Other People's Money – The Degeneration of Thatcherism, part two

 And so we move on to part two of the chronicle of the Conservatives’ remarkably profligate attitude towards other people’s money, despite what Margaret Thatcher may have led you to believe in 1978. Here is part one. 

This revisionism is not solely directed at Conservative hypocrisy – tempting as that may be – it also exposes the barren hulk of the current Labour party, which promises to transport us back to the halcyon days of early David Cameron. Another of Margaret Thatcher’s famous lines was to describe New Labour as her greatest achievement. “We forced our opponents to change their minds,” she said. And we haven’t stopped paying for it since.

Housing

If any part of British society bears the unmistakable imprint of Thatcherism – and almost all do in some way – it is the housing sector. The policy of the ‘Right to Buy’ – allowing council house tenants to buy their homes at discounted rates – undoubtedly came to embody the Thatcherite promise of creating a ‘property-owning democracy’. In awarding her the Presidential Medal of Freedom, the elder George Bush commended Thatcher for putting “private roofs over British heads”. But the policy, because it also involved preventing councils from replacing the stock they had to sell, had one consequence that was the polar opposite of owning your own property – having to rent it.

The number of private renters has more than doubled since the turn of the century and that doesn’t include those renting from housing associations. This change was enabled by classic Thatcher-era legislation, the 1988 Housing Act, a deregulatory bonfire which introduced short-term tenancies, allowed landlords to charge whatever rent they liked, and got rid of any security of tenure for tenants, permitting them to be evicted with only two months’ notice. It presaged a huge change from the post-war social democratic settlement which was characterised by a mix of owner occupation and council housing. “The private landlord, increasingly associated with the rack-renting of slums was nearly eliminated”, wrote historian David Edgerton of that period.

But this brave new (old) world which saw the triumphant return of the private landlord and the phasing out of council housing had consequences: the number of private tenants who couldn’t afford the rent, and thus became reliant on financial assistance from the state, shot up. The amount spent on housing benefit increased from less than £2 billion to £24 billion in 2015/6 and now stands at over £30 billion a year. This is a public subsidy to landlords to make up for the fact that the level of rent they are charging is beyond the capacity of their tenants to pay. True Thatcherite Conservatives like to present the enormous housing benefit bill as indicative of out-of-control welfare spending that needs to be pruned back but, in fact, it is a direct result of their deliberate gutting of the post-war social order.

Speaking of which, the Cameron/Osborne administration did successfully, although temporarily, reduce the size of the housing benefit subsidy. Naturally, this was through eliminating tenants’ entitlement to it – through denying it to under-21 year olds and introducing a benefit cap – rather than reducing the need for it by cutting rents. Curiously though, a little publicised feature of the Conservatives’ 2016 Welfare Reform Act did indicate the financially sensible nature of the latter approach. ‘Social’ Landlords – i.e. local councils and housing associations – were required to reduce rents by 1% a year for four years. According to a House of Commons Research Briefing, “of all the measures implemented to date, the requirement on social landlords to reduce rents …. has achieved the highest level of saving.”

Innocently, you might think therefore that such a policy of rent capping should be applied to the private sector, where rents, the number of renters and the housing benefit subsidy have all mushroomed over the last 30 years. But such an idea doesn’t factor in how the Conservatives are the party of asset owners, whose interests – even if reliant on a huge state subsidy – must be protected at all costs. Rent control, if applied to the private sector, seems to cause an irrationally vituperative reaction among Conservatives. Friedrich Hayek, Margaret Thatcher’s favourite philosopher, described the policy as “deadly”. More recent adepts have condemned it as almost as devastating to a city as bombing it.

At the other end of the scale, the Conservatives have subsidised the deposits and mortgage repayments of first time home (usually flat) buyers through the Help to Buy scheme launched in 2013 which has so far cost £21 billion. Aside from artificially raising house prices, and thus benefiting housebuilders like Taylor Wimpey, the scheme has left recipients high and dry after the huge rise in interest rates, and thus mortgage interest payments, following the Truss debacle. But such is the Conservatives’ obsession with home ownership, seen as such an indelible part of Thatcher’s remodelling of British society, they are prepared to move heaven and earth –  including their own allegedly free market ideology – to massage the optics.

