Social Murder, Productivity Crisis & Irresponsible Technology Policy: The 2017 Budget

by Tom Gann, Kyle Geraghty and Wendy Liu

Wednesday’s budget was more striking for the economic indicators and forecasts produced by the Office for Budgetary Responsibility than for any of its specific policies. The indicators and forecasts show an economy in which the deep structural and chronic problems of British capitalism have been intensified and have shaped almost a decade of post-crisis stabilised wretchedness. Contrasted with the grimness of the indicators, the Tory response is, of course, stunningly inadequate, lacking the desire or even the political capacity to address any of these deep-seated problems, not to mention the looming impact of Brexit. Indeed, this budget has been deemed a political success precisely for not containing any content that would upset any Tories enough to demand Hammond’s resignation.

Social Murder: Acute and Chronic

In The Condition of the Working Class in England, Engels accuses the ruling class of social murder: “England daily and hourly commits what the working-men's organs, with perfect correctness, characterise as social murder, that it has placed the workers under conditions in which they can neither retain health nor live long; that it undermines the vital force of these workers gradually, little by little, and so hurries them to the grave before their time.” In the wake of Grenfell, with John McDonnell describing the deaths as “social murder” and Aditya Chakrabortty arguing that “over 170 years [after Engels], Britain remains a country that murders its poor”, the continued need for the concept is clear. This continued importance of “social murder” should be apparent from the trivial sums of money allocated to address Grenfell, with Kensington and Chelsea Council granted a paltry £28 million for “mental health services, regeneration support for the surrounding areas and to provide a new community space for Grenfell United community group” (our emphasis). Not only is there considerable local scepticism about the usefulness of that money, there is no extra money for local councils for urgently-needed safety improvements, maintaining the same contempt that led to Grenfell in the first place. As Corbyn argued,

The horrors of Grenfell Tower are a reflection of a system which puts profits before people, that fails to listen to working-class communities...In 2013, the government received advice in a coroner’s report that sprinklers should be fitted in all high-rise buildings. Today, once again, the government failed to fund the £1bn investment needed.”

There’s acute social murder, as in the case of Grenfell, but there’s also chronic social murder, when “a class which...is so ill-provided with the most necessary means of subsistence, cannot be healthy and can reach no advanced age”. The OBR’s prediction that 26,000 more pensioners will die every year is a case of the latter. In The Guardian’s rolling coverage, this is only mentioned wryly, in connection with its beneficial effects on public finances: “which will mean less spending on pensions”. But pensioner life expectancy and quality of life are not immutable facts of life; they are reduced through political decisions. As Danny Dorling has noted,

The most plausible explanation would blame the politics of austerity, which has had an excessive impact on the poor and the elderly; the withdrawal of care support to half a million elderly people that had taken place by 2013; the effect of a million fewer social care visits being carried out every year; the cuts to NHS budgets and its reorganisation as a result of the 2012 Health and Social Care Act; increased rates of bankruptcy and general decline in the quality of care homes; the rise in fuel poverty among the old; cuts to or removal of disability benefits. The stalling of life expectancy was the result of political choice”.

Stagnant, average life expectancy, is not, of course, general across the whole population, as Dorling notes, “the first to be affected were elderly women living alone in the poorest parts of the UK.” How can this be expressed politically? Why is one of the only mentions of this couched in wry terms? Parliament’s chummy clubbiness, its absurd rituals of debate that maintain a pantomime antagonism whilst, ultimately, most MPs drink together, social democracy’s containing of contradictions and anger within limited boundaries, post-political technocracy—all these make real expressions of political anger appear out of place in Parliament or on TV. See Stella Creasy’s visible irritation at Aditya Chakrabortty pointing out that Tory policies kill people, or the mockery of Corbyn’s anger at there being no more money for social care; as Dorling notes, a major factor in the rise in mortality rates is the “delays in discharging elderly patients from hospital because appropriate social care was not available.” Political respectability still requires that the needless deaths of thousands of poorer pensioners a year can only be registered in statistics on the reduced pensions burden.

