Post on 25-Jan-2023
FOUR
1976 – the moral necessity of
austerity
Matt Clement
Introduction
Debt reduction has become central to political discourse. Despite
disagreements about the speed and scale required, there is a broad
Westminster consensus that substantial economies are unavoidable.
Those who question this paradigm are judged to have fallen into the
‘trap’ of believing another economic model than austerity is possible.
Several years on from the tumultuous economic crash of 2007/08, the
‘new politics’ of coalitions necessarily committed to austerity measures,
especially in the public sector, while living standards fall for thevast
majority, have become a long-term reality that we are told will lastat
least a decade. Recent social upheavals across several European countries
have resulted from the brutal results of these programmes, which have
shaken many people’s faith in mainstream political parties to govern
in the interests of all, leading to the growth of ‘new publics’ on the
extreme Left and Right who are prepared to defy market nostrums
and question the necessity of austerity. Although, at the time of writing
(late 2013), the UK economy has managed to halt some aspects of the
decline for the last few months – with slightly improved growth and
employment figures – many elements of the crisis remain.
This is not the first time that politicians have stared into the abyss
of a financial crisis; one recent example was the 1976 International
Monetary Fund (IMF) crisis. With hindsight, the necessity of spending
cuts looks questionable: are there lessons to be learned from the last time
that British government policy was dictated by international finance?
What were the results of the British public choosing to accept that the
crisis really meant that ‘there is no alternative’ to deindustrialisation and
mass unemployment, with all the social consequences that followed over
the next decade. Do today’s public want to consider creating alternatives
today, in the form of campaigning social movements encouraging
Public engagement and social science
68
resistance, or should we seek inspiration in more spontaneous outbreaks,
such as the UK’s 2011 ‘summer of discontent’ (Briggs, 2012)?
These are not merely academic or theoretical questions. Arguably, the
acts of resistance to austerity in Europe have challenged the dominant
mindset and slowed down the pace of a brutal economic reconstruction
process that otherwise threatened to engender poverty and anomie on
a scale that could melt down existing social relations. There is a power
generated by activism (Clement, 2009) and committed campaigning
for social goals that undermines the hegemony of neoliberalism and
could herald what Badiou (2012) has called the ‘rebirth of history’.
Governments have been very keen to promote public engagement
with the idea of the national debt in recent times. Necessarily so, for
if we are not convinced that our economic state is perilously fragile –
with all manner of social institutions under threat if the markets judge
the UK to be chronically indebted – then we may not accede to all
the ‘necessary’ economies the new climate of austerity requires. In my
opinion, the role of Social Science in the City is to critically analyse such
phenomena, specifically to see whether there really is a case for a shift in
public attitudes towards accepting a common sacrifice in wages, welfare
and public service provision, or whether vested corporate interests are
unnecessarily manufacturing austerity – with potentially antisocial and
calamitous economic consequences. Can Cohen and Young’s (1981;
Cohen, 1987) theory of moral panics help us to understand how the
spectre of austerity has arisen?
Hindsight can be useful in shaping foresight today. By presenting
evidence about how genuine the British IMF crisis of 1976 was, my
aim is to empower the audience to ask: was the economic picture
really as bleak as the government and the markets believed, and, most
importantly, what was the true cost to the public of accepting the fall in
living standards of 1977/78? As European governments are increasingly
populated by politicians seeking alternatives, should we see these as
irrational actors or enlightened critics of market realities? The positive
response that this chapter received as a useful antidote to contemporary
‘common sense’ when it was presented in March 2011 has been
vindicated by the climate of rising resistance to markets, technocracies
and the erosion of welfare democracy at the time of writing.
Austerity: a new moral panic?
