Get up, stand up

Thirty years ago, a violent clash with racists marked the beginning of a political and artistic aw

In April 1979, against a background of high unemployment and anti-immigrant sentiment, the National Front staged a rally in Southall, a suburb of west London where many Asians had settled. These immigrants, mainly Punjabis, worked at Heathrow Airport, keeping London connected with the world. They were making efforts to assimilate, listening to BBC radio programmes such as Apna hi Ghar Samajhiye (“Think of it as your home”) and watching Nayi Zindagi, Naya Jeevan (“New way, new life”).

Under the banner of the Anti-Nazi League, Londoners of all ethnicities turned out to challenge the NF and its racist message. The demonstration – or uprising, as many Asians prefer to call it – turned violent when police attacked protesters and a schoolteacher named Blair Peach was killed. That event spurred British Asians to find a political and artistic voice in the wider culture, creating a legacy that’s now being celebrated in the Southall Story, a series of concerts, exhibitions and talks taking place around London.

The artist and film-maker Shakila Taranum Maan, who grew up in Northolt, Middlesex, near Southall, recalls the late 1970s vividly. She remembers the terrifying experience of seeing her mother encircled by hate-filled white teenagers. “Our days were spent dodging Paki-bashers. The [Southall] riot came as no surprise, as people were very angry, and keen to shed their passive skins. I wanted to be in Southall the next day, but my dad didn’t want me to go. I had a huge argument with him, and I welcomed the uprising, and saw the strength in a group of people which had for too long been reduced to mere shadows.”

The Southall Monitoring Group emerged in the aftermath of 1979, initially to monitor racial abuse of Asians, but soon expanding its remit. (The group was at the forefront in supporting the families of the Chinese cockle-pickers swept away by the tide at Morecambe Bay in 2004.) Another organisation to emerge was Southall Black Sisters, campaigning against gender- and race-based discrimination. Its campaigns against religious fundamentalism in the Asian community, where patriarchs have a disproportionate role in determining how their sisters, daughters and wives should dress or behave, and its unstinting care for the victims of domestic violence, have helped build British opinion against forced marriages and honour killings. These women brought family secrets into the open and refused to let “multicultural” politics become an excuse to tolerate discrimination and violence.

Pragna Patel, a founding member of Southall Black Sisters, describes the Southall Story as a timely reminder of the need for a secular approach to fighting racism and oppression. “The state assumes that racism is no longer an issue, and that the real problem is the lack of cohesion brought about [by] the failure of migrant communities to integrate. Within our communities, anti-racist struggles have been reinvented as struggles for recognition of religious identity.”

In the aftermath of the 11 September 2001 attacks and the 7 July 2005 bombings, there has been a backlash against multiculturalism. Yet paradoxically, as Pragna Patel notes, the state, in the name of cohesion, has actually encouraged a “faith-based” approach to social relations. “We are fragmenting as a society into separate religious enclaves in which powerful and religious bodies hold sway. This is deeply anti-democratic, misogynistic and homophobic.”

Indeed, the thinking has become so warped that last year Southall Black Sisters almost ceased to exist when the local council, Ealing, decided to withdraw its funding. Ignoring language barriers and other cultural inhibitions that might prevent women of minority origin from seeking assistance from groups other than their own, Ealing claimed the group was discriminatory, in that it offered its services to black and Asian women only. A high court order kept SBS alive.

The political awakening of Southall was accompanied by an artistic outpouring, one that ultimately contributed to an environment in which everything from the films of the Bend It Like Beckham director, Gurinder Chadha, to the novels of Hanif Kureishi, to the hit sketch show Goodness Gracious Me could flourish. It mirrored the flowering of black culture in 1950s South Africa, recalled by Mike Nicol in his lively 1991 account A Good-Looking Corpse: the World of Drum – Jazz and Gangsters, Hope and Defiance in the Townships of South Africa. The Southall renaissance was different, yet equally sharp, according to the musician Kuljit Bhamra. “After those uprisings, there was a spirit of a bigger family; we felt we had arrived,” he says. “Old divisions reduced, some even dispersed. We felt we had conquered something.”

