The response to austerity can't be on the terms which led us into it

The only effective response must be to repudiate the debt, writes Molly Scott Cato

It is disappointing that the response from the Left in Britain to the politics of austerity has been so limp. The brilliant coup from the interests of capital to paint the economic crisis as a crisis of government debt and public spending—and therefore the basis for an attack on the ideology of the left—has seen little in the way of aggressive intellectual response.

The simple explanation for this is that the left is divided. The line taken by the socialist and labour left has largely been one of denial. This is not a high level of debt, they argue. By historical standards, we have survived much higher levels of debt. Why, after the last war we faced debts on a far greater scale and yet that is when we established the health service.

I think this is a mistaken approach to the politics of austerity. For one thing, it will not wash. Citizens have a sense of there having been a vast amount of cash floating around during the Labour years. They also know that consumption, individual and national, was based on untrammelled credit. This is their sense of how life was, and they are not wrong.

Secondly, the parallel between our economy now and in the 1950s does not hold up to scrutiny. At that time we were an imperial nation and the workshop of the world, if a somewhat scruffy one making rather unfashionable products. We could use our empire as a vast ‘internal’ market, sucking in resources and finding compliant customers for our products. We could repay our debts through hard, productive labour—and we did. Now what do we have to offer the world as justification for the debts we have incurred? Our favourite offering of financial services is finding considerably less favour than five years ago.

But most importantly we should reject this line of argument because it is morally wrong. We should not have to live through the 1950s again, working hard to return interest to those who loaned us money. Back then it was US and Canadian capitalists who, through lend-lease, had ensured that the value created by British workers would flow back to them. We would not have won the war without US productive capacity, but we would not have lost the peace as spectacularly as we did had they not insisted that we continue to pay for it right up to 2006, just two years before the credit crisis.

Rather than arguing about how we should pay it back we should be repudiating the debt.

This is what has been happening in other European countries, where Citizens’ Audit have been established, inspired by the examples of the Latin American countries who refused to pay their debts during the last decade. Why should we pay back money loaned to us by financial institutions who have the power to create money by electronic fiat, they asked. And we should be asking the same question. By the time we had paid our wartime debts—the debts we incurred for defeating Hitler and protecting European democracy—we had paid our ‘allies’ the US and Canada, or rather US and Canadian capitalists and financiers, twice what we had borrowed. This iniquitous use of the power of money to extract value should be the real target of the left.

Earlier this week Portugal’s citizens’ audit campaign published a preliminary technical report: ‘Understand the debt to get out of the trap’; the Spanish campaign is called ‘Who owes whom?’ and is part of the work of the indignados. The Irish citizens audit, supported by UNITE as well as debt campaign groups, challenged circular nature of Irish debt-holding, with the government guaranteeing banks which, in turn, hold its debt. It found that Irish debt had been transformed from a safe and boring investment to a vehicle of speculative interest. Its authors used Kissinger’s term of “constructive ambiguity” to describe the deliberate use of recondite language to undermine the citizen’s power to understand the actions of their politicians.

The real purpose of a citizens’ audit is precisely to challenge this “constructive ambiguity”. Most people never question whether it is right that they should pay interest to a bank for the privilege of buying their home, although they will pay around twice the cost of the house by the term of the mortgage. Whether this is just depends on how the bank acquired the money and in these days when the corrupt dealings of banks are becoming revealed in more egregious detail every day, an audit into how our debt was acquired, who owns it, and who will receive the money that we are paying in return for our borrowings is urgently overdue.

Photograph: Getty Images

Molly Scott Cato is Green MEP for the southwest of England, elected in May 2014. She has published widely, particularly on issues related to green economics. Molly was formerly Professor of Strategy and Sustainability at the University of Roehampton.

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The English left must fall out of love with the SNP

There is a distinction between genuine leftism and empty anti-establishmentarianism.

After a kerfuffle on Twitter the other night, I am all too aware that writing something even mildly questioning of the SNP government is the British equivalent of approaching a lion pride on a kill. Nevertheless, seeing the almost hero-levels of mental gymnastics tweeted by Mhairi Black, in the week of the Hillsborough inquiry whereupon Nicola Sturgeon posed with a copy of The Sun endorsing her re-election, prompted me once more to consider just how spectacular the distance has become between the SNP that stood against Ed Miliband versus the SNP today and in government.

