The Inhuman Failure of ‘Austerity’ By David William Pear May 5, 2015

The Framers of the U.S. Constitution said the Government should provide for the “general Welfare,” a mandate to help build a strong and prosperous nation. But the concept has been lost in a wave of anti-government, “neoliberal” propaganda making the Market king, as David William Pear explains.

By David William Pear

source: https://consortiumnews.com/2015/05/05/the-inhuman-failure-of-austerity/

Close your eyes and imagine an affluent society with subsonic trains crisscrossing the continent. One that produces unlimited clean energy. Provides basic healthcare for everyone. Values education for its own sake. Cultivates the arts and research to discover beauty and the unknown. An affluent society that responds with compassion to natural disaster. Conserves natural resources and protects the environment. And enjoys more leisure time. Cares about eliminating poverty and illiteracy. That ends racism and prejudice.

Does the affluent society seem like a dream? Is it an impossible goal? The neoliberals think it is. They imagine a world of austerity and a new Gilded Age.

The neoliberals are prisoners of the Eighteenth Century. They have not advanced since the neo-feudal teachings of Adam Smith (1723-1790). Smith is the godfather of economics and wrote the “bible” of capitalism, An Inquiry into the Nature and Causes of the Wealth of Nations. Smith was among the first to give much thought about economics.

In Eighteenth Century Great Britain, half the population lived in poverty. They survived, if they did, with disease, famine, illiteracy, lack of sanitation and in slums. It was normal then. Things had always been that way. They thought the poor, starving and ignorant mass of people would always be among them.  They thought their society was according to the law of nature.

Smith was a charitable man. He fretted about poverty, and gave a great deal of thought about wages. With a large pool of the unemployed, the new industrial class only had to pay subsistence wages.

Smith tried to tell the industrialists that people were like cattle. He said if one gave their cows more grass, then they would produce more milk. The industrialists said that if they gave their workers higher wages, then it would come out of profits, and the workers would just produce more children with mouths to feed, leading to greater starvation. The neoliberals still think this way.

Every progressive social project the neoliberals call it socialism, as if that is an obscene word. The only government projects they like are those that benefit the private sector, corporations and the wealthy.

Almost every modern democracy has done better than the U.S. at providing good government for its people. All the evidence proves it. The U.S. consistently ranks far below more progressive countries on the United Nations Human Development Index that measures health, education and equality of income.

On the Social Progress Index, which measures “Basic Human Needs, Foundations of Wellness, and Opportunity” (see interactive map); the U.S. is ranked sixteenth, and well behind other developed democratic nations. Those countries doing better have not degenerated into totalitarianism, as the neoliberals predict.

The neoliberals see Adolf Hitler or Joseph Stalin behind every government social program. In the 1940s the neoliberal’s idol, Friedrich von Hayek (1899-1992) wrote a thesis called The Road to Serfdom. It is a simple book in its Eighteenth Century theories about government and freedom. There is a comic book version, courtesy of General Motors. Hayek won the Nobel Prize for it.

John Maynard Keynes (1883-1946) and Hayek were colleagues at the London School of Economics. They had a long-running debate for years over the role of government. Keynes realized that government was important, that it has an active role in the economy. He said the government could do “good” and manage the economy well. Hayek said it was the road to serfdom.

Keynes was an economic advisor for the British government during World War I. He also advised the British during the Treaty of Versailles to negotiate Germany’s surrender. Keynes resigned from his position at Versailles in disgust, saying the harsh austerity the Allies were demanding of Germany and Austria would cause massive poverty and starvation. He said it was inhumane and would result in the rise of fascism and war. He proved to be right. He was not awarded the Nobel Prize.

In the Twenty-first Century, the European Union is imposing harsh austerity on its weaker members. The neoliberals are dismantling Europe’s progressive social programs. We are seeing the rise of fascism again too. So which is more likely to cause fascism and war: Austerity for the people, or progressive government social programs? Hayek said he did not mind a dictatorship, as long as it is neoliberal. The neoliberals like right-wing dictators.

During the Great Depression (1929-1939), President Franklin Delano Roosevelt turned to Keynes for advice about the Great Depression. Keynes wrote a letter to Roosevelt advising him on the need for government social programs to stimulate the economy. Keynes further warned FDR that lowering interest rates and increasing the money supply alone would only bailout speculators, but would not sustain economic recovery.

By contrast, President Barack Obama took the neoliberal advice in the Great Recession and bailed out the speculators. Keynes would have predicted that the result would be anemic economic recovery. He would have been right.

Keynes gave worthy advice that would do the American people well in the Twenty-first Century. The neoliberals keep sabotaging good advice from past sages. Their sabotage is well-funded by corporations, foundations, foreign governments and the wealthy.

John Kenneth Galbraith (1908-2006) was a genius with Twenty-first Century ideas. Galbraith served as an economic advisor to both FDR and John F. Kennedy.  His most famous book is The Affluent Society (1958), a popular book during the 1960s.

During the Stagflation of the 1970s, the neoliberals allied with the religious-right and racists to purge Keynes’s and Galbraith’s teachings. In the 1980s, the Reagan-Thatcher revolution established neoliberals, corporate hegemony and right-wing extremists in the halls of power.

The first experiment of the neoliberals was in Chile during the 1970s. It led to the rise of Pinochet, fascism and crimes against humanity. Hayek said in a 1978 letter to the Times of London that he personally approved of Pinochet, preferring a dictator to a democratic government without neoliberalism.