While groups such as the Progressive Writers Association explored expression in the Punjabi language, Bhamra himself experimented with music, expressing the community’s confidence through the folk beat of bhangra, blending this with rock, reggae and other forms to create a uniquely British hybrid. Other bands – Heera, Premi and Alaap – emerged; Indian Record House and ABC Music established their own labels, distributing home-grown rhythms that prefigured the work of 1990s pop acts such as Nitin Sawhney and Apache Indian.

In the art world, Shakila Taranum Maan’s performance piece The Bride attacked the way in which Asian women were often left at the mercy of husbands and in-laws. “The aim was to provoke,” she says. The piece brings a bloodied and bruised bride on stage, and many in the audience were appalled. Maan’s other projects have included stories about sex workers and interracial relationships. Over the years, she has perceived a softening of attitudes in the community, but, like Pragna Patel, Maan believes that splintering into religious groups has strengthened conservative elements. Indeed, since the violent protest by Sikhs in Birmingham that disrupted the opening night of Gurpreet Kaur Bhatti’s play Behzti (“Shame”) in 2004, Maan admits she has shied away from overtly political work.

Yet politics still matters. The Southall Story celebrates a community’s struggle and search for identity, asserting its complexities and challenging the idea that minorities must remain a city-within-the-city: what Salman Rushdie described in The Satanic Verses as “the city visible but unseen”. As Maan says, “Our aim was to transcend race – but on our own terms.”

“The Southall Story” is being launched on 24 April at the Dominion Centre, Southall, Middlesex. For more details about the season, log on to: www.thesouthallstory.com

This article first appeared in the 27 April 2009 issue of the New Statesman, Rise of the Geek

MILES COLE
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The new Brexit economics

George Osborne’s austerity plan – now abandoned by the Tories – was the most costly macroeconomic policy mistake since the 1930s.

George Osborne is no longer chancellor, sacked by the post-Brexit Prime Minister, Theresa May. Philip Hammond, the new Chancellor, has yet to announce detailed plans but he has indicated that the real economy rather than the deficit is his priority. The senior Conservatives Sajid Javid and Stephen Crabb have advocated substantial increases in public-sector infrastructure investment, noting how cheap it is for the government to borrow. The argument that Osborne and the Conservatives had been making since 2010 – that the priority for macroeconomic policy had to be to reduce the government’s budget deficit – seems to have been brushed aside.

Is there a good economic reason why Brexit in particular should require abandoning austerity economics? I would argue that the Tory obsession with the budget deficit has had very little to do with economics for the past four or five years. Instead, it has been a political ruse with two intentions: to help win elections and to reduce the size of the state. That Britain’s macroeconomic policy was dictated by politics rather than economics was a precursor for the Brexit vote. However, austerity had already begun to reach its political sell-by date, and Brexit marks its end.

To understand why austerity today is opposed by nearly all economists, and to grasp the partial nature of any Conservative rethink, it is important to know why it began and how it evolved. By 2010 the biggest recession since the Second World War had led to rapid increases in government budget deficits around the world. It is inevitable that deficits (the difference between government spending and tax receipts) increase in a recession, because taxes fall as incomes fall, but government spending rises further because benefit payments increase with rising unemployment. We experienced record deficits in 2010 simply because the recession was unusually severe.

In 2009 governments had raised spending and cut taxes in an effort to moderate the recession. This was done because the macroeconomic stabilisation tool of choice, nominal short-term interest rates, had become impotent once these rates hit their lower bound near zero. Keynes described the same situation in the 1930s as a liquidity trap, but most economists today use a more straightforward description: the problem of the zero lower bound (ZLB). Cutting rates below this lower bound might not stimulate demand because people could avoid them by holding cash. The textbook response to the problem is to use fiscal policy to stimulate the economy, which involves raising spending and cutting taxes. Most studies suggest that the recession would have been even worse without this expansionary fiscal policy in 2009.

