The view from the European Central Bank. Photo: Getty
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Robert Skidelsky: The welfare state did not cause the crash. So why is Osborne cutting it?

If a government has to cut its spending, it is much better to tax the rich than starve the poor.

The Institute for Fiscal Studies (IFS) has warned that there will need to be “colossal” cuts in public spending to balance the books by 2018-19 – at least £55bn extra. On 4 December, the day after the Chancellor’s Autumn Statement, the director of the IFS, Paul Johnson, said that it wasn’t for lack of effort that the deficit hasn’t fallen. Rather, it was “because the economy performed so poorly in the first half of the parliament, hitting revenues very hard”.

Very true – but what Johnson omitted to say was that the main reason the economy performed so poorly in the first half of the parliament was because George Osborne was busy cutting the deficit. He should have been expanding it!

This is something that expert commen­tators lack the guts to say because that would brand them as Keynesians. They may admit that fiscal consolidation has made eco­nomic recovery “more challenging”. But they don’t tell us why. This theoretical gap leaves them without a reputable story of why the economy behaved so poorly. They are in familiar “blown-off-course” territory.

Every possible event that might affect growth, however fleetingly, has been summoned in aid of explaining the failure of the economy to grow: the Greek crisis, the rising price of oil, the extra bank holiday on the Queen’s Diamond ­Jubilee and the closure of shops during the London Olympics, snow and floods – everything except the real reason, which is that a deficiency of ­private ­demand was not being offset by public-­sector investment.

The latest explanation of why the Chancellor has failed to meet his deficit targets concentrates on the nature of the labour market recovery. The government has congratulated itself on the fall in unemployment. We would expect falling unemployment to increase tax revenues and reduce public spending. However, this will not happen if government policy has created lots of new, mostly low-wage jobs whose holders pay no direct taxes and that must be propped up with benefits.

The catastrophic fall in productivity that we are now seeing was planted in the two and a half years of stagnation that followed the creation of the coalition in 2010. In October 2012, the Office for Budget Responsibility found that the economy had grown by only 0.9 per cent between Q1 of 2010 and Q2 of 2012, while its June 2010 forecast was 5.7 per cent growth over the same period. Subsequent upward revision has made these figures less dire but there is no doubt that Osborne and his advisers seriously underestimated the adverse effects of austerity on investment.

As is now increasingly recognised, this extended period of stagnation reduced the long-term growth rate of the economy through the destruction of both human skills and physical capital.

Despite his warning about the size of the cuts to come, Paul Johnson said that they could be achieved. He added, however, that they would require a “reimagining” (or, put another way, shrinking) of the state. Two questions arise. First, what effect will shrinking the state have on the economy? Second, what effect will it have on the polity?

On the first, Johnson seems to assume that the economy will go on growing at about 2.5 per cent a year, even as the deficit is being cut to zero. This is highly optimistic because the cutting is simultaneously reducing private incomes. It may be possible, by sufficiently heroic austerity, for a government to keep revenues for a time running ahead of cuts but at what level of GDP will the budget eventually be balanced? Certainly lower than it would have been without the cuts.

The cuts not only change the level of GDP but also its composition and, therefore, the relations between the state and its citizens. This point is recognised by Labour, which promises “fairer” cuts. If a government has to cut its spending, it is much better to tax the rich than starve the poor. However, this is alien to the spirit of cutting. The barely subliminal message of all austerity programmes is that the deficit has been caused by spiralling welfare payments to the poor, with the object of austerity ­being to “get them on their bikes” – like in the 1930s, when unemployment was consistently around or above 10 per cent.

We urgently need to have a proper debate about the role and size of the state. Prosperity does not demand that the state should spend 40 per cent-plus of national income as it does now, though justice may.

In the old days, people used to talk of a “trade-off” between efficiency and justice and some of those arguments may still be valid, though I am less and less persuaded that the private sector scores heavily over the public sector in efficiency. A financial system that allocates capital to itself and whose crash in 2008 left the population 15 per cent poorer than it would have been is hardly an advertisement for private-sector efficiency.

