by Daphne Liddle
BRITAIN has been breaking records lately, with levels of personal debt, long working hours and having the unhappiest children in the western world. These things are linked and this article aims to explore how the ruling class manipulate us into becoming debt slaves and the cost this is having on ourquality of life and that of our children.
Since the Thatcher years of the 1980s, both Tory and Labour governmentshave tried to justify the rampant privatisation of public services and utilities on the grounds of giving us more choice. A choice of service implies that not all the services on offer are the same quality – some are worse than others. The best services, naturally, are reserved for those whocan pay a bit more. When we complain that the poor are getting fobbed off with inferior services they come back saying, “Oh no, everybody has choices,would you like a bit of credit to help you pay?”
So we end up going into debt to pay for things we once had supplied free,as part of the social wage – things like healthcare, higher education,social services and so on. Now, working class people can’t get into higher education without going deep into debt; many non-emergency surgicalprocedures that were once free have to be paid for.
Meanwhile the rapidly diminishing supply of council houses, coupled with rocketing house prices, have forced home buyers to take on record levels of major debt just to find somewhere to live. Banks and credit card companiesencourage everyone to borrow up to their limit and then pay back slowly –interest only – in a way that extends the amount of interest eventually payable.
The marketing media and their friends in the Government encourage us to see spending as a pleasurable experience – “retail therapy”.
“Lifestyle” programmes urge us to throw out our old clothes to keep up with fashions, now this also applies to our furniture and home decoration. Our identity is expressed in our belongings and no longer in ourselves or in ourcommunity, so that when we are burgled or the bailiffs repossess something we feel as though we have suffered a physical injury.We are encouraged to be proud of what we own – and to forget what we havelost in terms of the social wage, community spirit and time for relaxation and recreation.
We think ourselves well off surrounded by the latest electronic equipmentbut forget that in our grandparents’ time the wage of one worker, usually a man, was enough to feed and clothe a family. Now it takes the wages of twoadults working all the hours they can and they never get to clear their debts or get time to relax.
House prices are so high that now we are seeing new kinds of mortgages –50-year mortgages; multi-generation mortgages and interest-only mortgages,which effectively mean the “buyer” will be forever paying interest withoutever coming closer to owning the home – they might just as well call it rent.
Bank staff are ordered to pressure customers into taking out loans. So the loans are offered to all, regardless of their ability to pay back, even topeople with a history of debt problems and to people with mental health problems. “As long as they’ve got a pulse,” is the criterion.
Whatever they can persuade us to want, someone is there to arrange a loan or credit agreement. When we get into trouble with the repayments, they offer to consolidate it all “into one affordable loan” – which could take many years to clear and ends up with us paying far more than the original debt.
Thousands of families are so much in debt they are living on the edge of financial disaster. It only takes a sudden change, usually beyond their control, to break them. This could be a rise in interest rates, a sudden illness or injury or losing their job because their employer has gone bankrupt.
According to Credit Action statistics compiled in February, total personal debt in Britain has exceeded £1.29 trillion. The debt growth rate for the past 12 months has been 10.9 per cent, equivalent to an increase of £114billion.
The average household in Britain has £8,791 in debts, excluding mortgages;if you include mortgages the figure is £53,326. The average debt owed byeach adult individual is £27,445 and the average interest paid by each household on their total debts is £3,400 every year. Britain’s personal debtis increasing by £1 million every 3.85 minutes.
Not surprisingly many people are having serious problems. The Citizens’Advice Bureau has dealt with 1.4 million debt problems in the last year;this equates to 5,300 people a day. Around 1.4 million adults with more than£10,000 of unsecured debt report that they are “quite likely”, “likely” and“certain” to declare themselves bankrupt or take out an IndependentVoluntary Arrangement.
During the last quarter of 2006 there were 34,626 mortgage possessionactions initiated by the banks and other lenders – a rise of 15 per cent onthe previous year.
The number of people given County Court Judgements (CCJ) for unpaid debts increased by 18 per cent, with lenders seeking to recover around £500million of bad debts through CCJs. This is a step lenders are reluctant totake, because once a CCJ is issued no more interest can be charged and thedebt is repaid at a rate the debtor can afford – as low as £1 a week for people on very low incomes.
Working class people tend to see debt problems as their own fault and to feel embarrassed about them. When snowed under with serious debt some try to blank it out and pretend it is not happening. These people are punished most harshly, with high penalties for missed payments that quickly turn a bill of a few hundred pounds into a debt of many thousands. There are threats of court action but the courts can be a debtor’s best friend. As soon as a CCJ is set there is no more interest and the repayments become reasonable.Furthermore magistrates have the power to write off some debts. They tend to do this where the debtor is on a low fixed income and has already made payments to cover the original amount borrowed, excluding interest and penalty charges.