The Economy

The Conservatives did not, it should be said, instigate the huge state bail out of the banks that the British government felt it had no choice but to pay following the 2008 financial crisis. That was the prerogative of the last Labour government. But market fundamentalist Thatcherite ideology – convinced of the inherent wisdom of allowing those at the top of society maximum leeway – was certainly in attendance in spirit.  And the Sunak administration is pursuing the very sensible policy of removing the regulations that Cameron introduced as a sop to the prevailing zeitgeist that something had to be done to prevent 2008 from playing out again. I’m sure it’ll end well.

What can be laid at the door of Thatcher’s children, however, is subsequently using the exclusive money generating power of the state to massively augment the wealth of the richest in society. This was through the capital creating policy of Quantitative Easing (QE). Since 2008, QE has been deployed three times – immediately in response to the financial crisis (Labour), after the Brexit vote (Tory) and then again in the economic panic that ensued post-Covid (Tory) – totalling £895 billion in Britain alone.

QE works by creating a huge mass of money (so-called fiat money), that naturally seeks investment opportunities. The stock market is one of those investment outlets, although the booms engineered are decoupled from traditional market reasoning – the backing of companies because they are thought likely to be successful in the future. The resultant “explosion in billionaire wealth” – the cumulative wealth of the UK’s top 10 billionaires has increased by 281% since 2009 – therefore cannot be explained solely, or even mainly, by the natural workings of the market. During the pandemic for example, economic activity and growth plummeted but the number of UK billionaires rose by a fifth. This huge wealth – a billion is a thousand million – has been given a stupendous boost by positively Stalinist state intervention, carried out by, among others, devoted Thatcherites.

It should also be pointed out that Quantitative Easing directly contradicts one of the core tenets of original Thatcherism, that of monetarism. Developed by the American ‘free market’ economist, Milton Friedman, monetarism held that, to combat inflation, the supply of money should be strictly controlled. Doubtless the theory was honoured in the breach by ’80s Conservatives, but from the 2010s government policy around the world has simply laughed at it. Whether the inflation we are now experiencing has something to do with massive increases in the money supply – á la Friedman – is a moot point. In the last decade, notwithstanding regular doses of QE, the main threat was deflation, not inflation, suggesting that the capital boost of QE had stayed within the financial system. Possibly the last tranche of it – the creation of $834 million dollars an hour worldwide for 18 months – was so huge that some of it, in line with the official narrative, leaked out. Or maybe support for a largely mothballed ‘real’ economy – i.e. increasing the amount of money in circulation but reducing the amount of goods – produced the classic ingredients for inflation. Who knows?

Certainly now, we are seeing the opposite of QE, so-called Quantitative Tightening (QT), on the part of the world’s central banks, along with increases in interest rates. Whether this presages a new financial crisis, which may be unfolding as we speak, is an interesting question. But to even make a dent in the massive inequality caused by the economic intervention of adoring Thatcherites it would have to go on for decades.

Possibly Conservatives would retort that their post-Thatcher predilection for economic intervention does not just help those at the summit of the society but also the many millions at the bottom end. This is through working tax credits which ‘top up’ low or moderate incomes. Tax credits were introduced in America in the 1970s and expanded massively by Bill Clinton. Naturally, this country followed suit, and working tax credits became a core part of New Labour’s welfare philosophy (with emphasis on the working).

Their origin among parties theoretically antithetical to Thatcherism and Reaganism is deceptive, however. In reality, tax credits are another form of state subsidy to vested interests, enabling employers to pay low wages and institute more part-time or zero hours contracts with the assurance that the state will meet the shortfall. They are an essential part of our Thatcherite economic landscape. In 2015, the charity Citizens UK revealed that large retailers, such as Next and Tesco, were costing taxpayers £11 billion annually so that their staff could enjoy “a basic standard of living”. The situation has only become more acute in the interim.

