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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

tightening the belts of the poor « Previous | |Next »
January 6, 2013

The politics of austerity in the UK being implemented by the Conservative Cameron Government, highlights how neo-liberalism's mode of governance-- through corporate power, mistrust of democracy, and the maintenance of market freedoms----reshapes welfare.

The welfare system is increasingly being shaped both to integrate it with work (eg., welfare to work) and to make significantly, to make work pay. The middle class is being squeezed as low pay (the working poor) moves up the income scale. So there is increasing in-work support for low and middle income households through tax credits for childcare costs which have soared, so much so that many parents, particularly women, can not afford to work. The joys of home ownership, private property, individualism, and the liberation of entrepreneurial opportunities look increasingly distant.

However the politics of austerity cut into these tax credits of the working poor. So neo-liberalism can be interpreted as as a political project to re-establish the conditions for capital accumulation and to restore the power of economic elites. David Harvey points out that this re-establishment was done at an ideological level by:

capturing ideals of individual freedom and turning them against the interventionist and regulatory practices of the state, capitalist class interests could hope to protect and even restore their position. emphasized the liberty of consumer choice, not only with respect to particular products but also with respect to lifestyles, modes of expression, and a wide range of cultural practices. Neoliberalization required both politically and economically the construction of a neoliberal market-based populist culture of differentiated consumerism and individual libertarianism.

What is now happening with the politics of austerity is tightening the belts of the poor whilst loosening those on the rich.

The neo-liberal state withdraws from welfare provision and diminishes its role in arenas such as health care, public education, and social services, which were once so fundamental to social democratic liberalism, it leaves larger and larger segments of the population exposed to impoverishment. The social safety net is reduced to a bare minimum in favour of a system that emphasizes personal responsibility. My health-care and education is my personal choice and responsibility.

This results in an ever widening circle of working poor, for the only way that I can satisfy my health needs in the market is through paying exorbitant premiums to highly profitable insurance companies. Or high child care costs or educational fees.

| Posted by Gary Sauer-Thompson at 8:35 PM | | Comments (4)


welfare has become a prop for the failure of neoliberal capitalism to deliver full time jobs or decent wages.The prop has partly taken the form of subsidising both poverty pay through tax credit; and subsidising the high private rents through an expanded housing benefit bill.

The income disparities are becoming more severe

"The welfare system is increasingly being shaped both to integrate it with work (eg., welfare to work) "

An example is Gillard Labor's decision to reduce the income of nearly 100,000 sole parents. This came into force on January 1 2013 and it was done by shifting the parents from the single parent pension to Newstart.

Russell Marks in ALP must make a Newstart on its broken welfare policy says:

There were plenty of line items the budget a social democratic government could have attacked if it wanted to save money, such as subsidies to oil and gas companies. That Labor chose single, stay-at-home parents reflects its unwillingness to defend the welfare state, which is widely acknowledged as one of the most important social democratic institutions in history.

Marks says that the representatives of the ALP can no longer articulate a social democratic defence of the welfare state.