Austerity and racism

The costs of fiscal austerity, and of this wretched government’s incompetence, are vastly higher than even its critics appreciate.

I say this because of a new paper by Markus Brueckner and Hans Peter Gruener which shows that “lower growth rates are associated with a significant increase in right-wing extremism.” This corroborates a point made by Ben Friedman back in 2005:

The history of each of the large Western democracies – America, Britain, France and Germany – is replete with instances in which [a] turn away from openness and tolerance, and often the weakening of democratic political institutions, followed in the wake of economic stagnation that diminished people’s confidence in a better future. (The Moral Consequences of Economic Growth, p8-9)

And let’s be clear. Stagnation is just what millions of people have suffered. The Resolution Foundation reports that over half of working age households have seen flat or falling living standards since 2002. This created a discontent with the establishment that manifested itself in support for Brexit. As Torsten Bell points out, there's a strong correlation between wage levels and the tendency to support Brexit, which suggests that if the economy had done better and wages (especially those of the worse off) were higher, there'd be less support for Brexit. Basic behavioural economics – prospect theory – tells us that people who feel they’ve lost will be tempted to take reckless gambles.

Of course, austerity isn’t the sole cause of low incomes: even a decent government would have struggled against the post-crisis stagnation in productivity and growth. But austerity undoubtedly exacerbated the problem.

And of course, support for Brexit, in itself, is not right-wing extremism. But as Aditya Chakrabortty says, the campaign helped to generate racism. Discontent with stagnant real wages and poor public services – both the result of austerity – led to a demand for Brexit which itself fuelled a surge in racism.  The cost of austerity isn’t just lost GDP. It’s is increased intolerance too. There’s a direct link from Osborne’s criminal economic mismanagement to hate crimes.

You might think I'm going too far here. I'm not. In fact, this is basic economics. Econ 101 says that people respond to incentives. And the incentive to express racist opinions rather than keep them bottled up has increased recently because when politicians express neo-racist ideas, people believe that the stigma attached to being racist has declined. In this sense, the cost of being a low-level racist has fallen - and a fall in costs generates increased supply.

Granted, Cameron and Osborne sincerely deplore such attacks. But that misses the point – that if you dump a pile of shit on your doorstep, you can’t disown the flies.

It’s not surprising that this link is under-appreciated. For one thing, people are lousy at making connections in the social sciences. For another, deference, ideology and tribalism mean that even the worst politicians retain support; a quarter of Americans thought Richard Nixon was doing a good job as US president even at the peak of the Watergate scandal. These forces are, of course, reinforced by our terrible media. On the Today programme Nick Robinson asked Osborne whether the government was right to call a referendum. But he didn’t ask whether austerity and stagnation had increased support for Brexit – perhaps because mediamacro ideology blinds the BBC to such possibilities.

But let’s be clear. Osborne and Cameron haven’t merely wrecked Britain’s reputation in the world, cost us billions of pounds in lower real incomes and driven people to despair and suicide. They have now created a climate in which migrants and ethnic minorities no longer feel safe. Has there ever in our history been a more abject, incompetent, stupid, reckless, contemptible government than this?  

Comments

[Hilary Richards]

No

[TickyW]

The austerians, relying on their "hard working" and "fairness to the taxpayer" rhetoric fed the monster that finally consumed them.

Justice. But at a very high cost

[Roy Lonergan]

The scarier thing about Osborne on Today was when he said that a coming recession would lead to tax rises or spending cuts. Perhaps he really believes it? I think that the logic was still because Greece.

TickyW - I disagree. How will Boris, or Gove, or Hunt, be any different? They are fundamentally interchangeable. I hope May gets it. She won't be any better but levels up the balance of the sexes a little.

Isn't John Major's stock rising in retrospect!

[Cityunslicker]

Aren't you all so clever in your ivoery tower. Deary me, I normally respect the content of this blog loads but this post is really woeful.

It basically poor little no nothing sheeeple being led along by nasty right-wingers.

What is your next post going to be? How Corbyn is the right choice for everything?

[Steve]

The racist blow up of the UK was inevitable as soon as we hit financial difficulties, given the high levels of immigration, and gloating of the privileged classes.

