There's a new horizon in history: "panic time"

It's no longer enough to think of history moving in series of events. Thanks to the Great Uncertainty, we now have to look at the moments when time breaks down.

In the final post in this series about what we have called "The Great Uncertainty" we seek to introduce to the discussion some questions about time. This isn’t as easy as it sounds. Historians routinely think about the unfolding of time when recounting the events of the past. But social scientists are not schooled in the same way and often they don’t reflect enough about time and, above all, the different tempos at which processes unfold.

The historian who can most help us here is Fernand Braudel, a Frenchman who became the leading figure in the so-called Annales School which devoted itself to the exposition of long-term social history. In 1949 he published a major historical account of the "world" created by the Mediterranean Sea. In his book he set out a very sophisticated way of thinking about "social time", specifically linking the practices of historical subjects to different dynamics calibrated according to three different concepts of time – or time horizons.

The first of these horizons is that of histoire événementielle, or the short time-span of single events, or chains of events, with all of their distinctive individuality and capriciousness. The second is the conjoncture, or conjuncture. This seeks to capture the location of the short term in a wider temporal horizon and identify trends occurring over a period of maybe 10-15 years, perhaps somewhat longer. The third notion, within which the conjuncture should in turn be considered, is the longue durée. This consists of regularities and patterns of action that conceivably span centuries and, by virtue of their duration, are best comprehended as mentalités, or mental frameworks, that guide how human beings handle the natural and social circumstances in which they find themselves.

So why are we inviting you to think about these various Braudelian notions of time? Do they ring any bells as you recall the three processes of major structural change that we claim have created the present uncertain era? We think they should, because we suggest that it makes sense to regard each of the three constituent processes (of financial crisis, shifting economic power and environmental threat) as unfolding in turn in accordance with each of these three different time horizons (or temporalities). Let’s explain.

The financial crisis is a chain of events which has a beginning and, for all that this is hard to discern at the moment, will have an end. This crisis will certainly have done a lot of economic, social and political damage by the time it ends, but it will eventually be brought to a conclusion, even if, as we said in our first post, its short-term history lasts for an awkward period of years.

By comparison, in Braudel’s terms shifting economic power represents a conjuncture. It’s a process that doesn’t easily lend itself to start-dates and finishing-dates, although we can now see that we are well advanced in the remaking of a world of Western economic dominance that peaked in the couple of decades following the ending of the Second World War in 1945. As again we argued earlier, it is still far from clear how these shifts will play out in precise fashion or even when the shift will settle into a new and recognisable shape. But the trend is manifest.

As for environmental threat and the growing challenge to the well-being of the planet represented by accelerating climate change, this is classically the stuff of the longue durée, the unfolding of change over a period of centuries (even if, once certain tipping points are reached, we move from the longue durée into the conjoncturel). From when do we conventionally date the beginning of industrialisation? When did oil first become the basis of the global economy? Whatever the answers, it’s surely becoming ever more likely that we will come to judge that an entire industrial-cum-economic civilisation of long standing has cumulatively undermined itself by its very success and global spread. It will need to be re-thought (or, in Braudel’s conception, its dominant mentalité will need to be reframed) via some of the painful, demanding means that we tried to begin to think about in the previous post in the series.

From a contemporary perspective, we should also add in to this complexity a fourth, and new, conception of time, that of "emergency time", or just as aptly "panic time", when something really dramatic and unexpected takes place and no play book exists for leaders to pick up in order to shape a response. This is the kind of time that was sparked by the collapse of Lehman Brothers on 15 September 2008 when for a few days nobody knew if the global financial system would survive or whether, as former US President George W. Bush crudely but accurately put it, ‘this sucker could go down’. It’s easy to imagine that emergencies like this will occur again.

We’ve approached this discussion analytically, seeking to separate out different processes of change against different time-scales. But it’s obvious too that, in the practical world of governance and politics, all of these four types of uncertainty need to be addressed – and addressed in fact simultaneously. Indeed, in the worst-case scenario they may all be coming to a head at the same time, and on our watch. Unfortunately, in such circumstances we don’t have the luxury of "waiting and seeing" on the really hard issues that have surfaced in the realms of the conjuncture or the longue durée and, in the meantime, seeking just to manage our way through the easy stuff, that is, the emergencies and the histoire événementielle they add up to!

There is one final aspect to the question of time which is worth mentioning. In thinking about all of this, we should surely show a bit more sympathy to elected politicians, wherever they exist, who are seriously trying to handle these multiple uncertainties in democratic fashion. Several years ago, the eminent American political theorist, Sheldon Wolin, noted that political time was out of synch with the temporalities, rhythms and pace governing economies, societies and cultures. He meant that in democracies political time requires an element of leisure; in particular, it needs to allow for deliberation and the negotiation of compromises between competing interests and views.

So here’s the lesson: if we are collectively to chart some kind of workable way through The Great Uncertainty, we need to be sure to find the time to talk all of this through as concerned members of global society.

A money dealer covers his face with his hands at a Tokyo foreign exchange market on October 25, 2010. Photograph: Getty Images

Professors Colin Hay and Tony Payne are Directors of the Sheffield Political Economy Research Institute at the University of Sheffield.

Show Hide image

Q&A: What are tax credits and how do they work?

