This was submitted as a ‘perspective’ document for the bulletin of the last IS Network conference.
Theses on austerity, and how to fight it
I. Austerity is a class strategy for installing (or conserving) a capitalist growth strategy under the dominance of finance capital. Whether it has been implemented in New York City in 1975, or in Greece in 2013, it is the financial institutions and their materially connected state apparatuses (treasuries, central banks, finance ministries, etc) which have been at the forefront of driving this policy.
II. Austerity is a crisis response. Gramsci warned that in any situation of structural crisis, “the traditional ruling class” was at a considerable advantage over opponents because of its control over the dominant institutions, its loyal cadres of supporters in the ideological apparatuses, and its overwhelming economic and political strength. Its ideological interpretations of the crises would prevail, and it was in a better position to impose its preferred solutions. Austerity was first floated immediately around the time of the bank ‘bail-outs‘. The Right began to blame government over-spending for the accumulating deficits, and treated these as the major political element of the capitalist crisis. In so doing, they engaged in an adept prophylactic move against the Left. Knowing that there could be a powerful political and cultural reaction against neoliberalism and the banks, and a popular demand for nationalisations, they began to displace anger onto the government. A ‘common sense‘ developed according to which there was just not enough money, and the government was going to have to begin tightening its belt just like everyone else.
III. Austerity does not just mean ‘cuts’. Nor is it a deficit-repayment strategy. Many of the measures implemented as part of austerity - tax cuts for corporations, privatizations, creating business opportunities in public utilities - are either of no use to reducing deficits, or they make it worse by sapping revenue or inflating costs. There are rational reasons why capitalist states want to minimise deficits, not least of which is the disciplinary effect such goals exert on public spending and thus on democratic demands. But in the case of austerity programmes, deficits are a pretext for far more fundamental transformations. The complex of policies labelled ‘austerity’ add up to a seismic shift in the political economy, the class structure and the culture of the capitalist states implementing such policies. The end results will be: a) a more polarised class system, with greater stratification within classes, a weaker working class, and the greater dependency of all classes on financial systems; b) a further penetration of capital, particularly but not exclusively financial capital, into the state, and the weakening of democratic institutions; c) the further spread of competitive, ‘entrepreneurial’ values, and the further mediation of human relations by markets.
IV. Austerity is not simply stupid and ineffectual, as Keynesian critics argue. Of course, they are right to say that cutting state spending at a time of economic weakness will reduce aggregate demand and thus weaken growth further. But this is an intended effect. It was exactly the predictable effect of implementing austerity in Britain from 1979-82, and it was the predictable effect of the ‘Volcker shock’ in the United States. It not only disciplined labour but it helped institutionalise economic priorities that fit the needs of the leading sectors of capital: militant counterinflation, balanced budgets and strict market discipline for everyone except the banks. That it succeeded owes much to the discovery of new vectors of growth in south-east Asia, permitted a global economic recovery to begin in 1982. This allowed the austerity discipline to be relaxed, allowed the austerians to claim victory, and ensured future electoral successes for neoliberal governments in the US and UK. And indeed, some form of sustained recovery for the global economy in the next few years cannot be ruled out. It is far from impossible that George Osborne will be able to go into the 2015 general election claiming some sort of victory - he is already bragging about green shoots of recovery, and promising a further sustained attack on welfare. And if the Tories can prove to their voters that they can implement austerity against all political opponents, and cruise to a general election on the back of growth, they will have at least temporarily rebuilt their base, which was in decline. Austerity is, far from being stupid, a form of intelligent ruling class praxis, which applies lessons from past class struggles and previous crises to resolve this crisis of capitalism in ways that are in the interests of the dominant sectors of capital.
V. Austerity does not involve the withdrawal of the state from the economy, as per the ‘free market’ myth, but rather the further penetration of capital into the state, and the re-organisation of state apparatuses to better accommodate the accumulation imperatives of specific sectors of capital, above all finance. In general, the state supplies not just the social reproduction necessary for capitalist growth, but also, as Mariana Mazzucato has demonstrated, the primary investments that make capitalist enterprise work from start-up capital to research and development. The state is integral to the production process and will continue to be so. But its current reorganisation is about bringing capital more and more into the material spaces of the state itself, on terms which leave capital’s autonomy intact. The way this works can be seen in the ‘bail-outs’. The government created a public company, UKFI, to organise the ‘bail-outs‘ at arms length from any government control, such that state funding was pumped into the banks in exchange for no public influence over the banks‘ decisions, even on something as basic as interest rates. In theory, the government owned large chunks of these banks. In practice, this was a partial privatization of the Treasury. We see a similar pattern in the UK with policies like ‘free schools’ and with the de facto privatization of the NHS, where public services are re-organised to resemble ‘markets’, with competitive structures built in, and opportunities for private sector investment. The idea in the case of ‘free schools’ is that businesses will take over and run state-funded private schools that will compete against state schools. All of these processes undermine Britain’s already weak democratic institutions, from parliament to local authorities, and they particularly limit the extent to which popular, working class interests can assert themselves. They register within the materiality of the state the changing balance of class forces in society.
