Feminism and class consciousness

The world needs feminism. In the western world one in four women will be affected by sexual violence in their lifetime and in developing economies women are more likely than men to have a lower standard of living. Any efforts to improve the living conditions of the world's poorest people will only benefit 50% of these societies if greater work is not undertaken to improve gender equality. The work of feminists is essential to our continuing social progress, not just bringing genders in line with each other but also working to combat racism, homophobia and transphobia.

There is broad support for the goals of feminism but there is also a good deal of debate as to the methods through which these goals should be accomplished. Due to the low social status of women around the world there are many factors which prevent them from uniting into a powerful political movement, as generally the politically less powerful do not engage with the political establishment as they feel the have less to gain from dong so. What I have set out below is my thesis on one way in which we can move towards accomplishing the goals of the women’s movement.

People who broadly identify as feminist come from a wide variety of backgrounds and bring their own experience to the debate, not just as women but also members of other minority groups. Feminism is in itself a Universalist ideology about readdressing the balance of power between minority and majority groups. As an inclusive movement it has many crossovers with similar struggles and causes, however here in lies a challenge that faces feminists, namely in building female class consciousness. Women (and indeed feminists) typically primarily identify as belonging to a more specific socioeconomic group, rather than simply identifying as being 'a woman'. More prevalent class signifiers incorporate a combination of class, race, sexuality and sub-culture as these have a large impact on someone's identity as well as gender.

Traditionally class consciousness is viewed as the Marxist idea of the proletariat becoming aware of how they are exploited by the bourgeoisie and banding together against their oppressors. In the 21^st century where the struggle against oppression has taken on many different forms I feel the concept is still valid but needs to be expanded. We need to stop thinking of class in a rigid way of factory owners and laborers and apply this model to the various different power relationships in society that can be exploitative. In this case the privilege men have over women. This is not to say a means of pitting women against men but a way to spread understanding of how women are opposed by the patriarchy.

Earlier this year, noted feminist blogger Helen Lewis wrote about the challenges facing feminism as a movement in 2012. The piece, which focused on the need to keep the feminist debate current, can be found here. Central to the article is where she asks "What is the biggest, most important single issue for feminists in 2012? What should we get angry about?" I agree with the conclusions Helen Lewis reaches and want to now add my own answer to the question which that it is important to create the idea of women as an oppressed class and to show that the same patriarchal systems which oppress poor black women in developing countries also affect rich white women in the OECD. However there can be problems in creating united class identity as there are a lot of differences between poor black women and rich white women, for example access to affordable childcare. Instances of rape and domestic violence are an example of an issue which affects women as an entire class and poor support for victims is an example of how women as an entire class are oppressed by the patriarchy.

In America, African Americans have been very successful in building a class consciousness that transcends economic background. This is partly through the emergence of an African American culture uniting the class, a culture which places emphasis on exploring how the current system oppresses African Americans and on overturning the barriers society places against members of ethnic minorities. For more details on this see, the documentary The Black Power Mixtape 1967-1975.

If this example of how African American culture transcends the gender and economic divides within African Americans then it can be used by feminists to develop a women's class identity. There is already a women's culture which is as diverse as women themselves but feminists need to use this culture to openly explore how women are oppressed and what unites them together in their oppression, much in the same way African Americans have used their culture to advance their liberation. Many feminists are already doing this, so in answer to the question posed by Helen Lewis above, I would say an important challenge and opportunity is supporting the work of these feminists in creating a women's culture to unite diverse women together in a single political movement. In other words developing a united female class consciousness.

Class consciousness makes a diverse movement a more effective political force. The high level of African American class consciousness creates social pressure to tackle issues which affect African Americans such as poor funding for intercity schools and gang outreach programs. The status of Africans Americans within American society is still low but the government programs to tackle racial issues receive more funding than those designed to reduce gender equality. Programs supported by feminists such as women’s shelters or outreach programs to victims of domestic violence less finical support. Most of the hard work in these areas is performed by charities with little support from the government.

