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.

Photo: Getty
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The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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