By Samuel Grove

One of the more disconcerting passages of Lewis Carroll’s Through the Looking Glass is Alice’s meeting with Humpty Dumpty. After a series of confused exchanges prompted by Humpty’s apparent refusal to make himself understood, the conversation settles on the meaning of words:

‘When I use a word,’ Humpty Dumpty said, in rather a scornful tone, ‘it means just what I choose it to mean—neither more nor less.’
‘The question is,’ said Alice, ‘whether you can make words mean so many different things.’
‘The question is,’ said Humpty Dumpty, ‘which is to be master—that’s all.’

This extract is popular among dissident intellectuals, however we need not subscribe totally to Humpty’s bleak reduction of language to power. Human beings are capable of using words in an objective and reasonably impartial manner. Nevertheless, I was reminded of Humpty’s refrain recently as I was reading through a selection of George Osborne’s speeches; speeches in which he was attempting to justify the deepest public spending cuts in a generation. Osborne’s use of language, it turns out, is as confused as Humpty’s—and no less disconcerting.

Science and Morality

In a talk back in 2009, Osborne outlined the economic principles that would underpin a future Conservative government. He appealed to the latest research coming out of the economic and social sciences. These sorts of appeals are not sufficient in themselves to overcome Humpty’s language/power bind. In spite of a certain amount of physics envy not least from the economics school that has had a powerful influence on Osborne himself, economics is not a science.

To begin with science deals with relatively simple questions abstracted from complex reality including human affairs. Scientific terms acquire their specificity in the context of this abstraction. Economic terms, on the other hand, don’t follow deductively from an explanatory theory; they are rooted in human relations. The validity of economic terms derive as much from their underlying moral presuppositions as their technical precision and the first question we always need to ask of these terms is who they purport to concern.

Osborne is keen to stress that his arguments are constructed in the interests of everybody. ‘Fairness’ is a ‘‘guiding principle’ of this government and the anchoring concept of the spending review. This provides a test for Osborne’s use of language; a test, given Osborne’s moral professions, that is quite straightforward to carry out. For the sake of brevity I have focused on the four key terms of his argument; the economic crisis, the debt that was supposed to have caused the crisis, the welfare spending which is at the root of the debt and the cuts that are supposed to rescue us.

i) Crisis—whose Crisis?

Osborne begins his analysis by outlining the margins and extent of the economic crisis. He does this in order to rebut the emerging view on the left ‘that the financial crisis is also a crisis of markets in general.’ Over the last thirty years, he argues, open markets across the world have delivered ‘awe inspiring increases in living standards’. He uses the example of India in which trade liberalisation has ‘done more to raise the living standards of more people than any other government policy in the history of the world.’

Osborne is referring to increases in GDP per capita; an accounting framework that, even on narrow statistical grounds, is shamelessly dishonest. Economic growth is not a poverty index. Indeed it is possible and even common for increases in growth to coincide with rapid increases in poverty. South Asia, for example, has been the site of rapid economic growth in recent years, but is also where most of the world’s poor are concentrated.

Even India, Osborne’s ‘economic miracle’, dropped to 126th in the Human Development Index during the years of market liberalisation. India is just one element of a global crisis; a crisis that took a stark turn for the worse in 2007 when the food crisis pushed ‘250 million new people into food insecurity and starving, and brought the world total up to over a billion people.’

Today some $1.44 billion live on less than a dollar a day. Severe problems affect the so called developed world as well. In the US the average income for 90% of the population is actually smaller than it was in 1980.

Likewise in Britain levels of inequality are now on a par with the Victorian era, as even Osborne concedes. When Osborne speaks of a crisis that began in 2008 he is referring to a very brief moment when the perpetual crisis of free markets briefly threatened to envelop the super rich. This quickly subsided however once it became clear that the crisis was actually precipitating even greater wealth increases for the super rich than before 2008 (see Britain, the US, China and India).

ii) Debt—whose debt?

Delve deeper into Osborne’s analysis and it transpires that the crisis is not a financial crisis at all, but a debt crisis brought about by 13 years of overspending by the Labour government; over spending that has burdened Britain with the ‘largest deficit in the G20’. Osborne strategic use of the term ‘deficit’ (government overspend rather than the amount the government actually owes) disguises the fact that the UK’s national debt is the second lowest in the G7 (lower than Italy, France, Japan, Germany and the United States).

Osborne’s disingenuousness regarding the ‘debt’ gives way to a flat dishonesty with regards to the causes of the debt. In fact government spending under Labour tracked that of previous Conservative governments until the financial crash in 2008. The financial crash and the ensuing contraction in the private sector increased the burden on benefits which the Conservatives are now claiming is unsustainable.

Meanwhile Osborne is keeping remarkably quiet about the bank bailouts. These included some £76bn in Royal Bank of Scotland and Lloyds TSB shares, £250bn in guaranteeing wholesale borrowing by banks, £280bn in insurance cover for bank assets and all totalling up to an incredible £850bn. In Osborne’s terminology this is a public debt.

iii) Welfare—whose welfare?

