The forthcoming proposed Tory budget, combined with measures introduced in the last months of the Labour party – hit the poor hardest and are likely to increase inquality.
If you believe Richard Wilkinson’s ‘The Spirit Level’, then inequality matters, because a whole host of social problems – from depression to crime – are correlated with the degree of inequality in society.
The exception is, of course, that the wealthiest ten percent lose out more than those in the middle – but it seams that it’s the poorest who are hit the hardest…
If you check out the graphic outside the room of P104 you will see that inequality increased massively under Thathcher, continued under New Labour, and the increase looks set to carry on into the future!
That’s an overall loss to the taxpayer of about £90 billion at a conservative estimate!
Just a brief summary from the WDM on the costs of the current financial crisis – yet more evidence of how the average guy on the street ends up paying for the greed of the capitalist class (the bankers who destabilised our economy and their government apologists who let them).
”The Treasury’s total net cash outlay for purchases of shares in banks and lending to the banking sector, including Northern Rock, amounted to around £117 billion by 2010. The Treasury’s additional potential exposure to banking losses totals (through insurance of bank assets and Bank of England lending) totals over £1 trillion.’
‘The crisis has had a huge impact on the public finances. UK households will have to pay around £3,900 per year more in taxes – or public spending per household will have to be reduced by £3,900 per year, or some combination – to balance the books. Households are also likely to face a one-off cost of £1,500 each (on average) for the banking bailout itself.’
The figures above may not quite add up because there are numerous different ways of caclulating (estimating most of the time) costs and potential costs!
In this podcast Laurie Taylor, Renata Selacl and Rachel Bowlby discuss whether or not we have ‘Too much choice? (second half of the broadcast)
This is relevant to ‘criticisms of postmodern thought’
Having established that ‘choice’ is the dominant way in which we experience life today’ – pointing to the areas in which we have to make choices – what school to go to, whether to have a caesarian birth, what mortgage,holiday, care, what partner… and so on!!! – two points of particular interest are –
Having too much choice can lead to anxiety – we constanly worry about ‘having made the right choices’ – and having made a choice – we sometimes worry that we have made the wrong choice and might focus on all the possibilities that have closed off to us a result – either way the net result of having too mcuh choice is anxiety. This challenges the idea that ‘more coice’ is automatically a good thing.
Secondly, there is the suggesting that we spend so much time making choices over relatively mundane things – that we lose sight of the bigger questions such as what’s wrong with society, where society is heading and issues such as social inequalities – Laurie Taylor in fact talks of us being ‘burdened’ with choice’ and there is a suggestion that ‘having to choose’ makes us less free and more powerless. ‘
I think the issue they are getting at is that we have choice over certain things – but only as consumers – and no real power to influence politics at a deeper level -the conservatives and labour and lib dems are all right wing for example. In this sense one can see consumerism as part of neo-liberal ideoligical control.
RSA video and podcast of David Harvey on the credit crunch – David Harvey has read, re-read and taught Marx’s Capital every year for the last four decades. According to him ‘any sane person today would join an anti-capitalist organisation, because otherwise we are screwed’ (or something along those lines) –
And the podcast from Thinking Allowed – http://www.bbc.co.uk/programmes/b00s3fzq
My summary of the above two together – These are relevant to the question ‘Assess the relevance of Marxist theory to an understanding of contemporary society’
This is really quite advanced stuff for an A level student – and quite difficult to understand – I will try and clarify if you don’t get it – catch me at the end of the day sometime!
David Harvey’s basic theory is that Capitalism is a system that grows in boom-bust cycles – the bust phase being what is commonly known as an ‘economic crisis’, which typically requires Nation States to step in and ‘rebalance’ the system to get economic growth going again. The problem is that the solutions to one economic crisis simply lay the foundations for another crisis, or downturn in economic growth, at some future point in another part of the world, or another sector of the economy.
David Harvey demonstrates one way in which Marxist theory is still relevant to understanding contemporary events – Here is how Harvey explains the ‘credit crunch’ in Marxist terms –
He starts off by pointing out that ‘the excessive power of finance capital’ is the root problem of the current crisis – In other words the banking and credit industries who lend money had (and still arguably have) too much power – but how did this happen?
Harvey goes back to another ‘economic crisis’ in the 1970s to explain this. At this point in history, he points out that wages, especially in the manufacturing sectors, in Europe were too high in order for Capitalists to make a profit. This crisis was solved by outsourcing manufacturing to the developing world where labour is cheaper and a combination of high unemployment in the West and Thatcher breaking the power of unions in the 1980s. This then meant that overall labour costs were lower, restoring profitability and economic growth.
However, wages provide people with the money that buys goods – thus a reduction in wages lead to a reduction in the demand for goods and services, which again reduces profit for Capitalists –
The solution to this problem was ‘pumping up the credit economy’ – or encouraging consumers to get out their credit cards and take on more debt. The average British household has trebled its debt in the last thirty or forty years, most of this debt being in the form of mortgages, which most of us regard as a normal part of adult life.
The end result of this is that the banking and finance sectors have grown massively in recent years – before the credit crunch, in the mid 2000s, they represented 30% of the British economy. The profits of these industries have soared in 1990s – whereas manufacturing profits were declining and Harvey argues that Britain has screwed the manufacturing industry to keep the financiers happy –
Something else that happened in the last decade was the ‘deregulation of the finance sector’ – banks and hedge funds were given more freedom to lend – and many banks such as Northern Rock did so to people who could not realistically afford to pay back what they borrowed – eventually people woke up to this fact and the banking sector of the economy started to collapse (economic growth based on debt which needs to be repaid – once it’s realised this can’t be repaid it causes a crash)
Of course in Britain, this was a disaster, because baking represented 30% of our economy – so the government bailed the banks out – and now we have a massive national debt – and what are the Tories doing – cutting our public services by 25% and raising the pension age so we, the tax payer, can pay for this.
What are we actually paying for – the billions of pounds of profit that the heads of banks have taken in wages and bonuses over the last two decades. We are paying for them – The unequal accumulation of wealth has not stopped – in 2009 more billionaires were created in India than ever and in the same year the managers of the 5 biggest hedge funds in the world shared bonuses of $15 billion.
The wealthy are doing fine out of the credit crunch, while we the people, in our ignorance of how Thatcher and the Bliar pimped our nation to the transnational capitalist class over the last three decades, pick up the bill for their wealth years later.
Harvey’s theory is that Capitalism can never solve its own crisis problems – it just moves them around geographically – eventually it is the little man that gets shafted while the wealthy just go on getting wealthier. This is classic Marx – all that has really happened since his day is that Capitalism has become more complex, some may say convoluted, but at its root – Capital will always make the little man pay for his wealth accumulation.
Harvey argues that any sensible person right now would join an anti capitalist organisation. If you decide to join one, an interesting debate would be ‘what level of violence is it acceptable to use against the Capitalist class and their Tory apologists in order to get your money back?’
Of course Harvey has his critics, and you might like to read the commentary below the video…
A hyperreflexive blog focussing on critical sociology, infographics, Buddhism and extreme early retirement