Developing the idea of 'woman' as class consciousness will help  bring political pressure on governments to address social and economic issues which affect women. However there is a problem with class  consciousness which is the homogenising effect it has on the class. In other words it creates pressure for the entire class to conform to the opinions and values of the prevalent subgroups within the class. A good example of this is seen again in African American culture where there is a lot of pressure within the class to identify as heterosexual. Class consciousness has created a hegemony of people identifying as heterosexual African Americans which makes it difficult for the oppressed class to connect with other oppressed classes in America to effect social change. For example homosexual Americans. An indication of this effect was the passing of Proposition 8 in California during the 2008 election, California being a state which also voted for Obama. Millions of African Americans went to the polls to support someone from their class but also support a law against another oppressed class because people identifying as African American also prominently identify as heterosexual.

One of the great strengths of feminism is it is a movement that can incorporate people from a variety of different oppressed classes. There are many crossovers in ideology between feminism and movements to liberate ethnic minorities, LGBT people, the poor and the disabled from the constraints that society places on them. This broad background is a great strength to the movement but also a handicap as it inhibits the emergence of a single united female movement as a class consciousness.

The development of woman as a class consciousness will create political pressure to improve the status of women the world over. This is no easy task but a good way of developing class consciousness is through the development of a feminist culture which would use the strength of the movement (its inclusiveness) to explore the problems being faced by women of different backgrounds and create a desire for political change. Hard work is already being done in this area and it is important that this work is encouraged and supported to protect the future of the movement. The world needs feminism, without it we cannot progress socially as half of society will be born into a world which restricts their freedoms.

Austerity or growth: a politician's dilemma

With Karolos Papoulias emerging as the new Prime Minister of Greece, the nations of the Eurozone hold their collective breaths to see what approach to the crisis the new government will take. In some ways, Merkel and friends must be breathing a deep sigh of relief at having dodged the bullet of a coalition involving the ΚΚΕ (the Communist Party of Greece) who wish to renounce austerity and and leave the Euro. After the election dust has settled, a coalition has emerged between the parliament's largest party, New Democracy, Pasok (the Socialist party) and the Democratic Left. All three parties are broadly in favor of remaining in the Euro and desiring a less radical renegotiation of the bailout. However, the new government does seek some changes to the demands placed on Greece, and this must worry Merkel and co.

Across Europe, austerity is looking less attractive to politicians, as voters turn towards parties which favor growth. In France, François Hollande defeated Nicolas Sarkozy on a platform of taxing and spending. This is a sign of how much things have changed in the two years since the last UK general election, where austerity was taken as common sense. Since then, European economies have seen little growth, and the prosperity that has been created has not helped where it is needed most. As government budget cuts force roll-backs across the services which are available, most people feel worse off under austerity. Now the Tory-led government talks about efficiency and promoting growth, realising that if the situation does not improve then re-election looks unlikely. As well as watching Greece, keen eyes are also focused on France to see if Hollande's policies of tax-spend will boost the economy faster than Merkel's austerity.

In the UK, boosting growth has support on both side of the political divide not the least because GDP must rise if tax revenue is to increase enough to meet the government's deficit reduction targets. Further stagnation in the economy will hinder growth in the long term and cause lasting structural damage. Aside from the much talked about 'lost generation' of young people locked out of jobs and the housing market through increased scarcity, social problems are becoming exacerbated through a lack of prosperity – see last summer's London riots for evidence of this. Faced with the prospect of the economy tanking, the government's austerity programme now looks a lot less like common sense and a lot more like an ideological commitment to privatization and rolling back the state. I have blogged before about the roots of the government's philosophical commitment to austerity.

If austerity is ever going to work, it will have to deliver some growth soon. In the meantime, the people of Greece are facing a fifth consecutive year of recession and world greatly appreciate some growth. The austerity conditions imposed on Greece are very harsh and surely smothering the green shoots of recovery. However, the new government has little room to maneuver, as they are reliant on the support of the rest of the Eurozone to manage the country’s enormous debt. Papoulias needs growth and austerity, but it is becoming evident that the two are mutually exclusive. Greece will be watching both France and Germany to see which economy grows the fastest. The divisions across Europe are summed up last Friday's Euro 2012 match between Germany and Greece, a contest of the prosperous against the impoverished. Germany's victory does not silence the doubts about the merits of austerity.

