ANDREW FISHER, author of a new book The Failed Experiment... and how to build an economy that works, argues it's time to challenge our economic model
- This article appears in the May issue of NIPSA News - the union journal of the Northern Ireland Public Service Alliance
I was born in 1979. That was the year when things changed. People didn't know it at the time, but some long-running trends went into reverse. Unemployment across the whole of the UK had not risen above one million between 1945 and 1978. Since the election of the Thatcher government in 1979 it has never been below 1.5 million.
For years, since the 1920s on some measures, the UK had been becoming a more equal society. That changed, and inequality shot up in the 1980s and 1990s, with the rate of growing inequality only slowed, not reversed, by the New Labour years. Since the coalition was elected more than an extra million people live in poverty – and last year the number of families using food banks trebled.
The beliefs have been crushed that each generation would be better off than the last, and that technological advance would benefit us all. I don't believe this was a delusion of the baby-boomer generation, but there had become a delusion that such social advance was natural and inevitable.
In an economy captured by corporate interests, the immense technological advances in our lifetimes have been used to cut wages and lay off workers, rather than increase pay and reduce hours. At the same time, politicians handed over vast swathes of our economy to be exploited for profit. Growing up, the phrase 'fuel poverty' had not been coined but energy companies have been making a mint from jacking up prices. Since privatisation, water bills and rail fares have also risen way above inflation.
And the tax system has been transformed. High taxes on big earners were cut, while the VAT consumer tax has doubled for us all. Corporation tax was 52% when I was born, next year it will be cut again to 20%. Taxes on petrol, alcohol and cigarettes have hit the poorest hardest. What was a tax system that redressed inequality is now a tax system that reinforces inequality.
I don't blame you if you don't pay much attention to the economy. The hourly updates from BBC News 24 on the performance of the FTSE index, that GDP rose by 0.8% in the last quarter, the annual profit statement of a multinational corporation, and the besuited men who tell us these figures with great reverence – it all seems rather remote, a bit irrelevant to our everyday lives.
It is. But that isn't the economy – in fact they are pretty useless measures of the things that matter to us, our friends, family and our community. I expect that, like me, you are more concerned about whether there are enough jobs for you and yours than the prices of shares on the London stock exchange. Likewise if the pound in your pocket is no longer meeting your monthly costs then George Osborne crowing over 0.8% growth feels rather like your neighbour telling you how sunny it is as the bailiffs evict you.
So our first job in building an economy that works for us has got to be to define what matters in the economy: improving average living standards; reducing poverty and inequality; providing work for all who need it; reducing tax avoidance and evasion; and ensuring our economy is stable and environmentally sustainable.
The reality is that economics is politics (OK, politics with a bit of maths). If you hand over responsibility for the economy to bankers, city traders, and big business, then you get an economy that, unsurprisingly, operates in the interests of bankers, city traders, and big business.
We need to democratise our economy so that we have an economy where people, not share dividends, matter most. How do we do it? As trade unionists we should know the answer better than anyone: we have to organise, campaign and cause trouble until it's easier for those in power to give us what we want than to deny us.
Every democratic gain, every freedom from exploitation that has been won has been won through organised collective action. In the best traditions of our movement we should educate, agitate and organise!
- The Failed Experiment ... and how to build an economy that works is out now. Order online or buy it from your local bookshop.