VI. Austerity is not necessarily unpopular. Ideology is incomplete and ‘contradictory’, and therefore no government could expect to achieve total acquiescence in its goals. But it is a matter of what underlying precepts are accepted, what people think is the dominant issue at stake. In the UK, almost all austerity measures aimed at the poorest have proven to be popular in opinion polls. Even more contentious measures such as ‘free schools’ have gained majority approval in some polls. It is worth examining why this is. Ipsos Mori’s ‘Generations’ poll provides some of the answers. There is been a long-term, generational collapse in support for the welfare state. Ironically, the voting demographic most supportive of welfare are otherwise most likely to be right-wing - the elderly population. Why should this be? Two factors are likely to be key. The first is that more and more of the welfare state is experienced not as a collective provision but either as a bureaucratic nightmare (the job centre), or as a vicious competition for scarce resources (this is how even state school placements are treated). The second is that while Thatcher was only able to exploit those antagonisms to a degree, inserting neoliberal ideas where social democracy had retreated, New Labour was able to actively sell neoliberal ideas about welfare to its working class base. It was notably in the New Labour period that social resentment against ‘chavs’, ‘feral children’, ‘nightmare neighbours’, and ‘ASBO kids’ was effectively aroused and channelled into an authoritarian anti-welfare politics. Or take the case of ‘free schools’. Of course, state schools and the national curriculum bore kids to tears. They are often lamentably under-funded and the pupils over-tested. So, ‘free schools’ offer a chance for some parents, generally middle class parents, to free their kids from the national curriculum and gain a bit of control over their education. Underpinning this, ironically, is one of the same ideological thematics that makes tuition fees and the abolition of Education Maintenance Allowance so unpopular: meritocracy. Insofar as people believe in meritocracy and competition, they buy the ‘free schools’ idea; but they also find it scandalous that ‘opportunity’ is denied so many young people once they turn sixteen. The basic problem is that much of the ideological ground-work for neoliberalism has already been done over almost forty years and, despite the resilience of certain collectivist values such as support for the NHS, and despite a sizeable minority contesting even the more popular elements of austerity, the Left is at a clear disadvantage in the ideological terrain.
VII. Thus far, there have been three basic responses to austerity, together forming what the sociologist Charles Tilly would have called a ‘repertoire of contention’: a) trade union action ranging from strikes to national demonstrations; b) radical left party agitation, generally emerging from long-term splits in the social democratic parties; and c) Occupy and ‘indignado’ style direct democracy, movements based on taking over key public spaces in protest against cuts and financial dominance. None of these tactics has been adequate in itself, and in the UK they have been retarded in their development:
a) Trade union struggle in Britain has been too limited and narrow in its goals. For all the ‘red hot autumns’, ‘boiling summers of rage’, ‘winters of discontent’ and even ‘UK springs’ that were predicted, 2011 witnessed a temporary spike in strike activity produced by two large one day actions. The total number of working days lost to strike action then was 1.4m. In comparison, the number of days lost to strike action in the actual winter of discontent was 39m, for two years running. In 2012, the days lost to strike action fell to 250,000, an historic low. Moreover, the way the strikes had been resolved indicated that the union leadership was far more interested in conserving some of the relative advantages enjoyed by their members than leading any kind of broader fightback against austerity. But this dispiriting conclusion wasn’t just the result of a ‘betrayal’ by the bureaucracy. Rather, workers accepted and voted for a bad deal for a number of reasons: accumulated political defeats for the unions, declining density, withering grassroots organisation and bureaucratisation, and the long-term political de-radicalisation of the working class. The majority of the working class is unorganised, and union membership is undergoing a long-term decline. Worst of all, it seems the union leaderships have no strategy for rebuilding their organisations.
