John Maynard Keynes famously claimed “look after unemployment, and the budget will look after itself”.
He was refuting the austerians of his time, who believed the best way to balance the budget was to attack it head on with tax rises and spending cuts. In Keynes’ view, employing people and otherwise stimulating the economy would kick start a process which would increase economic activity, getting people off unemployment benefit into work and paying taxes – thus balancing the budget. Conversely, he believed austerity would put this process into reverse and ultimately be counterproductive to its stated aims.
There is a similar but broader dichotomy at the heart of contemporary economic analysis: the idea that we cannot afford to provide basic human needs such as housing, education, health, and subsistence. During the UK general election campaign, Conservative MP and now First Secretary of State Dominic Raab responded to a woman who criticised cuts to disabled benefits by saying “I can think of lots of things that I would like to avoid making difficult decisions on and lots of areas like the health service or schools that I want to put even more money in. But unless you’ve got a strong economy creating the revenue, it’s just a childish wish list.” In response to this, those on the left made claims such as “we are the 5th richest economy in the world” and that we “can afford” these things. These arguments still imply needs are a luxury we must be able to afford.
