Osborne shouts bingo - but let's first keep up with Paraguay

The UK cannot achieve a sustainable recovery until it can pay its way in the world, and despite a 25% depreciation of the currency over the last 5 years it still fails lamentably to do so.

Osborne’s reckless boast that he has been proved right over the economy will come back to haunt him. None of his claims stand up to examination.

“Those in favour of Plan B” (i.e. stimulating the economy to produce growth), he asserts, “have lost the argument”. That will be news to employees whose real earnings at current rates will have shrunk by £6,660 during the 2010-15 parliament. It will also come as a surprise to the UK’s biggest companies still sitting on corporate cash stockpiles of £700bn because they doubt the level of demand justifies new investment in plant or services.   The stock exchange and finance markets may be frothing, but the real economy isn’t.

Nor is it likely to be any time soon. In the last 5 years UK investment has fallen by a quarter in real terms, which is devastating in terms of future growth potential. It now stands at just 14% of GDP, against a global average of 24%. Indeed in terms of the global investment-to-GDP league Britain now stands 159th, behind El Salvador, Guatemala and Mali. A recovery based on low wages, poor productivity and weak investment must be expected to stutter and slip back by 2015.

Nor does the historical evidence indicate that Osborne’s counter-intuitive plan, known by the oxymoron of ‘expansionary fiscal contraction’, has ever worked.  It has been tried three times before – the so-called ‘Geddes axe’ cuts in 1921-2, the May businessmen committee cuts in 1931, and the Howe budget in 1981. The first enforced expenditure cuts very similar in real terms to today and led to a decade of anaemic growth.   The second was only saved from a similar fate by Britain being forced off the gold standard. The third led to growth only because interest rates were eased, bank lending loosened and a reviving US helped to reflate the world economy. None of those conditions remain now to be applied, so there is no reason to believe the Osborne ‘recovery’ will defy historical precedent.

Osborne’s second claim is that “Britain is poorer because of a huge failure of economic policy in the past decade” (i.e. it was all Labour’s fault). In other words, falling incomes today are due, not to his own policies of austerity, but to Labour’s over-spending which caused the recession. But Labour didn’t over-spend, and didn’t cause the recession – the bankers’ crash did that. The budget deficit in 2007 just before the crash was only 2.9%, below the OECD average, and only rose to 11.6% in 2010 because of the enormous bank bailouts. Even by the time of the election in 2010 the UK national debt had only risen to 77% of GDP which compared with 75% for Germany, 84% for France, and 93% for the US. Labour spending was not out of line with other lead countries.

Equally it is disingenuous for Osborne to claim that today’s diminishing incomes – the longest fall in wages since the 1870s and on average 9% down in real terms since pre-crash levels – owes nothing to his austerity programme and all to the recession. Of course the latter has had a major impact, but to pretend that £81bn of expenditure cuts and £18bn (and counting) of benefit cuts have not significantly exacerbated the downward pressure on incomes is absurd.

Third, “nor are we seeing”, the Chancellor has claimed, “a return to unsustainable levels of indebtedness and household borrowing”. Well, actually, we are. Frighteningly, household lending is just 0.3% below its 2008 peak, while lending to firms is now 22% lower and if account is taken of inflation it’s fallen by a stunning 32%. There is no other way of describing this except as unsustainable. At the same time it’s clear that another major housing bubble is well under way, driven by Osborne’s own Help to Buy scheme, with estate agents the fastest growing sector in the workforce. Debt-to-income ratios, previously falling, have now turned up again. Plainly the recovery, such as it is, is propelled by borrowing.  And an economy dependent on consumer debt together with low wages, weak investment and poor productivity is likely once again to slip back after an initial short burst of expansion.

Osborne’s last assertion was that “growth had been too concentrated in one corner of the country – and HS2 will transform the UK’s economic geography”. The former statement is certainly true, with any recovery heavily concentrated in London and the south-east. But HS2, even if it goes ahead with a price-tag heading north of £50bn, will not remotely produce the degree of economic rebalancing required. The country’s finance sector is still too large and dominant, while manufacturing is shrivelled well below its potential.

The UK cannot achieve a sustainable recovery until it can pay its way in the world, and despite a 25% depreciation of the currency over the last 5 years it still fails lamentably to do so. The UK has only had a surplus in traded goods six times in the last 55 years, and last year the deficit on traded goods was £106bn, equal to 7% of GDP. HS2 won’t conceivably solve a problem of these proportions – only a fundamental revival of the UK’s capabilities for high-tech manufacturing will achieve that.

British Chancellor of the Exchequer George Osbourne speaks during the Conservative Party Conference in Manchester. Image: Getty
Calvert 22/Courtesy of the artist, Danila Tkachenko
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Ruin porn: the art world’s awkward obsession with abandoned Soviet architecture

Deserted fairgrounds, disused factories and forgotten military bases may look cool, but are we fetishising the remnants of such a cruel history?

Armenia, where one side of my family is from, was one of the first members of the USSR, annexed by Russia in 1922. A few years ago, when I visited this little country that perches precariously in the south of the Caucasus, I was struck most by its Soviet architecture.

Although its landscape is a hotchpotch of medieval Orthodox churches, a smattering of Persian-era domes, and brutalist concrete, it was the latter that particularly stuck out. From unfelled statues of Stalin to giant tower blocks spelling out the letters “CCCP” from a bird’s-eye view (well, half spelt-out – construction stopped partway through, with the fall of the Soviet Union), I’ve never forgotten it.