The leaders of Europe are in need of some answers to the question of austerity verses a bold dash for growth, and are keen to see what happens in the countries which have most openly embraced either stance. The new Greek government will have to make some difficult economic choices and the continuing existence of the Euro maybe rest on these decisions. One thing that is certain – politicians will need to embrace either harsh austerity or a strong push for growth soon, as the current stagnation is unsustainable.

The end of the high street: not with a bang but a whimper

It's easy to live in a left-wing bubble: between organic toiletries, pubs with locally-sourced food and shopping on the internet, sometimes it is easy to forget there are High Streets where a large number of people do the majority of their consuming. A few days ago, my delicate shield of ethical consumption was smashed when I spent a few hours inside the Westfield Shopping Centre near Shepherd's Bush, west London.

The phrase 'fish out of water' does not cover the experience that I went through. I assumed that Westfield employed people specifically to keep dirty lefties like me out of their palace of consumption. Much to my surprise, I was welcomed in and dazzled with the bright lights and the range of shiny baubles available for me to purchase. I had some time to waste, and decided to find a music shop to pass the time in. I briefly considered unraveling a thread from my shirt and attaching it to the door so that I could find my way back later, but then I noticed the handy maps available from an information stand. Armed with a plan of the place, and mentally comparing myself to Livingstone, I set out to explore this strange and unfamiliar land of retail.

As I walked past the juice stands and Sky TV sign up booths, two things become almost immediately apparent to me: firstly, that there were no music, DVD, books or games shops anywhere to be seen, and secondly that the shops which did make up the Westfield were almost exclusively either clothing or jewelry shops. This confused me, for surely the main point behind a large-scale retail development is to get as much diversity of shops into as small a place as possible, thus allowing consumers to satisfy all their needs at once. Apparently not, as the Westfield caters to a very small section of consumption, mainly high-end up-market deeply personal. For those who shop in the Westfield, the particular boutique they frequent is a statement about their individuality made through mass consumption, the triumph of late-stage capitalism. In short, I discovered that the Westfield is the last bastion of the high-end High Street retailers against the advancing tide of internet shopping.

Later in a gastro-pub serving organic, locally-sourced pies, I was firmly back in my element and discussing my afternoon with a friend. I said that clothes and jewelry were one of the few areas where internet shopping and has had little impact. My friend informed me that he purchases T-shirts and shoes online, to which I agreed. The internet's particular brand of culture is very suited to the T-shirt business and allows the consumer to seek out designs which speak to them. Here the internet has had success in breaking the High Street's stranglehold on fashion. I asked my friend, however, if he would consider buying trousers online and we both agreed the idea seemed somewhat perverse.

The internet has taken over from the High Street in areas where it does best: bulk selling of goods, mainly entrainment goods, where the major factors are price and range. The last time I went into HMV to purchase a DVD, a friend told me not to bother and that it would be 'cheaper online'. He did not specify a website or have any data to justify his claim, which was built on a cultural understanding that this variety of shopping is simply better on the internet.

So where does this leave the High Street, other than with pound shops and clothing outlets? Some things have to be brought in the flesh, and the time delay involved in internet shopping means some goods will always be purchased in meat-space. However, with the rise in smart phones, tablets and app stores, immediate entertainment purchases online are a reality. All that is needed is a shift in social conventions, to make the giving of online content an acceptable present, and there will be no need at all for High Street entertainment retailers.

The High Street is certainly in a bad state, and a simple Google search for 'the end of the high street' returns thousands of blog posts and broadsheet articles bemoaning the end of face-to-face retail and making lazy observations comparing the closure of Game to the rise of Angry Birds. The truth is that this is hardly a recent phenomenon. It was nearly two decades ago that Amazon's diversification into VHS selling meant that Saturday afternoons were no longer spent wandering into the city centre to buy the latest Simpsons collection. One article I read claimed that 2012 was the year the High Street would end, as if most people had only just discovered the internet. In fact, most High Street retailers discovered the internet a long time ago and have also moved into online shopping.

