Policy Research in Macroeconomics

The Source of the Problem

It is an old truism that politics and economics are inseparable, but these days we tend to accept the connection submissively, giving little serious thought to how the link could be used to improve our economic plight. This is a grave mistake, for we democratically elect our governments, and the thoroughly bad politics that underpins our economy is ultimately our responsibility. Only the demos, exercising its political rights conscientiously, can do anything to remedy the situation. Yet currently our electorates seem either blindly compliant or passively disillusioned, lulled into a state of apathy by the unceasing propaganda of the established elite.

In his treatise Representative Government,  the 19th century philosopher John Stuart Mill points out the danger of this type of lethargy particularly clearly. In his view, the success of representative government rests squarely on the political morality of the country, while lack of interest, political torpor and passivity leads to its inevitable failure. Without the well disposed participation of an informed electorate, private interest will infiltrate the whole political system. This will inexorably lead to corruption and to what Mill described as ‘class legislation’, resulting in the death of integrity and social justice. In other words, people must both make and must work their governments if deterioration is to be avoided, and the critical factor in preventing this declension is the desire and the motivation of the demos. The nature of such motivation is crucial, and motives, as Mill points out, are always agent centred. It is no use telling people how to act; they must rather become the sort of people who act as they do.

Today, our national and global political elite understands this fact only too well. Intent on maintaining its existing hegemony, together with the system of increasingly unregulated capitalism and escalating consumerism that supports it, it works ceaselessly to ensure that citizens become and remain the kind of human beings who will not question the established economic paradigm. In order to achieve this objective,  human nature must be manipulated in such a way that individuals either wish to elect representatives who support the status quo, or else that they abstain from voting – and from a wider participation in politics – altogether.

This indoctrination of the electorate consists in an unremitting effort to convince people that material gain is the summum bonum of all endeavour, that competition is the only key to success, and that co-operative behaviour designed to further the common good is of no value. A slow drip-drip of propaganda and policy has ensured that this ethos is internalised. The validation of public service has been replaced by the lauding of private profit-seeking. Collective power is systematically demonised, and individual competition encouraged at every level. The poor are characterised as ‘scroungers’, and welfare spending derided as a waste of national resources. Human achievement is measured by the possession of material goods, while other qualities, such as wisdom, public spirit, generosity and unselfishness, are brushed aside. Regressive taxation is held to be beneficial. Education is increasingly promoted simply as a path to pecuniary advancement, and huge inequality in the labour market is presented as morally acceptable. The lobbying power of the rich also determines the manufacture of goods unproductive of social benefit, especially that of military hard-wear and so-called defence armaments, while the fiduciary duty of corporations to maximise the profits of their shareholders plays havoc with environmental and social regulations and creates a race to the bottom in terms of human welfare. In other words, greed is valorised, and all that is good in human interaction is belittled. This repeated endorsement of self-interested behaviour is worse than social control – it is more like a covert exercise in eugenics.

From the point of view of the ruling elite, however, it is a very successful strategy, for it produces individuals deeply dependent for their very identity upon the high consumption lifestyle that capitalism is still able to provide. As self-worth becomes increasingly conflated with private gain and the capacity to outdo your neighbour, and wealth, made visible in the possession of material goods, becomes the yardstick by which all achievement is measured, so the desire to change to a more equable and redistributive system is diminished. Instead, the individuals who emerge from the indoctrination fall into two broad categories – the ‘haves’ who enthusiastically embrace policies that they perceive to further their own prosperity at the expense of others, and the ‘have-nots’ who, having been trained to ignore the power of co-operative action, make no effort to vote because they feel that their personal contribution can make no difference in a world where, as atomised individuals, they feel increasingly marginalised. If the 65% of social class DE citizens in the UK who declare themselves unlikely to vote were to go to the ballot box, for instance, all parties would have to trim their mandates considerably or become unelectable.[1]  Unfortunately, however, complaints that ‘my voice is not heard’, and ‘what’s the point of voting when my vote won’t make any difference’ are very common among this group, and the fact that it would be efficacious to make a contribution to a collective political process designed to bring about a desired end, has more or less disappeared from view under the weight of disparaging propaganda.

This state of affairs plays straight into the hands of global elitist government. If the ‘have-nots’ can be persuaded that it would be pointless to vote, let alone contribute to lobbying groups or selection processes, then their needs and welfare can safely be ignored by all political parties. Similarly, if the ‘haves’ can be convinced that having a social conscience, a public service ethos and a concern for the environment will bring no recognition from their peers, and in no way enhance their feelings of self-worth or moral satisfaction, they will follow the prevailing growth mantra without misgivings about the inequality, exploitation and environmental degradation that it inevitably generates.

