Friday, July 30, 2010

The axe falls – will anyone take on the axeman? (2010)

From the July 2010 issue of the Socialist Standard
The Con Dem coalition government is promising a new “Age of Austerity”. What should workers do about it?
Economic crises are like a universal acid, washing away all bullshit, leaving behind the unvarnished truth. The kind of economic analysis found just yesterday only in obscure academic journals or little-read Marxist periodicals is today on everyone’s lips and is assumed to describe the most elementary and obvious facts. It seems we are again being compelled to face with sober senses our real conditions of life. Only yesterday, for example, we were assured that the economy would be rescued by an injection of newly printed money and by bailing out bankrupt banks. Now, the G20 finance ministers have told us it’s time to sober up and get real. At their meeting held in Busan, South Korea, on 4-5 June, they announced an end to Keynesian illusion, and a return to the law of value. Sure, the rich got their bail-outs – the famed discipline of the markets is not for those with soft hands. But now it’s time to snatch away the buckets and leave ordinary working people to their fate in the sinking ship. Billions of pounds of state handouts for the capitalists; a new round of austerity for the working class.

The new chancellor, George Osborne, took the announcement from the G20 as a vindication of his own outlook and, with the prime minister, David Cameron, promptly embarked on a propaganda campaign to prepare us for the worst. Although Cameron’s speech on 7 June was presented as an exciting opportunity for radical change, with plenty of fine words about strengthening and uniting the country, about consultation and debate and “difficult decisions”, it was actually, as the Financial Times admitted, a “softening-up exercise for the real pain to come” – namely, cuts in state spending that would be “more savage than anything contemplated by even the Thatcher government”. By sleight of hand, the origin of most of the debt, the speculative activity of capitalists, has been hidden. The blame and the bill is instead being laid at the door of the state services relied on by the poorest people in the country and, as unemployment rises, more and more workers. Cameron says that the cuts he is preparing will affect "our whole way of life". But as trade unionists were quick to point out on the BBC website, what Cameron meant was your way of life, not his nor that of the rest of his class. As Unison general secretary Dave Prentis told the BBC: "There was nothing in [Cameron’s] speech that told the rich, the banking and financial sector or the city speculators that their privileged way of life will change."

Cameron and Osborne are being urged on by the credit ratings agency Fitch, which warned that the result of delay or hand-wringing over the savage cuts, which are not nearly savage enough to please Fitch, would be a downgrade in the country’s credit rating. The pressure is also being piled on by world events. As the Socialist Standard was going to press, the global economy looked to be heading into more big trouble – there were question marks hanging over the viability of eurozone banks; the euro continued to edge closer to collapse; US employment took a further nose dive; Germany and Spain announced new austerity measures; Hungary hinted that it might have to default on its debt, sending its stockmarkets and currency plummeting; and market risk and fear indices ticked upwards. The axe is falling, and it’ll be the working class that’ll take the worst of the hit. We were told the gory details when the government’s ‘Emergency Budget’ was presented on 22 June.

There was one interesting detail in Cameron’s speech that perhaps needs some explanation: Greece. “Greece stands as a warning of what happens to countries that lose their credibility, or whose governments pretend that difficult decisions can be avoided,” said Cameron. He was presumably referring for rhetorical effect to the policies of the Greek government in the recent past, which were little different in substance from those pursued by previous Labour and Tory governments before the universal acid of crisis made everyone change their minds. In terms of the current austerity decisions being forced on Cameron’s government, the Greek government seemed little slower than he has been in attempting to implement the necessary (for capital) reforms. The Greek prime minister, George Papandreou, accepted bail-out money from the EU and the IMF, then set about softening up the population for the demanded cuts, such as freezing public-sector salaries, raising taxes and slashing pensions, much like Cameron is doing now (although without the immediate threat yet of bankruptcy or IMF intervention).

So why the reference to Greece? There is indeed an important lesson to be learnt from Greece, one that has got Cameron and his class concerned. The lesson is to be taken not so much from the excesses or otherwise of its government, but the famed rebelliousness of its people. Instead of meekly accepting that it must pay the price for capitalism’s crisis, and waiting for the austerity measures to be handed on down, the Greek population immediately set about angrily resisting them. There was a general strike in the country on 5 May along with a 100,000-strong demonstration that ended in the death of three people (shamefully, these deaths were not at the hands of the police, but of demonstrators who set a bank building on fire). Anger over the deaths from all sides threatened to derail the protests. But since then, the struggles have continued. There have already been further demonstrations and strikes by transport workers, dock workers and journalists, and further strikes were on the cards as the Socialist Standard went to press. Indeed, as the Wall Street Journal amusingly reported, when a tourism workers’ union planned to officially announce strike plans, the union overlooked the fact that Greece’s journalists were striking on the same day, so nobody showed up to the planned news conference.

The ruling class has been watching these developments nervously, and the drama is far from played out: “… the main concern,” says a report from Reuters, “is whether governments rethink austerity measures as a result.” (An astonishing admission on the face of it – that popular opinion might influence the decisions of democratic governments is seen as a “concern”.) Further strikes and protests have been planned in Greece, France, Germany, Romania, Spain, Italy, and Portugal – and of course here in Britain, there is the ongoing BA strike, the coming BT strike, and perhaps more to come. The “concern” though is for now muted. As Reuters points out, the strikes in the rest of Europe are expected to be “tamer” than the Greek battles, and Britain’s tamer still because there has just been an election – the government can therefore rely on its democratic legitimacy to force through measures. That and unions are weak – membership has fallen since Thatcher fought the unions in the Eighties, and, according to the latest figures, continues to fall today (the influx of new members worried by the crisis has so far been offset by losses due to redundancies and retirements). And the success of Thatcher’s anti-trade-union legislation means more and more strikes are being challenged in the courts on highly dubious grounds, threatening to make strikes all but illegal.

But muted concern or not, the ruling class must still be asking itself just how much austerity the working class will be prepared to take. The working class has already lost many of the reforms introduced as part of the social democratic consensus after the Second World War – it traded them for a mortgage and a credit card. Now these too are in danger of being snatched away. The capitalist class and its governments are scrabbling around for the least-worst options to restore profitability without provoking working class unrest. It seems unlikely that the working class and its organisations are strong enough to stop these austerity measures being imposed, let alone imposing their own demands. But we must start from where we are. David Cameron and the new government will be expecting that you’ll just take whatever’s coming to you. We must try to prove them wrong.

While we’re fighting these essential defensive battles, we must also lift our eyes from the present game and consider just what kind of game we’re playing, and whether it’s a fit one for us and our children and grandchildren. Greek public opinion, as hinted at in our report from the country last month, expresses anger, but also confusion. As Stathis KouvĂ©lakis, a teacher of philosophy at King’s College, London, says, in an interview with (see here), Greek opinion is divided and oscillating: “[T]he oscillation is between anger and resignation, I would say, between the will to act, to protest, to do something about this, and the perception that perhaps there is no credible alternative…. These are the terms of the debate, and it’s still open.” This is where socialists have their most vital contribution to make – a clear idea about alternatives is not mere utopianism, but an important ingredient in inspiring successful struggle. An upturn in class war, such as we’re seeing in Greece, and may perhaps soon be seeing in this country too, is the only basis on which socialism can begin to make sense and seem like a credible and possible alternative to capitalism for the working class as a whole.
Stuart Watkins