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David Cameron's Cuts: Popular, For Now


Polly Toynbee on the radical changes in Britain that appear, for now, to be popular:

These were cuts beyond the dreams of Margaret Thatcher, an £83bn shrivelling of the state drawn from a Chicago School economic blueprint. How cleverly the man who re-invented his party as nice, green, caring and socially concerned has used the crash to turn it into a radical neo-liberal cutting machine. What's more, so far he has done it with public approval: 60% say this brutality is necessary.

The ground was well tilled with text-book doublethink that stood the facts on their head. The broadest shoulders will carry the burden, the chancellor intoned over and over. Yet even the government's own graph shows the poorest tenth losing a higher proportion of their income than the average – and every cut hurts them most. Months of stories softened up opinion, suggesting that all benefit recipients are scroungers with vast families living in mansions. One good anecdote beats dry statistics on poverty every time. So welfare cuts are popular – for now.

I have to say, a part of me is mightily impressed with Cameron's skulduggery - he's managed to create such an environment of fear that the British public has largely swallowed the nonsense his party is passing of as 'responsible economic policy'. These types of radical cuts have been tried before, many times around the world, all with the same disastrous results. Cameron's slick PR skills have allowed him to gloss over the facts of the argument and replace them with ideology. This ideology, born out of the Chicago School of Economics has been an utter failure everywhere it has been applied. Writes George Monbiot of the Chicago School economists foray into Chile:

Their ideas had already been comprehensively rejected by the electorate, but now the electorate was irrelevant: Pinochet used the crisis he had created to imprison, torture or kill anyone who dissented. The Chicago School policies – privatisation, deregulation, massive tax and spending cuts – were catastrophic. Inflation rose to 375% in 1974; the highest rate on earth. Even so, Friedman insisted that the programme was not going far or fast enough. On a visit to Chile in 1975 he persuaded Pinochet to hit much harder. The result was a massive increase in unemployment and the near-eradication of the middle class. But the very rich became much richer, and the corporations, scarcely taxed, deregulated and fattened on privatised assets, became much more powerful.

By 1982, Friedman's prescriptions had caused a spectacular economic crash. Unemployment hit 30%; debt exploded. Pinochet sacked the Chicago economists and started re-nationalising stricken companies, whereupon the economy began to recover. Chile's so-called economic miracle began only after Friedman's doctrines were abandoned. The Chicago School's catastrophic programme pushed almost half the population below the poverty line and left Chile with one of the world's highest rates of inequality.

Whether intentionally or not, this is the Britain the Tory government seeks to create. While blaming welfare cheats and the poor for Britain's economic woes seems popular now, once the reality sets in, expect to see some serious backlash. Writes Toynbee:

Will it last when reality bites by the middle of next year, when a million more are losing jobs? Newspaper anecdotes of a less favourable kind will show pensioners losing housing benefit evicted from their homes. Sick people queueing for admission on A&E trolleys will suddenly show that NHS ring-fencing was bogus, its inflation needs far higher than the tiny extra it was given. Try closing even one under-used library and hear the local protests, let alone leisure centres, school sports and youth clubs. Sure Start is not saved: without ringfenced funds, it will be left to local councils to wield the axe. Schools will cut teachers and teaching assistants, while a 10,000 cut in police will be blamed for any local crime. The stories of waste and welfare cheats will soon turn to horror tales of cuts. Will the comfortable 70% care then? You bet they will.

Thankfully, Ed Miliband's Labour is looking to provide a real alternative to this type of masochistic economics. So in 5 years time, the Conservatives could find themselves out of government for another generation - a fitting punishment for the havoc they are about to wreak.