Wednesday, July 1, 2015

Why writing isn't as easy as it may seem

The other week I was having a conversation with someone who scoffed at me and derided my assertion that being a writer isn't as easy as it might seem. I wasn't saying that I dislike what I do, just that it's sometimes very difficult to be a writer.

That writing is a difficult and often unrewarding occupation isn't just an idle opinion. There's plenty of evidence to show that it's a job that simply doesn't pay the bills. According to research by the Authors Licencing and Collecting Survey, the median income for all writers is just £4,000 per year, and the average for professional writers has fallen to less than £12,000. This means than these days only a tiny select band of writers are making enough from their trade to cover their costs of living. 

Several years ago I started writing as Another Angry Voice as a hobby, never imagining that it would ever become popular enough for me to earn an income from it. It's only in recent months that I've decided to throw myself into it on a full-time basis and hope that I can gradually raise enough small donations to cover my modest costs of living. Despite the fact that I'm not yet meeting my costs of living through my writing, I'm doing a bit better than a huge number of people who have similarly dedicated themselves to their writing, so that's something to be very grateful for.

One of the things that has made it even more difficult for me is that I'm absolutely determined to do it on the Pay as You Feel principle instead of blathering my blog in Google Ads and sponsored clickbait links. Given the traffic that my page attracts now I have no doubt that I could make more than enough to get by through revenue from adverts and sponsored clickbait, but as an advocate of heterodox economics I'd be a total hypocrite to do it that way. If even advocates of heterodox economics like me end up reliant upon orthodox ways of raising revenue, then what hope is there that things could ever be different?

One of the other things that makes my writing so difficult is that I have chosen to write about often appalling subjects like politics and economics, meaning that I'm more often than not writing about my dissatisfaction with the way things are.

As much as people who only know me through my political writing may think of me as a permanently disgruntled person, I'm not. I have a great appreciation for the finer things in life to rival my passions for freedom and social justice. Just today I walked through a field of buttercups and clover with my two kids and put up an enormous cloud of butterflies, the like of which I've never seen before. Sometimes I want to write about things like that rather than important issues like corruption, injustice and extremism, but then I understand that people follow my work for my political analysis, not for a load of flowery prose about how beautiful my bit of the world sometimes is, despite the fact that it's ruled over by a pack of malicious, incompetent and over-privileged Tory politicians and the ruthless profiteering corporations that they serve.

Sometimes, when I'm in the groove, the words flow out of me so effortlessly that it is an absolute joy to write about politics and economics. However I often find myself battling to construct every single sentence, and resenting the hopelessly biased political coverage and mind-numbingly dry economic texts I have to wade through in order to back up my assertions with facts and evidence. Sometimes I'd rather be reading something beautifully written and inspirational, or perhaps trying my hand at literature or poetry.

I really don't intend this to be understood as a whinge. It really isn't. I know I have a brilliant job, and I get an immense amount of satisfaction from a well constructed article or a widely shared infographic. I get the most satisfaction of all when people write me messages explaining how my writing has actually changed their lives. What better reward could I ask for than the knowledge that there are people out there who I've never met who want to thank me for informing and inspiring them?

It's just that having a great job is absolutely not the same thing as having an easy job.

 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.

Why you might well be more political than you think
Recommended Reading: Heterodox economics
What is ... the Pay as You Feel principle?
We need to talk about cyber bullying
How Ed Balls' austerity-lite agenda ruined Labour's election chances
The Tory ideological mission
How the Lib-Dems were just as compassionless as the Tories
Don't read this article

Friday, June 12, 2015

Why you might well be more political than you think

I often see comments on the Another Angry Voice Facebook page saying things like "I'm not really political" or "I don't know much about politics". In this article I'm going to write a little bit about what politics is and isn't about, political misinformation, the role of bloviating self-appointed political experts and most importantly, why you might well be more political than you think.

This article is principally aimed at people who don't think of themselves as being very political, but if you already think of yourself as a political person, you might find this article interesting nonetheless, so don't feel put off.

What politics is

Politics is a perspective, a way of thinking about things, a prism through which we view the world. There are countless different political perspectives, mine is a left-libertarian one because I believe in social justice and freedom, other people have a range of very different political perspectives. We all have a political perspective, it's just that some people have more well defined perspectives than others.