b) In the UK, no radical-left party has emerged to enjoy the same sort of success as the Left Bloc, Syriza, or Die Linke. This is not just because of the SWP’s crashing the Respect project once it could no longer control it. It is more fundamentally because there is neither a significant remaining ‘communist’ tradition, as there is in Portugal, Greece or France, and no split in social democracy, as there was in Germany and France. In the continent, the acquiescence of social democracy in neoliberal politics was often a shock to the supporters of these parties, and produced a rebellion in their left-wing. This was the basis for splits led by significant figures of the ‘ilk’ of Jean-Luc Melenchon and Oskar Lafontaine. In the UK, however, the hard defeats of the unions, the militant Left, and even ‘municipal socialism’, meant that Labour could begin swerving to the Right a lot farther, faster. Blair’s neoliberal revolution within the Labour Party was completed before he took office, and those remaining knew what to expect. And while individual policies such as the Private Finance Initiative disappointed and shocked supporters, there was neither an infrastructure nor an underlying ideological basis for a weak Labour Left to split. The closest Britain came to such an experience was as a result of the Iraq war, and even there George Galloway MP had to be pushed out of Labour: he did not want to leave. Left Unity is a positive and necessary initiative. We should support it. But we have to recognise that in doing so we are starting much later than continental equivalents, and with much sparser materials.
c) Just as the anticapitalist movement was far less developed in Britain than in Italy or France, so its Occupy movement was relatively small compared to the US or Spain - notable mainly for its innovative tactics, its experimentation with direct democracy, and its publicity successes. This is not to underestimate the numbers of people, especially young people, available for action against austerity. We have seen Millbank, Sussex, the Lewisham hospital campaign, and mass demonstrations against austerity as well as smaller targeted campaigns such as UK Uncut. But of course, the big struggles have been driven by specific issues and grievances. There are many people who are unhappy with the Tories; but there just aren’t that many anticapitalists. (Indeed, in light of the SWP crisis, we have to estimate that a significant number of UK anticapitalists will have retired from political activity altogether.) Ideally, the small minority of anticapitalists and militants who do exist would be able to coordinate their forces and act within a wider social movement which federated the diverse struggles that are happening. But the problem is that no such social movement presently exists, and until recently all attempts at forming some sort of ‘united front’ as an institutional focus through which such a movement might be galvanised have been sectarian failures - from the National Shop Stewards Network, to Coalition of Resistance, to Unite the Resistance. Currently, the People’s Assembly is an attempt to fill that gap and, insofar as it does so, is a positive development. But it is also problematic in the top-down way in which it is organised. For instance, the national People’s Assembly at the Central Hall in Westminster in June was clearly a large and enthusiastic gathering. It assembled exactly the sort of motley forces that are needed for a fightback. Thanks to a degree of pressure from would-be participants, it was not simply a day of being magnificently bellowed at by lionised leaders: there was a degree of participation and discussion. But it was all organised around a declaration, a ‘draft statement’, that represented ‘the views of all those who initially called for the People’s Assembly’ as to what the organisation should be doing. No other statements were accepted or invited, and no amendments will be discussed until the next national People’s Assembly in 2014. Either this means nothing happens between now and then, or actions are taken on the basis of an agenda agreed by a small, enlightened minority. This sort of top-down approach will necessarily impact on the ability of the People’s Assembly to draw in wider forces and make the kind of impact it needs to.
In hitherto the only case of an outstanding success against austerity, Quebec students used a combination of these tactics to great effect: combining forms of direct democracy on campuses with militancy on the streets, direct actions in support of striking workers, and tactical support for the left party Quebec solidaire in the federal elections. Notably they did so without deference to bureaucracy, or to ‘law and order‘, or to what the bourgeois media would say, or to parliamentarism. They opted for a militant, class-based strategy, and won. Yet the material basis for all this was a tradition of social democratic left-nationalism in Quebec, combined with patterns of grassroots student organising inherited from the ‘Quiet Revolution’ of the Sixties. In the UK, we do not have those advantages. We are starting from a much more backward position, and our strategy as socialists must recognise this.
VIII. As revolutionary socialists, we would like to ‘smash the state’ and say ‘all power to the soviets’. Alas, there are no soviets and the state is more likely to smash us than us it. But we can identify some intelligent mediations:
a) We can be absolutely sure that there will be outbreaks of struggle. These are not necessarily going to appear mainly in the public sector where the labour movement is concentrated. Rather, it is the unorganised, the unemployed, the marginal and the precarious who are experiencing the worst attacks under austerity. People are often experiencing the attacks less in their capacity as workers than as consumers of local services, as tenants, as welfare claimants, and as taxpayers. They are experiencing them disproportionately as black people and women. As a result, the struggles that emerge will be utterly heterogeneous, organised around a variety of political identities, and linked to a range of political issues not directly to do with austerity. Those fighting these struggles are stronger if they are united in a common cause, but it has to be a complex unity: a ‘unity in difference’. We need to help create ‘systems of alliances’, as Gramsci put it, that can connect ‘the 99%’ in their diverse social movements, whether trade unionist, feminist, gay, anti-racist, disabled people’s action, anti-Bedroom Tax campaigners, or anything else. Given the forces currently available to us, we need to argue for the People’s Assembly to be the forum where that unity can be forged - but that can only be done on the basis of authentic grassroots democracy. We should call for People’s Assemblies to be fully democratic, participatory events where policy is worked on and decided by those who are actually engaged in various struggles; rather than events at which nice people sit quietly and get spoken at for an hour and a half. We should call for statements and strategies to be accepted for debate at a national People’s Assembly at the earliest convenience. We should call for groups such as Sussex ‘pop-up‘ unionists, Lewisham hospital campaigners, student activists and others to be represented in any steering committee or leadership body. And within that work, we as socialists need to find and try to cohere the most militant forces who are able to argue for a strategy that is not parliamentarist, not based on deference to leadership, and not bound by ‘law and order’. Of course, those forces will be small and will probably lose most of the time. But the stronger they are, the harder the position of the wider anti-austerity movement can be.
