South Africa

Maverick Citizen: Editorial

The price of austerity: Adding up the costs of economic denialism

The price of austerity: Adding up the costs of economic denialism
Finance Minister Tito Mboweni (Photo: Leila Dougan)

Our minister of finance is perpetuating the myths of austerity economics at the very moment when many other parts of the world, and even the IMF, have been forced to acknowledge that it does nothing but damage.

Last week Maverick Citizen published an interview with Nobel Prize-winning economist Joseph Stiglitz.

Stiglitz is a progressive economist and a good friend of South Africa. As a Nobel Prize recipient, he’s up there with the best, talked of in the same breath as John Maynard Keynes and his nemesis Milton Friedman. Stiglitz has advised our government on its economic policy and during the interview, he was asked whether South Africa is “imposing austerity at a time when it’s going to have a contractionary impact?”

His answer was that:

“Austerity will have a contractionary impact, the question is, do you need it now? And I would suggest that probably not… The cost today – both economically and politically – of austerity is very high and I can’t imagine that there aren’t things to spend on that would both be socially very productive and generate a lot of jobs, and be fiscally responsible.”

Stiglitz is understandably diplomatic. So, below I record some of the costs of “cost-saving”:

Austerity will be the cost of an increasingly incapable state, starved of the funds it needs to do its most basic of functions.

Austerity is underpaid police, taking bribes as a salary supplement; it’s the demoralised civil servants trying to implement instructions to take rights from people rather than put in place services needed to make rights real.

Austerity is the exhausted nurse and the small army of overpaid mayors, municipal managers, fixers, consultants and directors-general – but only the nurse gets blamed for the rising public sector salary bill.

Austerity is a broken state that has its brokenness reinforced by an even more broken basic education system. Austerity is shit-filled pit toilets that children fall into and the millions of rand the state then pays to unscrupulous lawyers to defend unconstitutional conduct while feathering their chambers.

Austerity is the bare walls where there should be books, bare shelves where should be libraries, overcrowded classes where there should be teachers. Austerity closes the doors of learning and culture to most.

Austerity will be costed in increased anxiety, rising mental illness bringing people into a health system that hasn’t got a budget for mental health and putting the cost of their care back on their families.

Austerity will lead to increased suicide, depleting family savings on the cost of funerals, eroding social fabrics and traumatising children left behind.

Austerity is tik without rehabilitation centres; nyaope without recrimination for the druglords; it’s gang violence without police and social workers; teenage pregnancy without sex education; and epidemic child abuse, leaving today’s victims to become tomorrow’s perpetrators.

Austerity is the cost of water infrastructure that is allowed to fall into even greater disrepair, making it more expensive to fix; planting seeds for the next Eskom and the excuses of the next generation of politicians.

Austerity is treating electricity differently from water.

Austerity is the cost of policing service delivery protests, at the rate of five a day, as people take to the streets to protest their hunger and indignity; then it’s the cost of cleaning up the damage: it’s burned clinics, burned schools, it’s Vuwani on steroids.

Austerity is cowardice to invest in climate change mitigation; it’s not investing today in renewable energy sources that will be standard practice in a decade because our politicians are beholden (in their pockets) to fossil fuel industries that pollute and choke and send people to hospitals and clinics where they create new costs.

Austerity is the lack of readiness for climate change adaptation; it’s knowing the dams are emptying because the water reticulation system is broken and there’s (allegedly) no money to send people out to fix the leaks. It’s the polluted rivers, the refusal to recognise the economy and the dignity of the army of waste pickers.

It’s listeriosis without health inspectors.

It’s MDR-TB without infection controllers.

Austerity is the name of tired politicians, who don’t read or think any more, who surf on a conveyor belt that shuffles them from meeting to meeting, funeral to funeral.

Austerity is the coffee-sipping progressive upper classes of Bishop’s Court, Stellenbosch, Tyrone Avenue and Sandton Square who keep mum and seek ways to avoid paying taxes while lamenting crime and corruption but still pledging fealty to the Constitution over dinner.

Austerity is the reserve bankers who argue that it’s their duty to “protect the public purse for reasons of inter-generational equity”, but don’t appreciate that what we are denying people is life’s necessities, not its luxuries. While they enjoy life’s necessities.

As King Lear said, “O, reason not the need.”

Austerity is Uyinene Mrwetyana and the multitude of rapists who slip through the net because there’s not enough money for public policing.

Austerity is the politicians who – while inflicting hardship on the present – are kicking the real costs of penny-pinching down the line to a future generation.

Meanwhile, they look and sound smug and self-satisfied.

Austerity is the dream of equality, wrapped in the shroud of Madiba and the sacrifice of Kathrada; it’s the joss sticks Cabinet ministers burn as they retire to expensive whiskeys and luxury hotel rooms after a hard day wielding the axe in Parliament.

Austerity is a broken Constitution; a peace agreement that forestalled (postponed?) a racial civil war and promised social justice to “free the potential in all”.

Austerity is a globally celebrated social compact that the dogs of finance capital pissed on.

Austerity is when politicians have run out of ideas or crossed to the other side.

Austerity is what a respected historian calls the perversity that “in many households it is the disabled, the sick and the elderly who generate income (through social grants), and not young men and women in the prime of their lives…”

Austerity is culpable crimes against humanity.

Austerity is death by fiscal consolidation.

Tito Mboweni, austerity is you. Own its consequences.

Let me put it another way.

In economics, according to Mboweni, our overriding priority must be to control the debt to GDP ratio and so we must “tighten our belts” (actually have our belts tightened for us).  But Mboweni’s sums just don’t add up. Our minister of finance is perpetuating the myths of austerity economics at the very moment when many other parts of the world, and even the IMF, have been forced to acknowledge that it does nothing but damage. Austerity has costs, even when measured in purely monetary terms. It costs much more than raising taxes, fiscal expansion and sensibly growing our debt in order to fulfil binding constitutional duties. Austerity is creating costs that will have to be paid for in the short, medium and long term.

We are also further strangling the domestic market, thus making impossible a reignition of the economy based on spending power, public services and jobs. In truth, the government has plenty of alternatives: by spending more, attacking corruption effectively, raising taxes and reviving quality in healthcare and education we would prevent (a lot) of the costs I have described. MC

Mark Heywood is the editor of Maverick Citizen.

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