Stanley Cohen describes a moral panic as a phenomenon whereby ‘A
condition, episode, person or group of persons emerges to become
defined as a threat to societal values and interests; its nature is presented
1976 – the moral necessity of austerity
in a stylized and stereotypical fashion by the mass media’ (Cohen,
1987, p 9). Ever since the election campaign in 2010, the principal
moral panic that has dominated political and media discourse has been
about the perilous state of the national economy. There has been an
immense moral panic generated about the size of the national debt and,
consequently, the necessity of the imposition of a range of measures
to reduce public sector services and welfare spending. All politicians,
the heads of financial institutions and the media barons are agreed that
this regime of austerity is both essential and of paramount importance,
trumping any other goals of social policy. A consensus has emerged
which believes that the last government has created this condition of
near-bankruptcy, and the current Coalition has no alternative but to
reverse the measures that had been widening educational opportunity
and improving the welfare system during the century’s first decade.
Even at the time of writing, despite their rising unpopularity and
growing popular anger at growing economic inequality, mainstream
politicians believe themselves trapped within the hair shirt of austerity,
which they cannot throw off – however much it chafes. Nick Clegg
recently explained ‘we’re doing it, not because we want to, but because
we have to’ [BBC 2012]]. Cameron helpfully pointed out that it was amatter
of perception, ‘What you call austerity, we call efficiency’ [BBC2012],
while Ed Miliband seems determined not to take advantage of his
opponents’ discomfort – when asked if Labour would follow France’s
new president in denouncing austerity, his answer was a plaintive ‘we
must remember not to make promises that we can’t keep’ (BBC, 2012).
Cohen maintains, however, that sociologists ‘must question and not
take for granted the labelling … by certain powerful groups in society
of certain behaviour as deviant or problematic’ (Cohen, 1987, p 13).Is
the deficit, in scale and impact, really so damaging to the functioning
of everyday life as to justify the range of highly divisive and punitive
measures proposed for its amelioration? Some light can be shed upon
this situation by examining the last time Britain’s government was
dictated to by the banks, and evaluating – with the benefit of hindsight
– how necessary all the measures taken were. Moreover, given their
socially divisive impact, how far did the Labour government’s 1976
moral panic make such folk devils of the trade unions as to enable the
Tories to grind down their resistance in the 1980s? Fundamentally, this
article attempts to address the question posed by Paul Foot: ‘Why was
the world in recession? Why, after thirty years of relative growth, full
employment and expanding public services, was it suddenly necessary
for [a] Labour Government and its trade union
allies to throw all three into reverse? (Foot, 2005, p 388).
Public engagement and social science
Back to the future
By 1976, the rulers of Britain were convinced that the Labour
government’s programme of social democracy was really going too
far. Not only had the legitimate party of business, the Tories, been
unceremoniously vanquished when it tried to discipline the trade
unions in 1974, but the Labour government had then received an
improved mandate in its October election victory. This had encouraged
those activists among the working population, particularly shop
stewards and their supporters, to believe that they should have moreof
an influence in the running of the economy: a partnership of unions,
government and business.
The new Tory leader, Margaret Thatcher, saw the writing on the
wall. Free markets were being leashed by these social goals. To her
eyes, without the reinforcing element of market discipline, people’s
ambitions for their standard of living and quality of welfare could
run riot. In her opinion, the country could not afford, for example,
to have everyone believing that their children were entitled to go to
university, which would mean equal educational opportunities for all.
And Britain certainly could not afford the progressive taxation regime,
which funded comprehensive schools and the welfare state through
clawing significant chunks of wealth from the pockets of the wealthiest.
Worst of all, these measures were actually popular. As the vast majority
of the population stood to gain, they could not see how wrong it was
for a government to make these reforms. Thatcher saw it as her mission
to manufacture a sense of doubt, a climate of uncertainty, leading to a
moral panic about the dangers of taking this path.
The first ingredient required to manufacture moral panic is a
nightmare: a vision of the future that so alarms the public as to instil
in them a sense of foreboding. Thatcher chose to utilise a concept to
be taken up again 30 years later by the next Tory PM, that of ‘broken
Britain’, claiming that ‘If Britain were to break, a well-nigh mortal blow
would be struck against the whole western world’ (Beckett, 2009, p
388). In 1976, Thatcher allied herself with those maverick right-wingers
in the military and at the top of the civil service who saw Labour’s
piecemeal nationalisation programme and concessions to the idea of
workers’ participation in industry as a red-blooded assault on their
long-held privileges. Their panic was genuine – one of endangered self-
interest – but their aim was to get the rest of the population to join in
– in order to rein in their aspirations and accept falling living standards.