Perfunctory, if high profile, attempts to wean on employers off tax credits, such as Osborne’s higher minimum wage, have not worked partly because they have been accompanied by a never-ending war on trade unions, the one force in society capable of making tax credits unnecessary through compelling employers to pay higher wages. Rishi Sunak’s anti-strike legislation, which permits employers to seek damages for the effect of strikes, will hit what’s left of trade union power, already hobbled, as we know, by archetypal Thatcherism. Tax credits in themselves are hostile to trade unions because if wages rise because of trade union influence, the tax credit level will fall as a result. It is no accident that a country such as Norway, which regards trade unions as social partners, not ‘the enemy within’, and which has a system of sectoral collective bargaining to determine wages, has not introduced tax credits. It doesn’t even have a minimum wage because strong trade unions mean it isn’t necessary. Norway, incidentally, also has a much higher standard of living.

It’s clear that the Thatcherites in Britain didn’t vanquish ‘socialism’ as they claimed they had. They merely changed the beneficiary group.

Covid and Corruption

There is something viscerally enraging about the Conservatives’ fiscal incontinence during the Covid pandemic.  It came after years of justifying taking money away from poor people – through policies like the benefit cap, sanctions and reducing the amount received by sickness claimants by £30 a week – on the grounds that it was only fair to the hard-pressed taxpayer.

But the interests of the taxpayer, allegedly so close to Conservative hearts, were strangely downgraded during the Covid lockdown when corruption and the raiding of the public purse by friendly businesses were rife. Virtually no prosecutions concerning the £5.8 million lost through fraud have taken place despite 30,000 allegations of fraud being reported to HMRC. The same is true of Rishi Sunak’s month-long Eat Out to Help Out scheme, which attracted an estimated £21 million in fraudulent claims from the hospitality sector. This dawdling contrasts with the alacrity that the Conservatives look upon alleged fraud in the benefits system. Permanently staffed hot-lines for the public to report fraud, regular tests for sick and disabled people, and the dispensing of thousands of sanctions to claimants for not upholding their “contract with the state”, have been features of this parallel universe in the UK for years.

In total £4.3 billion lost in fraud during Covid has been written off by the Treasury, prompting one minister in the House of the Lords to resign and accuse the government of “having little interest in the consequences of fraud to our society”.

But far from having little interest in it, Conservatives seem positively in favour of subverting free market ethics when it involves their friends. Michelle Mone, accused of secretly receiving some of the profits of a PPE firm that won large government contracts after she recommended it ministers, became a Conservative life peer in 2015. Altogether, nearly £1 billion in Covid contracts were awarded to 15 companies linked to donations to the Conservative party. It certainly pays to network.

The Conservatives’ alleged concern with getting value for money for the taxpayer is for the birds. The overriding aim is that 1) A narrow elite circle benefit and 2) The cash – otherwise known as other people’s money – finds its way through labyrinthine sub-contracting to the “good hands” of the private sector. Dido Harding, appointed as chair of “NHS Test and Trace” in 2020 is an example. Her lack of medical experience was no obstacle. Known as “an accomplished networker” according to The Times, she went to Oxford with David Cameron, married a future Conservative minister, and rose to become the chief executive of a mobile phone company and a Tory peer. Despite being given an astronomical £37 billion in funding, Test and Trace, reliant on sub-contracting by firms like Serco and consultants paid up to £6,000 a day, was a monumental failure, with more than 60% of those with Covid symptoms not being contacted. By contrast, the in-house teams of the doomed Public Health England and local authorities reached nearly 98% of their contacts. Go figure.

Ubi omnes errabis?

As alluded to earlier, this is not about simple hypocrisy. Arguably most political movements are hypocritical in that they don’t do what they say they are going to. The historical reputation of the Britain and America is that they compelled the rest of the world to accept the virtues of free trade, whereas in reality they were arch protectionists, and in Britain’s case, actually destroyed the industries of competitors through imperialism.

But Thatcherism started out with free market intentions. In its early days it preached the tenets of monetarism and controlling the money supply, sold off loss making industries to the private sector, declared war on trade unions as impediments to ‘free’ employment relations and hiked interest rates (causing a huge recession and remaining unmoved while thousands of businesses who couldn’t survive in the new unforgiving environment went to the wall). Only gradually – through for example contracting out essential public services and bailing out ‘too big to fail’ banks – did it morph into something else. Now the Thatcherites, notwithstanding their free market sheen, are presiding contentedly over a system of socialism for the rich.