The other side of the deep impact of policy decisions, again presented rather wryly if noted at all, is the trimming of fertility forecasts. As Silvia Federici argues,

so far are procreation and population changes from being “natural” that, in all phases of capitalist development, the state has had to resort to regulation and coercion to expand or reduce the workforce...even later the state has spared no efforts in its attempts to wrench from women’s hands control over reproduction, and to determine which children should be born, where, when, or in what numbers.[1]

One major factor, acknowledged but not addressed by the 26-30 Young Persons’s Railcard, is the extension of years of precarity and an inability to provide for possible children; another is the impact of essentially eugenicist benefit policies such as limiting tax credits to families with two children or the benefits cap on working class families being able to support children beginning to be felt. All of these amount to policies that make young, working-class women available for work, but without actually providing that work, and certainly without providing well-paid and secure work. The purpose of the economy should be the meeting of human needs, via an orientation towards the reproduction of life and its conditions. Unfortunately, the budget not only offers nothing for care, but contains energy policies that actively harm the conditions of life, with transferable tax credits for North Sea oil and gas to “spur further deals that will help extend the life of mature fields” alongside there being no new subsidies for low-carbon electricity generation until at least 2025.

Productivity Crisis

The pressure to make workers, especially working-class women, available for work (even if that work does not exist) is part of an economy in which changed incentives for capital and labour, and capital’s ability to throw flexible cheap labour into production, with the aid of the state, disincentivises investment in capital improvements that would improve productivity per worker.

In an era obsessed with innovation yet marked by a moribund crisis requiring genuine change to resolve, the latest budget offers a bleak picture of our ability to implement recent advancement and few strategies for changing this. The dramatic stagnation from pre-crisis gains in productivity and the still relatively optimistic figures underpinning the budget are particularly indicative of this.

Showing a drop from historical productivity growth rate of 2 to 1 percent by 2020 as part of an apparently long-term trend since the crisis, this long-term, post-crisis trend, however, represents more than anything else a return to a traditional British sickness. This sickness dates back to at least the mid 19th century and became acute by the turn of the century, with Britain as a parasitic economy based on finance and trade, “living off the remains of world monopoly, the underdeveloped world, her past accumulations of wealth...symbolised by now the country house in the stockbrokers’ belt of Surrey and Sussex and no longer by hard-faced men in provincial towns.”[2]. The collapse in productivity represents a decline in capitalism’s self-proclaimed utopian contradiction of increasing exploitation while, simultaneously, increasing the number of use values available for worker consumption.

The budget’s measures to resolve this are underwhelming, focusing on tax changes and a continuation of infrastructural investment without clearly connecting it to any concrete strategy for altering the geography and perspective of firms. For example, though a rapid increase in research and development funding to 2.4 percent is advised, it is not connected to the extensive attacks on universities as part of the Brexit-centred attack on immigrants and funding changes. Likewise, the obsession with artificial intelligence and driverless cars without any discussion of how the UK could compete with Silicon Valley’s long-standing geographical advantages is severely limited and limiting, as we argue below.

Similarly, although the increase in the “living wage” may help incentivise investment, it's disconnected from a discussion of benefit cuts which are undermining domestic consumption and ignores the the potential for Brexit to remove our access to key markets. Therefore there is a potential mechanism for investment provided while stripping firms of potential markets.

Finally, the appearance of apparent new political divides driven by the emergent differences between cities and towns, and the geographical differentiation in productivity, is unaddressed. This is generated in part by deindustrialisation, supporting a split between globally-oriented high-value cities (albeit with deprived hinterlands) and towns focused on logistics and manufacturing for the relatively low-value domestic market. This parallels already existing divides over the concentration of research and high-tech manufacturing clusters in the South and the finance service cluster in the South-East and represents splits in the location of concrete industry. Though inexcusable in itself, the lack of a focused industrial strategy here pairs the overall threat that lowering productivity has on the UK economy with an acute socio-political problem that undermines any potential successes its minor changes may generate.

Uneven and Combined Development

These existing divides and contradictions, which deindustrialisation intensifies along sectoral and spatial lines, are not addressed and are even exacerbated by the housing policy in the budget. There are three notable policies related to housing. Firstly, a commitment to a million new homes by 2050 in Oxford—Milton Keynes—Cambridge, alongside further spending commitments on road infrastructure to link the so-called “brain belt”. Secondly, there is a pledge to increase the number of new homes built to 300,000 a year through offering £44 billion of capital funding, loans and guarantees. Thirdly, there is an announcement to abolish stamp duty for first-time purchases of properties worth up to £300,000, with those costing £500,000 or less maintaining a 0% tax on the first £300,000.