Perhaps rightly, the international rulers of finance reckoned that the
Tories could not be relied upon to successfully co-opt British workers,
1976 – the moral necessity of austerity
as Heath’s humiliation had shown. The 1970s’ Labour leadership would
have to be the architects of the downfall of the interests of the working
class; for this, a change at the top would be necessary.
In 1975, the same year that they were getting out of Vietnam, the
US was plotting economic intervention in Europe. Why else was it
that Henry Kissinger ‘flew specially to Cardiff to see Labour’s Foreign
Secretary, Jim Callaghan, given freedom of the city’ (Beckett, 2009,
p 328)? New Yorkers had seen their public administration declared
bankrupt that year by the federal government and the banks, ushering
in a wave of cutbacks that well and truly signalled the end of the ‘Great
Society’ welfare programme of the late 1960s and early 1970s. Now he
had a similar message for Labour: the economic crisis was coming for
Britain, in which US interests through the IMF would be a principal
instrument, and this was an opportunity for ‘sunny Jim’. The Americans
had never trusted Harold Wilson, notoriously bugging him when PM
in the 1960s. Wilson had blamed the bankers – the ‘gnomes of Zurich’
– when he had seen his last reform programme scuppered in the 1967
sterling crisis and could not be relied upon to accept the necessityof
succumbing to this latest financial ‘moral panic’ measure (Foot, 1968;
Ponting, 1989). Moreover, when the unions successfully opposed
Wilson’s 1968 ‘In place of strife’ legislation, Callaghan – an ex-trade
union leader himself – had joined in the attack. This gave him some
credibility within the ‘labour movement’, that coalition of MPs, trade
union leaders and members whose interests the government claimed
to represent, which would be crucial in ensuring that trade union
leaders stuck to imposing wage cuts through the social contract during
1977/78. Consequently, Kissinger told Callaghan that, for them, he was
the man of the hour. He could become Labour’s new leader – if the
markets induced another sterling crisis and toppled Wilson – and if he
was prepared to lead a ‘new Labour’ party, willing to comply with the
demands of the international bankers. ‘And don’t worry Jim’, Henry
may have said during his Welsh stopover, ‘because we trust you, we’ll
make sure you get the money to cover the “debts”. It’s a win–win’.
The tragedy here is that Labour’s leaders succeeded in ‘seeking a way
of cutting back on government spending at so controlled a rate that
political and social upheaval did not immediately ensue’; Coates calls
this ‘little short of a political miracle, winning Trade Union support
for wage cuts and unemployment, and ending abruptly the highest
level of industrial militancy since 1926’ (Coates, 1980, pp 26, 25).To
understand why, we need to look closely at the trade unions, specifically
the difference between the attitudes of the leaders and the rank-and-
file membership towards that ‘glorious summer’ (Darlington et al, 2001
Public engagement and social science
[[NIR? and Lyddon?]]) of strike action in 1972 that had seen off Yes Darlington and Lyddon
anti-union laws and launched waves of sit-ins and occupations to save
jobs, protect wages from rising inflation and assert some control over
their working conditions. For the workers, their victories in 1970 to
1974 had strengthened their movement and sought to put some socialist
backbone into the resolve of the incoming Labour government. By
contrast, once in office, the leaders of Labour and the trade unions
swiftly convinced themselves that ‘the country’ could not afford to not
cut public expenditure any longer.
Tony Crosland, for example, ‘a man who believed high public
expenditure was morally right’ [Crosland, 1983, p293 ], according tohis biographer,
in an uncanny echo of today’s Tory government, claimed that ‘the
surge of local government spending under the Tory government has
continued through the first year of Labour’s return to office. Tony
accepted that local authorities were certainly spending more than the
country could afford’. This led to his notorious speech in Manchester in
May 1975, where his blunt message was a dire warning of government
determination to impose austerity: ‘British people must experience the
first real decline in living standards in a generation. We have to come
to terms with the harsh reality of the situation which we inherited.
The party’s over’ (Crosland, 1983, p 295).