Perhaps it was so compelling because such stark physical symbols make recent history all the more tangible. A history still profoundly affecting the country of my ancestors (and all post-Soviet and communist states). But also, it just looked really cool.


Mixed air corps, Mongolia. Photo: Calvert 22/Courtesy of the artist, Eric Losito

It’s a bit passé now to mock the hipster obsession with reclaimed industrial detritus, exposed pipes and bare concrete. An aesthetic – that of a post-industrial wasteland, but a chic one – which has gripped western cities for years, and crept worldwide.

But it could be this tendency to find disused stuff visually intriguing, and a morbid fascination with cruel regimes, which has led to the art world’s obsession with abandoned Soviet architecture. A whole wave of artists and photographers have been poking around the eastern bloc’s architectural graveyard in recent years.

Late last year, we saw the hugely popular disused Soviet bus stop series by photographer Christopher Herwig, echoing photographer Sergey Novikov’s equally absorbing collection of abandoned Soviet cinemas from 2013.

Following Russian filmmaker and photographer Maria Morina’s “Atomic Cities” project four years ago, London-based artist Nadav Kander explored the “aesthetics of destruction” in his exhibition, Dust, in 2014, snapping “radioactive ruins” of secret cities on the border between Kazakhstan and Russia. The same year, Moscow photographers Sasha Mademuaselle and Sergey Kostromin travelled to the disputed region of Abkhazia, capturing fragments of its deserted infrastructure.


Fighter aviation regiment, Mongolia. Photo: Eric Losito
 

And photojournalist Anton Petrus’ now iconic pictures of Chernobyl’s abandoned amusement park have long been an internet favourite, as have numerous haunting images of Pripyet – the city famous for lying deserted following the nuclear disaster.

Jamie Rann, a lecturer in Russian at Oxford University, has written that the quality and technical accomplishment of most of this photography make the style more “ruin erotica” than “ruin porn” (the tag being used by some critics), but argues: “The enormous online popularity of this genre . . . combined with their voyeuristic, almost exploitative feel, certainly has something porny about it.”

The latest exploration of Soviet society’s skeletons can be found at the Power & Architecture season at London’s Calvert 22 Foundation. In an exhibition called Dead Space and Ruins, we see abandoned military bases and formerly mighty monuments, forgotten space ports freezing in the tundra, the ghost of an entire unused, unfinished city in Armenia lying derelict.



The unfinished "ghost city" built in Armenia to house earthquake survivors (water added by artist). Photo: Calvert 22/Courtesy of the artist, Vahram Aghasyan

The works are beautiful, but do they feed in to this zeitgeisty lust for Soviet ruins?

One of its curators, Will Strong, laments this trend. “I was keen that this didn’t become like a kind of ‘ruin lust’, ‘ruin porn’ thing; this slightly buzzwordy term that there is at the moment, this kind of fetishisation of dead space,” he tells me.

“This history is incredibly loaded, and it did not end in 1991. To sort of fetishise it in the very bourgeois western way of, ‘oh yeah, look at all this wonderful Soviet architecture, isn’t it fantastic?’ Obviously a lot of people who lived in that time hated it . . . a lot of people were very miserable under these regimes, so it’s important not to forget that.”


Gym at the Independent Radar Centre of Early Detection, Latvia. Photo: Eric Losito

He adds: “It’s more a point of reflection on how buildings were designed, what their legacy is, what their narrative is, and who the people are who live with that story. This show looks at the aftermaths of when utopia hasn’t been delivered.”

This view is echoed by the Moscow artist, Danila Tkachenko, whose work is featured in the exhibition. “It is rather a metaphor for the future, not the past,” he says. “It represents an image of a possible future. When there is a visualisation of this issue [utopia], it evokes a response in people; they see this utopia in their lives . . . There is disappointment in all utopias.”


The world's largest diesel submarine, in Russia's Samara region. Photo: Calvert 22/Courtesy of the artist, Danila Tkachenko

His Restricted Areas series explores great behemoths of European communism left to lie forgotten in the tundra of remote regions in and around Russia and Kazakhstan: the world’s largest diesel submarine, like a beached whale in the snow; a giant satellite, thatched with antennae, built to communicate with Soviet bases on other planets some day; the deserted flying saucer-like communist headquarters in a region of Bulgaria. The structures hover in blank, white space, making the photos appear black-and-white.


Deserted observatory, Kazakhstan's Almaty region. Photo: Danila Tkachenko
 

Anton Ginzburg is an artist who grew up in St Petersburg in the Eighties as the Soviet Union was disintegrating. He believes studies like his film, Turo, of disused modernist constructions in the post-Soviet bloc, appeal to people’s connection to history. After all, picking through the architectural carcasses of former societies isn’t exactly a new thing:

“Russian culture is still haunted by its Communist past, and constructivist architecture is a decaying shell for its ghosts. It is an active reminder of the recent history,” he reflects. “Perhaps [its appeal] is a mixture of memento mori, with its thrill of beauty and destruction, along with a Romantic tradition of contemplation of Greek and Roman ruins.”

(Anton Ginzburg Turo teaser from Visionaireworld on Vimeo.)

The Power & Architecture season is on at the Calvert 22 Foundation, London, from 10 June-9 October 2016. Entry is free.

Anoosh Chakelian is deputy web editor at the New Statesman.