Fiscal stimulus changed to fiscal contraction, more popularly known as austerity, in most of the major economies in 2010, but the reasons for this change varied from country to country. George Osborne used three different arguments to justify substantial spending cuts and tax increases before and after the coalition government was formed. The first was that unconventional monetary policy (quantitative easing, or QE) could replace the role of lower interest rates in stimulating the economy. As QE was completely untested, this was wishful thinking: the Bank of England was bound to act cautiously, because it had no idea what impact QE would have. The second was that a fiscal policy contraction would in fact expand the economy because it would inspire consumer and business confidence. This idea, disputed by most economists at the time, has now lost all credibility.

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The third reason for trying to cut the deficit was that the financial markets would not buy government debt without it. At first, this rationale seemed to be confirmed by events as the eurozone crisis developed, and so it became the main justification for the policy. However, by 2012 it was becoming clear to many economists that the debt crisis in Ireland, Portugal and Spain was peculiar to the eurozone, and in particular to the failure of the European Central Bank (ECB) to act as a lender of last resort, buying government debt when the market failed to.

In September 2012 the ECB changed its policy and the eurozone crisis beyond Greece came to an end. This was the main reason why renewed problems in Greece last year did not lead to any contagion in the markets. Yet it is not something that the ECB will admit, because it places responsibility for the crisis at its door.

By 2012 two other things had also become clear to economists. First, governments outside the eurozone were having no problems selling their debt, as interest rates on this reached record lows. There was an obvious reason why this should be so: with central banks buying large quantities of government debt as a result of QE, there was absolutely no chance that governments would default. Nor have I ever seen any evidence that there was any likelihood of a UK debt funding crisis in 2010, beyond the irrelevant warnings of those “close to the markets”. Second, the austerity policy had done considerable harm. In macroeconomic terms the recovery from recession had been derailed. With the help of analysis from the Office for Budget Responsibility, I calculated that the GDP lost as a result of austerity implied an average cost for each UK household of at least £4,000.

Following these events, the number of academic economists who supported austerity became very small (they had always been a minority). How much of the UK deficit was cyclical or structural was irrelevant: at the ZLB, fiscal policy should stimulate, and the deficit should be dealt with once the recession was over.

Yet you would not know this from the public debate. Osborne continued to insist that deficit reduction be a priority, and his belief seemed to have become hard-wired into nearly all media discussion. So perverse was this for standard macroeconomics that I christened it “mediamacro”: the reduction of macroeconomics to the logic of household finance. Even parts of the Labour Party seemed to be succumbing to a mediamacro view, until the fiscal credibility rule introduced in March by the shadow chancellor, John McDonnell. (This included an explicit knockout from the deficit target if interest rates hit the ZLB, allowing fiscal policy to focus on recovering from recession.)

It is obvious why a focus on the deficit was politically attractive for Osborne. After 2010 the coalition government adopted the mantra that the deficit had been caused by the previous Labour government’s profligacy, even though it was almost entirely a consequence of the recession. The Tories were “clearing up the mess Labour left”, and so austerity could be blamed on their predecessors. Labour foolishly decided not to challenge this myth, and so it became what could be termed a “politicised truth”. It allowed the media to say that Osborne was more competent at running the economy than his predecessors. Much of the public, hearing only mediamacro, agreed.

An obsession with cutting the deficit was attractive to the Tories, as it helped them to appear competent. It also enabled them to achieve their ideological goal of shrinking the state. I have described this elsewhere as “deficit deceit”: using manufactured fear about the deficit to achieve otherwise unpopular reductions in public spending.

The UK recovery from the 2008/2009 recession was the weakest on record. Although employment showed strong growth from 2013, this may have owed much to an unprecedented decline in real wages and stagnant productivity growth. By the main metrics by which economists judge the success of an economy, the period of the coalition government looked very poor. Many economists tried to point this out during the 2015 election but they were largely ignored. When a survey of macroeconomists showed that most thought austerity had been harmful, the broadcast media found letters from business leaders supporting the Conservative position more newsworthy.

