Alternatives to the cuts…

Some notes from the “Fink Club” False Economy meeting I attended last week (an interesting format – opening speakers only had three minutes each and many contributions from the floor invited, of 1 minute each – and the presentation was “in the round”, never had to speak to an audience in 360-degrees before, but it certainly added energy and movement compared to the traditional “speakers behind a table” format).

Possibly the best line of the evening was from Andrew Simms, New Economics Foundation, who was the host, on the pro-cuts protesters: “fanboys of economic selfharming”. He added: “NEF was going to be on a debate on Newsnight with them, but even Newsnight found them a little weird so it was called off.”

Clifford Singer, False Economy, suggested three alternative plans: Plan B, as presented by the TUC – a robin hood tax, an end cuts to get the economy going again, but admitted that this had been perhaps fairly criticised as “a list of good things” rather than a plan. Plan C, as presented by the New Political Economy Network (PDF), which has a particular focus on clamping down on tax-dodging. Clifford noted that Richard Murphy estimated this cost £120bn, the government says £42bn. “If you split the difference that’s £81bn, which is what govt decided to cut.” Plan D was something altogether bigger: do we really want to maximise human happiness, and if we do, how would we reshape society?

Anne Pettifor, Green New Deal Group, noted that the average G20 debt is 100% of GDP; we are heading towards 83%.
Japan was now applying green new deal principles in trying to rebuild after the tsunami. “We haven’t had a tsunami, but we have had a crater blown in our economy, 2.5m people at least are not doing anything at moment, and we’ve got companies that can’t invest because they can’t get loans. The crater has to be filled by economic activity. We have to nationalise banks, probably will have to soon anyway due to their continuing crisis state.

Steve from UKuncut raised a concept I hadn’t heard before that sounded very interesting, that the war to stop tax avoidance is by introducing a “general avoidance” principle into law. He noted that we, the public, are now giving £220bn in services to banks.

Anna Coute from the New Economics Foundation said “the logic of cuts is when we have dealt with the crisis we will return to business as usual”. But she suggested the alternative of reducing working hours, so that “those who are current overworked have more time to be better citizens and people who can’t get a job have the opportunity to work”.
The proposition was gaining ground among economists, she said. People who work shorter hours are more productive; people who work longer hours have more carbon emissions even when adjusted for income.” But it was essential to ensure everyone had a decent living wage, so a gradual introduction over 10 years was the way to go. She referred to the “lump of labour fallacy” – it is possible to create more jobs by reducing hours that people work.

A contributor from the floor whose name I didn’t catch pointed out that you can set an almost-bank yourself, an industrial provident society, for a £40 registration fee with the FSA. It has a limit of £20m assets, and any one member can put in a maximum of £20k. It can pay interest and loan money. “If we all did this could mop up the bank’s money.”


  • May 21, 2011 - 9:53 am | Permalink

    The cuts won’t work, are cruel and are based on a quite false set of assumptions. I wish the ‘Green tax Parachute’ got more of a media airing.
    Here’s a quick analysis of what’s wrong with the tory economic narrative:

    Ten economic facts that every person opposed to Osbornomics should know | Horner’s Corner:

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