What is really indefensible is to cut the state for reasons of financial dogmatism, as though the size of the state – and especially the welfare state – were the cause of the slump. We need a cool discussion on the role of the state as owner and regulator in a market economy and in the light of the civic purposes that people set for themselves. It needs to be pointed out that these huge cuts imply serious losses to the quality of government services and the strength of the defence and police services.

I’m not sure which is worse: to bleed the economy with small cuts stretching many years ahead or to cut deeply now and hope for the best. What does seem clear is that politics will not allow the second and only a ­Labour government can avert the first.

This article first appeared in the 09 December 2014 issue of the New Statesman, How Isis hijacked the revolution

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Angela Merkel's call for a burqa ban sets a disturbing precedent

The German chancellor's plan for a partial ban of the full-face veil is a clearly political move, which will do more to harm those women who wear it than protect them.

 

In these febrile times, women’s freedom and autonomy has become a bargaining chip in the poker game of public propaganda — and that goes double for brown, Muslim and migrant women. Angela Merkel should know as well as any other female politician how demeaning it is to be treated as if what you wear is more important than what you say and what you do. With the far-right on the rise across Europe, however, the German chancellor has become the latest lawmaker to call for a partial ban on the burqa and niqab.

We are told that this perennial political football is being kicked about in the name of liberating women. It can have nothing to do, of course, with the fact that popular opinion is lurching wildly to the right in western democracies, there’s an election in Germany next year, and Merkel is seen as being too soft on migration after her decision to allow a million Syrian refugees to enter the country last year. She is also somehow blamed for the mob attacks on women in Cologne, which have become a symbol of the threat that immigration poses to white women and, by extension, to white masculinity in Europe. Rape and abuse perpetrated by white Europeans, of course, is not considered a matter for urgent political intervention — nor could it be counted on to win back voters who have turned from Merkel's party to the far-right AFD, which wants to see a national debate on abortion rights and women restricted to their rightful role as mothers and homemakers.

If you’ll allow me to be cynical for a moment, imposing state restrictions on what women may and may not wear in public has not, historically, been a great foundation for feminist liberation. The move is symbolic, not practical. In Britain, where the ban is also being proposed by Ukip the services that actually protect women from domestic violence have been slashed over the past six years — the charity Refuge, the largest provider of domestic violence services in the UK, has seen a reduction in funding across 80% of its service contracts since 2011.

It’s worth noting that even in western countries with sizeable Muslim minorities, the number of women who wear full burqa is vanishingly small. If those women are victims of coercion or domestic violence, banning the burqa in public will not do a thing to make them safer — if anything, it will reduce their ability to leave their homes, isolating them further.

In the wake of the Brexit vote, racist and Islamophobic attacks spiked in the UK. Hate crimes nationally shot up by 42% in the two weeks following the vote on 23 June. Hate crimes against Muslim women increased by over 300%, with visibly Muslim women experiencing 46% of all hate incidents. Instances of headscarves being ripped off have become so common that self-defense videos are being shared online, showing women how to deflect the “hijab grab”. In this context, it is absurd to claim that politicians proposing a burqa ban care about protecting women: the move is transparently designed to placate the very people who are making Muslim women feel unsafe in their own communities.

When politicians talk about banning the burqa, the public hears an attack on all Islamic headscarves — not everyone knows the difference between the hijab, the niqab and the burqa, and not everyone cares. The important thing is that seeing women dressed that way makes some people feel uncomfortable, and desperate politicians are casting about for ways to validate that discomfort.

Women who actually wear the burqa are not invited to speak about their experiences or state their preferences in this debate. On this point, Islamic fundamentalists and panicked western conservatives are in absolute agreement: Muslim women are provocative and deserve to be treated as a threat to masculine pride. They should shut up and let other people decide what’s best for them.

I know Muslim women who regard even the simple hijab as an object of oppression and have sworn never to wear one again. I also know Muslim women who wear headscarves every day as a statement both of faith and of political defiance. There is no neutral fashion option for a woman of Islamic faith — either way, men in positions of power will feel entitled to judge, shame and threaten. Either choice risks provoking anger and violence from someone with an opinion about what your outfit means for them. The important thing is the autonomy that comes with still having a choice.