Partly this is to do with misunderstanding what conservatism is. Friedrich Hayek, the major intellectual influence on the modern Conservative party, succeeded in reconnecting it to its classical liberal, or ‘old Whig’, philosophical inheritance. According to him, this conservative-liberalism, in contrast to idealistic socialism, had a “low” view of human nature. Hayek famously said that everything would turn out well if everyone behaved selfishly. But this selfishness was meant to exist within the law and the rules of the free market.

But nobody, besides intellectuals, believes in the sanctity of the free market. Many wealthy people will go where they can make even more money and the state, which rakes in and distributes hundreds of billions of pounds, offers that opportunity. The corruption around Covid illustrates the temptations and modern privatisation more broadly relies on the existence of a well-endowed state which can re-distribute taxpayer funds to the private sector. The Conservatives have, for years, been resolutely unforgiving about a ‘something for nothing’ attitude on the part of the multitude. Benefit sanctions, already at an all-time high, are being multiplied still further by Jeremy Hunt. But for the rich this sternness melts like ice left out in the sun. This is because the Conservatives are, and always were, a class-based party and exponents of class solidarity. When Tony Blair declared in 1999 that the class war was over, only one side was listening.

But the degeneration of Thatcherism has deeper causes than just the class bias of the Conservative party. Thatcher tapped into a profound conviction among Conservatives that if burdensome regulations and socialistic rates of taxation were lifted, the result would be prosperity for all and runaway economic growth. This certitude can be traced back to Adam Smith who thought the “natural effort of every individual to better his condition” was so powerful a principle it would carry society to “wealth and prosperity” and surmount ignorant obstacles placed in the way by “the folly of human laws”.

Coincidentally, the UK did – in common with the rest of the world – experience an economic boom in the mid-1980s. Naturally, Thatcherites took this as confirmation of the economic wisdom of their policies, which despite the temporary pain involved, had to be persevered with (actually the pain was probably connected to the ensuing boom, capitalism had always relied on a shake-down of capital value to lay the ground for subsequent growth). In fact, the economic boom of the mid-1980s became lodged in the public mind as the consequence of tough Thatcherite medicine and has endured despite the boom being revealed as a unique event.  Economic growth has declined in every decade since the 1980s, culminating in the present torpor. Real wages are not predicted to return to their 2008 level until 2026 and are experiencing a 3.9% annual decline, productivity is terrible when compared to before the Financial Crisis (0.5% compared to 2.3%), and business investment is anaemic.

But rather than face up to these issues, Thatcher’s children are umbilically attached to the idea that the only solution is more deregulation and tax reductions for the investors. These policies – known as supply-side reforms because they concentrate on those ‘supplying’ investment and employment (or not) – are religiously propagated by many conservatives despite the fact that they have already been implemented, with the results we see before us, for nigh on four decades (the corporation tax rate was 52% in 1981, it is now 19%). Liz Truss, for example, convinced herself that a bias towards redistribution over economic growth lay at the root of poor economic performance despite the evidence pointing in exactly the opposite direction.

One very obvious reason why these questions are not honestly examined, is that it would move into the crosshairs numerous Thatcherite shibboleths, most notably the idée fixe that underperforming economic growth can be palliated by reducing tax rates and irksome regulations on the wealthy. This ‘fix’ seems to be impervious to empirical evidence, though the Sunak administration is finally increasing corporation tax after decades of reductions, hoping no-one will notice that this contradicts a basic tenet of conservative economic philosophy.

As the South Korean economist Ha-Joon Chang pointed out a few years ago, the level of regulation is not a disincentive if there is a prospect of profit to be made. “…. strange as it may seem to most people without business experience,” he wrote in 2010  “businesspeople will get 299 permits … if there is enough money to be made at the end of the process. “In contrast, if there is little money to be made at the end of the process, even 29 permits may look too onerous.”

Why there is in the UK “little money to be made” – with the notable exception of finance and property – is not a question many are eager to ask, especially if it indicts their whole economic strategy which supposedly rests upon the inherent virtue of making money.

