These days, the voices of fools and knaves on almost all issues become louder and louder. The American decision to give its government the permanent right to detain anyone in the world perpetually without civil trial, for instance, brought out people who proclaimed that since America is in danger, it is absolutely necessary to do away with the U.S. Constitution’s Bill of Rights, together with a boring little document called the Posse Comitatus Act which forbade using the military against citizens except under the authority of peace officers. Likewise, the extent of public global warming denialism is higher now than it has been since the 1970s, despite the enormous extent of global warming which is noticeable to the public.
There are plenty of other such cases, many concerned with foreign and social policy. The essence of the voices of fools and knaves, in this regard, is to disseminate lies, lies which the knaves spread and the fools believe. However, in most of these cases, the lies are quite transparent. Nobody really believes that permanent detention without trial is good for the U.S. Constitution – the knaves and fools just believe that it is in the immediate benefit of the party which they happen to support at the moment. (Witness the sudden about-turn of the American Democratic Party on global warming the moment they were responsible for it.) Invasions of foreign countries, attacks on the poor and vulnerable, are easily justified so long as nobody asks – or is allowed to ask – difficult questions. This accounts for the tight control of the media, which can’t be allowed to take a line which would shatter the fragile lies on which the policies of the rich depend.
There is, however, a fundamental issue where the lies are much less fragile. This is the field of economics.
Consider the fundamental lies which we have had to deal with. “You can’t spend your way out of a recession.” “A balanced budget is absolutely essential.” “The debt and the deficit can only be addressed by tightening our belts.” “We can’t (can no longer) afford a welfare state.” “We need [insert enormous number here]% economic growth before anyone except rich people can expect any job creation.” “Anyway, governments can’t create jobs.” All these points are taken as gospel because economics is supposed to be a complicated issue which only clever people (that is, people who aren’t us) can understand.
But we can, of course, if we endeavour to.
The issue of escaping a recession through expenditure is basic Keynesian theory, which in its turn is very simple arithmetic; you spend some money and thus get the economy moving, and in its movement the economy creates an enormous amount more money which makes things move faster, and thereby and in turn you get out of the recession. This was what got everybody out of the Great Depression. So what that quote (which is drawn from the right-wing British politician James Callaghan, one of the architects of the destruction of the British Labour Party) actually means is “You can not spend your way out of a recession” – you can accomplish this achievement either by not spending, which usually ensures that you don’t get out of the recession, or alternatively, by spending in such a way that you don’t get out of the recession. In other words, provided that the people in charge are more interested in spending money on their favourite charities, the rich and corrupt businessmen and the political agencies connected with them, you can be sure of not escaping a recession. But if you want to spend your way out of a recession, it’s fairly easy to do.
As to the matter of a balanced budget, it is immediately obvious that this is balderdash. Everybody gets into debt at some stage. Therefore, the budget inevitably becomes unbalanced. The problem is simply that if the budget becomes so unbalanced that the debt becomes unsustainable, you are in deep trouble. As a formal rule, this has never been implemented by anyone – it is a fantasy rule which is chanted by the proponents of corrupt practices in order to legitimate their own sleazy behaviour and condemn the behaviour of others, even when the others are extremely sensible by comparison.
Again, of course, there is the question of belt-tightening. If you have overspent your budget for a few years, it’s a good idea to cut back on expenditure. The only alternative is to kick-start economic growth to such an extent that economic growth generates revenue which enables you to meet your expenditure targets. However, there’s no reason not to do both at once. In good times, a great deal of unnecessary expenditure often creeps in, and it’s often worth looking closely at this expenditure to determine whether it is worthwhile. Of course, that requires people being willing to cut expenditure according to whether it promotes revenue collection and economic growth – ironically, one of the first places where expenditure tends to be cut is in revenue collection, because the rich don’t like having a revenue service which chases them down for their tax defaulting. And another place to cut expenditure is in the promotion of economic growth – because giving money to the poor is usually the best way to promote economic growth (their spending goes straight into the domestic economy) and yet this is where the cuts are mostly coming in our contemporary neoliberal system.
In short, it all depends where you choose to tighten your belt. For the most part, our modern neoliberals place the belt around the throat and then tighten savagely, meanwhile providing themselves with an air-hole elsewhere. The grim fact is that there is usually an enormous amount of “pork-barrel” expenditure on the rich which provides essentially no service to economic growth and which could be cut without any harm to anybody, but that this expenditure is almost never cut.
Then there’s the question of the welfare state. Many countries have a welfare state. (South Africadoes not.) It is invariably funded out of tax contributions. The first welfare state was established in the 1870s, when the gross domestic product was a tiny fraction of what it is now. Hence, it follows that we can afford a welfare state now, and we always could. What people mean when they say that we cannot afford a welfare state, is that they are not prepared to spend money on a welfare state because that money will mostly go to people other than themselves – so they hope. The details of the cost of welfare are invariably exaggerated, sometimes to a truly bizarre extent, but always so much so that anyone who thinks for a moment about the mathematics can see the exaggeration. The trick is not to think about the mathematics, but instead to fantasise that the poor deserve to stay poor and the people without healthcare deserve to die. If you fantasise hard enough about such things, they become true.
As far as economic growth and the growth of jobs is concerned, jobs grew immensely in South Africa in the 1960s when economic growth was persistently less than the 6% that is now proclaimed (by the most optimistic corrupt corporate-centred economists) necessary for any growth of jobs. Jobs grew somewhat between 2002 and 2007, when the average economic growth was only 4%. It is actually possible to make the number of jobs grow when economic growth is zero, just by redistributing wealth – although it is difficult, under these circumstances, to constrain economic growth – wealth redistribution leads to more purchasing, which usually leads to more employment and hence more economic growth all around. In other words, the statement is false, but it is also largely economics standing on its head – a more accurate statement would be to suggest that job creation leads to economic growth, not vice versa, and hence that we can’t have rapid economic growth unless we have rapid job creation. As plausible as the other, and considerably better-supported by the facts.
These are simple arguments which can easily be used to refute right-wing economic arguments. It isn’t rocket science; you can find all theinformation you need on the Web within a fraction of a second. Of course refutation will not silence the arguers, because they depend neither on logic nor on fact. Your goal must rather be to mobilize everyone else against the right-wing nonsense peddlers, to make them look like the boring, puppet-stringed babblers they actually are.
In the end, such people fall back on Ayn Rand (who is her own refutation), or on Hayek and Friedman with the declaration that they both won Nobel Prizes. It is easy to show first that they didn’t win Nobel Prizes (the economics prize named after Nobel is not a Nobel Prize but a prize awarded by the Swedish Central Bank) and secondly that what Friedman won his prize for was some subtle microeconomic theory and not for his crass nonsense about the imaginary free market, and that both Hayek and Friedman’s theories have been tested for the last thirty years and proved unambiguously wrong in every detail, so that they have the same status as if they had won the Nobel Prize for Physics in 1750 for a cutting-edge new theory about phlogiston. You can thus make such people look like fools for appealing to authorities who no longer have any authority, and wish them good night. And sweet dreams.
Alas, when you wake up, the discredited fools will still be in control of the entire world . . .