The problem with privilege-checking

While we're concerned with our own potential prejudices, we're not fighting back against the Coalition.

The left, it’s fair to say, has a long tradition of infighting. Groups with only a hair’s breadth difference in ideology splinter off into rival factions, aggressively defending their interpretation of the One True Path. It’s the perfect example of what Freud called “the narcissism of small differences”: communities with adjoining territories and seemingly identical goals who engage in constant feuding, striking outlandish poses to differentiate themselves from one another. 

For a time it seemed like the fall of the Berlin Wall and the rise of the internet might usher in a new era of protest: one more communal, less reliant on the old dogmas. But in the individualistic, free-floating, frequently anonymous world of the internet, modern progressives have stumbled across an even more effective means of dividing themselves: privilege-checking.

For the uninitiated, “checking your privilege” amounts to maintaining a constant awareness of ways in which you might accrue some social, cultural or economic benefit as a result of your background: your class, race, gender, sexual-orientation and so on. If someone speaks out of turn, they’ll be instructed to check their privilege. It’s a cuff round the ear, a way of saying: think about how your personal circumstances might influence what you’re saying.

In October Ariel Meadow Stallings, founder of Offbeat Empire (a series of alternative lifestyle blogs), wrote a brilliant blog entitled "Liberal bullying: privilege-checking and semantics-scolding as internet sport". Meadow Stallings diagnosed the problem as progressives being over-zealous in their privilege-checking and turning their fire on each other, but personally I’m not so sure. While the idea is obviously born out of honourable intentions, I believe the whole discourse around privilege is inherently destructive – at best, a colossal distraction, and at worst a means of turning us all into self-appointed moral guardians out to aggressively police even fellow travellers’ speech and behaviour.

Why does this matter, you ask? The answer is simple: it matters because privilege-checking has thoroughly infected progressive thought. While large swathes of the left are obsessively pouncing on verbal slips on Twitter, the right are acting: systematically deconstructing not just the welfare state, but the state itself.

Privilege-checking plays into the dangerous postmodern fallacy that we can only understand things we have direct experience of. In place of concepts like empathy and imagination, which help us recognise our shared humanity, it atomises us into a series of ever-smaller taxonomical groups: working class transsexual, disabled black woman, heteronormative male.

Worse still, it emasculates political activity. A very talented blogger friend of mine read Owen Jones’ Chavs and said it made them “very aware of my middle class privilege”. Personally, it made me want to burn down the Department of Work and Pensions. My friend is deeply involved in activism, but for many simply being aware of their privilege has taken on the same function as an online petition, a way of feeling like you’ve made a difference without actually getting involved.

In many respects, the system of privilege-checking is the perverse mirror reflection of unregulated capitalism: whereas an unstinting belief in free markets requires an attitude of triumphalism and an aggressive lack of empathy, “privilege” requires an attitude of constant self-abasement worthy of someone going through a 12-step program. I, Tom Midlane, have cisgender privilege, male privilege, able-bodied privilege, white privilege, heterosexual privilege, and middle class privilege.

Not that I’m for a moment advocating a prejudice free-for-all. I’m a firm believer in calling people out on hate speech, but there’s a world of difference between taking someone to task for voicing racist, sexist or transphobic views and snarkily asking someone to check their privilege because they expressed themselves slightly clumsily. Rather than stopping at calling out bigots, privilege-checking turns us all into private sleuths, constantly on the lookout for linguistic slip-ups.

The kind of semantic nit-picking that “privilege” encourages is aloof thought, un-coupled from questioning or attempting to change the hegemonic order. It’s a kind of identity politics which assumes the post-ideological position as fact and embraces the idea that nothing will change beyond small shifts. Within this assumed safety net you’re given your own playspace to act out divisive and willifully obscurantist verbal games. Corporate lobbyists couldn’t invent a better system for neutralising collective action if they tried.

Also implicit in this new conception of “privilege” is a simple idea: the more points you score on the privilege bingo card, the less weight your view carries. This has the catastrophic effect of turning debates about racism, sexism, transphobia, class and disability into a game of Top Trumps, but equally importantly, it ignores the long history of social progressives, from Karl Marx to Tony Benn, who hail from privileged backgrounds.