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In my view, mediamacro and its focus on the deficit played an important role in winning the Conservatives the 2015 general election. I believe Osborne thought so, too, and so he ­decided to try to repeat his success. Although the level of government debt was close to being stabilised, he decided to embark on a further period of fiscal consolidation so that he could achieve a budget surplus.

Osborne’s austerity plans after 2015 were different from what happened in 2010 for a number of reasons. First, while 2010 austerity also occurred in the US and the eurozone, 2015 austerity was largely a UK affair. Second, by 2015 the Bank of England had decided that interest rates could go lower than their current level if need be. We are therefore no longer at the ZLB and, in theory, the impact of fiscal consolidation on demand could be offset by reducing interest rates, as long as no adverse shocks hit the economy. The argument against fiscal consolidation was rather that it increased the vulnerability of the economy if a negative shock occurred. As we have seen, Brexit is just this kind of shock.

In this respect, abandoning Osborne’s surplus target makes sense. However, there were many other strong arguments against going for surplus. The strongest of these was the case for additional public-sector investment at a time when interest rates were extremely low. Osborne loved appearing in the media wearing a hard hat and talked the talk on investment, but in reality his fiscal plans involved a steadily decreasing share of public investment in GDP. Labour’s fiscal rules, like those of the coalition government, have targeted the deficit excluding public investment, precisely so that investment could increase when the circumstances were right. In 2015 the circumstances were as right as they can be. The Organisation for Economic Co-operation and Development, the International Monetary Fund and pretty well every economist agreed.

Brexit only reinforces this argument. Yet Brexit will also almost certainly worsen the deficit. This is why the recent acceptance by the Tories that public-sector investment should rise is significant. They may have ­decided that they have got all they could hope to achieve from deficit deceit, and that now is the time to focus on the real needs of the economy, given the short- and medium-term drag on growth caused by Brexit.

It is also worth noting that although the Conservatives have, in effect, disowned Osborne’s 2015 austerity, they still insist their 2010 policy was correct. This partial change of heart is little comfort to those of us who have been arguing against austerity for the past six years. In 2015 the Conservatives persuaded voters that electing Ed Miliband as prime minister and Ed Balls as chancellor was taking a big risk with the economy. What it would have meant, in fact, is that we would already be getting the public investment the Conservatives are now calling for, and we would have avoided both the uncertainty before the EU referendum and Brexit itself.

Many economists before the 2015 election said the same thing, but they made no impact on mediamacro. The number of economists who supported Osborne’s new fiscal charter was vanishingly small but it seemed to matter not one bit. This suggests that if a leading political party wants to ignore mainstream economics and academic economists in favour of simplistic ideas, it can get away with doing so.

As I wrote in March, the failure of debate made me very concerned about the outcome of the EU referendum. Economists were as united as they ever are that Brexit would involve significant economic costs, and the scale of these costs is probably greater than the average loss due to austerity, simply because they are repeated year after year. Yet our warnings were easily deflected with the slogan “Project Fear”, borrowed from the SNP’s nickname for the No campaign in the 2014 Scottish referendum.

It remains unclear whether economists’ warnings were ignored because they were never heard fully or because they were not trusted, but in either case economics as a profession needs to think seriously about what it can do to make itself more relevant. We do not want economics in the UK to change from being called the dismal science to becoming the “I told you so” science.

Some things will not change following the Brexit vote. Mediamacro will go on obsessing about the deficit, and the Conservatives will go on wanting to cut many parts of government expenditure so that they can cut taxes. But the signs are that deficit deceit, creating an imperative that budget deficits must be cut as a pretext for reducing the size of the state, has come to an end in the UK. It will go down in history as probably the most costly macroeconomic policy mistake since the 1930s, causing a great deal of misery to many people’s lives.

Simon Wren-Lewis is a professor of economic policy at the Blavatnik School of Government, University of Oxford. He blogs at: mainlymacro.blogspot.com

 Simon Wren-Lewis is is Professor of Economic Policy in the Blavatnik School of Government at Oxford University, and a fellow of Merton College. He blogs at mainlymacro.

This article first appeared in the 21 July 2016 issue of the New Statesman, The English Revolt