Does London Hold Lessons for the United States?

There is an all too predicable Op-Ed in today’s NYT (“Cameron’s Broken Windows”) by Richard Sennett and Saskia Sassen. The core argument: the riots in London are a product of austerity and if the Tea Party has its way, the same riots may be heading our way.

According to the authors, “Mr. Cameron’s austerity program is the Tea Party’s dream come true” and the spending cuts “have led to the neglect and exclusion of many vulnerable, disaffected young people who are acting out violently and irresponsibly — driven by rage rather than an explicit political agenda.”

The authors conclude:

Britain’s current crisis should cause us to reflect on the fact that a smaller government can actually increase communal fear and diminish our quality of life. Is that a fate America wishes upon itself?

Obviously, there is any number of explanations one could develop for the riots in London.  One should not be surprised with the general argument and the suggestion that efforts to reduce the growth of federal spending could lead to a similar outcome in the United States (indeed, I would have been shocked if this argument did not emerge in the NYT).

While I think the argument is a bit tortured when addressing the current problems in London, it seems to me that the kind of changes necessary to address the long-term structural deficit and debt and the $54 trillion in unfunded liabilities could be quite destabilizing.  Of course, a failure to make the necessary reforms could also prove quite destabilizing, as generations are consigned to confiscatory tax levels, stagnant growth, and little hope of prosperity.

Is London our future?

14 thoughts on “Does London Hold Lessons for the United States?

  1. Marc,
    I can’t believe how stupid Sennet and Sassen are. There haven’t actually been any spending cuts yet! The cuts are proposed for the coming year – so how they can have led to the ‘exclusion of the young and the vulnerable’ is not clear. In the last ten years government expenditure has increased from 39% of GDP to just over 50%- 6% of that increase coming before the financial crisis. The ‘cuts’ if they are actually implemented will take government spending back down to about 44% of GDP in 2015. Clearly in Sennet and Sassen land that counts as ‘small’ government. Perhaps it is the entitlement culture that this level of spending generates that is the real culprit. But of course, they would never dream of considering such an explanation.

  2. Thanks Mark. This is precisely why I find their argument a bit tortured when applied to the current situation.

  3. It seems we will have riots regardless of the path taken.

    Witness riots in Greece and other places over attempts to scale back massive social spending, riots in Paris due to unemployment and cultural conflict, riots in London due to…..?

    Mark Steyn makes an argument in America Alone (among other places) that the rise of a welfare state that cares for all one’s needs results in massive civil unrest when the welfare state runs out of money to continue, and attempts to scale back can only result in angry riots from well-fed, bored, semi-educated, leisure classes with a massive sense of entitlement, doing so because their livelihood is being taken away.

    Several columns on what is going on in London have noted that these are coordinated looting attacks, where one part of a group sets a car on fire, distracts the police, then loots elsewhere when a sentinel gives a signal by cell phone that the area is clear. What sort of feeling could drive such behavior unless there were some sort of group feeling of “we deserve these looted items”? I submit that the entitlement mindset underlies much of this behavior in its generation.

  4. I agree: there is an entitlement mindset and it underlies much of the behavior in this generation BUT i fail to understand how increased government spending and structural deficit rest on the [poor’s] entitlement. Also why don’t you guys talk about corporate welfare and the absurd subsidies dished out to rich companies (In 2001/2002 the value of US cotton production amounted to $3 billion at world market price with subsidies of $3,9bn in that same year exceeding the value of the product).

    It is entitlement to the poor that counts THE absurd military spending for pointless wars and occupation of foreign lands is about right. The whole debate is not fair . .

    1. Of course, we have been writing about these things here (and elsewhere). It might be useful to look back at earlier posts on
      (1) corporate welfare,
      (2) tax expenditures that benefit wealthy transfer seekers and serve as our de facto industrial policy (and the insanity of the GOP using anti-tax pledges as a justification for preserving)
      (3) the need to reduce defense spending dramatically and dismount from the seemingly endless number of wars.
      (4) the failure of Democrats and Republicans to seriously engage the long-term fiscal crisis.

      Of course, these are some of the things I am most passionate about.

      We may not agree on all the particulars, but I guarantee there is little support among the contributors of Pileus for the practices you describe–indeed, quite the opposite. Thanks for post. I look forward to many more!

  5. That aligning public programs and spending with the reality of available funding could result in some disaffected individuals rioting and otherwise engaging in various forms of tantrum throwing is of no value in evaluating the rightness or wrongness of making changes and reductions in services.

  6. I should add that what Britain’s experience does tell us is to be prepared for the likely mischief we will see when we do cut services, or, perhaps, even when we endeavor to simply discuss changing them.

  7. The reference to “Cuts” is as misleading in the UK as here. Total government spending in the UK will continue to rise in absolute terms. Only the amount of increase is being “cut. See the “total expenditure / total government” graph at: http://www.ukpublicspending.co.uk/.

    One reads about the cancellation of Labour’s programs aimed at youth unemployment but the fact is those programs were negligible. From the Work and Pensions Committee of Parliament, after the election last year:

    “The Future Jobs Fund (FJF) was announced in the 2009 Budget as a part of the Young Person’s Guarantee. Funding of around £1 billion was pledged, to be spent between October 2009 and March 2011, to support the creation of 150,000 temporary jobs, primarily for 18-24 year olds who had been out of work for at least six months. As part of the March 2010 Budget, the scheme was extended for another year to March 2012
    DWP statistics show that in the first four months of the scheme (October 2009 to January 2010), 8,660 DWP claimants started a FJF job (of which 5,920 were aged between 18 and 24).”

    Right? 150,000 jobs envisioned, 8660 delivered. That is a 95% shortfall. These programs were nominal, negligible, ineffective and utter frauds on the people.

  8. The spending cuts may not have taken place yet, but haven’t student fees for the UK equivalent of the “community college” already risen? I know the type here in San Francisco that take a few community college classes, live off unemployment and student aid, maybe sell some ___ on the side and generally lead a life of partying and DJing. A disruption to this low level “good life” and a catalyst such as a police shooting can certainly contribute to a tidal wave of vandalism etc.

    London must have a similar socio-economic group, and a much larger one at that.

  9. I didn’t think these riots were even about the cuts at all. Is this more about cultural marginalization?

  10. @ehisodijie
    If you want to see an attack on corporate welfare on this site and who the recipients have been see Marc’s post on ‘From Political Exchange to State Vampirism’. I don’t know anyone on this site that supports agricultural subsidies.
    I also don’t know anyone on this site who supported the bail-out of the big auto companies – not sure you would get such clarity from the likes of Ha Joon Chang.

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