An increasingly common claim is that a lack of house building in the South-East, London and parts of the East (that is, in “productive regions”) is a factor in Britain’s overall lack of productivity. The “Brain Belt” proposals, as well as the £44 billion for developers to build more housing, aims to address Britain’s chronic and intensified post-crisis productivity problems—not through investment in those places that have been denied it, but through extending and supporting the existing spatial and sectoral organisation, whereby the economy is organised around finance and IT agglomeration across the South-East region. Whilst there is still some high-productivity manufacturing—for example, around Cambridge—this remains both significantly less systematically important than finance and at the same time absolutely reliant on it. Notoriously, in 2008, Policy Exchange produced a report arguing that it was unrealistic to revive Bradford, Liverpool and Sunderland, and that these places should be abandoned. This, rightly so, led to considerable anger. The direction of contemporary government policy, however, is identical, even if the death of places that cannot be much more than dormitory suburbs for London now “seems a natural one, since the offence is more one of omission than commission”.

To propose to resolve the housing crisis through supporting developers to build more houses represents a one-sided understanding of a set of interlocked but antithetical housing crises within the UK’s uneven and combined development. What is described as the housing crisis is primarily a crisis of spatial contradiction, of a lack of jobs and investment outside the South-East pulling millions towards this region. Liverpool, for example, has thousands of empty homes coupled with high levels of homelessness that will not be solved through the budget’s Housing First pilot—the problem is structural, not due to a lack of “intensive support” for people help them settle into new homes. Finally, the Stamp Duty proposals are significantly orientated towards maintaining house prices in the South-East, given that properties bought for up to £500,000 are covered by the change; the OBR argues “the main gainers from the policy are people who already own property, not the FTBs [first-time buyers] themselves.” This points to a further contradiction in the housing crisis—the "resolutions" proposed by this budget favour those who already have money and resources, whereas what young working-class people need is a reduction in house prices; but that, of course, would be opposed by those who already own property.

The Technology Sector

Lastly, the budget’s policy proposals regarding the tech sector range from ineffectual and lacking in substance to downright irresponsible. There's very little in the way of fostering innovation that will actually be socially useful; instead, what we see are superficial attempts to appear innovation-friendly, as a way to assuage the sector’s concerns over Brexit. The £406 million for improving STEM education may reassure businesses of a large future talent pool, but when coupled with ongoing funding cuts for schools, it’s hard to see this as anything other than an empty gesture. By the same token, the £75 million that’s touted as an investment in AI is really earmarked for the creation of a new advisory body, whose goal will be to establish a regulatory framework for AI; whether this body will actually have any enforcement power is unspecified.

The more dangerous aspect is the way technology is viewed as a panacea. Underlying the proposals on technology is an implicit faith that growth in the tech sector will somehow fix larger socioeconomic ills. When Hammond says that “a new tech business is funded every hour and I want that to be every half hour”, he perfectly encapsulates the ideology behind this budget’s attempt to funnel more money into tech, through offering tax breaks for venture capital investments and making it easier for pension funds to invest in startups. As if there isn’t already too much money in tech chasing the same tired ideas in oversaturated markets; as if startups—increasingly functioning as get-rich-quick schemes and operating with little to no oversight—are really our best hope for solving collective problems. It seems like technological innovation is being used as a smokescreen to keep people distracted from everything the budget doesn’t address. What’s more, there’s no concern for whether the benefits of technology will be shared equally. Driverless cars are breathlessly celebrated for their potential to create jobs in the autonomous vehicle industry, but the number of jobs that might be lost in the process is never mentioned. Likewise, there are proposals to continue subsidising the purchase of electric cars (up to £4,500) and invest in charging infrastructure, but given that even the cheapest electric car (with a subsidy) is still unaffordable for most, this seems like little more than a handout for the wealthy few who would have bought such a car anyway.

Conclusion

In sum, the budget offers no solution to post-crisis failures of UK capitalism, let alone to deeper, structural tendencies that preceded, determined and intensified the crisis. It barely meets the problems we would have been facing without the threat of Brexit, never mind with. Even radical solutions to the slow decline of neoliberalism would face problems creating a more sustainable and equitable future, but it would at least provide some options.

Photo: Chris Shaw


  1. Silvia Federici, Caliban and the Witch, p. 91. ↩︎

  2. Eric Hobsbawm, Industry and Empire, London: Penguin, p. 170-1. ↩︎


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