The Austerity Lie: How Austerity Swept Across Europe

By: Max Mosley, Student Voices Writer

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It’s been 8 years since economies across the globe began to crumble. Since austerity fever swept across Europe as a shining solution to a global disaster. But, in those 8 years, it has become apparent to most that the austerity project has been an abject failure. But Britain marches on, further and further, despite world renowned economists, the IMF and many more pleading for us to turn back. But why? Why have we been following so obediently to this damaging recovery package? The answer is simple and wholly mortifying.

It was widely argued during the 2010 general election that the need for an assault on public spending was one born out of necessity. This position was argued as Britain found herself in amongst a uniquely European predicament. The culture leading up to 2008 had been spend spend spend, any subsequent debt was seen as a bi-product of social prosperity. But the music stopped, and Britain stumbled to find quickly had to find a chair.

Spending leading up to 2008 had provided one of the most stable and prosperous economic periods in history. When the unthinkable happened, Britain’s high debt was soon to become a critical burden. The argument lead by the Conservative opposition shifted to blaming the current Labour government for its spending policy and offered a plan to make a drastic u-turn, cut back and rebuild. Austerity fever had swept across Europe, inspiring nations that a slash in spending and a rise in taxation would plug the leak and offer a path to a new more secure period of economic prosperity.

Niall Ferguson, author of ‘The Great Degeneration’ argues that even if Labour had defeated the Conservatives austerity rhetoric, it still would have been faced with no option but to follow suit with the austerity agenda due to the debt pile being so high. This situation was faced across Europe. Austerity had begun, inspiring nations that a slash in spending and a rise in taxation would plug the leak and offer a path to a new more secure, sustainable period of economic stability once and for all. Britain with it’s now critical debt simply had to cut back. This argument may have been true of 2010, but why is it still the case?

Surely, in five years Britain had cut back on its debt enough and could begin looking for an alternative, but this wasn’t the case. Politicians alike had dismissed the growing calls from economists to end its austerity agenda and continued arguing more slashes to public spending was needed. As a result, Britain faces 5 more years austerity, the question is, do we still need it.

Across the pond, America faced the same global economic crisis, but, the American culture has never been for federal spending, so during 2008, unlike the European nations, its debt was high, but not enough to force herself into a period of harsh austerity. Giving the newly elected democrat Barak Obama the freedom to explore  alternative recovery packages that would safely steer America away from a deeper recession. In 2009, Obama offered a stimulus package, a plan in which public spending would not be cut, but refocused. America now shifted its money to spend more and invest in institutions that would create jobs and increase incomes across the US. Resulting in a now booming car industry, a public sector that was spared  from the sharp sword of austerity, and a nation making a comeback to a period of secure economic prosperity European countries can only dream of.

The IMF’s chief economist, Olivier Blanchard described that the austerity agenda that took hold of European nations has now proved to be a grave error. He expressed that scheme has caused far more damage than good. Anybody with a basic A-level in economics knows that increasing taxation and a cutting in investment will stifle growth. But this revelation isn't new, it wasn't made this year, nor the year before, it was announced in 2012. So why are politicians still pursuing this austerity agenda still being pursued? The answer is rather predictably a blend of politics and sheer incompetence.

It's clear that conservatives partied across Europe figured early on that basing their campaign around their austerity agenda, any left wing party would have to offer an alternative, knowing that there wasn’t any viable alternative that the public would buy into. So, as was seen in the UK, Labour had to offer a watered down version of their austerity agenda, making it appear that Labour’s original policy of high public spending was wrong and that their solution wasn’t enough. Labour took the position that instead of swimming against the tide and arguing against what was the sentiment of the nation, it would have to go along with the Conservatives plan. Clearly a clever, calculated move.

By 2015, the Conservative was continuing with this narrative. But faced an issue. After 5 years Labour had the opportunity to offer an alternative, even attack the 2010 Labour blaming rhetoric, but it followed the same watered down path as before. It’s incompetence to offer an alternative ultimately lead to its own demise. For ‘Nobel Memorial Prize In Economic Sciences’ Paul Krugman, there is very little doubt that the austerity agenda is not only unnecessary but immensely damaging. The simple fact is that it’s all politicly motivated, the current politicians are willing to follow a toxic economic policy in the pursuit of power. Any attempt by the Conservatives to offer an alternative could have been seen as contradictory to their original 2010 message. But ultimately it allowed them to promote the 'let's finish the job' rhetoric. If they'd followed a message of 'the jobs finished', the public would have most likely gone back to the high spending choice to lead the country back where it was before. Ultimately the message of fear was the deciding factor for the shock Conservative win, leaving the discredited austerity agenda in place and continuing to wreak havoc across the nation.

The fact that this information isn't new creates a worrying scenario. The opposition has had 8 years to come up with an alternative, and yet not serious strides have been made. With the election of the Lord and Saviour Jeremy Corbyn (see previous article) we should be expecting a challenge to this narrative that results in a credible alternative arising, but alas, so far all we've seen is an attack on the narrative. It's time now for the opposition to offer a real message of hope, challenging the narrative of prudence with prosperity, offer a message of investment into the lives of the everyday. Show the world that we mustn’t attempt to fix a drying up pond by making it smaller, we must look for new ways to afford the pond a steady supply of water. It's time for Labour to translate its message of hope, into a tangible alternative to the lethal austerity agenda. The world is standing by.

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Meet the author:

Max Mosley

Writer

Max Mosley is a writer from London, preparing to go to the London School of Economics to study Social Policy. Max is a former Yvette for Labour staffer and experienced campaigner. Intending on writing in a Bi-Partisan format while offering a common sense sober analysis of the issues facing Britain today.

Twitter: @M_A_Mosley