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	New Systems: Possibilities and Proposals by Gus Speth Next System Project USA   Truly addressing the problems of the twenty-first century requires going beyond business as usual – it requires “changing the system.” But what does this mean? And what would it entail?   The inability of traditional politics and policies to address fundamental U.S. challenges has generated an increasing number of thoughtful proposals that suggest new possibilities. Individual thinkers have begun to set out – sometimes in considerable detail – alternatives that emphasize fundamental change in our system of politics and economics.   We at the Next System Project want to help dispel the wrongheaded idea that “there is no alternative.” To that end, we have been gathering some interesting and important proposals for political-economic alternatives – in effect, descriptions of new systems. Some are more detailed than others, but each seeks to envision something very different from today’s political economy.   Individually and collectively, these papers challenge the deadly notion that nothing can be done – disputing that capitalism as we know it is the best and, in any case, the only possible option.   We have been working with the authors on the basis of a comparative framework aimed at encouraging them to elaborate their visions to include not only core economic institutions but also – as far as is possible – political structure, cultural dimensions, transition pathways, and so forth. The result is two-dozen papers, to be released in small groups over the coming months.   Individually and collectively, these papers challenge the deadly notion that nothing can be done – disputing that capitalism as we know it is the best and, in any case, the only possible option. They offer a basis upon which we might greatly expand the boundaries of political debate in the United States and beyond. We hope this work will help catalyze a substantive dialogue about the need for a radically different system and how we might go about building it. Visit the related web page
	Austerity in one country: The case of Britain by Des Cohen Open Democracy United Kingdom   When the Guardian reported that the former Chancellor of the Exchequer George Osborne had been appointed Professor of Economics at the University of Manchester, it seemed like an April fools joke or perhaps some fake news. But it turns out to be true, despite the objections from many of the economics students at the university who have for many years railed against the neoclassical teaching they have to endure. Luckily Professor Osborne is not being paid for his endeavours, whatever these may be.   George Osborne is the person responsible for the appalling state of the public finances as a result of policy decisions taken when in office during the period 2010-2016. Of course his policies were also those of the coalition government between 2010 and 2015 and thus the Liberal Democrats bear part of the responsibility for what happened during those years.   But the core responsibility for economic policy in the period since 2010 lies with the Tories, and they are now faced by a storm of problems which have their origins in their doctrinaire and misguided strategies for Britain. What they have done over the past 7 years has resembled Thatcherism on steroids, and the rest of us have had to bear the costs. These have been huge, and focused on the poorest and most vulnerable members of society.   As always it is worth recalling what Thatcher said – “there is no such thing as society” – so who cares whether social and economic policies create further divisions, add to income and wealth inequality, and make the poor poorer.   Indeed, a basic mantra of the Tory government continues to be that inequality is good for economic growth and for the health of society, despite the clear evidence that this is untrue. This has been demonstrated by the experience of the Nordic countries and is fully documented in ‘The Spirit Level: Why Equality is Better for Everyone’ by Richard Wilkinson and Kate Pickett. They concluded that, “there is a strong tendency for ill-health and social problems to occur less frequently in the more equal countries….Health and social problems are indeed more common in countries with bigger income inequalities, The two are extraordinarily closely related”.   But then whose interests are the Tories representing? Not the disabled, the sick, the single parents, the unemployed, the homeless, the increasing numbers in low paid and insecure employment, the poorly educated and inadequately trained. There was a time when the Tory party reflected the interests of British business, of those firms and industries that were productive. But as their importance has declined, the hedge fund managers, asset strippers, bankers and property developers have taken their place. The fiscal policies that have been followed have favoured the extractive and destructive activities of the unproductive rich.   Privatisation and deregulation   One of the core principles of Thatcherism is that the public sector is bad and the private sector is good. Hence the raft of privatisations of more or less everything that could be sold so that neoliberalism could be advanced. The results could have been predicted – and were – but no one in Government was listening. There is no evidence that the privatised industries have performed better than when they were in public ownership. Indeed, rather the opposite – with results that have been catastrophic.   Anyone interested in the effects of privatisation should look at the recent book by James Meek, ‘Private Island: Why Britain Now Belongs to Someone Else’. It is evident that market power has been used by former public utilities to engage in ‘tax farming’ – a process whereby prices are raised to enhance profits and with nothing consumers can do to escape extreme exploitation.   Instead of creating a share owning class as promised by Thatcher we have instead industries with monopoly and oligopolistic power, often foreign owned, which are in many cases no longer public companies but privately owned and managed. The case of water privatisation speaks for the general effects of these policies, which are worse than anyone could have imagined.   In the case of housing, not only has little new social housing been built despite the huge rise in household formation, but low cost housing has been forcibly taken out of public ownership and almost all of it ended up in the private rental sector.   