1976 - the moral necessity of austerity

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).


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,


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


[[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


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


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


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


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


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

sentiment internationally completely switched around.

(Whitehead, 1985, p 200)


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,


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

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BBC (2011) Newsnight, 26 January.

BBC (2012) Newsnight, 8 May.

Becker, H. (1963) Outsiders, New York, NY: Free Press.

Beckett, A. (2009) When the Lights went out: Britain in the 70s, London:

Faber.

Benn, T. (1990) Against the tide: diaries 1973–76, London: Arrow.

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1976 - the moral necessity of austerity

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