Every time we ever think about the political consequences of anything, we're engaging in politics. If you go to a shop to buy an item of clothing but find yourself wondering whether it was made by a child in a sweatshop because it is so cheap, you're using your political perspective. Every time you fill your car with petrol you're engaging with politics (think of the wars in the middle east fought over access to oil). Every time you decide whether or not to recycle something, you're making a political decision (albeit one that few people are ever likely to notice). 
In fact, pretty much every time you experience anything at all, it's possible to consider the political ramifications.

The political establishment would prefer us to believe that politics isn't a perspective, but that it's a concrete thing, of which they are the main manifestation. It suits their interests that we think this way and believe that voting in elections is the main way by which we engage in politics. Because if we think about politics like this then it becomes very easy to accept the tribalistic political allegiances that come with the party political system.

Politics isn't something that is done by politicians, it is something that is done by all of us. The problem is that so many people have become so hopelessly disengaged from Westminster politics that they mistake their rejection of the corruption riddled and apathy inducing political systems we suffer with a rejection of politics in general.

Political propaganda

One of the most offputting things about politics is the fact that we are surrounded by political propaganda. The mainstream media is utterly dominated by a few highly partisan corporations (the Murdoch empire and the Daily Mail group are by far the biggest purveyors of political propaganda).

The mainstream media is full of over-simplistic propaganda designed to convince people to vote in the ways that the press barons would like them to. It's appalling that foreign billionaire press barons are allowed to spread extremely biased political propaganda, and even explicitly tell people how to vote.

In my view, the whole idea of democracy is a sham if the public are not properly informed. How is it even possible to make an informed political decision when completely surrounded by biased and misleading political propaganda? Pablo Iglesias, the leader of the Spanish anti-austerity, anti-corruption party Podemos put it like this: "If the right to information is an actual right, then we can't allow all of the big media groups in this country to be controlled by a few multi-millionaires".

The fact that a few staggeringly wealthy press barons control such a large chunk of our media has led to a situation where bizarrely misleading political propaganda is taken as fact by millions of people, and goes completely unchallenged by other, supposedly neutral news organisations like the BBC.

Noam Chomsky once said that "the smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum", which is a pretty accurate description of the mainstream media in the UK.

"The recovery"

To put the problem of political propaganda into perspective, just think about how often you've heard the word "recovery" repeated in news broadcasts over the last few years.

The fact that Tory assertions about "the recovery" go unchallenged, and news reporters keep endlessly repeating the word would make most people believe that there has been a recovery, but what people don't realise is that GDP per capita (the amount of economic activity per person in the UK) is still significantly below pre-crisis levels.

The stagnation of GDP per capita isn't the only glaring flaw in the recovery narrative either. There's the fact that the UK balance of trade is in an appalling mess, productivity of the UK workforce has been in a prolonged decline, British workers have suffered the longest sustained decline in wages since records began, the national debt is still growing rapidly (despite George Osborne's promises back in 2010 that the deficit would have been eliminated by now), and the amount of household debt has risen well above the pre-crisis level.

What kind of recovery results in almost everyone getting poorer apart from the tiny super-rich minority, causes productivity and wages to fall, sees the biggest trade deficits on record and is built on the back of rapidly inflating bubbles of household and government debt?

The fact is that there has been no recovery for most people, yet the Tories and their chums in the right-wing press are confident that the more often they repeat the lie that the economy is doing really well, the more people will come to accept it as the truth.

Self-appointed experts

Another offputting thing about politics is the abundance of self-appointed experts who tend to shout down anyone who tries to say anything that falls outside of the narrow spectrum of orthodox political debate.

If you haven't rote learned your political opinions from the mainstream media, it is more than likely that people who have are going to try to shout you down because they can't tolerate hearing anything that contradicts the narrow political worldview they've been programmed with.

It is often the case that people like this are hopelessly misinformed about political issues, and when you scratch the surface they've actually got no facts, evidence and analysis to back up what they say. They're often the kinds of people who are easily swayed by empty rhetoric and emotive arguments.

If you know anyone who fits the description of bloviating self-appointed expert, it's always a good idea to arm yourself with a few choice facts and statistics if you think they're going to try to shout you down for daring to think outside the narrow spectrum of political debate that they are familiar with.