But if the debtor does not turn up in court to present their case, they face a visit from bailiffs who are now to be given new powers to break into people’s houses to distrain goods. This is a punitive measure that finance companies take to shock and intimidate debtors into paying. The goods seized rarely raise enough money to cover the debt because they are sold at rockbottom prices at auction. When unregulated bailiffs get a reputation for behaving like bullies and terrifying the families of debtors it suits the loan companies, because this will intimidate other debtors into paying uppromptly.
How can a worker whose debt repayments and essential living costs combined are greater than their income find more money? Legally there is only one way– to work extra hours, either in overtime or by getting a second job. Again,many workers blame themselves for getting into debt and see the extra workburden as part of the penalty they are paying for being foolish – not as adeliberate policy to exploit them to the hilt.
And it is deliberate ruling class strategy. Chancellor Gordon Brown’s“economic miracle” has been based entirely on high levels of domestic consumer spending. Two Australian economists – Shaun Wilson of the University of Sydney and Nick Turnbull of New South Wales – describe this as“secret Keynesianism”. The original forms of Keynesianism, first implemented in the 1930s in Roosevelt’s New Deal in America and later in Europe, relied on Government deficit spending on large public works to combat unemployment,take people off benefit and into work and to put more money in circulation.
Many social democrats have seen Keynesianism as relatively progressive inthat it did fund public utilities and reduce unemployment – in the short term; they boasted that it did away with the old capitalist cycle of boom and bust. But it was still capitalism and ultimately capitalism does nothave a kind face. In the long term it led to the devaluing of money and the rampant inflation of the early 1970s, followed by collapse and a worse crisis than ever – as we saw in the 1980s. The ruling class then abandoned Keynesianism and reverted to old fashioned free market, or “liberal”,capitalism, and started privatising all the public utilities thatKeynesianism had built.
Wilson and Turnbull argue that the new “secret Keynesianism” operates not by the Government undertaking deficit spending but by pushing millions ofprivate households into deficit spending.
They describe how the system operates: “Faster growth rates among countriesthat have placed an ever greater institutional reliance on the privatesector have led to now familiar claims about the superior functionalperformance of markets and the strength of the new, flexible hi-techeconomies. Critics of the achievements of these economies, however, point to the shifting burdens of adjustment that faster growth has entailed longworking hours, widening earnings inequality and higher consumer debt.”
Then they describe the effect in Australia: “We must now look beyond theformal balance sheets of state finances to understand how the state iscontinuing to ‘pump prime’ the Australian economy by relying onhousehold-based deficit spending. Are these policies either desirable or sustainable dimensions of Australia’s economic performance?”
They continue: “Australian households are no longer net savers, saving lessthan two per cent of their annual income. At the same time Australia’s oncemodest household debt levels have ballooned out in the last 10 years, risingto about 90 per cent of household income, closing the gap between Australiaand other countries like the UK, Canada and the United States. Debt-financed consumption expenditure is important in explaining Australia’s recently improved economic growth performance…. Household consumption remains the solid and consistent contributor to Australia’s economic growth.”
Wilson and Turnbull explain how the Australian government is deliberately pushing households into taking on more debt: “Australia’s dependence on rising household expenditure for growth is not coincidental. As we shallsee, there are a plethora of public measures, inducements, taxes and incentives to encourage private spending and growth in household debt in order to sustain Australia’s growth rate.”
They show that household spending on childcare; education and rent have risen linked to the “long-term ‘rollback’ of public provision”. They also say that “gambling accounts for an ever-increasing share of household expenditure” – funded by a run-down in household saving. This follows a dramatic increase in gambling resulting from government deregulation of the industry and an increase in casinos – a warning for Britain.
They conclude: “Recent economic growth has little or nothing to do with the benefits of increased market dynamism. In fact, it is the same old indebtedeconomy we have always had, but with ever greater reliance on household consumption, debt and long working hours to keep it blooming … government policies have assisted this success as a reworked variant of traditional Keynesianism – something not immediately obvious.
“The state, rather than undertaking the expense and risk of deficit spending to stimulate growth itself, is using policy mechanisms to encouragehouseholds to do this. Through these mechanisms households now undertake more of the state’s function in maintaining growth, financed by their rising consumption and household debt.”
Back in Britain we can see now why the European Union 48-hour directive is not working in Britain. Workers up to their ears in debt are as keen to subvert it as the bosses are. The boss does not need to crack the whip and impose long hours when the bank manager is cracking it harder. But of coursethe boss is well pleased with all the extra surplus value that long workinghours bring.
But the effects on our health and quality of life are devastating. A recentAmerican survey, published in Occupational and Environmental Medicine, showed that overtime and extended working hours are associated with anincreased risk of hypertension, cardiovascular disease, fatigue, stress,depression, musculo-skeletal disorders, chronic infections, diabetes andother health complaints.
