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The values that created #gfc

Written by Prem Sikka Saturday, 19 November 2011 20:00
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Hard Times call for courageous action and thought leadership to challenge the “there’s no alternative” brigade.

Cometh the hour cometh the man and that man is Richard Murphy. Through his research, analysis and commitment to social justice he has opened up possibilities for forging a just and sustainable society. His policy prescriptions now attract attention in higher echelons.

Murphy’s book “The Courageous State” shows much that is wrong in our society. All around us there is economic and social decay. The era of managed capitalism has been displaced by the New Right philosophies of leaving it to the market, or preferring private regulation to public regulation, and the state’s primary duty is now to impose cuts, take away jobs, hit the vulnerable, shift taxes away from multinationals corporations and wealthy elites to ordinary, or normal, people, and make the planet fit for the whims of markets, corporations and their controllers. Our jobs, savings, pensions, food supplies and even hospitals are all plugged into financial markets and resulting volatility is bound to create even more instability. Such a state is facing a legitimacy crisis as people take to the streets and withdraw from the electoral processes altogether.

Murphy prefers it to call it ‘the cowardly state’ whilst others may have called it a corrupt state which acts to defend the privileges of the elites but does little to attend the causes of social decay and erosion of communities. The evidence of decay is not hard to find: MPs fiddle expenses; peers go to prison for fraud but continue to act as lifelong legislators; journalists hack people’s phones and emails; bankers receive mega bonuses for destroying the economy; credit rating agencies publish false credit ratings and continue to thrive; tax dodging companies get public contracts funded by taxpayers and their directors get knighthoods and peerages; banks publish misleading accounts; company auditors give clean bills of health to bank accounts that would easily win the Booker Mann prize for fiction; energy, water and phone companies are ripping consumers off. Sleaze and corruption has become the order of the day.

The real problem is that many of these practices are, or have been, permitted by the prevailing legal, regulatory and political culture.

People seem powerless to influence the leading political parties as they are all funded by the very interests that are undermining the fabric of society. Ministers wring their hands. In response to the financial crisis they have reduced pensions, winter fuel allowances, raised VAT, income taxes and eroded the value of people’s savings. Income and wealth inequalities are rising and millions of people will be condemned to a life of misery. All this in a country which comparatively rich and is the world’s sixth largest economy. Yet there has been no scrutiny of the value systems that have created the economic crisis. Some three years after the banking crash, there has been no tangible reform of the sector. Despite losing billions in tax revenues each year there is no scrutiny of the tax avoidance industry. If anything leading players from the tax avoidance industry, mostly located in major accounting firms, are now advisers to the government.

As Murphy argues, we need a courageous state and that requires mobilisation of public opinion, alternative policies and visions. In pursuit of economic dogma the state has no qualms about increasing the unemployment queues, or penalising the people which did not cause the economic crisis. Such practices show the state not only to be cowardly but also highly partisan as it engages in old-fashioned class warfare.

The irony is that the resulting social instability will not help businesses to make profits either.

Murphy’s book documents the problems and provides emancipatory policies.

It makes a valuable contribution to an understanding of the deepening economic woes. There is nothing inevitable about the crisis. It is the outcome of prevailing institutional structures and belief systems, all promoted or underwritten by the state The book provides plenty of food for revitalising human consciousness and debates about the state. It is lucid, easy to read and highly accessible and should form part of many Xmas stockings and birthday gifts.  No doubt, it will be attacked by neoliberals and other supporters of status-quo.

George Orwell once said that “In a time of universal deceit, telling the truth is a revolutionary act”.

This book tells ii as it is without favour and fear and will resonate with the lived experiences of many.

Prem Sikka is Professor of Accounting at the University of Essex.

The Courageous State by Richard Murphy is now available @

http://www.searchingfinance.com/products/soon-to-be-published/the-courageous-state-rethinking-economics-society-and-the-role-of-government.html
Last modified on Saturday, 19 November 2011 23:11

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