"I don't read the papers"

I was speaking to someone the other day who said that they're not very political because they don't read the papers or watch the TV.

I told them that in consideration of the fact that the mainstream media is so full of desperately misleading political propaganda, they're actually in a much better position to understand politics than someone who has been rote learning their opinions from the mainstream press. This is because it is much easier to use facts and logic to get through to someone who has not been heavily indoctrinated, than it is to convince someone who has been indoctrinated that they have been fooled.

Why you may well be more political than you think

The essence of political awareness isn't learning lots of political opinions, it's actually about understanding the importance of reading between the lines.

If you're the kind of person who, when confronted with political information, tends to think "who is telling me this?", "why are they telling me this?", "what evidence is this based on?" then you're actually already far more politically aware than the kind of person who knows a lot about politics but hasn't subjected what they've learned to this kind of analysis.*

Political awareness isn't measured by how much you know, it's measured by how you have come to know what you do.

Even if you don't know that much about politics at all, I'd maintain that you're probably more politically aware than someone who has been rote learning their political opinions from the mainstream media, because it's very much harder for someone to take an analytic approach to politics if they're already heavily indoctrinated in the orthodox way of thinking, than for someone who knows less about politics to begin learning about political issues from an analytic perspective.

 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.

* = You should be asking these kinds of questions about my work too you know!

Austerity is a con
What is ... the difference between a debt and a deficit?
Why I don't speak for the collective left
George Osborne has created more debt than every Labour government in history combined
Pablo Iglesias and the appeal of Podemos
The Tory ideological mission
How the Lib-Dems were just as compassionless as the Tories
Margaret Thatcher's toxic neoliberal legacies

Wednesday, June 10, 2015

What the response to the Fair Votes petition tells us about the Tory mentality

In the aftermath of the 2015 general election almost half a million people signed an Unlock Democracy petition calling for the replacement of the old-fashioned, unrepresentative and apathy inducing voting system we suffer in this country with a proper proportional system.

I won't detail the arguments in favour of such a reform because I've already outlined the case in this article.
In June 2015 the organisers of the petition received their response from the government.

Nobody in their right mind would have expected the Tories to admit that reform is needed to a system that works so heavily to their advantage, but the arrogance, lazy dismissiveness and intellectual paucity of the reply is still extraordinary to behold.

The only argument

The government response written by the minister for constitutional reform John Penrose, included only one single argument against the proposal, which is this:

"Thank you for your letter and accompanying petition to the Prime Minister calling for electoral reform and the possibility of changing the electoral system to Proportional Representation (PR) ... I appreciate your point, although the difficulty would be that we had a referendum on it in 2011. The result was a fairly resounding rejection of the idea ... It would be pretty difficult to argue that we should ignore the democratic verdict in the referendum and go ahead anyway"
Factual inaccuracy

It should be easy enough to see where the factual inaccuracy in this argument lies (look at the text I've made bold in the quote). If you still can't see the problem I'll explain.

The referendum in 2011 was not a referendum on Proportional Representation as John Penrose inaccurately claims, it was a referendum between the current system and a slight variant of the current system called Alternative Vote (AV).

AV is absolutely not PR because it does not create a balance between the proportion of votes cast for a party and the proportion of representatives they get in parliament. In fact AV is such an unrepresentative system that Nick Clegg (the face of the pro-AV campaign) once called it a "miserable little compromise".

It's no wonder the referendum was lost when even the leader of the pro-AV campaign thought the idea was shit!

Ignorance and arrogance

The effort to dismiss the campaign for Proportional Representation by lying that we've already had a referendum on the issue is a shocking display of ignorance, that betrays the utter arrogance of the Tory party.

When writing a response to a group of experts on a subject (electoral reform), one would hope that a government minister would at least take a bit of effort to understand the issue at hand, rather than firing off a letter that makes a fundamentally ignorant assertion about it.

The response from John Penrose is appalling because it shows that he is willing to build his entire argument on an ignorant and blatantly inaccurate assertion. To compose such a feeble response betrays a great deal of arrogance; the attitude that "I don't need to know what I'm even talking about because I'm a government minister, and we'll do what I say because I'm in charge".