Most likely the current process will simply continue. Places like the Westfield will hold their own in certain sectors for a while, but eventually changes in technology and social conventions will move our lives and consumption almost entirely online. If the High Street does end, it will be slowly over many decades, and not because everyone turned exclusively to online shopping over one Christmas period. If the High Street does end, it will not be with a bang but with a whimper, and one which is already well underway.

The Hunger Games and Game Theory

I do not usually write posts about popular culture topics, so this blog will open with a first which is a SPOILERS WARNING. This article may ruin the ending of The Hunger Games if you have not seen the film or read the book yet.

With that out of the way, I can move onto the main area of discussion. One might think that The Hunger Games, which opened at cinemas nationwide on the 23^rd of March, might not have much to teach the viewer about economics, but that would be a mistake. The film has some important insights into the nature of competition and game theory.

The film follows the story of Katniss Everdeen, a teenage girl who volunteers to combat 23 other juveniles in a battle to the death in order to avoid the same fate befalling her sister. She strikes up a friendship come romance come rivalry with one of her opponents who hails from the same district of the film's dystopian future as she does. Katniss has to rely on her own survival skills to make it back to her family but is also faced with difficult decisions along the way in regard to who she can trust. There can be only one winner of The Hunger Games and only one can return to their home, co-operation in this environment can only go so far.

This is very similar to game theory and I am sure that had John Forbes Nash been alive today he would have found the questions raised by this literary sensation fascinating. Nash's game theory is a study in human selfishness which attempts to find mathematical and logical optimal solutions to real world problems. His results are bleak and frequently point to the power of human greed as a means to achieve the optimal result from any situation. Nash won the Nobel Prize for economics for his efforts and his theories underpin a lot of the prevailing market ideology and government policy. I have blogged on Nash and his theories before.

In a typical game theory situation there is a trade off between cooperating with the other player(s) and behaving selfishly for personal gain. Frequently you do not know what the other player's moves are or how they affect yours until after you have made a key decision. Nash found that there is always an incentive to betray trust for personal gain as in any one moment the other player(s) is likely to be betray you if they are behaving logically according to game theory.

In The Hunger Games itself there is an incentive to cooperate with one or more opponents against further opponents. Katniss teams up with Rue during the game to great effect whereas Peeta Mellark (her rival/love interest) allies himself with the stronger and better trained players. However there is an incentive to betray trust at any point as there can only be one winner. During the course of the game Peeta switches sides to help Katniss defeat his former allies. Signs of personal weakness are rewarded with timely betrayal and several characters come to an abrupt end at the hands of their recent allies. At any moment there is an incentive to betray trust just as whoever you are allied with is likely to also be planning the moment they turn on you.

This all sounds very bleak and has led many to doubt the human virtues of cooperation and altruism but there is a positive side to game theory. More recent experiments have been based upon the idea of iterated game theory where games are not played in isolation but repeated over and over with the long term outcomes monitored. These studies have shown that there is a mathematical advantage to altruism in iterated game theory. If you cooperate in the long term, through repeated games then all parties can each gain greater results than they could have achieved through seeking personal glory.

The Hunger Games also has an argument for cooperation and altruism if you view not as a single game but a series of games Katniss repeatedly plays against a changing series of opponents. There is a clear incentive for her to cooperating with weaker plays against the players with advantages. Ultimately Katniss's victory in The Hunger Games is achieved because she works together with others and uses their competitive advantage against her opponents. She also exploits the selfish players willingness to turn on each other to thin the field. At the end of the film Katniss is able to save herself and Peeta not because of their ability to work together to achieve a common goal but because they are able to trust each other.

The Hunger Games shows that there is not only an incentive for cooperation but also for trusting others even in an single victor environment. It is a strong argument against Nash's dark view of human nature as motivated by selfishness and personal gain. In our personal lives as well in society as a whole we need to learn from Katniss example of helping the weak, harnessing the power of cooperation over selfishness and above all that we need to trust each other.

