Austerity is not inevitable but a policy choice

Martin Kettle confuses at least two issues (Austerity is here to stay, and we’d better get used to it, 15 November).

Yes, we have austerity in this country, and in Europe. But this is a policy choice and a bad one, repeating the mistakes of the 30s.

Timing on deficit reduction is everything: what we need now is more spending, when the economy is misfiring, not less; lower spending by government, or higher taxes, are needed tomorrow, not today.

Similarly in the US the “fiscal cliff” is much better described as an “austerity timebomb”.

The danger is that the threatened tax increases and spending cuts undermine the modest US recovery. But this has almost nothing to do with the rise of China and the reduction in the share of world GDP originating in the west over the next 50 years.

China getting richer does not make us poorer.

Poor countries have the potential to grow faster than rich ones by using existing technology. Surely this is what we want to see: poor countries reaching the same standards we have.

In a world where incomes per head are much more equal, populous countries will inevitably have the biggest economies. I fail to see what economic problems this creates, though there will be political consequences.

The UK has been growing at just over 2% a year since 1945 and there is no reason to suppose that this is going to dramatically reduce over the next 50 years let alone turn negative (declining growth does not mean negative growth), even with a lost decade from poor policy choices. So we can expect to have higher incomes over the longer term to pay for what we need. As people live longer and with better healthcare there will be pressures on our higher incomes. But we have always had to make choices about what to buy, how long to work and how to pay for it, and higher taxes and later retirement are options. These are the consequences of success, not of failure.

Michael Phelps
Colchester, Essex 

• The financial crash is simple proof that capitalism contains the seeds of its own destruction and that perpetual greed can only take a society so far.

If a system is dependent on growth, while a small elite fills its pockets, that growth will eventually dry up as desirable products grow out of reach of the low-income majority.

The entire national deficit could be paid off in one fell swoop by the richest 1% in Britain and still leave them wealthy beyond the wildest dreams of the majority.

Therefore, the key is effective wealth redistribution measures, with radical taxation and clamping down on tax evasion with the same zeal that benefit claimants are currently being targeted.

Kettle praises George Osborne for his realisation that incumbent governments can win re-election as Obama has. This is only because people are offered no real choices.

Labour has to rediscover its socialist soul and promote policies that change the whole order of power and wealth in modern Britain.

As austerity bites, these policies should appeal to the mass of the electorate more and more.

Tim Matthews
Luton, Bedfordshire 

• Reading between the lines of Mervyn King’s statement (Report, 15 November), one is forced to conclude that both the Bank of England and the government are playing some sadistic self-fulfilling prophecy game.

With each awful ratchet of the screw to drive the economy down further via cuts and job losses there is a new announcement telling us how awful things are and will be.

However, it is becoming apparent that the awfulness that is living in Britain in 2012 is not shared by all.

With the recent whistle-blower exposé of alleged rigged energy prices, the gas and electric companies join a long queue of rich corporations and private companies who are taking the British public for a ride.

One week it’s banks, the next it’s supermarkets and now it’s energy companies and yet the government and bank seem to exist merely to uphold the status quo.

Quantitative easing, all £375bn of it, far from helping the economy, its retail industry and its people, appears to be in a revolving door – the bank puts it in and the bankers take it out.

Meanwhile in the real world cuts affecting the very fabric of communities and everyone’s ability to pay their way in the world are being vindictively imposed on huge swaths of this country.

How bizarre that only mainland Europe’s peoples believe they are being subjected to unnecessary austerity.

Alan Dazely
Horsham, West Sussex

• Scarcity is, and has always been, the central economic problem, and choice is the way that competing claims on scarce resources are resolved.

Who exercises choice, by what process, and according to what values and criteria – these are the crucial issues.

The reality is that for those who choose austerity, relative scarcity is not the issue.

Austerity means choosing to underuse resources, reducing the exploitation of the economy’s true productive potential.

It means letting people, land and capital lie idle, to serve the interests of the money markets, corporatists and technocrats – not those of the people of Europe.

Those that condemn millions to poverty and unemployment are the rich and not the poor – they are simply expected to pay for the crisis of capitalism.

Graham Smith
Walton on Thames, Surrey

 

• What I find offensive is Kettle’s statement that

“the hope is likely to prove optimistic if the left simply shouts the old mantras”

Some of the old mantras need to be shouted from the rooftops.

Fair pay.

A fair tax system.

Less inequality.

Since the west consumes a disproportionate share of the world’s resources the secret of success and sustainability must be associated with fairer distribution.

Oh, let’s not forget nationalisation either.

We might be able to address climate change if the levers are passed from private to public control.

And let’s not hear all the old mantras from the right that public control doesn’t work.

All privatisation has achieved is to replace all the scientists and engineers with billing clerks, leaving the country with no technological base to tackle the problems of the future.

Rod White
Uley, Gloucestershire