Hopelessly underqualified people

It is absolutely clear from the content of his letter that John Penrose is hopelessly underqualified to serve as the Minister for Constitutional Reform because he doesn't even have the most basic grasp of the issues.

Anyone familiar with the Tory cabinet knows that they are very keen on the idea of stuffing government full of shockingly inappropriate and hopelessly underqualified people. I'll give a few examples:

George Osborne: The Chancellor of the Exchequer has no economics qualifications whatever. He's got a 2:1 in Modern History and some work experience of folding towels at Selfridges.

Jeremy Hunt: The Health minister has no experience of working in the health sector and in 2008 he co-authored a book that called for the NHS to be abolished. He's now been put in charge of it!

Michael Gove: Only the second person in history with no legal qualifications to be appointed as Lord Chancellor. The other was his immediate predecessor Chris Grayling who was also appointed to the position by David Cameron.

Priti Patel: Appointed employment minister in 2015, Patel has a visceral hatred of trade unions. Anyone would have thought it would be a good idea for an employment minister to be able to work with both business owners and employees in order to improve productivity, instead of being the kind of person to continue fighting the divisive and destructive ideological class wars of the 1970s and '80s.

Nicky Morgan: Appointed equalities minister in 2014 despite voting against gay equality!

What we learned

The fundamentally ignorant and appallingly arrogant response from John Penrose perfectly illustrates the Tory mentality. Stuff like facts, evidence
, logical coherence and reason are all irrelevant to them.

It doesn't matter that they're hopelessly underqualified people who don't have a clue about the absolute basics of their jobs - what matters is that they're in charge now, and us uppity plebs had better damned well do as we're told.

 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.

The campaign for fair votes
Labour vs the Lib-Dems in the strategic ineptitude stakes
Why are so many right-wingers still fighting the ideological battles of the 1970s?
George Osborne has created more debt than every Labour government in history combined
How Ed Balls' austerity-lite agenda ruined Labour's election chances
The Tory ideological mission
How the Lib-Dems were just as compassionless as the Tories
Margaret Thatcher's toxic neoliberal legacies

Wednesday, June 3, 2015

Farewell Charles Kennedy

I never had the pleasure of meeting Charles Kennedy but I did feel almost as if an old friend had died when I heard about his premature death. It would take a spiteful spirit indeed to contest the general consensus that UK politics has lost one of its very few genuinely good guys.

It would take a poor article indeed not to mention his principled opposition to the murderous folly that was the invasion and occupation of Iraq. Back in 2003 he was the only UK wide party leader to stand in opposition to the invasion (Plaid Cymru and the SNP voted against it too). Charles resolutely stuck by his principles despite despicable efforts to smear his stance as some kind of unacceptable anti-British treachery by his political opponents (especially from the Tories and the right-wing press), and the pleading from many within his party for him to abandon his anti-invasion position.

It doesn't matter so much that he was completely vindicated when the case for war unraveled revealing little but lies, spin and imperialist posturing, and when the invasion gave birth to the predictable wave of appalling sectarian violence, culminating in the rise of ever more extreme Islamist cults like ISIS.

It's no reward that we were right and the majority of the British establishment were wrong, because hundreds of thousands of people have died and literally millions have been displaced by the devastating instability wrought by those who ignored us. What matters is that Charles Kennedy dared to give us a voice, albeit a marginalised one, in the halls of power. Those of us who actively opposed the invasion and occupation of Iraq will never forget Charles Kennedy's principled stance in the face of such vicious criticism.

Another illustration of Charles Kennedy's principles is the fact that while many of his fellow politicians were gaming the parliamentary system to the max by claiming all manner of luxury items, and even using their so-called expenses as a free taxpayer subsidy to fund their speculative property investments (second home flipping), Charles did nothing more than make a few minor oversights. While so many of his peers were enriching themselves to the tune of tens, or even hundreds of thousands of pounds at the taxpayers' expense, the biggest sum he was made to pay back was just £35.75 for some confectionery he'd accidentally claimed.