A budget to reward work?

Politicians are always looking to incentivise employment. The general means of accomplishing this is by either cutting taxes on high earners and corporations to encourage entrepreneurship or cutting benefits to get the unemployed off the dole and contributing to GDP and tax revenue. In the run up to today’s third budget of the coalition government Chancellor George Osborne claimed he was planning a “budget to reward work”, i.e. one which will benefit those already in employment and encourage the unemployed to get a job.

Now with the details of the next 12 months of government spending announced we can ask ourselves: to what do degree has he succeeded? There was some welcome news, such as raising the level at which someone in employment begins to pay income tax to £9,205 a year with the aim of raising it to £10,000 next year. Not only will this reduce the tax burden on those with the lowest incomes but all those in employment will pay less tax; the average basic rate tax payer will now be £305 a year better off. This may not sound like a lot but it will boost consumption and aid the economy. Another good idea was tax breaks for firms working in the fields of computer games, animation and high end television manufacture. These are important sectors to the UK economy where we have a competitive advantage and are vital to our growth.

However over the last year those in employment have had their prosperity dogged by the specter of inflation above the Bank of England’s target. Although inflation has fallen back in the last few months (currently the CPI is at 3.4%) higher inflation erodes the value of income made from working and reduces the incentive to enter work. Firms have tended to give lower than inflation pay rises recently so as inflation remains high and those in work are finding themselves worse off. Inflationary pressure is largely the result of rising fuel costs caused by the soaring price of oil and gas on the global market. A domestic fuel subsidy or measures to reduce transport costs could have reduced inflationary pressure and made the income from work more valuable. This, however, was never on the agenda.

Another consideration is where will the funds come from to pay for this tax reduction? Borrowing is projected to be £1bn lower than anticipated which has given the Chancellor room to maneuver. A certain amount of the slack will be taken up by the rise in stamp duty for properties over £2m and the proposed clamp down on tax avoidance. The majority of the additional revenue will be raised by an extra 37p per unit tax on cigarettes. It is worth remembering that taxes on commodities disproportionately affect low earners as they spend a higher proportion of their income on the taxed commodity. A tax break for lower earners could be a double edged sword for those who also smoke – which there is also a higher instance of among the poor.

The other main highlight of the budget was the reduction in the top income tax bracket - from 50p in the pound to 45p – aimed at encouraging entrepreneurship and investment from overseas. I have blogged about this before but investment will remain low and the rate of business start ups will be sluggish while GDP growth is lack luster. With growth in 2012 projected at a mere 0.7%, Osborne should consider a growth strategy if he wishes to stimulate investment and create a fertile environment for new businesses.

Job creation and a plan for boosting growth were not overtly stated in today’s budget. There was protection for some vital areas but others important growth sectors (such as renewable energy) were all but activity discouraged – mainly through the government’s continual commitment to non-renewable energy. Unemployment is projected to hit a peak this year at 8.7% and a clear plan for job creation is needed to protect the recovery. Unemployment and the low growth rate are the biggest problems the UK economy faces right now and the government should commit to a clear strategy for tackling these before it leads to endemic social problems. Such a plan would also send a clear signal to overseas investors and aspiring entrepreneurs that the UK is committed to economic prosperity above political goals.

Overall this is a budget lacking in ambition or a clear plan to boost the economy out of its current dire situation. There were no sweeping cuts, surprise new schemes or massive tax boondocks. Just a few tweaks to the system with the vague goal of stimulating growth and getting more people off benefits and into employment. If Osborne really wanted to create a budget that would reward work he would take measures to reduce inflation or help get more people into work. More employment and a better growth rate would benefit both those in and out of work as it would grow the economy overall. The Coalition maybe attempting to incentivise work but while the economy remains weak, their efforts will be unsuccessful.

50p Tax: What’s going through the Torys’ heads?