Herein lays the explanation as to why Thatcherism has degenerated into a system of socialism for the rich. It’s quite possible – indeed common – to remain ideologically blinkered in the face of evidence showing the hollowness of your ideology. It’s even possible to implement policies, such as corporate tax cuts, that do not have the beneficial effect you say they will. But it’s not possible to ignore the real world consequences of the failure of your economic philosophy. That is why free market Thatcherism has degraded into a swirl of subsidies, bail-outs, phoney privatisations, landlord patronage and plain corruption. They’ve been necessary because the free market hasn’t been able to prosper under its own devices and if you, as a party, represent the interests of asset-holders at the end of the day, they aren’t especially difficult choices to make. And in those circumstances, delving into the ready pile of “other people’s money” becomes irresistibly tempting.

But the remains – what lies at the root of economic failure?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Who is Jeffrey Sachs and why is he saying these things?

Last month the economist Jeffrey Sachs said something which should have sent shockwaves around the world. “I chaired a commission for The Lancet for two years on Covid,” Sachs told a conference in Madrid. “I’m pretty convinced it came out of US lab biotechnology, not out of nature; just to mention after two years of intensive work on this. So it’s a blunder, in my view, of biotech, not an accident or a natural spillover."

 This is not the kind of claim that can be safely dismissed – as claims going against the orthodoxy invariably are – as a ‘conspiracy theory’. Sachs is a famous economist. Twice one of Time Magazine’s most influential people in the world, he was responsible, as an advisor to Boris Yeltsin, for imposing shock therapy on post-Communist Russia (coincidentally the 1990s saw life expectancy in Russia fall by the largest amount, outside of war or famine, in any nation in history). Since then he’s undergone something of a metamorphosis, endorsing Bernie Sanders in the 2020 American election.

The Lancet is a famous British-based peer-reviewed medical magazine, not noted for its articles on the Loch Ness monster, Big Foot sightings and the lost city of Atlantis.

The Sachs/Lancet combination is therefore not one that can be plausibly accused of spreading fake news in order to garner a few thousand likes on Twitter. But what Sachs had to say wasn’t greeted with the kind of peaked curiosity you might expect from the media. The UK right-wing press – Telegraph and Daily Mail – did register his comments, though noticeably without the level of glee that accompanied claims from the year before that China, alone, might be responsible for Covid. State media (the BBC) and the liberal press (The Guardian) were conspicuous by their silence. Likewise the left-wing, and generally pro-China, Morning Star.

‘This was teamwork’

If Sachs is too close to the Establishment to be branded a conspiracy theorist, claims he is merely a “Xi propagandist” (Xi Jinping is the President of China) don’t really stack up either. After all, what he is saying does not exonerate China. To do that, he’d have to parrot the Chinese government line – and that of many western scientists – that Covid definitely originated in the wild.  Or echo Chinese media claims that the Covid-19 virus was cooked up at a US military base in Maryland. But he’s doing neither. He’s saying it’s very possible – not definite, no-one can know for sure without transparency by all parties – that SARS-COV-2 (Covid) was a deliberate creation of a US-Chinese scientific partnership and leaked out inadvertently as a result of a terrible mistake.  

It’s a matter of public record that US government agencies funded coronavirus research at the Wuhan Institute of Virology among other places. This was a result of a 2014 Federal ban on such research in the US because it was considered dangerous. There were, Sachs says, grant applications that wanted to manipulate coronavirus strains to make them more infectious to humans (the logic being that if you do so, vaccines are supposedly easier to formulate). The National Institutes of Health – the US government agency that doled out the funds – says that no such proposals were approved. But, retorts Sachs, it’s common knowledge in these fields that some research is always undertaken in advance of the securing of funding.

“If this came out of a lab, it was US biotechnology that made it possible,” asserts Sachs. “The US actually trained the people at the Wuhan Institute of Virology, they were engaged with them, they were part of the same grant proposals. This was teamwork.”

Two caveats should be made. One if Covid was released from a lab, it was a catastrophic error, not part of some dastardly plan to create a devastating new bioweapon. Two, there is no certainty. “We don’t know for sure, I should be absolutely clear,” Sachs cautions. “But there’s enough evidence that it should be looked into and it’s not being investigated, not in the United States, not anywhere. I think for real reasons that they don’t want to look underneath the rug too much.”

 

Oops

 

But what is clear is that, Jeffrey Sachs aside, there isn’t much of an appetite for truth here. Some people – US Republicans, Tony Blair etc. – were all for lifting up the rug when they thought China was the sole perpetrator. Certain Trumpists even wanted to go to war over it. But the enthusiasm on the Right for the unvarnished truth has waned the more the plot has thickened.