One of the saddest spectacles in British politics was seeing Charles Kennedy get hounded out of his job by his own MPs, who orchestrated a campaign of leaks and smears relating to his alcohol problems, eventually culminating in the majority of his shadow cabinet forcing him out of his job. When they should have been rallying around to support him in his hour of need, they turned on him and humiliated him. When Margaret Thatcher's MPs turned on her like a nest of vipers, there was some justice in it, for she worshipped at the alter of self-interest, so to see her MPs turning on her and vying for position within the party was just her acolytes following her philosophy of ruthless self-interest to its logical conclusion. There was nothing just about the way the Lib-Dems turned on a good man; a man who turned out to be by far the best and most popular leader they ever had.

In 2010 Charles Kennedy once again proved to be a lone voice of reason, this time counselling against a binding coalition agreement with the Tories, but this time he was ignored, and the Lib-Dems, giddy with opportunism and short-term personal ambition, formed a consensus in favour of such a strategically inept move.

What followed was a five year long vindication of Charles Kennedy's decision to speak out against entering a pact with the Tories (the tuition fees debacle, the complete failure to deliver political reform, secret courts, "Bedroom Tax", the gagging law, Theresa May's grotesquely illiberal immigration laws, DRIP...). 

There are many within the Lib-Dem bubble who, despite all of the damage to their party, still stubbornly refuse to see what a catastrophic strategic error their deal with the Tories was, but many of us outside the party can see that Charles Kennedy was right and that the Lib-Dems ended up getting ragdolled almost out of existence by the Tories and their chums in the right-wing media because of it.
Charles Kennedy was one of the only Liberal Democrats I was genuinely saddened to see loose his seat in the 2015 General Election. It clearly wasn't his fault that the party he once led had abandoned his commitment to social justice in favour of the sickening Orange Book Toryism that has driven the party to the absolute brink of ruin, but he still paid the price for it at the ballot box, just like so many other decent hard working Lib-Dem MSPs MEPs and councillors paid the price before him.
In my view it was a measure of his great loyalty that he stayed with the party at all. He'd been hounded out of his job, marginalised and ignored by them, but he stuck by them even when he would surely have had more personal success by joining a group of genuine liberals in a breakaway group from a party that had so clearly abandoned all pretence at liberalism in return for a tiny taste of second hand Tory power. Perhaps he just couldn't bear the thought of tearing apart the party he'd worked so hard to build up? Or perhaps he was just too loyal to even contemplate abandoning his friends and colleagues, even though several of them had ruthlessly stabbed him in the back in his hour of need, and almost all of them had gone along with the terrible error of judgement he'd explicitly waned them against?

Returning to his much publicised alcohol problems. I think it's worth noting that Charles Kennedy managed to be the best party leader the Lib-Dems ever had, retained more integrity than the overwhelming majority of his political peers, and was an exceptionally popular man for a politician, and he achieved all of this even though he was often heavily drunk. Despite his problems, he stood head and shoulders above his political peers, and stands especially tall against his sickeningly unprincipled successors at the top of the Liberal Democrat pyramid.

I can only hope that there are some sensible people within the party who are willing to accept that Charles Kennedy was right; that the pact with the Tories was a terrible mistake; and that the Lib-Dems were at their absolute best when they had a principled leader with the strength of character to stick by his convictions.

If the future leaders of the party use the memory Charles Kennedy as an inspiration, there might be some small chance of a Lib-Dem fightback. If they want to regain any ground at all they've got to look back to the Charles Kennedy era and try to recreate the party that stood for social justice, progressive reform and political integrity, then they might just win back some of the hard earned trust and respect that people like Nick Clegg, Danny Alexander, Steve Webb, Ed Davey and Vince Cable saw as disposable commodities in their quest for a taste of second hand Tory power.

If the Lib-Dems choose to continue with Orange Book neoliberalism, continue breaking pledges, promises and vows all over the place, and continue blaming everyone but themselves for their predicament, they're sure to suffer even bigger electoral defeats in the months and years to come.

The loss of Charles Kennedy is a great loss to anyone who appreciates integrity in public life, but an even bigger loss to the the Liberal Democrats. Just when they needed a voice of reason within their party more than ever to guide them away from the kind of toxic self-righteous drivel that is emanating from the Lib-Dem bubble; just when they needed to listen to their voice of reason and to rediscover the commitments to social justice, integrity and political reform that he championed; he's no longer with us.

 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.

