor that the DWP’s own commissioned report says that they are being imposed in such a way that vulnerable people often don’t understand what is happening to them, and are left uninformed of the hardship payments to which they are entitled. Six out of 10 employment and support allowance (ESA) claimants who have had their benefits stopped have a mental-health condition or learning difficulty. Are these the chosen victims of austerity now? By definition of being in receipt of ESA, many will struggle to do things such as be punctual for meetings or complete work placements with strangers in environments they don’t know. It is setting people up to fail and then punishing them for it.

Sanctions are not an anomaly. Rather, they are emblematic of the wider Tory record on welfare: one of incompetence and, at best, indifference. The work programme fails to find work for 95% of disabled people, but enforced, unpaid labour or loss of benefits is the DWP’s answer. More than a quarter of a million people are still waiting for PIP, the benefit needed to help cover the extra costs of disability. Seven hundred thousand people have been left waiting for an ESA assessment. Locking people out of their rightful benefits is becoming a theme for this government. The consequences are human; the response from the government is inhumane.

Clapson had only left his last job to care for his elderly mum, and before that had worked for 29 years. On the day he died he had £3.44 to his name and six tea bags, a tin of soup and an out-of-date can of sardines in his kitchen cupboards. Benefit sanctions are aimed at ending the “something for nothing” culture, as the DWP’s press release brags. I vote for ending the demonisation of the unemployed, disabled and poor.

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What happened to him is truly gruesome and absolutely shameful.

This is why I reject free market capitalism for (Christian) socialism.
In the first system, MONEY is the measure of all things which naturally leads to a very small minority of incredibly rich people and an exponentially higher number of poor ones.

In socialism, free competition is encouraged AS LONG AS the welfare of human beings is not threatened, in which case the State intervenes.
Comparisons between the well being of poor people in hyper-capitalistic countries such as the United States and socialistic countries such as Sweden let us recognize a stark contrast which looks all the more tragic when glancing at children.

https://lotharlorraine.files.wordpress.com/2014/09/ceefe-baby-beggar.jpg

I think that the UK is drifting more and more towards wild capitalism and actually it has always hindered us from building up a “social Europe”. So we’d probably be much more successful if they had left us, presumably deprived of Scotland.

But their departure from the EU would likely have dire consequences on many sectors of British economy and employment as Obama himself pointed out.

Some implications for Christians

All Christians agree that a starving child is a horrendous evil. Actually this is agreed upon by the large majority of human beings regardless of their worldview.

So should we not work together towards constructing a society where this kind of evil is MINIMIZED?

While reading these lines, many Conservative Christians would doubtlessly answer me that while we are taught by our Master to care for the poor, the solution doesn’t have to be political.

But many of them couldn’t tell me that with a straight face, that is without either cognitive dissonances or a hypocritical tongue. When abortion and homosexuality are concerned, they certainly believe that a political solution is not only in order but also the most Christian thing anyone could do.

Let us suppose that we know that option A (status quo) will uphold the suffering of poor children whereas option B will considerably reduce it.

What kind of human beings are we if we refuse to engage B out of convenience or love for abstract political ideals?

 

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On the definition of Socialism

Deutsche Version: Von der Definition des Sozialismus

 

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In the German-speaking and English-speaking worlds, Socialism has largely a bad press. It is all too often associated with the totalitarian countries of the former Soviet Union and the omnipresence of the state in every area of life.

But in France, Socialism has historically mainly meant the belief that the state ought to intervene as soon as the well-being of workers and employees is threatened by the unlimited free-market competition going on. It has nothing against free-market competition in and of itself, so long as the quality of life of people is not menaced.

There is of course also a striving towards social justice, in that taxes should take into account the personal wealth.

A similar feeling seems to have been present in the Early Church among the first followers of Jesus of Nazareth after his resurrection:

All that believed were together, and had all things in common; And sold their possessions and goods, and parted them to all men, as every man had need.
(Acts 2:44-45)

There was not a needy person among them, for as many as owned lands or houses sold them and brought the proceeds of what was sold. They laid it at the apostles’ feet, and it was distributed to each as any had need. There was a Levite, a native of , Joseph, to whom the apostles gave the name Barnabas (which means “son of encouragement”). He sold a field that belonged to him, then brought the money, and laid it at the apostles’ feet.
(Acts 4:34-37)

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