All you need to know about the government's plan to cut tax credits.

What are tax credits?

Tax credits are payments made regularly by the state into bank accounts to support families with children, or those who are in low-paid jobs. There are two types of tax credit: the working tax credit and the child tax credit.

What are they for?

To redistribute income to those less able to get by, or to provide for their children, on what they earn.

Are they similar to tax relief?

No. They don’t have much to do with tax. They’re more of a welfare thing. You don’t need to be a taxpayer to receive tax credits. It’s just that, unlike other benefits, they are based on the tax year and paid via the tax office.

Who is eligible?

Anyone aged over 16 (for child tax credits) and over 25 (for working tax credits) who normally lives in the UK can apply for them, depending on their income, the hours they work, whether they have a disability, and whether they pay for childcare.

What are their circumstances?

The more you earn, the less you are likely to receive. Single claimants must work at least 16 hours a week. Let’s take a full-time worker: if you work at least 30 hours a week, you are generally eligible for working tax credits if you earn less than £13,253 a year (if you’re single and don’t have children), or less than £18,023 (jointly as part of a couple without children but working at least 30 hours a week).

And for families?

A family with children and an income below about £32,200 can claim child tax credit. It used to be that the more children you have, the more you are eligible to receive – but George Osborne in his most recent Budget has limited child tax credit to two children.

How much money do you receive?

Again, this depends on your circumstances. The basic payment for a single claimant, or a joint claim by a couple, of working tax credits is £1,940 for the tax year. You can then receive extra, depending on your circumstances. For example, single parents can receive up to an additional £2,010, on top of the basic £1,940 payment; people who work more than 30 hours a week can receive up to an extra £810; and disabled workers up to £2,970. The average award of tax credit is £6,340 per year. Child tax credit claimants get £545 per year as a flat payment, plus £2,780 per child.

How many people claim tax credits?

About 4.5m people – the vast majority of these people (around 4m) have children.

How much does it cost the taxpayer?

The estimation is that they will cost the government £30bn in April 2015/16. That’s around 14 per cent of the £220bn welfare budget, which the Tories have pledged to cut by £12bn.

Who introduced this system?

New Labour. Gordon Brown, when he was Chancellor, developed tax credits in his first term. The system as we know it was established in April 2003.

Why did they do this?

To lift working people out of poverty, and to remove the disincentives to work believed to have been inculcated by welfare. The tax credit system made it more attractive for people depending on benefits to work, and gave those in low-paid jobs a helping hand.

Did it work?

Yes. Tax credits’ biggest achievement was lifting a record number of children out of poverty since the war. The proportion of children living below the poverty line fell from 35 per cent in 1998/9 to 19 per cent in 2012/13.

So what’s the problem?

Well, it’s a bit of a weird system in that it lets companies pay wages that are too low to live on without the state supplementing them. Many also criticise tax credits for allowing the minimum wage – also brought in by New Labour – to stagnate (ie. not keep up with the rate of inflation). David Cameron has called the system of taxing low earners and then handing them some money back via tax credits a “ridiculous merry-go-round”.

Then it’s a good thing to scrap them?

It would be fine if all those low earners and families struggling to get by would be given support in place of tax credits – a living wage, for example.

And that’s why the Tories are introducing a living wage...

That’s what they call it. But it’s not. The Chancellor announced in his most recent Budget a new minimum wage of £7.20 an hour for over-25s, rising to £9 by 2020. He called this the “national living wage” – it’s not, because the current living wage (which is calculated by the Living Wage Foundation, and currently non-compulsory) is already £9.15 in London and £7.85 in the rest of the country.

Will people be better off?

No. Quite the reverse. The IFS has said this slightly higher national minimum wage will not compensate working families who will be subjected to tax credit cuts; it is arithmetically impossible. The IFS director, Paul Johnson, commented: “Unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget on average.” It has been calculated that 3.2m low-paid workers will have their pay packets cut by an average of £1,350 a year.

Could the government change its policy to avoid this?

The Prime Minister and his frontbenchers have been pretty stubborn about pushing on with the plan. In spite of criticism from all angles – the IFS, campaigners, Labour, The Sun – Cameron has ruled out a review of the policy in the Autumn Statement, which is on 25 November. But there is an alternative. The chair of parliament’s Work & Pensions Select Committee and Labour MP Frank Field has proposed what he calls a “cost neutral” tweak to the tax credit cuts.

How would this alternative work?

Currently, if your income is less than £6,420, you will receive the maximum amount of tax credits. That threshold is called the gross income threshold. Field wants to introduce a second gross income threshold of £13,100 (what you earn if you work 35 hours a week on minimum wage). Those earning a salary between those two thresholds would have their tax credits reduced at a slower rate on whatever they earn above £6,420 up to £13,100. The percentage of what you earn above the basic threshold that is deducted from your tax credits is called the taper rate, and it is currently at 41 per cent. In contrast to this plan, the Tories want to halve the income threshold to £3,850 a year and increase the taper rate to 48 per cent once you hit that threshold, which basically means you lose more tax credits, faster, the more you earn.

When will the tax credit cuts come in?

They will be imposed from April next year, barring a u-turn.

Anoosh Chakelian is deputy web editor at the New Statesman.