So finished the book "Who needs the Cuts" Professor Saville Kushner and his brother Barry. As expected, it is very good at drawing on historical statistical evidence, specifically of post war period to show that not only the austerity measures of the coalition government are not necessary but they positively stop the potential growth. The book also gives a detailed description of how finance capital - banking sector - has, for decades, engaged in very dubious, immoral and near illegal practices in search of ever increasing profits at the expense of the public. The Kushnars produce evidence to show how the governments have colluded with the banks to produce conditions which puts the latter in a win-win situation so that they always make their money, whether they fail or not, at the expense of the tax payer. "Who needs the cuts" relies heavily on the Keynesian theory that growth can only be achieved by enabling the public to go out and consume. And this needs the active involvement of the government in creating jobs by investing in capital projects. This will reduce unemployment, increase disposable income, reduce poverty and... ultimately lead to further growth.There is now indisputable and growing evidence to show that austerity has failed and despite the untold human misery that this government has unleashed, growth hasn't happened. Yet the Tory led government refuses to change course. Saville and Barry argue that the reason for this, and the whole idea of austerity, is to do entirely with Tory ideology than economic facts.
All that is good but the glaring omission throughout the book is what has happened to wages since the 70's. We know that the relative income of the majority of workers has either remained flat or actually declined in real terms in the last decades, drawing increasing number of people into a debt-dependent. This suggests strongly that the reason for consumers defaulting on their debts is the widening income gap and increasing exploitation of labour. But this book is silent about how the bad debt came about in the first place. They seem to blame this on the bad management and irresponsible decisions of bank managers and their government backers.
The second disappointing feature of this book is that despite quoting various economists from Adam Smith to Keynes, Friedman, neo-liberals and others, there is not a single mention of Marx. It is hard to imagine any serious analysis of capitalist crises without and reference to Marx, however cursory. As a result, the book seems to regard the current crisis as something of an anomaly which could have been avoided had the economy been managed properly. It does not deal with the cyclic nature of capitalist crisis and the inevitability of them. Whether Saville or Barry agree with Marx's analysis of the capitalist mode of production or not, his theory deserves serious consideration and it is odd and disappointing that the brothers have ignored this. In a way, Saville and Barry have done what they accuse the media of. Their criticize the media for having bought and promoted the cuts and austerity narrative and not giving due exposure to alternative strand of thoughts. But similarly this book has taken capitalism as given and does not present any possible alternative to that ideology. If only it could be managed better!