Twenty years earlier, Crosland had written The future of socialism
(Crosland, 1956 [[NIR?]]), which promised an increasingly prosperousnow in refs
Britain in a mixed economy of private investment and public welfare.
Now the ship of state was floundering in a crisis of currency speculation
and inflation produced by the markets. Once again, government is
being ‘blown off course’. For the leaders of social democracy, the only
option was surrender. They were caught up in a moral panic; they
believed they could not control the economy and had, at all costs, to
obey the market – and, more importantly, persuade labour voters and
trade unionists to do the same. They were manufacturing the panic and
its austere consequences. As Cohen and Young (1981 346), describing
the process, put it: ‘Their over-all effect is nevertheless to help close
the circle by which the definitions of the powerful become part of
the taken-for-granted reality of the public by translating the unfamiliar
into the familiar world’.
Panic in the cabinet
Of course, we will never know the actual contents of Callaghan and
Kissinger’s Cardiff conversation, but the crisis hit the pound the next
year – ‘in the fortnight before Wilson’s resignation, it began to lurch
1976 – the moral necessity of austerity
downwards … on 8 March, a fall of over 5 cents occurred in a single
hour’ (Beckett, 2009, p 330). With Wilson gone, Callaghan became
PM and Healey, already a convert to Milton Friedman’s doctrine
of monetarism, remained as Chancellor. Both men set out to push
massive spending cuts through a cabinet full of ministers ostensibly
committed to defending working-class living standards, although
some – like Crosland – had already shown their fragility. Callaghan’s
notorious renunciation of Keynesianism at the 1976 Labour Party
conference began with a Cassandra-like prophecy of doom: ‘Britain
has lived for too long on borrowed time, borrowed money, borrowed
ideas’, dramatically manufacturing the sense of panic by shattering old
Keynesian ‘myths’, he went on: ‘We used to think you could spend your
way out of a recession and increase employment by cutting taxes and
boosting government spending. I tell you in all candour that option
no longer exists’ (Whitehead, 1985, pp 188–9).
This apocalyptic outburst rightly caused outrage from delegates,
but only reiterated Crosland’s earlier statement. Callaghan and Healey
assembled the ingredients to manufacture a moral panic that would
undermine the resolve of the likes of Peter Shore, Tony Crosland and
Tony Benn. Healey, himself an ex-Communist Party member, gambled
that the Labour Left would rather remain in power carrying out
measures they disliked, than admit defeat. During prolonged cabinet
negotiations he argued:
So long as we live in an open and mixed economy, we shall
depend on the market judgement to determine our future.
If we couldn’t persuade our followers that these were the
facts … then another Party would have to take over…. We
would have proved that our brand of social democracy
doesn’t work. (Benn, 1990, p 695)
Healey’s ‘brand’ was monetarism – a form of economics that we now
understand as neoliberalism. It is well known that Blair created New
Labour to embrace neoliberalism and junk social democracy, but
the events of 1976 prove that it was ‘old Labour’ that began post-
war austerity before Thatcher took up the standard (Cliff et al, 1988 yes, Cliff and Gluckstein
[[NIR? and Gluckstein?]], p 322). Austerity is not a brand of social
democracy – it is its nemesis. It denies the possibility of any social
element ever taking priority over profit-making. In Labour’s hands,
the ‘social contract’ evolved from a negotiated partnership between
labour and capital into a regime of cuts in jobs and wages imposed by
big business upon the trade unions. The key to getting the Labour and
Public engagement and social science
trade union leadership to implement these cuts was the creation of a
moral panic over the state of the economy; one manufactured by the
markets and amplified by its willing acolytes, Callaghan and Healey,
but also swallowed wholesale by those who led the labour movement.
Foreign Secretary Tony Crosland was initially forthright in
condemning the logic of cuts. According to one recent commentator, he
argued that ‘the situation was nowhere near as catastrophic as was being
painted, he suggested simply facing down the I.M.F. Crosland’s analysis
was, by any objective measure, perfectly sound’ (Turner, 2008, p 188).
He was adamant, stating in cabinet: ‘There is no case for a change….