Why the Lib-Dems have got to stop living in denial
Labour vs the Lib-Dems in the strategic ineptitude stakes
Secret Courts and the very Illiberal Democrats
George Osborne has created more debt than every Labour government in history combined
How Ed Balls' austerity-lite agenda ruined Labour's election chances
The Tory ideological mission
How the Lib-Dems were just as compassionless as the Tories
Margaret Thatcher's toxic neoliberal legacies

Saturday, May 30, 2015

The spending cuts vs tax increases false dichotomy

One of the most commonly occurring defences of George Osborne's ideological austerity con is the spending cuts vs tax increases false dichotomy. I'm not sure where people are rote learning this vastly over-simplified and economically illiterate argument from. All I know is that they're learning it from somewhere and repeating it in lieu of making any actual effort to understand the economic issues for themselves.

Here is an example from the Another Angry Voice Facebook page:

"What would you have the government do, raise taxes or cut spending? They're the only options."
The fetishisation of public sector borrowing

There are numerous problems with this kind of over-simplified question, not least the fact that the unhealthy fetishisation of the public sector borrowing figures (above other vitally important economic indicators such as the balance of trade, GDP per capita, private debt levels, workforce productivity ...) is so extreme that it's completely warped political debate in the UK.

After five years of ideological austerity the UK's GDP per capita is still way below the pre-crisis level, the UK balance of trade is woeful, we're languishing behind the other developed economies in terms of workforce productivity, disposable income (and therefore economic demand) has been eroded away by the longest sustained decline in wages since records began and levels of household debt have rocketed back above pre-crisis levels - yet all people tend to worry about is a level of public sector debt that is only a third of what it was in the 1940s, and still lower than the average for the entire 20th Century!

If this illogical public debt fixation weren't such a serious problem, it would be laughable that the level of government borrowing is being given such complete priority over other incredibly significant problems like the fact that the UK is trapped in an ever widening trade deficit, that the so-called recovery has been funded with another unsustainable bubble of private debt, that the recklessly deregulated and corruption riddled private banks haven't been reformed, and that the British workforce is falling further and further behind the other developed economies in terms of productivity.

false dichotomies

Once we get beyond the bizarrely over-simplified idea that levels of public sector borrowing are the be-all and end-all of any nations' economic performance, it's important to note that the spending cuts vs tax increases question is a false dichotomy that makes absolutely no sense whatever to anyone with a basic understanding of macroeconomics.

False dichotomies are very useful propaganda tools because they can be used to trick people into supporting all manner of things under the mistaken impression that there is only one other alternative that is much worse.

The presentation of false dichotomies is such an effective propaganda technique that the tactic of programming people to believe in simplistic binary choices is not going to go away. What we can do is try to remain ever vigilant when we are presented with binary choices by politicians and the media. If we can think of any other possibility that lies outside the two given choices, it becomes obvious that the choice we're being presented with is more of a propaganda device than an actual choice.

Returns on investment

The reason that the spending cuts vs tax increases choice is so misleading is a fundamental part of macroeconomics theory called fiscal multiplication. I've already written an article explaining the term here, so I won't go into excessive detail about what the term means other than to give a very brief description and to demolish one of the commonly cited criticisms of the concept.

The basic idea of fiscal multiplication is that some forms of government spending produce more economic activity than others.

A hypothetical example could be government funding for a new bypass to ease congestion that might return £3.70 for every pound spent by virtue of the fact that construction companies, their workers and their suppliers will benefit from the construction project, then millions of gallons of fuel and millions of hours will no longer be wasted sitting in traffic jams.

Another hypothetical example could be a government scheme to increase employment by bringing in a load of corporate outsourcing giants to get people into work that only returns 20p for every pound invested because the companies end up raking in hundreds of millions of pounds despite producing results that are statistically worse than had nothing been done at all*

The new bypass would have a fiscal multiplication value of 3.7 and the corporate work scheme would only have a value of 0.2. 

The concept is pretty easy to understand, but I think it would be better named "returns on investment ratio" (or something similar) so that people could easily grasp its meaning when they hear the name of it.

People of the extreme-right libertarian persuasion often try to dismiss the concept of fiscal multiplication by making misleading claims that the concept is "highly contested", a claim that is often used in conjunction with attacks on the character and competence of John Maynard Keynes, who was the Godfather of macroeconomics.