This means that in adversarial party politics, no political party need put forward a mandate that includes measures for wealth redistribution or serious regulations for calming a financial system that makes fortunes for the few and radically destabilises the economy for the many, and which leads to the type of economic meltdown that the world endured in 2008. As with this crisis, the politically inert poor can be left to pay the price of these calamities, while the rich who provoked them are bailed out by a subservient state. Insistent and mendacious propaganda ensures that even those suffering from the fallout become convinced that their hardship is necessary, while the real cause of the disaster is forgotten. The graph below [2] which was circulated in 2012, illustrates the actual composition of Europe’s debt in the wake of the last financial crisis. In the particular case of the UK, the distribution shown makes nonsense of the claim that social spending was responsible for the country’s debt. In fact, UK social expenditure as a percentage of GDP is comparatively low, standing at 23.8% for 2013, less than that of Germany (26.2%) France (33%) or Italy (28.4%).[3] Crippling austerity measures aimed at reducing the tiny yellow portion of the graph may marginally reduce the yearly deficit, but will do little to affect the country’s overall debt position. Government spin, however, has successfully hidden this fact from those who suffer most from fiscal spending cuts.

debt distribution

debt distribution

It need not be like this. Once we recognise that a distorted and dysfunctional economy essentially depends upon a distorted and dysfunctional politics, and that this is itself kept in place by a pernicious theory of moral individualism internalised by the voting public, we are equipped to break the vicious spiral. And it is imperative that we do so, for otherwise no radical economic changes will be achieved, and any small progress we have made towards equality and justice will be reversed at an escalating speed. In Mill’s words, such a deterioration ‘once begun, would proceed with increasing rapidity and become more and more difficult to check, until it reached a state…when hardly anything short of superhuman power seems sufficient to turn the tide …’

Indeed so – and if we feel it unwise to wait for superhuman intervention, we had better get on with the task of replacing the destructive ethos that is corrupting our populations as fast as we possibly can.

[1] At the extreme ends of the scale, and according to the Hansard Audit of Political Engagement for 2013, the proportion of social class ABs in the UK declaring themselves ‘certain to vote’ is 54%, while the percentage of DEs is 35%. Unsurprisingly under these circumstances, ABs are also more than twice as likely as DEs to feel that they have any influence over decision making. This feeling of disempowerment is partly due to lack of knowledge – the proportion of ABs who say they feel knowledgeable about parliament stands at  66%, while that of social class DE is 28%.   (See http://www.hansardsociety.org.uk/wp-content/uploads/2013/05/Audit-of-Political-Engagement-10-2013.pdf )

[2] Source Haver Analytics, Morgan Stanley Research, see http://www.slideshare.net/Agcapita/may-10-2012-charts-that-count-sovereign-debt-and-monetary-malfeasance-insurancehat-count


3 Responses

  1. This is a brilliant analysis of our dysfunctional politics and how it links to an exploitative economic system. It needs to be disseminated widely to counter the myths and disinformation that are spread by so much of the media and the political elite.

  2. An excellent critique, with which I completely agree. The greed of the established elite has become like a virus – destroying the host, which is humanity. It will be a close run thing, but in my view, humanity will prevail.

  3. I agree wholeheartedly with this article. Selfish individualism goes unchecked from childhood onwards making it difficult for people to engage from the heart, as well as the mind, with the hardships others have to endure in today’s political/economic climate. If and when we begin to ask ourselves what it really is like to be the person who is suffering, we, as individuals,cease to be the primary point of reference for everything that goes on around us.
    Focusing outwards also allows us to understand history in a new and different way. It affects the way we remember. History repeats itself because people have forgotten the real meaning of sociality – that what happens to my neighbour, and what happened to the neighbour in the past, affects me because of our shared humanity. We seem to have forgotten about this vital trans-generational connection. This is one of the reasons for political apathy today. We do not hear or understand one another across the generations.

    Political apathy is due to all the factors raised in this article, but it is also a way of avoiding reality. Engaging with the political process requires that we engage with the real needs and aspirations of others, but it is too frightening to contemplate the neighbour’s situation because it might cause us to question our own.

    The other tragedy that is a direct result of the pursuit of material growth and that elusive thing we call ‘success’, is the spiritual bankruptcy which so often accompanies both. Only look at the growth in depression-related social illnesses among the affluent, like alcoholism and drug addiction, not to mention addiction to work itself. The moral questions raised in this article have profound spiritual implications which are costing us dearly.

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