International

We have to cut spending. That’s what the European Union says and that’s what our Prime Minister Mark Rutte and Finance Minister Jeroen Dijsselbloem say. So how can it be that in the last twenty-five years that our Gross Domestic Product (GDP) has risen by 35%, while the level of provision of public services has deteriorated? And how can it be that the rise in prosperity has not been reflected in our disposable income, which has not risen in fifteen years, after rising by a mere 20% or so in the decade which preceded that period? We are richer as a nation, yet the state must cut more and more services, while as individual consumers we also have less to spend. Something here simply doesn’t add up.

The answer is complicated. What’s certain in any case is that businesses are demanding a bigger slice of the cake: it was 2% in 1992 and now stands at 10%. Within this broad category, moreover, there’s nothing resembling a fair division, with the self-employed suffering high rates of bankruptcy, while major corporations cultivate gigantic reserves. The US has seen an enormous spike in big banks’ profits. Goldman Sachs is raking it in like never before. In relation to private individuals’ incomes, also, growth is hugely skewed, with the poor getting poorer and the rich richer. The number of dollar millionaires in the Netherlands grew in 2012 by 12.9% to a total of 191,000. The greater wealth of the last twenty-five years has not been shared out fairly. Capital can never have enough: big corporations accumulate more than is needed for investment in the real economy while rich individuals cultivate ever greater fortunes, much larger than any normal person has use for. The bigger the stocks of capital of corporations or private individuals, the easier it is for them to get high returns on this capital.

Of course, tax evasion also comes into this. The richest firms and individuals pay proportionately little tax. Ordinary people and small firms pay much more. They have no tax advisors or trusts companies via which they can salt their money away in tax havens. Instead they pay the highest rates of income tax and proportionally the most VAT.

It can’t be denied that the state is also demanding a bigger slice of the cake. This is somewhat strange, given that for years now all sorts of essential responsibilities of the state have been farmed out to private corporations and that this was supposed to make everything less costly. This is, however, a fallacy: health care costs are rising steeply, not in the first place as a result of an ageing society, as is so often asserted, but through bureaucratisation and wrong-headed incentives based on the transformation of health care institutions into market participants with shareholders. In this way the public sector indirectly makes the same group which is already rich still richer. In education a similar process can be seen: educational institutions are forced to compete and have managers who do very well for themselves, but at the same time are destroying the quality of education.

For socialists none of this is news. We know that capital will grow at the expense of all we hold dear. The entire discussion over the 3% EU norm is not something which is value-free, but a conscious attempt to reduce the size of the state. At the same time the EU encourages a race to the bottom which results from pressure on tax revenues from those who in recent years have profited most from increased prosperity. Firm agreements on minimum tax levels for big corporations are absent. Tax evasion is tackled, if at all, with reluctance. And social rights are stripped ever further down. All of this for no other reason than to make capital grow, while most people, even of the middle classes, grow poorer, public services such as education deteriorate, and the government claims that it can offer fewer safety nets to those who will not or cannot enter the rat race.

It may still seem a distant prospect, but things will often change unexpectedly if people are pushed too far. You can try to keep people down, but a moment will arrive when “enough is enough”. Part of the world is already in flames. Our hope is that in the near future there will be a timely shift of course and that we will once again be able to build a society where ordinary people take centre stage and where the wealth is divided fairly. The European elections of 2014 offer an opportunity to take a step in the right direction, but this will require the heavy defeat of the right. A left majority in the European Parliament can’t achieve everything, but it can make a difference.