‘Help me Milton…’
“If everyone demanded peace instead of another television set, then there’d be peace.”
― John Lennon
The period immediately after WWII saw the introduction of modern consumerism in western European economies.
Consumerism as a political force was closely tied to the Cold War. Consumerism was a totem of the idea that in the ‘West’ ordinary people are free politically and economically and that these freedoms are interrelated and interdependent.
Consumerism was founded on the idea of disposable income, which in turn was founded on the idea of discretionary expenditure. Discretionary expenditure is money you spend as and where you choose. What was innovative about post war policy in the west was the idea of creating mass discretionary expenditure and corresponding mass economic’ freedom’.
In order to build a consumer society it was necessary that the economic system was capable of producing enough disposal income for ordinary people so they would have something to spend. This gave rise to the concept of a living wage; it was the accepted norm that one man could earn enough to keep a family. Where this did not happen the state would take up the slack. It is important to realise that this was NOT the idea of the economy providing each person with enough to live on but the idea of having enough on top of necessities to buy stuff just because you wanted to. Discretionary spending defined the idea of western economic freedom in the post war period.
The three main areas where western states stepped in to ensure provision of necessities adequate enough to support a consumer society were Education, Health and Housing. But it was NEVER the intention of western states to provide the most egalitarian education. or the best availablehealthcare. or the highest possible quality public housing. At no time did western states provide more of these necessities than was just enough to support a consumer society. This support for consumerism defined the limit of what elites were willing to support in post war welfare provision.
For an elite under sustained domestic and international moral and political attack, what made the costs of consumerism worthwhile was that it supported the political message that the enemies of freedom were ‘out there’ and that the defence of individual freedom should be facing outwards to deal with this.
The ideological message of consumerism was that :
The enemies of freedom are alien (to our ‘way of life’).
The alien enemies of freedom were pro coercive state (while we are pro ‘welfare’ state).
The enemies of freedom were extremist, (and willing to sacrifice ‘freedom’ in favour of equality or justice whereas we have the best of both worlds)
The importance of these concepts to the rehabilitation of Capitalism in the post war period can’t be overstated. In essence, consumerism was/is a fusion of nationalism, rhetoric of economic democracy and a limited amount of material progress. This ‘facing outward’ strategy was completely successful for western elites and has shaped the entire conception of economic freedom ever since.
Since the end of the Cold War, ‘democratic’ discretionary expenditure has come under repeated attack culminating in the ‘Credit Crunch’ period that has seen double digit (roughly) falls in the spending power of the vast majority of ordinary consumers across the western world. In Mediterranean economies this fall has been magnified by a large factor. A fall in spending power tends to be expressed disproportionately in the purchase of discretionary items. After all, you are less likely to buy another pair of training shoes if you have a large, outstanding electricity bill. This explains in large part the hotly debated deflation seen in developed economies. There is deflation. It is deflation in discretionary purchases and it reflects the effective end of the mass consumer society.
This deflationary effect has been magnified by the abdication of the Monetarist state from necessity provision. This withdrawal from provision of healthcare, education and housing has been justified by the Credit Crunch and the need to restructure welfare expenditure. The effects of the state no longer taking responsibility for housing, education and health are becoming increasingly clear. University tuition fees and housing mortgage cost now comprise a large and ever increasing part of the budget of newly forming households. The forthcoming rollout of medicine privatisation will intensify this effect. Expenditure like this requires credit for most people. The requirement for credit to provide necessities as opposed to desires or investments produces a Permanent Credit Economy.
Perhaps this is really just the old argument about state vs. private provision of services? Perhaps it is simply a matter of people re-ordering priorities- a few less trips to the cinema, no holiday this year. In other words is it possible that the Monetarist state abdication for provision of necessities will have no fundamental, negative effect on the economic well-being of the majority of people?
The answer is no. It is easy to see this if we consider the risks involved. Private provision of housing, medicine and education all entail an element of private risk- or put more accurately, monetisation of risk. If I buy a house, invest in education, or decide on a private health policy with various deductibles etc. I am undertaking private, personal risk. The house may go down in value. The degree I get may be worth less than the cost of obtaining it. The health insurance I have may not cover a serious illness or accident. This much is obvious.
But underpinning this risk/insurance model is a credit model that is harder to see at first glance. It is this credit that allows the monetisation of risk. If you buy education, housing, or medicine you do so on credit. In other words you don’t pay for these things outright; you can’t afford to
Anyone who obtains credit pays a premium for that credit. This premium reflects the risk inherent in the agreement. The risk that the borrower will default; the risk that the loan will not be as productive as another agreement. This premium is the interest rate. The interest rate is the means by which the risk is monetised; it is the means by which wealth can be extracted from the risk. But more important than the financial loss to the borrower is the more subtle loss of freedom; the freedom of the borrower is curtailed by the credit agreement. You do not have a money history but you DO have a credit history. And it follows you around.
However, the most important loss of freedom occurs on the level of society as a whole. If a group of people is effectively self insured through the public provision of goods (as in state provision of health, education and housing), then no credit monetisation of risk is possible and no extraction of wealth is possible. Further, no imposition of outside agreements is possible. The people who self insure are SOVEREIGN; that is to say self enclosed, beholden to no one.
This is more than just collective sharing of risk. This is sovereignty. Sovereignty is by definition a self-sealed system that no outsider can break into. Sovereignty is the key to economic freedom. In fact, it is the only real economic freedom there can ever be. All other talk of economic ‘freedom’ is simply political rhetoric.
Once you understand the full power of public ‘sovereignty’ as an ‘alien’ economic and political force, you understand the horror that capitalist elites felt at the realisation they were infected with it. At the end of WWII, just as China was passing into Communist control and away from western influence, so health and education at home was being taken over by another foreign power! The sovereign plebs!
Like a cancerous tumour, this alien sovereignty was growing inside the bowels of the weakened capitalist system. And just like the cinematic victims of the Alien ‘face hugger’, elites were forced to supply the parasite with blood and oxygen or die! Only in this context can we truly understand the endless western Cold War emphasis on witch hunting the ‘alien’ and the ‘enemy at home’ . In effect, for sixty years western elites have been shrieking in pain and terror like Lieutenant Ripley in ‘Alien’:
‘Get it out! get it out!’
Western elites see the end of state provision of health, education and housing as a great healing. They see the end of the consumer society as a great boon. No more economic sovereignty for the plebs. They will learn again their true place in the scheme of things. The tumour of public sovereignty has taken forty years of painful surgery and Monetarist radio therapy and still it is not all been removed.
But we are getting there.
For we aliens however, the end of sovereignity is the end of the consumer society. For aliens like us it is the end of whatever economic freedom we had. We can look forward to a future in a glass bottle in the laboratories of the Weyland Corporation.
I hope you know who the real enemies of YOUR economic freedom are now.