It is no secret that the Tories want to abolish the 50p tax band. There are few points more fundamental to Tory ideology than the belief that taxing the wealthy is not only bad for the economy but also morally wrong. It runs to the heart of their belief in individual freedom, economic liberalism and personal responsibility. The most surprising fact about the rumoured plans to abolish the 50p tax rate in the forthcoming budget is that it has taken the Tories the better part of two years in government to consider acting.

This is partly due to their coalition partners. The Liberal Democrats oppose the removal of the tax without the instigation of another tax on the wealthy in its place. They would prefer the Mansion Tax they proposed in their 2010 manifesto – which is also vehemently opposed by grass roots Conservatives. If the Tories were to repeal the 50p tax rate without implementing the Mansion Tax (or something similar) it could derail the coalition’s remaining legislative agenda at a time where Lib Dem support is essential to pass the government’s welfare reforms.

The second reason why the Tories have waited until now to considering removing the tax is fiscal. The government’s argument that the nation’s coffers are in such a dire state that all must make sacrifices for the economic wellbeing of the country carries little weight if it emerges that there is room in the budget to cut a substantial revenue stream. The Conservatives would be on dodgy political ground if as soon as they entered government they cut the essential services lower income earners rely on (such as EMA) and introduced a tax which falls disproportionally on the poor (the VAT rise) whilst also passing a tax break for the highest earners.

Sound economics does also lie behind the decision to keep the 50p tax rate. To reduce government borrowing as quickly as possible, tax streams would have to be kept at the current level or raised – hence the rise in VAT. Income Tax is the largest proportion of the government’s income from taxation, and high earners pay the lion’s share of this income.

So why act now? Again there is an economic case to repeal the tax. Growth has been poor since the coalition came to power, and many think tanks and economists believe that repealing the 50p tax would stimulate consumption of consumer durables (predominantly purchased by high earners) and boost the economy. It would also go some way toward attracting investment from overseas - although investment will be limited whilst growth remains sluggish. The Tories’ re-election and deficit reduction programme depend on growth rising in the next few years, and cutting taxes on high earners is seen as a short cut to achieving this.

There is also pressure to repeal the tax from within the Tory Party. Cameron has a problem with his own right flank, who feel that too many Liberal Democrat policies are on the agenda, that the government has not played hard ball sufficiently with the EU, and that Cameron is not doing enough to protect the international standing of Britain as a great nation. These MPs are also concerned about their own re-election under the Tory banner, and are crying out for some traditional Tory reforms to take back to their constituencies. Cameron’s failure to support the back-benchers’ proposed EU membership referendum has created resentment within his own party, and he needs a bone to throw to them to ensure they keep supporting the continuation of the coalition.

The Tories do have to consider the strong case for keeping the higher tax rate. Firstly, it generates essential revenue at a time when growth is slow and tax receipts are lower accordingly. Another key point to consider is that those who stand to benefit from the repeal of the rate are the very wealthy, and studies have consistently shown that the wealthy save a higher proportion of their income, whereas those with lower incomes spend the majority of their income out of necessity. If the government’s plan is to boost consumption, then conventional logic suggests the amount of money that circulates around the economy should be raised, rather than the amount left inactive in bank accounts.

Aside from this, the government is faced with a moral responsibility that any government should have, which is to help the less fortunate, the vulnerable, and those who cannot look after themselves. This government is failing in that regard as its austerity programme is cutting the services needed most by those whom society is supposed to look out for. To reduce taxes paid by those most capable of providing for themselves at this time would be a failure on a moral level.

If Osborne wishes to abolish the 50p tax band in tomorrow's budget, then he must consider the political fall-out with his Lib Dem coalition partners as well as the wider economic implications. He must also bear in mind that the most obvious logic of cutting taxes to boost consumption does not always hold true. Whatever decision is reached, it will certainly be considered a test of the Tories’ claim that all sections of society must make sacrifices in order to tackle the budget deficit. The Conservatives certainly would love to abolish the top tax bracket; whether they are willing to spend the political capital needed to do so will be a question that can only be answered by Wednesday's budget.