New cuts would have a disastrous effect … they’d damage wages policy
and destroy confidence’ (Beckett, 2009, p 352). Crosland’s resistance
was not as left-wing as Benn’s, he was arguing that even accepting
the parameters of the capitalist economy, there was no logic dictating
the necessity of cuts; the markets did not need to impose them as the
‘Public Spending Borrowing Requirement’ (PSBR) – Labour’s rather
opaque term for the deficit – was exaggerated: ‘Far from reducing the
PSBR, the spending cuts would mean higher unemployment … thus
actually increasing the PSBR. In any case, the Treasury forecasts ofthe
PSBR were unreliable; other experts’ forecasts were much lower than
the Treasury’s’ (Crosland, 1983, p 377).
This last point nailed the exaggerations and panic-mongering carried
out by Healey and the Treasury. Today, politicians talk of reducing the
deficit to gain the ‘confidence’ of the markets. In 1976, it was thesize
of the PSBR that was deemed decisive. But if the figures cannot be
relied upon, then perhaps the motive was simpler: revenge – a backlash
against the rising expectations of Labour’s core support. Gavin Davies
– later to head the CBI [[in full?]] and become a Labour peer – was yes, Confederation of British Industry
then a junior adviser at No10, his explanation was simpler: ‘The markets
wanted blood. They wanted humiliation’ (Turner, 2008, p 188).
Just like Miliband today, Tony Benn and the trade union leaders Jack
Jones and Hugh Scanlon accepted the scale of the so-called national
debt – and therefore the huge PSBR that necessitated holding down
wage claims and cutting benefits to ‘balance the books’. Benn had rightly
opposed Wilson, who in turn demoted him from Minister for Industry
in 1975, but failed to see Callaghan’s agenda, naively welcoming his
election as leader. During their extended cabinet discussions about what
to cut and where to satisfy the IMF’s requirements, Benn sums up his
feelings in his diary with remarkable honesty (for a politician): hewas
‘almost sick with anxiety and disgrace to hear people elected with the
support of Labour people talking in that way’ (Benn 1990 p 637). Tragically, his
will to resist was paralysed by his belief that loyalty to his partywas vital
1976 – the moral necessity of austerity
despite all, resulting in a failure to ‘lose his illusions’: Benn continued to
hope against hope that the government would change course: ‘I really
do wonder now whether I can possibly stay in a government that does
this. But this morning they said I must stay in because the alternative
strategy is winning’ (Benn, 1990, p 638).
The alternative economic strategy of import controls and greater
regulation was not winning. Callaghan and Healey’s gamble that the Left
would rather stay in a government acting against their beliefs than allow
it to be defeated was vindicated. Holding the coalition together was
deemed more important than representing the working-class interests
that they were pledged to uphold. The centre, represented by Crosland,
watched the cabinet opposition to accepting the IMF package crumble,
telling his wife that ‘I may well switch my argument tomorrow’, she
records: ‘Tony went down the corridor to the PM’s room. “In Cabinet
tomorrow,” he said to Jim, “I shall say I think you’re wrong, but I also
think that Cabinet must support you”’ (Crosland, 1983, p 381).
For Benn, ‘the death of the social democratic wing of the party
occurred in that cabinet, when Tony Crosland said at one stage: “It is
mad, but we have no alternative”’ (Whitehead, 1985, p 199). He and
his other cabinet colleagues voted for austerity, while trade union
leaders enforced effective wage cuts on their members still in a jobthe
following year. They were caught up in the moral panic of the PSBR,
accepting the imperative that the government must cut its cloth to
the market pattern, not realising that ‘the market’ was not a neutral
umpire, but an institution with its own agenda and interests. Whitehead
summarises Benn’s role: ‘Benn had the ability to be the most creative of
cabinet ministers or the most effective tribune of the party outside. He
believed he could do both … he was wrong’ (Whitehead, 1985, p 147).
The alternative was, literally, unthinkable: a phenomenon Zizek
has described whereby people can believe in the possibility of the
destruction of the planet, but are not able to envisage the end of a
capitalist system and its ‘self-governing’ markets (Callinicos, 2010).