Privilege becomes an inescapable feedback loop: any attempt to critique privilege-checking is met with the retort: “You’re privileged enough to have the luxury not to think about privilege.” But that’s not it. I’ve always been aware that as a child of a white, middle-class family, I have life easier than some people – but that’s precisely what drives me on to seek social justice for those less fortunate than myself. Prejudice exists. We live in a radically unjust world. But turning our personal circumstances into some sort of pissing contest achieves precisely nothing.

If you want an example of how ridiculous the culture of privilege-checking has become, take this from male transsexual Gethin Jones’s piece on transphobia for brilliant feminist site The F-Word: “As a trans man, they [transphobic bloggers] accuse me of being a misogynist, having transitioned to gain male privilege and of being a "lesbian in denial" (unlikely, considering my bisexuality). Allegations of transitioning for the purpose of gaining privilege irritate me, considering the cisgender privilege I’ve lost through doing so.”

This is a textbook example of this kind of privilege-checking taken to its logical conclusion. Is this really how we want to live? Constantly weighing up our every action against some theoretical checklist? The cosmic irony at play here is that the very concept of “privilege” is inherently privileged, requiring a nuanced understanding of complex sociological ideas on race, sexuality and gender.

Meanwhile, back in the real world, the NHS is being dismantled, large swathes of the public sector are being outsourced, social care is about to be cut to ribbons, the bulk of the cuts are yet to hit and even abortion rights are being undermined. Rather than problematising everything that comes out of one another’s mouths, let’s put aside our differences and start fighting back.

Tom Midlane is a freelance journalist who writes for the Press Association and Huff Post UK. You can read his blog here or follow him on Twitter @goldenlatrine

UPDATE 17/12/2012 14:30 We've published a response by Zoe Stavri to this piece - you can find it here

It's time to stop examining our own privilege and start opposing the government. Photograph: Getty Images
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We're racing towards another private debt crisis - so why did no one see it coming?

The Office for Budget Responsibility failed to foresee the rise in household debt. 

This is a call for a public inquiry on the current situation regarding private debt.

For almost a decade now, since 2007, we have been living a lie. And that lie is preparing to wreak havoc on our economy. If we do not create some kind of impartial forum to discuss what is actually happening, the results might well prove disastrous. 

The lie I am referring to is the idea that the financial crisis of 2008, and subsequent “Great Recession,” were caused by profligate government spending and subsequent public debt. The exact opposite is in fact the case. The crash happened because of dangerously high levels of private debt (a mortgage crisis specifically). And - this is the part we are not supposed to talk about—there is an inverse relation between public and private debt levels.

If the public sector reduces its debt, overall private sector debt goes up. That's what happened in the years leading up to 2008. Now austerity is making it happening again. And if we don't do something about it, the results will, inevitably, be another catastrophe.

The winners and losers of debt

These graphs show the relationship between public and private debt. They are both forecasts from the Office for Budget Responsibility, produced in 2015 and 2017. 

This is what the OBR was projecting what would happen around now back in 2015:

This year the OBR completely changed its forecast. This is how it now projects things are likely to turn out:

First, notice how both diagrams are symmetrical. What happens on top (that part of the economy that is in surplus) precisely mirrors what happens in the bottom (that part of the economy that is in deficit). This is called an “accounting identity.”

As in any ledger sheet, credits and debits have to match. The easiest way to understand this is to imagine there are just two actors, government, and the private sector. If the government borrows £100, and spends it, then the government has a debt of £100. But by spending, it has injected £100 more pounds into the private economy. In other words, -£100 for the government, +£100 for everyone else in the diagram. 

Similarly, if the government taxes someone for £100 , then the government is £100 richer but there’s £100 subtracted from the private economy (+£100 for government, -£100 for everybody else on the diagram).

So what implications does this kind of bookkeeping have for the overall economy? It means that if the government goes into surplus, then everyone else has to go into debt.

We tend to think of money as if it is a bunch of poker chips already lying around, but that’s not how it really works. Money has to be created. And money is created when banks make loans. Either the government borrows money and injects it into the economy, or private citizens borrow money from banks. Those banks don’t take the money from people’s savings or anywhere else, they just make it up. Anyone can write an IOU. But only banks are allowed to issue IOUs that the government will accept in payment for taxes. (In other words, there actually is a magic money tree. But only banks are allowed to use it.)

There are other factors. The UK has a huge trade deficit (blue), and that means the government (yellow) also has to run a deficit (print money, or more accurately, get banks to do it) to inject into the economy to pay for all those Chinese trainers, American iPads, and German cars. The total amount of money can also fluctuate. But the real point here is, the less the government is in debt, the more everyone else must be. Austerity measures will necessarily lead to rising levels of private debt. And this is exactly what has happened.

