Monday, 6 September 2010

Some simple economics

A poll conducted by the BBC has found that six in ten people questioned were i"n favour of taking steps to reduce the deficit." No doubt, that will be enough for the government who will take this  a public "endorsement" of their programme. But, even without context, this result is hardly vindication.

It would be a surprise if the majority of people thought any other way. Before the election, all three main parties took a virtually identical line on the "need" for cuts, and the media has continually parrotted the propaganda line with consistent attacks on public sector workers in order to justify robbing the poor to pay for the rich.

With the ideological line being hammered home so consistently, it is no wonder that people believe that we need to take action to reduce the deficit. But this doesn't mean that they agree with the Tories that their basic standard of living needs to come under fire.

In fact, as the BBC found, they believe quite the opposite. Hence why "some 82% of 1,000 people surveyed were against education and healthcare cuts."

But then, these people (that is, the majority of ordinary people) are "deficit deniers." They simply don't understand economics or what's good for them. The working class need to understand that their being able to sustain themselves adequately would "set the economy on a road to economic ruin."

This is the great lie about economics that so many happily perpetuate - it is not a science, and it is not a specialist area that you have to study and understand. It is, in fact, an extremely simple thing to grasp.

What those who spend years studying it learn, in essence, is the bluff and bluster which goes into masking the subject's simplicity and keeping it out of the reach of ordinary people. Economists are little more than the high priests of capitalism.

Thus, the "deficit deniers" don't actually deny the deficit at all. We simply recognise that it is not our deficit, but the ruling class's deficit, borne of gambling and lending on the back of stolen wealth.

The working class constitute the vast majority of people on this planet, and it is from us that all the wealth of this world comes. Through our labour power as workers, we produce every necessary, valuable, or saleable product. Through our purchasing power as consumers, we drive trade and give money its value.

This is the real economy. But whilst the workers drive it, on the back of our labour it feeds a small minority of parasites in the top strata of society: the capitalist class.

The capitalist class punch above their weight because, right back to the feudal era, the monopoly of violence enjoyed by the state has enforced the illusory "right" of private property, allowing the few to control the wealth of the world and claim dominion over those who produce it.

The financial markets, meanwhile, are merely the mechanism by which that class gamble with money which isn't their own, against "indicators" whose parameters they define, to multiply their wealth to entirely fictitious levels. The money being played with during the financial crisis and bailouts, for example, did not exist until central banks declared that it did and "injected" it into "the economy."

All that the "stability" of banks and the financial markets, much vaunted as the basis of economic security, guarantees is the ability of the ruling class to create money out of thin air.

Back on planet earth, it is the real economy which produces actually existing wealth, and upon which genuine economic stability is built. After all, it is no good having vast quantities of imaginary wealth if you can't keep your family fed and clothed and a roof over your head.

But the British government (among others) want austerity. That is, they want cuts in jobs, benefits, and public services. Even within the parameters of the existing economic system, this is little short of madness.

As workers, our labour power is reduced with less of us working. As consumers, our purchasing power is diminished with less money to spend on the goods being produced. Each impacts on the other, and production and consumption are driven into a downward spiral.

Thus, the real economy contracts. The effects of this, based upon the tangible rather than on generated figures, is far more damaging than of a recession in the financial markets.

All of which is obvious on the basis of simple observation. Ordinary people are aware of this, even if on an unconscious level, which is why acknowledging the deficit doesn't equate to accepting the government's "fix" for it.

Propping up the financial markets at the expense of the real economy will bring down both. Maybe when that happens, the market ideologues will start listening to the deficit deniers.