[Peter K]

From Eschaton:

http://www.eschatonblog.com/2016/06/what-blairites-were-busy-doing-instead.html

TUESDAY, JUNE 28, 2016

What Blairites Were Busy Doing Instead of Campaigning for Remain

Remember this is what they're using to justify trying to oust Corbyn, that he didn't try hard enough to prevent Cameron from fucking up the country. The reality is, they saw an opportunity long before the vote was taken. The "reasons" were inserted after.

"Labour rebels believe they can topple Jeremy Corbyn after the EU referendum in a 24-hour blitz by jumping on a media storm of his own making.

Moderate MPs who believe Mr Corbyn can never win back power think his failure to close down public rows which flare up and dominate the news channels leaves him vulnerable.

By fanning the flames with front bench resignations and public criticism they think the signatures needed to trigger a leadership race can be gathered within a day."

That was two weeks before the referendum. I wonder how those media storms just happen? Of course the press is really playing along with the "IT'S ALL CORBYN'S FAULT" narrative. New Labour is in their blood. 20 years from now Labour still won't have won an election and it will be Corbyn's fault.

"Launching a coup in the Labour Party at this moment has diverted attention away from those responsible for this national crisis — not least by staggering resignations to ensure Labour’s woes dominate the news cycle for as long as possible."

That was the plan!
by Atrios at 12:00

[Dave Timoney]

Xenophobia and racism have taken a turn for the worse since 2010, but let's not forget the spadework that was put in from the mid-90s to prepare the ground for this. The rapid rise in public concern over immigration (as measured by Ipsos-Mori) starts in 1999, not with EU enlargement in 2004, and actually fell after 2008, as the economy became more salient, before rapidly rising again over the last 3 years.

Prudence was the mother of austerity, just as "rights and responsibilities" birthed "strivers and skivers". Neoliberalism provided a vocabulary by which racism could be recuperated as a contest over resources: "I'm not a racist but ... they get council houses, they get more benefits, they clutter up the GP surgery" etc. In other words, the legitimisation of bigotry actually starts during the "good years".

The roots of this lie in the Tories attempt to arrest their post-1992 decline in popularity with a turn from economic to cultural issues (the "nasty party" years), notably with the 1996 Asylum and Immigration Act, which was followed by the first Blair government's 1999 Act that simply rearranged the same words and thus delivered a similar message.

[Blissex]

The blairites may have been educated by how T Blair has been made an example of what happens to people like him: the large revenues he is collecting from his grateful sponsors in his post-politics "entrepreneur" phase.

They don't realize that it is a winner-take-all logic, and nearly all of them won't be given the same treatment.

[Endrew]

0. I am getting serious buyers remorse from voting remain! The wailing and nashing of teeth of condescending establishment lame-brains in protest at the messy and glorious workings of democracy is almost worth the 350 million a week that the working class never really gave a toss about anyway!

1. There has been no austerity. We have an enormous current account deficit of 7% of GDP, bigger than any other major country.

2. Of course economic stagnation breeds antipathy to group outsiders. This makes a change from your constant misguided attribution of social attitude shifts to short term political leaders. We had a referendum because there was grassroots political pressure for one.

3. You apparently have no idea why we are in economic stagnation. Unless I missed that post.

4. That Aditya Chakrabortty article is appallingly bad. Racism is still not "OK" in this country. This country remains remarkably tolerant by European and world standards, not withstanding a temporary uptick from recently emboldened idiots. The huge increase in hate crimes he notes is from a very small number to a slightly less small number and the rest is his inexcusable conflation of dislike of large uncontrolled immigration flows with racism, and his utter contempt for half the country.

5. Of course we have had far worse governments. Are you so consumed in your self-regarding elitist bubble that you are entirely ignorant of history?

6. This hasn't wrecked Britain's reputation in the world beyond certain vested interests in the very short term. Even the more thoughtful EU voices are recognizing the vote as a wake up call. Such hyperbole.

7. It is Eurozone austerity that is by your lights wrecking entire generations of southern Europe and France - yet you hardly ever seem to bang on about that - and the presumed racism it engenders - compared with your beloved Osbourne and his record current account deficit "austerity". What is that doing to those countries "reputations".