In Japan they have a word, karoshi, for death by overwork and a few years ago there was a minor epidemic of it, leading to court cases against bosses.In Britain people rarely die of overwork but thousands suffer breakdowns –physical or mental or both – and end up on the “scrap heap” of incapacity benefit, with their life-expectancy shortened.
Professor Cary Cooper, a stress expert at Lancaster University Management School, claims the risk is not only to those who work over 60 hours a weekbut affects anyone regularly working over 45 hours. She said: “If you work consistently long hours, over 45 a week every week, it will damage your health, physically and psychologically. In the UK we have the second-longest working hours in the developed world, just behind the States and we now have longer hours than Japan.”
An Amicus survey found that one in five workers was put off sex because of long hours and a third said they did not have enough time to spend with their children. Long hours also lead to tiredness, lapses in concentration and higher accident rates.
Binge drinking is another product of the long hours culture. When young workers do not have time for leisurely relaxation and recreation they findthat hard drinking and drunkenness brings them a few hours respite from thestresses and tensions of endless work. But it does long-term damage to their health and leads to violence and anti-social behaviour.
Another factor in lengthening working hours is the target culture that has invaded many workplaces, where lower and middle management are constantly set new targets to improve performance. Failure to meet targets leaves them vulnerable to sacking so they drive those under them all the harder. Andsince it is unrealistic to imagine performance can be improved under all circumstances, this culture also encourages corruption, of middle management falsifying figures to make their performance appear better than it is.
The effects of long working hours on our children are also devastating andthere is a developing anti-child culture. Once children were seen as thefuture of the nation and our pride and joy. Winston Churchill, in the middleof the Second World War, spoke of the importance of “putting milk into babies” as a vital investment. Now children are seen as a nuisance, theydemand our time and attention and they distract us from work. Childcare is no longer taught in schools and few young adults have grown up with anyexperience of minding younger siblings. Many are terrified of the responsibility.
Long hours and big debts put many young people off having children at all.We are told that bringing up a child will cost us £180,000. Those who dohave children are regarded as self-indulgent and a burden on society.Overweight pregnant mothers are told they are a burden on the NHS. Anyone who takes time off work to look after children is regarded as a selfish slacker.
The rich of course are exempt from this disapproval. And the ruling classdoes not need to worry about the next generation of workers. There are thousands in Africa, Asia and eastern Europe – fully adult and trained at another country’s expense – queuing up to come to Britain to escape the direpoverty and wars that imperialism is imposing on their home countries.
It is not surprising that the recent Unicef report found that Britain’s children are the unhappiest in the developed world. The Unicef report covered six different areas of well-being using 40 separate indicators. In five of the six areas, British children came in the lowest third, making them overall the unhappiest children in the western world. In particular their own assessment of their well being was very low. This is hardly surprising in a society that regards them only as a nuisance and a burden.It is heartbreaking to compare them to children in socialist countries who are so confident and high achieving because they know their whole community treasures them and takes pride in them.
Britain is one of the few countries around the world that does not celebrate International Children’s Day, usually set on 1st June or in late May, though some countries celebrate it at different times.
What can we do to combat this culture of debt, long hours and child neglect? We can call on the trade unions to fight for higher wages but this alone is not enough. The credit companies would probably raise everyone’s credit limits and the Treasury and the banks would look upon it as a fresh supply of household deficit spending. This is a problem that has to be fought on many fronts.
Karl Marx said: “Workers of the World Unite, you have nothing to lose but your chains.” Now the debt culture is fooling too many workers into working all hours to pay for the use of the chains. It sets workers at odds with their unions in wanting to work long hours.
We must support the trade unions in their fight to defend the 48-hour limit. And we must involve them in discouraging debt, supplying debt counselling and campaigning for the restoration of the social wage – in other words to reverse the privatisation of the last two-and-a-half decades and restore free healthcare and education.
We must support the campaign to restore council housing, which will bring down house prices. We could demand that mortgage payers in serious trouble and facing eviction should have the right to demand that their local authority buy out the house from the mortgage lender by compulsory purchase– at a price that takes into account what has already been paid – and thenthe family remain in the house as council tenants. And we must call for the restoration of the Rent Act.
We must call for stiffer lending controls, so that banks and finance companies who lend to people they know will struggle to keep up payments cannot pursue their mis-sold loans in the courts. We must definitely call for the restoration of strict gambling controls and oppose the opening ofsuper-casinos.
We must use all our propaganda resources to combat the culture that judges people by the possessions and try to restore a sense of community in the working class. We must also use our resources to remind people that after a socialist revolution, personal and household debts would be abolished overnight. Probably in today’s anti-political and cynical culture not many would believe us but it is one benefit a socialist revolution can deliver instantly.