American Democrats and centrists and liberals of various hues are fervently attached to the zoonotic explanation for Covid because to depart from it puts science in the crosshairs when it belongs firmly on a pedestal.  When the Chinese government isn’t agreeing with them for slightly different reasons, it’s urging the World Health Organisation to investigate the sudden closure of the US military base denounced as the harbinger of Covid.

But Covid as the bastard child of a joint US-China scientific project gone cataclysmically awry? That doesn’t have quite the same partisan appeal, not least because you can’t blame communism or the US military. Ironically, if it is true, the only possible scapegoats for a death toll of, conservatively, over six million and counting, are the signature forces of our age, globalisation and outsourcing.  I mean who’d have thought they could have any downsides?

That’s the one certain ‘takeaway’ in the Sachs version of the lab leak theory. The world is a lot stranger than you thought. A new Cold War, even direct military conflict, is brewing between the USA and China. The most ‘globalist’ candidate to replace Johnson as UK PM, Rishi Sunak, promises to “face down China” as the biggest threat to world security. And yet here were these deadly enemies cooperating on extremely risky germ research. And that’s beyond dispute; they were cooperating even if at this point the Armageddon outcome is a matter of conjecture. I’m fairly sure that in the actual Cold War, even at the height of détente, the US didn’t farm out biomedical research to the Leningrad Medical Institute.

In all probability, even if some version of the lab leak theory is what happened, it will never become the accepted narrative. To concede that would be to invite a moral reckoning so seismic it would fatally damage the legitimacy of the world’s two superpowers and give a new fervour to the forces of ethno-nationalism and religion. I’d like to think the non-national, council democracy of the Kurds could step into the breach but I realise its libidinal reach is at present a lot smaller.

 It will be interesting to see how the final, peer-reviewed report of Sachs’s Covid commission in The Lancet deals with the issue; whether it will be as outspoken as he has been. If it is, I expect it to be one of the most unwelcome items of news in history.

Addendum, 1 Nov 2022

Maybe as expected, the Commission report hedges its bets about the origins of Covid, saying it is “feasible” the virus leaked out as a result of a “research incident” but also that a “zoonotic” explanation – a natural spillover – is equally plausible. In the absence of independent investigation of US laboratories engaged in “manipulation of SARS-CoV-like viruses” or laboratory research in Wuhan, it is not possible to say with any certainty what happened. “Commissioners held diverse views about the relative probabilities of the two explanations, and both possibilities require further scientific investigation,” the report says.

https://uk.news.yahoo.com/lancet-report-claiming-covid-could-132931783.html

https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(22)01585-9/fulltext

 

However, evidence for the synthetic origin of Covid-19 remains: https://twitter.com/mbalter/status/1583203103293071360

The Fiction of Consent – The Unfreedom at the Heart of Liberalism

 

If liberalism has one guiding thread it’s that nothing should happen to a person without their consent.  John Locke, probably the most famous philosopher in the history of liberalism, argued that “no-one ought to harm another in his life, health, liberty or possessions.”

Good intentions were rather undermined by the fact that in Locke’s Britain, a bastion of liberalism since the Glorious Revolution of 1688, the number of offences for which the death penalty applied rose to around 250 by the early 19^th century. A person could be hanged for stealing a handkerchief or taking an unauthorised clipping from an ornamental bush. A slight impediment to health, one might think.

Locke himself invested in the slave trade and thought children as young as three ought to be sent out to work.

But, nonetheless, the principle was laid down.

The liberal dictatorship

In addition to a penchant for hanging peasants, early liberalism was implacably hostile to democracy. Faced with the huge Chartist petition of 1842, the liberal historian and politician Thomas Macaulay declared universal suffrage “incompatible with civilisation”. Chartist leaders in Britain were jailed and the mere demand for the vote often treated as a criminal act by the ‘liberal’ authorities.

However, in the intervening years the opposition of most liberals to democracy dissipated to such an extent that ‘liberal-democracy’ is now seen as an eternally natural state of affairs, rather than the coupling of once sworn enemies.  And in the reconciliation the liberal principle of consent has survived. Governments, it is proclaimed, are dependent on the will of people. They are compelled to seek a popular mandate. Nothing should be done without the people’s consent.