The idea that fiscal multiplication is "highly contested" is completely wrong. Fiscal Multipliers are used by the IMF and World Bank (hardly radical "leftie" organisations by any stretch of the imagination) and by every government that is interested in generating anything resembling accurate economic projections.

Anyone who tries to talk down the concept of fiscal multiplication is essentially saying that it's better not to have a measure of how strong the economic returns are on any given tranche of government spending. This stance makes no economic sense, and surely doesn't even make sense to people of the right-wing persuasion because it would mean that government spending on stuff like policing, roads, infrastructure, etc would be precisely as useful as the so-called government "non-jobs" the tabloid press are always harping on and on about.

Fiscal Multiplication errors

A lot of people seem to have forgotten the Tory double-dip recession that happened as a result of George Osborne's ideological austerity agenda. The reason that the UK economy took such a huge hit between late 2010 and early 2013 was that instead of working out the economic returns on investment on the various bits of government spending they were slashing, the Tories simply assumed that every bit of government spending had a fiscal multiplication value of 0.5.

Of course it makes sense to go on an indiscriminate cutting spree if you assume that every aspect of government spending results in 50% waste, but the problem is that in reality it doesn't. In 2012 the IMF released research that showed that since the global financial sector insolvency crisis, fiscal multiplication values tend to range between 0.9 and 1.7, meaning that most of the stuff George Osborne had cut had actually been creating more economic benefits than it had cost.

It turns out that if you look at reality rather than assuming that all government spending is essentially 50% waste, arbitrary across the board spending cuts are a really really bad idea.

Intelligent investment

The idea that the only options are spending cuts vs tax increases is economically naive because it's absolutely clear that public debt can be reduced as a result of focusing government spending on things that produce more economic benefits than they cost.

This doesn't just make sense in theoretical macroeconomics, there are plenty of real world examples of governments spending their way out of debt.

The most relevant example is that of the post-war Attlee government of the 1940s that inherited a shattered war-torn economy and a debt to GDP ratio of 238% (way more than four times the size of the debt inherited by the Tories in 2010). Despite all of that debt Attlee's government founded the NHS, introduced legal aid, built hundreds of thousands of new homes per year, improved pensions, unemployment benefits and disability benefits and set about rebuilding Britain's war damaged infrastructure. By the time they left office in 1951 the debt was down to 175% of GDP, and by the time Margaret Thatcher tore up the post war consensus in 1979 the debt was down to just 43% of GDP.

Anyone who thinks that it's impossible that a government could spend its way out of trouble is not only guilty of ignoring countless historical precedents, they've also clearly never run a successful business of their own.

If we take a highly simplified example of a loss making business group with ten factories. It would make good business sense to see how much each factory is making it relation to the running costs. If it turns out that five of the factories are making losses, two are breaking even and three are making profits - it makes no sense whatever to make arbitrary across the board spending cuts in all of the factories, neither does it make sense to arbitrarily increase the product prices. Any responsible business owner would surely consider investing some money to convert the loss making factories to doing what the profitable ones are. In other words intelligent investment makes more sense than arbitrary spending cuts or increasing prices/taxes.


Of course it suits George Osborne and the right wing press to have people believe that government spending is essentially waste that is incapable of producing strong economic benefits. If people believe this, then the public can be hoodwinked into believing that the only alternative to the Tory austerity con is that we'd all have to pay a load more tax, but that's simply not the way things work.

Next time you hear anyone using the
 spending cuts vs tax increases false dichotomy, you should ask yourself whether they are saying that because they are trying to trick you into thinking that ideological austerity is a good idea, or whether they themselves have been tricked, and they're just saying it because they've rote learned it from the right-wing press.

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* = this isn't such a ridiculous example as it sounds. I've actually given a basic description of Iain Duncan Smith's Work Programme. The only thing I made up was the fiscal multiplication value of 0.2. I've got no evidence to suggest that it's anything like as good as that.

Austerity is a con
What is ... Fiscal Multiplication?
The myth of right-wing patriotism
How George Osborne has created more debt than every Labour government in history combined
An entirely Osbornomic double-dip recession
The Tory ideological mission
Austerity and economic illiteracy
David Cameron's "austerity to infinity" speech