A Future That Works

A Future That Works
NO2aTory/Liberal coalition - Vote with your feet for an alternative to a neo-liberal economy and neo-conservative state Yes2aLeftFront and a Red/Green Left Alliance

Sunday, 14 August 2011

Remember ‘‘We are all in it together’’, but some are more in it than others

George Osborne confirms intent to end 50p tax

Saying that ‘‘I've said with the 50p rate I don't see that as a lasting tax rate for Britain because it's very uncompetitive internationally, and people frankly can move’’


  1. There is a link between cuts and riots

    The ‘‘Left’’ blames poverty as a major cause of the outburst of social unrest last week. It may be true that the Tory/Liberal coalition government’s cuts haven't yet been fully implemented

    Social unrest and instability is a very complex issue.

    Jacopo Ponticelli and Hans-Joachim Voth have found a link between austerity measures and unrest. In a study of Europe between 1919 and 2009 and Latin America from 1937 they found clear statistical evidence for a link between expenditure cuts and social unrest.

    Five indicators of social unrest

    Anti-Government Demonstration
    General Strike
    Political Assassination
    Attempted Revolution

    The average for a typical year and country would be about 1.5 incidents of this type. The more cuts the more incidents and by the time austerity measures hit 3% the number of incidents doubled.

    In Britain they found the link even stronger for every percentage point of cut-backs, instability goes up more than the average in other countries in addition to the relationship between lower growth (associated with more unemployment) and higher instability.

    The study didn’t show a deterministic relationship the chance of unrest does go up as governments make cutbacks in social spending. But austerity measures create an environment for massive unrest most probably because they usually hit the poorer areas disproportionately more than affluent areas of society.

    Tax increases don’t appear to have the same effect suggesting that governments wanting to cut the deficit should consider tax increases, first and foremost to prevent social instability.

    Governments that implement huge austerity programmes may be able to win elections but they risk social and political unrest and research by the IMF suggest that the so called economic benefits regarding growth are unproven.
    We cannot predict when or where social unrest will happen or what scale and form it will take. But the historical dialectics suggests austerity programme can quickly turn into waves of social unrest and political violence.

    The government would be wiser to increase taxes on the better off than make cuts in social spending so that it can cut taxes for the wealthy.

    (Jacopo Ponticelli and Hans-Joachim Voth Guardian, Tuesday 16th August 2011)

  2. DP8513 Austerity and Anarchy: Budget Cuts and Social Unrest in Europe, 1919-2009

    International Macroeconomics

    From the end of the Weimar Republic in Germany in the 1930s to anti-government demonstrations in Greece in 2010-11, austerity has tended to go hand in hand with politically motivated violence and social instability. In this paper, we assemble cross-country evidence for the period 1919 to the present, and examine the extent to which societies become unstable after budget cuts. The results show a clear positive correlation between fiscal retrenchment and instability. We test if the relationship simply reflects economic downturns, and conclude that this is not the key factor. We also analyse interactions with various economic and political variables. While autocracies and democracies show a broadly similar responses to budget cuts, countries with more constraints on the executive are less likely to see unrest as a result of austerity measures. Growing media penetration does not lead to a stronger effect of cut-backs on the level of unrest.

    (Jacopo Ponticelli and Hans-Joachim Voth August 2011)

  3. People's Charter

    ‘‘The main demands of the charter are to tax the rich and big business, take finance, public transport and the energy utilities into public ownership, invest in housing, education, productive industry and non-nuclear renewable energy and an end to policies for militarism and war.’’

    ‘‘The fundamental treaties of the EU prohibit the implementation of key elements of the People's Charter in particular, controls on the movement of capital, public ownership of the financial and infrastructure sectors, such as transport and energy, and state aid for industry….the Lisbon Treaty must be revoked and the Euro Plus Pact, which aims to tighten EU federal control over member state finances, must be resisted.’’

    (John Foster Communist Party of Britain's economic committee)

  4. If Britain is to learn from the events of last week argues sociologist and union activist lecturer, Dr Martin O'Donnell, then ‘‘The social and economic direction we’ve been going in since the 1980s has got to be abandoned.’’

    (Martin O’Donnell 14th August 2011)


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