Now, if this seems to have very little to do with the way politicians talk about such matters, there's a simple reason: most politicians don’t actually know any of this. A recent survey showed 90 per cent of MPs don't even understand where money comes from (they think it's issued by the Royal Mint). In reality, debt is money. If no one owed anyone anything at all there would be no money and the economy would grind to a halt.

But of course debt has to be owed to someone. These charts show who owes what to whom.

The crisis in private debt

Bearing all this in mind, let's look at those diagrams again - keeping our eye particularly on the dark blue that represents household debt. In the first, 2015 version, the OBR duly noted that there was a substantial build-up of household debt in the years leading up to the crash of 2008. This is significant because it was the first time in British history that total household debts were higher than total household savings, and therefore the household sector itself was in deficit territory. (Corporations, at the same time, were raking in enormous profits.) But it also predicted this wouldn't happen again.

True, the OBR observed, austerity and the reduction of government deficits meant private debt levels would have to go up. However, the OBR economists insisted this wouldn't be a problem because the burden would fall not on households but on corporations. Business-friendly Tory policies would, they insisted, inspire a boom in corporate expansion, which would mean frenzied corporate borrowing (that huge red bulge below the line in the first diagram, which was supposed to eventually replace government deficits entirely). Ordinary households would have little or nothing to worry about.

This was total fantasy. No such frenzied boom took place.

In the second diagram, two years later, the OBR is forced to acknowledge this. Corporations are just raking in the profits and sitting on them. The household sector, on the other hand, is a rolling catastrophe. Austerity has meant falling wages, less government spending on social services (or anything else), and higher de facto taxes. This puts the squeeze on household budgets and people are forced to borrow. As a result, not only are households in overall deficit for the second time in British history, the situation is actually worse than it was in the years leading up to 2008.

And remember: it was a mortgage crisis that set off the 2008 crash, which almost destroyed the world economy and plunged millions into penury. Not a crisis in public debt. A crisis in private debt.

An inquiry

In 2015, around the time the original OBR predictions came out, I wrote an essay in the Guardian predicting that austerity and budget-balancing would create a disastrous crisis in private debt. Now it's so clearly, unmistakably, happening that even the OBR cannot deny it.

I believe the time has come for there be a public investigation - a formal public inquiry, in fact - into how this could be allowed to happen. After the 2008 crash, at least the economists in Treasury and the Bank of England could plausibly claim they hadn't completely understood the relation between private debt and financial instability. Now they simply have no excuse.

What on earth is an institution called the “Office for Budget Responsibility” credulously imagining corporate borrowing binges in order to suggest the government will balance the budget to no ill effects? How responsible is that? Even the second chart is extremely odd. Up to 2017, the top and bottom of the diagram are exact mirrors of one another, as they ought to be. However, in the projected future after 2017, the section below the line is much smaller than the section above, apparently seriously understating the amount both of future government, and future private, debt. In other words, the numbers don't add up.

The OBR told the New Statesman ​that it was not aware of any errors in its 2015 forecast for corporate sector net lending, and that the forecast was based on the available data. It said the forecast for business investment has been revised down because of the uncertainty created by Brexit. 

Still, if the “Office of Budget Responsibility” was true to its name, it should be sounding off the alarm bells right about now. So far all we've got is one mention of private debt and a mild warning about the rise of personal debt from the Bank of England, which did not however connect the problem to austerity, and one fairly strong statement from a maverick columnist in the Daily Mail. Otherwise, silence. 

The only plausible explanation is that institutions like the Treasury, OBR, and to a degree as well the Bank of England can't, by definition, warn against the dangers of austerity, however alarming the situation, because they have been set up the way they have in order to justify austerity. It's important to emphasise that most professional economists have never supported Conservative policies in this regard. The policy was adopted because it was convenient to politicians; institutions were set up in order to support it; economists were hired in order to come up with arguments for austerity, rather than to judge whether it would be a good idea. At present, this situation has led us to the brink of disaster.

The last time there was a financial crash, the Queen famously asked: why was no one able to foresee this? We now have the tools. Perhaps the most important task for a public inquiry will be to finally ask: what is the real purpose of the institutions that are supposed to foresee such matters, to what degree have they been politicised, and what would it take to turn them back into institutions that can at least inform us if we're staring into the lights of an oncoming train?