By Daniel Margrain 

 

Theresa May recently described free-market capitalism as the “greatest agent of collective human progress ever created”. But progress is an ideology linked to advances in technology and science, that since the emergence of industrial capitalism in the mid-19th century, has infected much of intellectual life (see, for example, Chris Harman’s ‘A People’s History of the World, pp. 384-86).

What the obsession with the prevailing neoliberal socioeconomic orthodoxy of successive governments over the last 40 years illustrates, is that right-wing politicians like May proselytize, not on behalf of genuine free-markets, but an extreme form of crony capitalism in which the publicly owned assets of the state are systematically asset- stripped and the spoils distributed to the elite economic and political class.

Farm subsidies, public sector retrenchment, quantitative easing, share giveaways and housing benefit subsidies, are some of the ways in which neoliberal corporate welfare continues to greatly enrich the wealthiest in society. Figures reported in the Guardian indicate that the richest one per cent in Britain have as much wealth as the poorest 57 per cent combined.

More evenly shared

The growth in inequality during the neoliberal era contrasts with the thirty year “post-war settlement” period in which the wealth created by workers was shared much more evenly. For example, data indicates that the share of income going to the top 10 per cent of the population fell over the 40 years to 1979, from 34.6 per cent in 1938 to 21 per cent in 1979, while the share going to the bottom 10 per cent rose slightly. Meanwhile, other figures indicate that economic growth in the UK, adjusted for inflation, has grown over the last 60 years from £432bn in 1955 to £1,864bn in 2016.

The Tory exchequer in 2017, therefore, has roughly four times as much money at its disposal in real terms compared to six decades ago. Moreover, the ratio of national debt to GDP was approximately three times higher in the post-war years compared to 2017. Nevertheless, the then Labour government built hundreds of thousands of “homes fit for heroes” and brought the National Health Service into being.

Many decades later, Theresa May who leads a immeasurably wealthier country than was the case during the post-war period, claimed “there is no magic money tree” to fund public services. Whereas neoliberal fundamentalists envisage the market as an ideological manifestation of a notion of scientific and technological progress, Corbyn’s vision is a return to a more equal society in which improvements to the quality of life for the majority through investing in public infrastructure and social capital play a crucial role.

The evidence Jeremy Corbyn intends to break the neoliberal consensus marking a return to the kind of equitable redistribution of the spoils of growth of the post-war years, is an economic strategy that is worrying a Tory government bereft of ideas. May and her Chancellor, Hammond, continue to advance the notion that the aspirations of those at the bottom of the socioeconomic ladder are most effectively met as a result of economic trickle-down emanating from the top – a theory that has – given the subsequent growth in inequality – been comprehensively discredited. Under neoliberalism, wealth doesn’t trickle down. On the contrary, it gushes up.

Mixed economy in the right hands

Potentially, sustained economic growth that capitalism engenders can create the conditions for the mass of humanity to overcome poverty and pestilence and to meet its fundamental needs – but only in the right hands. Paradoxically, the neoliberal model is is likely to lead to the exact opposite: the extinction of our species and probably many others.

The poorest who can’t afford to enjoy the benefits of capitalism are, in the short-term, the most likely to be adversely affected by the climate chaos and wars it engenders. But the rich are not insulated from the process either since the affects of nuclear fallout and global warming are not undemocratic.

Theresa May’s notion that the ideology of progress, manifested in scientific and technological advancement, is indicative of the “greatest agent of collective human progress ever created”, is negated by the chaos wrought by global warming, the spread of wars, the growth in relative poverty and the lack of disposable income for millions of people.

Under neoliberalism, the impoverished and war-torn are unable to engage in the kinds of commercial and cultural activities the rich disproportionately benefit from. It is therefore not “collective” human progress that May is referring to when she espoused the virtues of capitalism.

For neoliberal ideologues, progress is measured in terms of the extent to which people are able to consume what the advancements in technology the market is able to deliver. While it is true that more people than ever have access to “luxury” technologies like flat screen TVs, mobile phones and computers, it’s still the case that the majority of the worlds population don’t.

Moreover, it doesn’t necessarily follow that those who do have access to them are not struggling to feed their families. There is no correlation between poverty and the amount of consumer goods people have access to. Poor and hungry people without money who do have access to consumer goods like mobile phones are not able to console themselves by eating them.

Absolute v relative poverty

The Prime Minister is right to infer that the historical inward tidal flow of capitalist development over time has corresponded to an overall reduction in absolute poverty. But if it were only absolute poverty that resulted in social resistance there would never have been general strikes or revolutions after the first years of industrialization. As John Rees in Imperialism and Resistance (pp. 102-3) remarked:

“Few people in modern Britain wake up in the morning to face a new day and content themselves with the thought that at least they are not living like 19th century weavers. They ask themselves different questions. Is my child’s life going to be harder than mine? Are we, the people, who do the work, getting a fair share of all the wealth that we see around us in this society?”

It is therefore not capitalism’s ability to reduce the level of absolute poverty, but it’s socially relative poverty measured in terms of the level of income inequality that counts. 

At the turn of the century, the Office of National Statistics provided a snapshot of relative poverty in Britain. In interviews with panelists selected from the General Household Survey, it drew up a list of items regarded as “necessities”: a bed, heating, a damp-free house, the ability to visit family and friends in hospital, two meals a day and medical prescriptions.

The study found that four million people do not eat either two meals a day or fresh fruit and vegetables. Nearly 10 million cannot keep their homes warm, damp-free or in a decent state of decoration. Another 10 million cannot afford regular savings of £10 a month. Some 8 million cannot afford one or two essential household goods like a fridge or carpets for their main living area. And 6.5 million are so poor to afford essential clothing. Children are especially vulnerable – 17 percent go without two essential items and 34 percent go without at least one.

With the massive increase in the use of food banks, the rise in zero hours contracts and in-work poverty; the adverse affects of the bedroom tax and cuts to council tax benefit for the poorest over the last decade, these figures almost certainly understate the extent of the current problem.

Wanda Wyporska, Executive Director of The Equality Trust, said:

“The cavernous gap between the richest and the rest of us should be a real source of worry…Extreme inequality is ravaging society…While many people’s incomes have barely risen since the financial crash, a tiny elite has continued to pocket billions. If politicians are serious about building a genuinely shared society, then they urgently need to address this dangerous concentration of power and wealth and tackle our extreme inequality.”#

System of enslavement

A world in which the mass of humanity is getting increasingly poorer while the rich are getting richer, largely as a result of the latter’s collective theft of state assets, is indicative of a form of inherent systemic corruption on a huge scale. This is reflected by the extent to which public enterprises are privatized for profit and private capital debt is socialized through subsidy by the tax-payer. This is the kind of “free-market” capitalism espoused by May – a vision of a system built on the principle of socialism for the rich and enslavement for the rest. 

Although many commentators point out, correctly, that this neoliberal socioeconomic model is not working for the vast majority of people, the point is, it was never intended to be that way. The purpose of neoliberal socioeconomic policy is not to improve the living standards or protect the jobs for the many, but to defend the short-term economic interests of the few.

In Spain, the Rajoy governments use of brute force against the people of Catalonia is an illustration of the extent to which the one percent are prepared to go in order to protect their corrupt neoliberal system of wealth usurpation. In theory the EU, as an institution, can be the catalyst for raising the living standards of the poorest, but under neoliberalism, it too, has become a corrupt extension of the sovereign state.

What Theresa May really means, is not that capitalism is the “greatest agent of collective human progress ever created”, but rather that neoliberalism is the best economic model through which her class is able to financially enrich themselves by manipulating the institutions of society.

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