Hayek made one excuse after another for Pinochet. He was not even faithful to his own principles, and said Pinochet’s firing squads would transition to democracy. Those on the wrong end of Pinochet’s firing squads would not live to see that miracle. The neoliberals never take responsibility, admit they are wrong, or say they are sorry. (See example, here.)

Galbraith’s discarded ideas had some excellent questions and answers to ponder in the Twenty-first Century. What is our obsession with economic growth and the Gross Domestic Product (GDP), when an affluent society already produces all the private goods and services needed, Galbraith asked? And, shouldn’t we be more concerned about what is produced instead of how much? He said there is a “problem with social balance … private affluence and public squalor … as well as related environmental, aesthetic, and cultural concerns.” He was a man for the Twenty-first Century.

Neoliberals are not against fascist and corporate planning of the economy. Fascists use the firing squad as their economic planning tool. Corporations use monopoly power, public relations departments and political graft. Corporations are hierarchical organizations that meet in secret to decide what to produce and the price people will pay. They spend billions of dollars on advertising to change consumer preferences and move their products off the shelves. Their propaganda has created a privatized culture of consumerism, materialism and gluttony.

The corporations are dictating government programs too. Their oligarchies have taken over governments globally at all levels. They plan the government and the economy for their own profit and greed. Corporate oligarchies and neoliberals attack every social program for the public. They impose austerity on the public sector and the people. The impoverished public sector is in dire need of investment.

Education could use a tsunami of new investment. The lack of investment for education, especially in poor neighborhoods, is glaring. The neoliberals blame “bad teachers.” They want to privatize public schools and hire proctors that will work for the minimum wage, so their hedge funds can make billions of dollars in profits that should be going to education.

Higher education is failing too. Students are condemned to indentured servitude to payoff student loans. Young people have been indoctrinated that the value of education is to learn how to work for corporations and the military.

College graduates discover that there are no jobs for their qualifications. Neoliberals stuck in the Eighteenth Century say the answer is that not everybody needs an education to be a widget or carry a gun. They want other people’s students to enroll in online schools pushed by their hedge funds, while their kids go to Harvard, Yale and MIT.

An affluent society needs educated people. There is a cadre of potential teachers, healthcare workers, nutritionists, scientists, sociologists, historians, artists, engineers and administrators now working at meaningless minimum wage jobs. There is an abundance of opportunity for college graduates in an affluent society.

New community centers could staff professionals to enrich the lives of seniors, teens and children. With people living longer, retired seniors could improve their lives and social activity by taking courses and enjoying the arts. Teens could have tutoring, learn to play chess, take music lessons, cooking classes, creative writing, languages, and have supervised sports. The possibilities for public investments and to improve the quality of life, and provide meaningful jobs are endless. Neoliberals want everybody to sit alone at home and watch TV.

Malnourished and neglected children are unacceptable in an affluent society. The problem is not a lack of resources. It is because of unequal distribution. There is a shameful lack of prenatal care. As a result, infant mortality in the U.S. is higher than every developed nation. It is 30 percent higher than even Cuba, which the neoliberals constantly chastise about its human rights.

New parents could get healthcare, infant care and education in an affluent society. Instead, Eighteenth Century neoliberals want to kill Obamacare, Medicare and Medicaid; and they want to privatize the Veterans Administration. Their greed is insatiable.

Obama promised single-payer healthcare. The public got excited and wanted it. The Eighteenth Century neoliberals killed it in the womb. Long-term health care and homecare goes uncovered by any public insurance. Neoliberals let the old and disabled go without and die, as if those people are just useless eaters. Instead an affluent society would treat the old and disabled humanely; and single-payer healthcare would create more careers and professional jobs.

Twice a day every workday the highways are in gridlock with automobiles idling, burning fossil fuel and polluting the air. Clean, fast and comfortable light-rail and motor coaches would be quicker, more comfortable and use less energy. Building and operating a Twenty-first Century mass transportation industry would make commuting time productive and leisurely; and create more skilled jobs.

An affluent society should not neglect the unemployed. The public sector has the responsibility of full-employment and providing for those unemployed. Employees did not volunteer to be the risk-takers of capitalism. They should not be condemned to their fate because they were unlucky and chose the wrong industry or employer years ago.

Society must also face the reality that some people are permanently unable to work because of social, emotional and health reasons. The unemployed need treatment, counseling, education and care; which would also create more jobs.

These are just a few ideas, some from Galbraith’s The Affluent Society. As Galbraith said in 1958, the private sector is a king; the public sector is a pauper. They can both be royalty.

The neoliberals and their alter-ego, the neocons, do not have any good ideas for the Twenty-first Century. They have caused financial disasters and endless wars, and they tell us not to expect better.

Part of the public sector that is not a pauper but should be is the military. The military-industrial complex is wasting vast resources making machines of death. Society is spending trillions of dollars to send armies to invade other countries. We spend trillions of dollars in order to protect us from imaginary enemies and those that our wars have created. It does not make us any safer. The jobs that it creates do not add any value.

The Eighteen Century neoliberals and the neoconservatives say that government economic planning will destroy our freedom, while they plan the economy for war and financial speculation. The neocons say the American people must give up the Bill of Rights in exchange for safety. The neoliberals say that austerity will bring prosperity. Instead we are less free and more poor. They are leading us down the road to fascism and serfdom.

Let’s open our eyes and stop listening to the neoliberals.
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After 40 years, David William Pear retired from investment management and started writing on economic, political and social subjects. He is a regular columnist for The Real News Network and Op Ed News.

Reference Sources:
Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics:  by Daniel Stedman Jones.

Keynes, Hayek: The Clash that Defined Modern Economics by Nicholas Wapshott.

The Affluent Society by John Kenneth Galbraith