Osborne’s argument that economic growth and our future prosperity relies on cutting welfare spending and rolling back ‘big government’ places him firmly in the neoliberal tradition of Milton Friedman and Friedrich Hayek, a pair frequently contrasted with the economist John Maynard Keynes who had argued that a large state sector was necessary to regulate markets. In fact neither Hayek nor Friedman was opposed to big government and neo-liberalism has always remained committed to financial welfare in order to save the market from itself. The bank bailouts were not inconsistent with neoliberalism but indicative of its fundamental principles:

One of the basic pragmatic principles that emerged in the 1980s was that state power should protect financial institutions at all costs. The principle, which flew in the face of the non-interventionism that neoliberal theory prescribed, emerged from the New York City fiscal crisis of the mid-1970s. It was then extended internationally to Mexico in the debt crisis that shook that country to its core in 1982.

Put crudely, the policy was: privatise profits and socialise risks; save the banks and put the screws on the people (David Harvey, The Enigma of Capital, Profile Books 2010, p.10).

Neoliberals aren’t simply committed to financial welfare. In the 1980s Ronald Reagan ran up huge deficits on corporate welfare while cutting back on payments to the population. In Britain the Conservative and Labour governments devised together their own corporate fleecing scheme with the Private Finance Initiative (PFI).

Ostensibly PFI is a public private partnership; in practice firms have been allowed to devise the projects, dictate the terms and set their own price for the UK taxpayer. This has led to some of the most shocking and bizarre scams imaginable. The Conservatives have remained silent on the corruption and profligacy of Labour in this department while moving steadily to extend the reach of private companies in the public domain.

iv) Cuts—whose cuts?

On numerous occasions Osborne has criticised Labour for failing to come up with an alternative plan to the cuts. ‘We know everything about the cuts Labour opposes’ he said ‘but nothing about the cuts it supports’). Labour’s impotence on this question should not be interpreted as evidence of a genuine lack of alternatives.

The argument that the left is ideologically opposed to cuts in public spending is simply not true. The question has always hinged on where the axe should fall. It is already clear the government could save a great deal of money simply by abandoning corporate welfare; welfare that extends to the military realm with private military firms having been ‘spared the knife’.

Since the formation of CND in 1957 there have been calls for unilateral nuclear disarmament. This re-emerged on the political agenda recently with the question of the renewal of the UK’s Trident missile programme. Were this to be scrapped it could save the tax payer as much as £130bn. More recently principled opposition to the wars in Iraq and Afghanistan has been supplemented with arguments identifying the costs of occupation.

Finally the government could save a great deal of money simply by enforcing corporate tax law.

Which is to be master?

In Bertrand Russell’s estimations, the method of simply ‘postulating what we want has all the advantages of theft over honest toil’. The ascription of “technical terms” for phenomena we don’t “technically” understand fits neatly into this tradition.

If it was not obvious before the 2008 crash that economics is not a science, it was after it. Even Alan Greenspan, the former head of the Federal Reserve, who had spent his career treating economics as a hard science, was forced to concede flaws in his economic “theory”.

This is to put the matter mildly. Dan Hind was probably closer to the mark when he likened the failure of economists to identify the largest real estate bubble in history to physicists ‘pushing an elephant up the stairs of the physics department and then express[ing] surprise at what happened when they heaved it off the roof.’

Hind is a political commentator rather than economist, so perhaps his conclusions are easy to dismiss. Economists themselves are more difficult to ignore. If science is defined by its ability to forecast the future’ Joseph Stiglitz wrote ‘the failure of much of the economics profession to see the crisis coming should be a cause of great concern’. Stiglitz remains committed to the idea that economics can at least attain an adequate degree of description and offered hope that the crisis would initiate a paradigm shift in economic thought.

‘The fall of Wall Street’ he declared ‘is for market fundamentalism what the fall of the Berlin Wall was for communism’. Naomi Klein repeated Stiglitz’s analogy but with a simple revision; she inserted the word—“should”—at the beginning of the sentence. Klein is more disposed to seeing ‘economic theory’ as a weapon of class war and was therefore highly sceptical of the notion that free market theory had been falsified.

Nonetheless her analysis succeeded in making a solid prediction. In an article in the Guardian back in 2008 she wrote:

…nobody should believe the overblown claims that the market crisis signals the death of “free market” ideology […] rest assured: the ideology will come roaring back when the bailouts are done. The massive debts the public is accumulating to bail out the speculators will then become part of a global budget crisis that will be the rationalization for deep cuts to social programs, and for a renewed push to privatize what is left of the public sector.

Osborne has packaged the proposed cuts with vapid appeals to ‘difficult choices’ and vacuous claims that we are ‘all in this together’. In one of his more outlandish rhetorical flourishes Osborne even dared to suggest that the cuts would ‘deliver a fairer society’. It will not. The cuts are, as David Wearing put it, ‘one of the greatest single social injustices of the post-war era in domestic politics’ particularly for the poor, women, the disabled, the young and the old. In other words the population, save for a very narrow, and very rich, elite. If Osborne is trying to make himself understood, it can only be on the assumption that his audience already knows the answer to Humpty’s question.

Samuel Grove is a writer and activist.