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. She is Green Party parliamentary candidate for Bristol West.

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Leader: Mourning in Manchester

Yet another attack shows we are going to have to get to used to the idea that our liberalism and our freedoms can only be preserved by a strong state.

Children are murdered and maimed by a suicide bomber as they are leaving a pop concert in Manchester. As a consequence, the government raises the terror threat to “critical”, which implies that another attack is imminent, and the army is sent out on to the streets of our cities in an attempt to reassure and encourage all good citizens to carry on as normal. The general election campaign is suspended. Islamic State gleefully denounces the murdered and wounded as “crusaders” and “polytheists”.

Meanwhile, the usual questions are asked, as they are after each new Islamist terrorist atrocity. Why do they hate us so much? Have they no conscience or pity or sense of fellow feeling? We hear, too, the same platitudes: there is more that unites us than divides us, and so on. And so we wait for the next attack on innocent civilians, the next assault on the free and open society, the next demonstration that Islamism is the world’s most malignant and dangerous ideology.

The truth of the matter is that the Manchester suicide bomber, Salman Ramadan Abedi, was born and educated in Britain. He was 22 when he chose to end his own life. He had grown up among us: indeed, like the London bombers of 7 July 2005, you could call him, however reluctantly, one of us. The son of Libyan refugees, he supported Manchester United, studied business management at Salford University and worshipped at Didsbury Mosque. Yet he hated this country and its people so viscerally that he was prepared to blow himself up in an attempt to murder and wound as many of his fellow citizens as possible.

The Manchester massacre was an act of nihilism by a wicked man. It was also sadly inevitable. “The bomb was,” writes the Mancunian cultural commentator Stuart Maconie on page 26, “as far as we can guess, an attack on the fans of a young American woman and entertainer, on the frivolousness and foolishness and fun of young girlhood, on lipstick and dressing up and dancing, on ‘boyfs’ and ‘bezzies’ and all the other freedoms that so enrage the fanatics and contradict their idiot dogmas. Hatred of women is a smouldering core of their wider, deeper loathing for us. But to single out children feels like a new low of wickedness.”

We understand the geopolitical context for the atrocity. IS is under assault and in retreat in its former strongholds of Mosul and Raqqa. Instead of urging recruits to migrate to the “caliphate”, IS has been urging its sympathisers and operatives in Europe to carry out attacks in their countries of residence. As our contributing writer and terrorism expert, Shiraz Maher, explains on page 22, these attacks are considered to be acts of revenge by the foot soldiers and fellow-travellers of the caliphate. There have been Western interventions in Muslim lands and so, in their view, all civilians in Western countries are legitimate targets for retaliatory violence.

An ever-present threat of terrorism is the new reality of our lives in Europe. If these zealots can murder children at an Ariana Grande concert in Manchester, there is no action that they would not consider unconscionable. And in this country there are many thousands – perhaps even tens of thousands – who are in thrall to Islamist ideology. “Terror makes the new future possible,” the American Don DeLillo wrote in his novel Mao II, long before the al-Qaeda attacks of 11 September 2001. The main work of terrorists “involves mid-air explosions and crumbled buildings. This is the new tragic narrative.”

Immediately after the Paris attacks in November 2015, John Gray reminded us in these pages of how “peaceful coexistence is not the default condition of modern humankind”. We are going to have to get used to the idea that our liberalism and our freedoms can only be preserved by a strong state. “The progressive narrative in which freedom is advancing throughout the world has left liberal societies unaware of their fragility,” John Gray wrote. Liberals may not like it, but a strong state is the precondition of any civilised social order. Certain cherished freedoms may have to be compromised. This is the new tragic narrative.

This article first appeared in the 25 May 2017 issue of the New Statesman, Why Islamic State targets Britain

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