Getting economy back on track

Have your say

What is the difference between food banks and wages? The answer is, not much.

During the two post war decades, 50s and 60s, the biggest boom in the economic system back to the beginning of the industrial revolution in the 1750s took place. Fueled by what?

Certainly not by tax cuts. Fueled by a phenomenon called the permanent arms economy. Each year, more money was spent on arms through these two decades than was spent at the height of the second world war.

Two exceptions to the industrial arms producers – Germany and Japan, the losers of the war.

Corresponding to this unheard of boom, these two societies marched ahead in economic growth faster than anybody. Why? They got the gains of the arms economy without the costs.

The real indicator of these amazing days was the profit level – 15 percent. But the arms economy could not last.

In fact it was the USA losing the Tet Offensive in 1968 that spelt its ending. Americans decided that with all the arsenal the world had ever seen, they could not even beat a bunch of peasants. Why spend so much? They did not cut the absolute amount. They cut the rate of growth. But this was enough to send the wobbles through the system.

Anyone remember the hyper-inflation of the early 70s? The doubling and more of unemployment? The Labour Government of the time cutting the wages of working people faster than any government for decades? The 70s swam into the 80s and 90s – print your own wage rise, debt.

The debt bubble grew, economic growth limped on a false premise. In fact the other parallel decade is the 1920s, which was equally debt engineered. And what took place to end that party? Our party has also ended. The average rate of profit today – 7.5 percent, exactly half of the famous Macmillan/Beatles years.

The big 21st century question – how do we get the profit rate back to the teens? Cut wages. Cut buses. Cut schools. Cut hospitals. Note with these last two, they have to be public, not private. In other words, cut the social wage and cut the monetary wage. Freeze incomes and let inflation rip. Earnings are forced down in the face of climbing living costs. There was once a floor to people’s impoverishment called benefits. Wages nearing the levels of benefits makes little sense. Cut benefits. Stop benefits. Introduce food banks. The circle is completed.

Colin Frost-Herbert, Lewes