A law which treats women like children who cannot be trusted to make basic decisions about their bodies and clothing is a sexist law; a law that singles out religious minorities and women of colour as especially unworthy of autonomy is a racist, sexist law. Instituting racist, sexist laws is a good way to win back the votes of racist, sexist people, but, again, a dreadful way of protecting women. In practice, a burqa ban, even the partial version proposed by Merkel which will most likely be hard to enforce under German constitutional law, will directly impact only a few thousand people in the west. Those people are women of colour, many of them immigrants or foreigners, people whose actual lives are already of minimal importance to the state except on an abstract, symbolic level, as the embodiment of a notional threat to white Christian patriarchy. Many believe that France's longstanding burqa ban has increased racial tensions — encapsulated by the image earlier this year of French police surrounding a woman who was just trying to relax with her family on the beach in a burkini. There's definitely male violence at play here, but a different kind — a kind that cannot be mined for political capital, because it comes from the heart of the state.

This has been the case for centuries: long before the US government used the term“Operation Enduring Freedom” to describe the war in Afghanistan, western politicians used the symbolism of the veil to recast the repeated invasion of Middle Eastern nations as a project of feminist liberation. The same colonists who justified the British takeover of Islamic countries abroad were active in the fight to suppress women’s suffrage at home. This is not about freeing women, but about soothing and coddling men’s feelings about women.

The security argument is even more farcical: border guards are already able to strip people of their clothes, underwear and dignity if they get the urge. If a state truly believes that facial coverings are some sort of security threat, it should start by banning beards, but let's be serious, masculinity is fragile enough as it is. If it were less so, we wouldn't have politicians panicking over how to placate the millions of people who view the clothing choices of minority and migrant women as an active identity threat.

Many decent, tolerant people, including feminists, are torn on the issue of the burqa: of course we don't want the state to start policing what women can and can't wear, but isn't the burqa oppressive? Maybe so, but I was not aware of feminism as a movement that demands that all oppressive clothing be subject to police confiscation, unless the Met’s evidence lockers are full of stilettos, girdles and push-up bras. In case you're wondering, yes, I do feel uncomfortable on the rare occasions when I have seen people wearing the full face veil in public. I've spent enough time living with goths and hippies that I've a high tolerance for ersatz fashion choices — but do wonder what their home lives are like and whether they are happy and safe, and that makes me feel anxious. Banning the burqa might make me feel less anxious. It would not, however, improve the lives of the women who actually wear it. That is what matters. My personal feelings as a white woman about how Muslim women choose to dress are, in fact, staggeringly unimportant.

If you think the Burqa is oppressive and offensive, you are perfectly entitled never to wear one. You are not, however, entitled to make that decision for anyone else. Exactly the same principle applies in the interminable battle over women's basic reproductive choices: many people believe that abortion is wrong, sinful and damaging to women. That's okay. I suggest they never have an abortion. What's not okay is taking away that autonomy from others as a cheap ploy for good press coverage in the runup to an election.

This debate has been dragging on for decades, but there's a new urgency to it now, a new danger: we are now in a political climate where the elected leaders of major nations are talking about registries for Muslims and other minorities. Instituting a symbolic ban on religious dress, however extreme, sets a precedent. What comes next? Are we going to ban every form of Islamic headdress? What about the yarmulke, the tichel, the Sikh turban, the rainbow flag? If this is about community cohesion, what will it take to make white conservatives feel “comfortable”? Where does it stop? Whose freedoms are politicians prepared to sacrifice as a sop to a populace made bitter and unpredictable by 30 years of neoliberal incompetence? Where do we draw the line?

We draw it right here, between the state and the autonomy of women, particularly minority and migrant women who are already facing harassment in unprecedented numbers. Whatever you feel about the burqa, it is not the role of government to police what women wear, and doing it has nothing to do with protection. It is chauvinist, it is repressive, it is a deeply disturbing precedent, and it has no place in our public conversation.

 
 
 
 

Laurie Penny is a contributing editor to the New Statesman. She is the author of five books, most recently Unspeakable Things.