However, I want to argue that both economically and politically, the liberal – now liberal-democratic – principle of consent is a sham. In the words of Noam Chomsky and Edward Herman we manufacture consent, we don’t seek it out.  A society founded on genuine consent would look incalculably different to the one we now inhabit.

I will illustrate this hollowness by looking at two seemingly disconnected topics – UK Labour party leader Keir Starmer and “modern slavery”.

By any means necessary

Keir Starmer was overwhelmingly elected as leader of the Labour party in 2020. In his election campaign, he presented himself as a crusader for striking miners and printers. If elected, he promised to make “the moral case for socialism” based on ten pledges – including support for common ownership of utilities, abolishing the House of Lords, an end to ‘illegal wars’, and reversing cuts to corporation tax. He also set himself up as the unity candidate, promising “an end to factionalism”.

In retrospect – after a year and a half of Starmer’s leadership – all this seems utterly farcical. He has shunted the party inexorably to the Right, urging activists to embrace the legacy of Tony Blair, a man venerated as “the master” by George Osborne.  Starmerism has involved courting the support of billionaires, seeking Parliamentary candidates from outside the party and trade unions, defenestrating the left-wing leader of Scottish Labour, forcing shadow ministers to apologise for being ‘anti-business’, refusing to make any spending commitments and being outflanked from the left by the Conservatives, for example on nurses’ pay. In the words of an aide, rather than making a moral case for socialism, “all that nonsense” – meaning Corbynite policies – had to be ditched.

And far from seeking unity, Starmer has waged an unrelenting war on opponents in the party, removing the whip from his predecessor for telling the truth, sacking left-wingers from the shadow cabinet on spurious grounds and expelling and suspending members who disagree with him, including swathes of left-wing Jews.

It is sometimes argued that Labour party members – all half a million of them – are unfortunate, but necessary, collateral damage in Starmer’s quest to make Labour “electable”. But this is belied by Starmer’s plummeting approval ratings and the fact his predecessor’s policies – if not the man himself – were popular with voters.

However, in assessing Starmer’s performance, mainstream commentators don’t condemn the duplicity he exhibited in order to get elected as Labour leader. In fact they laud him for shrewdness or political nous. Because Starmer encapsulates – in telescoped form – what ‘democracy’ under neoliberalism, or ‘new liberalism’, is. It is not about seeking to define and represent the popular will, but to obtain – by any means necessary including lying – consent for a pre-ordained set of policies.

Without doubt pre-neoliberal Parliamentary democracy has often manifested exactly the same tendency. But it has been distilled into an art form in the last four decades, with real power usurped by pan-governmental organisations like the IMF. Governments are now placed in a straitjacket, compelled to support balanced budgets and accompanying austerity, liberalized financial markets, low corporate taxes, and personal tax rates that don’t prompt an exodus to the Bahamas on the part of the very wealthy. Given the resentments that this state of affairs inevitably generates, ‘democracy’ is largely about ensuring they are directed at powerless targets, usually immigrants and benefit claimants.

Curiously, however, even though the spirit of democracy can be unashamedly trampled on, the formalities can’t. Free and fair elections must be periodically held and consent, by hook or by crook, extracted. It is an irony of history that just as a wave of democracy rolled across the world after the fall of the Berlin Wall, toppling dictatorships and one-party states in its wake, the actual content of democracy was hollowed out. Governments, whatever their theoretical commitments, were invariably compelled to accept the strictures of IMF Structural Adjustment Programmes and the dictates of the Washington Consensus. Post-apartheid South Africa is a textbook example of “democracy without democracy”. Elitist fears expressed at the dawn of universal suffrage a century and a half ago, that democracy would swamp liberalism, have proved groundless. Precisely the opposite has happened.

Liberalism and slavery

The same liberal neuroses about consent can be observed in the furore over “modern slavery”. Governments bend over backwards to condemn it in the strongest possible terms, charities pledge to eradicate it, and the media join the chorus.