Mhairi tweeted: “So Kezia wants to put up the taxes of Scottish people to subsidise Tory cuts that her party supported in Westminster?”. Confused? So am I.

This follows in a series of SNP revisionism on what austerity is and the excuses the SNP has hidden, not quite so conspicuously, up its sleeve to not act on its new tax powers, so as not to break its bond with Middle Scotland. They insist that Labour’s plans for a penny tax are not progressive, and have framed it in such a way that an anti-austerity plan has now become a subsidy for cuts Labour actually haven’t supported for more than a year now. Just like that, the SNP is a low-tax mimicry of Toryism.

But it isn’t ‘just like that’. The SNP have governed from an economically cautious stance for seven years. For a brief period, they borrowed Ed Miliband’s clothes. But once the Red Wedding had been completed, they returned back to where they started: as successors to New Labour, though that is hardly fair: they are far, far less redistributive.

So why is it, in the 2015 election, and even today, many of us on the left in England still entrust our faith in SNP rhetoric? Still beat the drum for an electoral ‘progressive’ coalition with a party that doesn’t seem very happy to embrace even the concept of higher taxes?

My theory is that the SNP have successfully, indeed more successfully than any party in Britain, adopted the prime hobby of much of the Left: ‘againstism’.

‘Againstism’, clumsy I admit, is to be against everything. This can include a negative framing of being anti-austerity but not pro-anything in its place. But in this instance, it means to be anti-establishment. The latter, the establishment, is what Labour as a party of government always has aspired to be in competing to be the national government in Westminster - which is why elements of the Left will always hate it and will always vote against it. In a way, some of the left is suspicious of governance. This is occasionally healthy, until it prevents real progressivism from ever being elected.

While in government, Labour could be seen as sell-outs, rightly or wrongly, because they became the establishment and had no one but themselves to blame. The SNP are the establishment, in Scotland, but can nevertheless exercise ‘againstism’, even with new tax powers. They always will so long as Westminster exists, and so long as their main motivation is independence. This is why the bogeymans that sustain nationalism are not natural allies of social democracy; to achieve social democracy would be to remove the bogeyman. This means that the Lesser New Labour tradition within which they govern will continue to go unnoticed, nor be doomed to eventual death as New Labour itself suffered, nor be looked back on as an era of neoliberalism. The SNP can just avert attentions back to the Westminster establishment. ‘Againstism’. Paradoxically, the way the SNP have managed to come to exploit this is because of New Labour's devolution. Devolution has created, for the first time, the perfect environment for an establishment in one part of the country to blame the establishment in another. It has allowed for the rise of an incumbent insurgent. The SNP can campaign as insurgents while still being incumbents. It is a spectacular contradiction that they alone can manage.

Insurgency and anti-establishment politics are not, of themselves, a bad thing. We on the Left all dip our toes in it. It is a joy. It is even more fun for us to be successful. Which is why the celebratory mood that surrounded the SNP gains in Scotland, a paradigm shift against one incumbent for another, is, objectively, understandable. But these insurgents are not actually insurgents; they are the illusion of one, and they have had the reigns of power, greater now for the Scotland Bill, for seven years. And they have done little radical with it. The aim of an anti-establishment politics is to replace an establishment with something better. All the SNP have done is inherit an establishment. They are simply in the fortunate position of managing to rhetorically distance itself from it due to the unique nature of devolution.

This is why some of the Left still loves them, despite everything. They can remain ‘againstists’ regardless of their incumbency. They do not have the stench of government as a national Labour government did and inevitable would have. So the English Left still dream.

But now, with this mounting evidence and the SNP’s clumsy revisionism, it is up to the English Left to distinguish between genuine leftism and empty anti-establishmentarianism, and to see the establishment -via governance- as something to define for itself, to reshape as something better, rather than something to be continuously against. This is, after all, what Attlee's government did. The SNP have not defined the establishment, they have continued someone else's. It's up to us to recognise that and fall out of love with the SNP.