So the supposed objective of creating a property owning class has ended up with a huge increase in the number of households who are privately renting – often at rents that take 50 to 60% of family income. Often these are properties that are poor quality and poorly maintained.   Not only do we have exploitation by private landlords (encouraged by tax concessions from the Tory Government) but to a significant degree the rents are being funded by rent support provided by the government. Thus we have a totally inadequate housing stock which is poor in quality and in quantity and increasingly in the hands of private landlords, where rents are both excessive and in part funded through the public purse. What kind of social policy is this?   All that seems to have been important for Tory Governments is that the public sector be shrunk and the private sector take its place. Indeed, the former Deputy Prime Minister, Nick Clegg, reported during the coalition years that the only concern that Osborne had when there were discussions of tax and social policy was ‘how would supporters of the Tory party react and whether they would benefit’. What kind of calculus is this for a Minister supposedly concerned about national interests?   But the costs of privatisation are not confined to the appalling consequences of the government’s failure to meet housing needs. It is everywhere that there has been privatisation – railways, energy, water and sewage, telecommunications, bus services, airport management and so on. We are only too aware of the failures of many of the private companies that now own and manage these services and of the price gouging that has happened over many years.   Regulation of former public enterprises where it exists has been nothing more than window dressing, for how else could these companies have got away with levels of service that are often poor together with high and rising profits, massive management fees and executive pay and bonuses. For the high profits to be possible, prices had to increase exorbitantly with much of the profits transferred to overseas companies often themselves in public ownership. In many cases we have swapped British public ownership for foreign public ownership.   Is there any logic in this? If there is then it is hard to see how consumers have benefited by the changes in ownership and de-regulation that simply increases the profits of companies.   The banking group Santander carried out research on their customers pay and expenditure on utilities and other core outlays, and concluded that over the past decade:   “Basic household bills have increased by an average of 43 per cent in the last decade – more than double the rate of wage growth… Gas and electricity are the biggest drivers of price increases, rising 73 per cent and 72 per cent respectively in the last decade, while water bills have increased by 41 per cent – all significantly higher than inflation at 32 per cent. Council Tax has risen by 27 per cent and TV, phone and broadband prices have all risen by 24 per cent, albeit slower than inflation but still faster than wage growth (19 per cent).”   Transport is not included, but anyone who travels frequently on trains will confirm how outrageous the fares are, and how much faster these have risen since privatisation. Railway fares in UK are much higher than elsewhere in the EU and it seems that government subsidies in practice simply bolster the profits of the train operators. Standards of service are also lamentable compared with railways in Europe, which are still largely in public ownership.   Investment in the railway infrastructure has also been totally inadequate, as the 300,000 commuters who have suffered now for several years from disrupted Southern Rail services can attest. Costs of other public transport are also high – the London underground is extremely expensive – and buses similarly are also costly for regular users who are not pensioners.   That wages and prices have behaved in the way detailed in the above table is scarcely accidental, but in significant part reflects government policy. It reflects the privatisations undertaken by the Tories, together with a belief that deregulation produces the best results.   For years the Tories have followed a programme of dismantling regulations, and have followed a policy of two regulations abolished for any one new regulation – irrespective of the consequences. Public resources have flowed into an organisation established by David Cameron called the Red Tape Initiative, the intention of which is to dismantle regulations as part of their neoliberal programme. This did not appear in any manifesto.   The collapse of effective fire regulations has in part been the direct consequence of this policy, together with the underfunding of local government (including the fire service). Unfortunately, it is not surprising that the disaster at Grenfell Tower happened given the general dismantling of local government responsibilities and the subcontracting of housing development and management to private companies. Where private profit dominates and regulation is weak, standards will decline. This is only too evident in relation to social housing.   Cutting Public Sector Employment and Pay   As a direct consequence of Treasury policy under Osborne and now under Phillip Hammond, there have been enormous cutbacks in employment across huge area of the public sector. The fire service and the police have lost thousands of jobs, with consequences for the effective response to emergences and a reduced ability to monitor terrorists and to be able to respond to attacks.   Similarly, in education and health there have been budgetary cutbacks and reductions in staff which have had knock on effects on the quality of teaching in schools and colleges and health care in the National Heath Service.   But the government seems largely uninterested in the effects of its policies, and despite the evidence continues to ignore the pressure to reverse their policies on the funding of public services – including those for the disabled and the mentally ill. There is a pressing crisis in social care, as demographics increase the pressure on services that are increasingly inadequate..   * Access the complete article via the link below. Desmond Cohen was previously an Economic Advisor to HM Treasury, and subsequently Reader in economics and Dean of the School of Social Sciences at University of Sussex. Visit the related web page
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