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).
The obsession with the prevailing neoliberal socioeconomic orthodoxy of successive governments over the last 40 years demonstrates the fact that right-wing politicians, like Theresa May, peddle these beliefs, not on behalf of free-markets, but on behalf of crony capitalism; where publicly owned assets are systematically stripped and sold off in order to enrich an elite economic and political class.
Farm subsidies, public sector retrenchment, corporate tax avoidance and evasion, government share giveaways and housing benefit subsidies, are just some of the ways in which neoliberalism continues to greatly enrich the wealthiest in society. Figures reported in the Guardian indicate that the richest one percent in Britain have as much wealth as the poorest 57% combined.
More evenly shared
The rise in inequality during the neoliberal era contrasts with the thirty-years “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% of the population fell over the 40 years leading up to 1979, from 34.6% in 1938 to 21% in 1979. While the share going to the bottom 10% rose slightly. Meanwhile, other figures show 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 three times higher in the post-war years compared to 2017. This is despite the fact that a Labour government, ravaged by war, built hundreds of thousands of “homes fit for heroes” and brought the National Health Service into being.
Numerous decades later, Theresa May, who ‘leads’ an immeasurably wealthier government than its post-war predecessors, nevertheless claims “there is no magic money tree” to fund public services. The evidence is overwhelming and Labour leader, Jeremy Corbyn, intends to finally break the neoliberal consensus that is strangling the UK, marking a return to the kind of equitable redistribution of the spoils of growth of the post-war years. Corbyn’s is an economic strategy that is concerning a Tory government, bereft of ideas.
Whereas neoliberal fundamentalists envisage the market as ideological manifestation: scientific and technological progress and the theft of publicly-owned resources etc. Corbyn’s vision for humanity is to improve the quality of life for the majority through the redistribution of wealth and by increasing the investment in public infrastructure and social capital. Approaches that couldn’t be more polar.
As is the case with numerous advocates for neoliberalism, the Tories 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.
Mixed economy in the right hands
Potentially, sustained economic growth that capitalism promotes can create the conditions for humanity to overcome poverty and pestilence and to meet its fundamental needs – but only in the right hands. Paradoxically, under neoliberalism, the “perpetual growth-ideology of progress” model 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 effects 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 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, smart-phones and computers, it’s still the case that the majority of the world’s 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 number 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 versus 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 the UK and elsewhere of 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?”
Therefore, it’s 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 really 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 that they can’t afford essential clothing. Children are especially vulnerable – 17% go without two essential items and 34% go without at least one.
With the massive increase in food banks, zero hours contracts and in-work poverty; the adverse effects 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 massive scale. This is reflected by the extent to which public enterprises are privatised for profit and private capital debt is socialised through subsidy by the tax-payer. This is the kind of “free-market” capitalism espoused by Theresa May – a vision of a system built on the principle of socialism for the rich and enslavement for the rest.
Although many commentators correctly point out 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 a 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 richest one percent are prepared to go in order to protect their corrupt neoliberal system of wealth usurpation. In theory, the EU is a positive institution 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.