This is not to deny that modern slavery is a serious problem, and a separate category from the conventional employer/employee relationship. But the wall erected between “compelled labour” and the normal workings of capitalism is supremely ideological. In the urge to locate “exploitation” as happening solely when a worker is coerced – the UK’s Gangmasters & Labour Abuse Authority defines its aims as “preventing worker exploitation” – another claim is implicitly made: that when the labour exchange is free and consensual exploitation doesn’t occur.

But this is nonsense. In the words of academic Neil Howard, this fictional binary “protects the system from the moral outrage that might otherwise challenge its hegemony”.

Capitalism – i.e. an economic system based on ‘free’ labour exchange – cannot do without reams of people without property who are compelled to rent themselves out in order to procure the means to physically survive.

Even if one is to ignore the millions of people on the margins of the global economy who choose to submit to servitude or trafficking because in conditions of dire poverty they represent their least worst options, a comparatively wealthy country like Britain shows the depth of the well from which exploitable people are drawn.

There are, it is estimated, 16 million people in the UK who have less than £100 in savings. And nearly 80% have some form of personal debt in the shape of credit cards, personal loans, bank overdrafts and payday loans. In such circumstances – and in those of a benefit system that will sanction claimants who can’t prove they are looking for work – saying no to a job offer is not, practically, possible. In previous, more honest, eras, this was called wage slavery.

Exploitation through the ages

Marxism is frequently presented as nightmare ideology that wants to make everyone the subject of an all-powerful state and was responsible, in the last century, for killing millions in gulags and famines. But the hysteria partly comes from Marxism’s insistence, uniquely in economic thought, that exploitation doesn’t just occur under patently coercive arrangements like slavery and feudalism but also when people, on the surface, voluntarily choose to work for an employer.

“There’s only one basis that any capitalist ever hired a worker,” says author Richard Wolff, “and that condition is ‘you gotta produce more for me than I pay you for coming here to do it’”. In this sense, capitalism is no different from prior economic systems, or the vestiges of such systems that remain. In all cases, a small minority exploits the vast majority in order to extract a surplus from them. “Capitalism, even though the workers are not slaves or serfs, does replicate those two systems in this particular way,” says Wolff. “One group of people – the employees – go to work on condition that they produce a surplus that the employer gets.”

You may baulk at the notion that someone like Lionel Messi (salary €71 million at Paris Saint-Germain F.C.) is exploited. However, what cannot be honestly denied that is corporations and other businesses, practically and legally required to maximise profit, view the world’s population as either a resource ripe for exploitation or a human mass to be left to rot (“the misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all,” said 20^th century economist Joan Robinson). In the latter case, the human material is created for trafficking and forced labour in the West.

And in most Western countries, exploitation – exploitation that is of workers who ‘freely’ consent to do their jobs – is intensifying. In Britain, in the wake of the financial crisis, zero hour contracts have mushroomed and many workers – for example builders or delivery drivers – are falsely reclassified as ‘independent contractors’ in order to save the employer from having to fork out for holiday or sick pay. They can also earn below the minimum wage because they aren’t officially paid a wage and don’t have set hours.

In addition, as pandemic conditions slowly lift, many employees are finding they are being sacked and told to reapply for their jobs based on inferior conditions. Despite the rhetoric about the inestimable value of key workers in the worst stages of the pandemic, Tesco, British Gas, British Airways and local councils and have all tried to engage in this “industrial thuggery”.

In such circumstances what better way to shield capitalism from justifiable anger, than to focus all attention on the plight of slaves and coerced workers who, it is claimed, exist entirely outside of its legitimate confines?

The cooperation of the exploited

But there is a deeper reason, in my opinion, for this blindness of liberalism. In the 1970s, psychologist Stanley Milgram, author of the famous obedience to authority experiments, noted that for obedience to work seamlessly, those subject to it had to believe that their submission was a voluntary choice. “The psychological consequence of voluntary entry is that it creates a sense of commitment and obligation,” he said, “which will subsequently play a part in binding the subject to his role.”

Any endeavour – and that includes the ubiquitous labour contract – is so much easier to perform if the victims of it can be convinced to cooperate. Enforcing coercion is hard. It requires perpetual surveillance and overcoming an ingrained human resistance – some have called it counterwill – to bowing to another’s desire.

That is why liberalism insists that consent exists in political and economic arenas when patently it has to be fabricated. But if consent can be given, it can also be withdrawn, if only spiritually at first.