Austerity economics: how we were misled

Hindsight is wonderful thing in economics. Knowing exactly what should have been done at certain cross road in history to avert catastrophe has been the subject of many books and PhD thesis. The Former US Defence Secretary Robert S. McNamara once said that “historians are not interested in counterfactuals. The what might have beens.” Economists certainly are. Economists use the data from lead indicators, current indicators and lag indicators to work out exactly what the state of the economy is and what would be the best course of action. Sometimes this is simple, growth is low interest rates are cut and households have more money. Thus aggregate demand is boosted and there is a spike in growth. Usually it is much more complicated than that and the data shows no clear path to be taken out of a crisis.

In the absence of knowing for certain what needs be done, politics often comes into play in making the decision. In other words, the debate becomes about what should be done. The root of all politics is philosophy. Governments decided on a philosophy of marketization or state intervention and from this their politics and the economics follows. By the time this reaches the public in the form of social pressures it often appears that the facts have been twisted to be in line with the philosophy.

With the benefit of hindsight we can see that the Thatcher government’s curtailing of union powers was philosophical and not economic. It stemmed from her government’s ideological commitment to neo-liberalism and not a genuine need to decrease union powers to make the economy more prosperous and therefore grow faster. At the time it was sold as such but now we can see how the economics flowed from the politics and that the politics had its root in her philosophical views.

It is no longer fashionable for parties to have a clear ideology but there is still philosophy at the root of their politics. Nearly two years into the coalition government, with the benefit of hindsight, we can start to see how the philosophy has guided the economics and where the mistakes were made.

Austerity is the economics of the coalition government. In the campaign there was also a commitment to opening public services to market competition but this has been less forthcoming, especially with the woes associated with NHS reforms. When George Osborne became Chancellor he offered us a simple economic parable, cut the state and the private sector will grow. Two years later with growth lacklustre at best, unemployment higher than it has been at any point under Labour and the country teetering on the brink of another recession this parable seems more like a fairy tale - or a coma fantasy. In years to come Osborne’s austerity program will be seen as a result of his philosophical commitment to neo-liberalism rather than a response to the economic necessity of cutting the budget deficit. This goes hand in hand with his proposals to open public services to competition from private firms. Right now the philosophy is still being sold as economics, but it is politicians who are driving the economics and their philosophy which drives them.

Sociology is applied economics and the social consequence of economics facts - such as rising number of the unemployed – are seen in urban decay and public order offences. Last August’s riots were in essence the application of economic factors to the population and as incomes continue to fall and more and more people are out of work social breakdown becomes more likely.

Social breakdown is also in evidence in Greece were rioting against the government’s austerity program has become a feature of daily life. The Greek coalition government is attempting to impose a gruelling program of public sector cuts in order to secure essential funds from the European Central Bank and the International Monetary Fund to prevent a default on their sovereign debt. However with the Greek economy entering its fifth consecutive year of recession and the most recent data indicating that this recession is depending and not improving, austerity does not seem like the best course of action. Couple this with evidence from the UK that our recovery has faltered since the beginning of our program of cuts and the case for austerity in Greece looks pretty week. Of course the pressure for austerity emanates from the ECB and IMF and their control of the bail out money. These bodies, the IMF especially, also have philosophical ties to neo-liberalism and use their status as the world’s creditor to pressure their own political agenda. Economic good comes behind a philosophical world view and social consequences to the ordinary Greeks comes last of all. Hence the neo-liberal agenda of the IMF and others leads to rioting on the streets of Athens.

Austerity was sold to the public as economics when in actual fact it is a philosophy; a philosophy which the data – the life blood of economics – does not support. Until economists can see the future, they will always need philosophy and politics to guide them. Yet philosophy and politics need be informed the data of economic reality and must consider the social consequences of their actions. Philosophy and Politics are essential to governance, as they are a vision to aim for and a direction to travel in. Even this blog, ostensibly an economics blog, frequently wonders into politics and philosophy.

Hindsight is useful for knowing exactly which economic policy should have been adopted at a cross roads - like the one Britain and the Euro face. Lacking hindsight in the present we must always be aware that sometimes when politicians are selling us economic necessity they are in fact selling us their philosophical desires.