b) We are not parliamentarist, but nor do we dismiss capitalist democracy. Capitalist democracy is a ‘contradictory’ formation, but it is not a fraud. The democratic bodies which exist, from council chambers upward, are feeble at best, but their erosion under neoliberalism does not help our side. This is why, for example, part of our struggle is a defensive one to defend local authority control over education against privatization. But if the analysis above as to the importance of long-term ideological and political ground-work is correct, then electoral work is necessary. It might be different if social democracy was not experiencing a secular decline. If we could always defer to Labourism at the ballot box, if there was a Labour Left that we could work with while casually insulting their reformism, things would be easier. But there isn’t much of a Labour Left (no offence to Owen Jones, but there isn’t). Whatever short-term adaptations Ed Miliband makes - reducing union power here, sidelining some Blairites there - Labourism is ineluctably mutating in an ever more rightward direction, its base is fragmenting, and the major beneficiaries thus far have been the Right. We have to learn from the European Left. The radical left parties of Europe are significant because they maintain a space for anti-neoliberal politics, and even some currents of anticapitalist politics. They give confidence to workers where they are successful, and they occupy a space that other forces, such as the far right, would be quite happy to colonise in their absence. Moreover, they break significant layers of workers away from social democracy to the left, in an era where it is more common for workers to break either to the right or to nothing. Finally, they provide a nourishing milieu in which radicals and revolutionaries inter-mingle, learn from one another, and join one another in new struggles. In the UK, given the balance of forces, we would be fortunate to assemble a radical formation with a broadly ‘left reformist’ politics that was nonetheless hospitable to a significant anticapitalist minority. It could usefully deploy some simple demands that would gain widespread support and threaten significant institutional bases of ruling class power: ‘nationalise the banks’, for example. We ought to be directly involved in helping to build that. Recognising the true state of play, moreover, we would be utterly foolish to try to artificially impose a de facto revolutionary programme, of the sort advocated by the Socialist Platform, on such a formation without the real balance of forces having shifted in that direction.
In the long-term, we need a process of reconstruction-from-below: of unions, and of the left.
c) The labour movement is in parlous state and we are too small to make much difference to that; even if we weren’t, we’d need to make a difference sooner than would be likely. In this sense, speaking of a ‘rank and file‘ strategy today can seem terribly unworldly. There is no rank and file movement today, and the material basis for rank-and-fileism is non-existent. But we have seen unusual forms of organising emerge in the context of austerity. One such is the ‘pop-up union’. In Sussex University, a rebellion by students and non-academic staff against cuts led to pressure for strike action. The three unions on the campus dragged their feet. In response, a ‘pop-up union‘ developed to fight the struggle, and quickly recruited more members than the three established unions combined. It was both a rank and file initiative, and one that involved many previously unorganised workers. The ISN has a perspective of trying to organise the unorganised, and learning and disseminating the skills which make that possible. The ‘pop-up union‘ has shown a clear way in which this can be materialised where struggles kick off. Clearly, it is not a satisfactory long-term alternative to rebuilding a union movement. However, it does offer a means by which workers who are forced to fight and who have little to no experience of trade unions can legally and reasonably safely take industrial action. It is a beginning of a pedagogic and organising process, and if we really expect struggles to break out in surprising ways among unorganised groups, we should try to prepare the ground for our members being able to join in such struggles. The creation of a ‘pop-up’ union requires rank and file initiative, and that entails confidence and even expertise ‘on the ground’. It needs, among other things: i) practical knowledge about union laws and procedures; ii) knowledge of employment law and recourses that workers have available against employers over matters such as pay, breaks and holidays; iii) a general understanding of the extant trade unions, how they work, how one can effectively operate in them, and what their limits are. As a starting point, therefore we should coordinate with other groups - be they trade union militants, autonomists, wobblies or whomever - to host day schools in which this knowledge, and these skills, are shared with as many people as possible. Our ‘rank and file’ perspective should be about contributing, in however small a way, to the long process of reconstruction of rank and file confidence and initiative.