The cost of living
A detailed examination of the period shows how artificial this climate of
‘necessary’ austerity was. Throughout 1976, the speculators were selling
England by the pound. Endless attempts to rescue the currency only
used up government reserves of currency without halting its decline.
Huge sums – £1.25 billion in March, £1.5 billion in April – were
transferred from state coffers to those of the speculators via the stock
exchange currency markets, a massive earner for the rich in itself, as
Public engagement and social science
it still is in the City today. David Coates relates how Healey’s rhetoric
initially refused to give in to market blackmail and admit that the cuts
were necessary, but he then implemented them anyway:
At the peak of the first major run against sterling, in June,
the pound lost ten cents against the dollar in just thirteen
working days…. Healey maintained throughout that there
was ‘no economic justification for the fall which has taken
place in recent weeks…. Those who have sold sterling have
done so in disregard of the basic facts of our economic
situation.’ Still, he was forced to take £1012 million off
planned public expenditure. (Coates, 1980, p 39)
By October 1976, sterling was in freefall, only slowed by the
government’s announcement that they had asked for the maximum
loan permitted by the IMF – £3.9 billion. Healey and Callaghan
duly delivered the price they wanted in return: ‘after lengthy battles in
Cabinet, further cuts in public expenditure were announced. £3000
million’ (Coates, 1980, pp 40–1). This was in December 1976; now,
instead of further decline, the whole bout of speculation stopped the
following year. The pound ‘improved against an ailing dollar in 1977
and 1978’ (Coates, 1980, p 32). One does not have to be a conspiracy
theorist to see that speculation was bound to calm down once the
markets had achieved their goal. Now it was the turn of the working
class to pay the price – and from 1977 to 1978, real wages were cut
by 5%, according to Callaghan (Turner, 2008, p 189). Today’s financial
powers still have the same goals – epitomised by governor of the Bank
of England Mervyn King’s advice in January 2011: ‘The Monetary
Policy Committee neither can nor should it try to prevent the squeeze
in living standards, half of which is coming in the form of higher prices
and half in earnings rising at a lower rate than normal’ (BBC, 2011).
Despite her bloody record of industrial vandalism, the subsequent
Thatcher government was never able to inflict an actual fall in living
standards for those in work. This was Labour’s achievement in 1977/78;
it halted the ‘forward march of labour’ by attacking and demoralising
its core supporters. The offensive militancy of 1968–74 had failed to
prevent austerity. Of course, resistance was not permanently vanquished.
It reappeared – eventually – in 1978/79’s ‘winter of discontent’, when
public sector workers’ anger exploded over the endless demands from
the government for ‘sacrifice’ at the altar of economic necessity. But,
by then, the mood was no longer one of fighting for positive changes,
but rather punishing the party that had betrayed them. In the name of
1976 – the moral necessity of austerity
protecting their brand of neoliberal governance, Labour had allowed
the Tories to claim that ‘Labour isn’t Working’, shoehorn themselves
into office and proceed to embark on their notorious bout of 1980s’
deindustrialisation. There was nothing inevitable about this course of
history, no rationality in either Callaghan or Thatcher’s claims that
‘there is no alternative’.
Conclusion
So, what was the IMF moral panic all about? The message was simple:
the economy was broke and huge sums of money were required to
guarantee that everyday life could continue. Only a combination of
public sector cuts and wage restraint could change the social landscape
sufficiently to reassure international investors, specifically the IMF. It
was a tragic, apocalyptic and harsh reversal of all Labour’s aspirations
for those who voted for the government. Above all, it was vital that
however painful these cuts were, people believed them to be necessary.
This characterisation of high levels of public spending as a form of
deviance reminds the reader of Howard Becker’s nostrum: ‘social groups
create deviance by making the rules whose infraction constitutes
deviance’ (Becker, 1963, p 2).
The results of succumbing to this moral panic were hardly rewarding
for its architects. All the idealism and aspirations associated withLabour
fell away as Healey’s cuts bit. According to Foot, ‘the effect of his
cuts was a two per cent drop in disposable income… Labour lost its
majority in Parliament and in early 1977 cobbled together a deal with
the Liberals’ (Foot, 2005, pp 309, 393). There would be some crumbs
of comfort for the decision-makers if they really had no alternative,
but, astonishingly, Healey later admitted that there was, concludinghis
interview with Beckett about the IMF deal with: ‘we didn’t really need
the money at all … very irritating but there you are’ (Beckett, 2009, p
356). In an earlier interview, he was still more upbeat about how well
he thought the government had managed the crisis:
We got a good deal, and managed our own economy so
well that I drew only two slices of the four slices of money
available and paid it all back before I left office…. The virtue
of the whole thing, even though it wasn’t necessary, is that
Public engagement and social science
The Labour leadership, trade union leaders and international bankers
had all believed that they had something to gain in becoming gripped
by an unnecessary moral panic that there was no alternative to
austerity. It was a ‘magical effect’ that they fell for wholeheartedly;
a trick whereby workers saw their living standards cut by accepting
pay deals well below the rate of inflation – until the dam finally burst
in 1978/79’s ‘winter of discontent’. The roots of the bankers’ moral
panic was the preservation of their profits: a product of the love of
money, the necessity of seeing every use of resources as an investment,
a possession to be hoarded and guarded in competition with everyone
else. In Our Mutual Friend (Dickens, 1901), Dickens describes how the
Industrial Revolution bred a climate of ‘financialisation’, which breaks
down social ties and alienates selflessness while rewarding hypocrisy
and the selfish spirit of calculation. His characters, upon becoming
wealthy, degenerate into misers and speculators, parasitic upon society.
Their imperative to accumulate, with its perverse and anti-social
consequences, corrupted their morality, and their greed for ever-greater
profits led to speculation – creating a tottering edifice of debt, upon
which Dickens passes judgement:
My lords and gentlemen and honourable boards, when you,
in the course of your dust-shovelling and cinder-raking,
have piled up a mountain of pretentious failure, you must
off with your honourable coats for the removal of it, and
fall to the work with the power of all the queen’s horses
and all the queen’s men, or it will come rushing down and
bury us alive. (Dickens, 1901, p 437)
It may be that it is the wilful blindness of the captains of the financial
ship, believing the old corrupt practices of tax evasion and bonus-
grabbing can still be sustained while demanding that the crew take
short rations. They are certainly aided by politicians more than happy
to acquiesce to their corrupt private practices while hypocritically
denouncing and dishonouring the worst offenders in an attempt to
assuage public disquiet. Much of the public are, however, far more aware
of what criminologists label the ‘crimes of the powerful’ (Pearce, 1976 in refs now
[[NIR?]]) than they were in the 1970s, and organisations like UK
Uncut have successfully targeted corporations for their tax avoidance
– growing the private corporate profit rate while public services are
necessarily cut. The growth of the Occupy movement in the US and UK,
and movements such as the Spanish indignados, occupying city squares
and organising free food distribution to the poor from the supermarkets,
1976 – the moral necessity of austerity
are inspired by the greater revolutions in the likes of Egypt and Tunisia
(Calhoun, 2013; Gitlin, 2013 [[NIR?]]). These waves of protest may in refs now
rise and fall over time, but their imminence and existence is testament
to the depth of opposition to this contemporary financial ‘moral panic’.
The jury is still out as to whether the bulk of UK citizens are
succumbing to the moral panic of necessary austerity today. One of
the purposes of creating Social Science in the City is to gain a greater
appreciation of what, why and how groups of people feel about
these issues: to create a counter-hegemony to the ruling discourse, as
Gramsci would see it. The media and the ruling politicians of Europe
may remain convinced of the necessity of austerity (Clement, 2013);
to them, the ‘folk devils’ are those who dare to disagree. As long as the
population leave the government and management of austerity in the
hands of the rich and powerful, they will necessarily perpetuate their
exploitation; but there are heartening signs that, today, many of those
affected are resisting being caught up in an anti-social moral panicand
are seeking alternatives to austerity (Clement, 2012).
References
Badiou, A. (2012) The rebirth of history: times of riots and uprisings, London:
Verso.
BBC (2011) Newsnight, 26 January.
BBC (2012) Newsnight, 8 May.
Becker, H. (1963) Outsiders, New York, NY: Free Press.
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