austerity |ôˈsteritē| noun – sternness or severity of manner or attitude
It was possible, therefore, to commit a sin without knowing that you committed it, without wanting to commit it, and without being able to avoid it. Sin was not necessarily something that you did: it might be something that happened to you.
– George Orwell, “Such, Such Were the Joys”
Why what have you thought of yourself?
Is it you then that thought yourself less?
Is it you that thought the President greater than you?
Or the rich better off than you? or the educated wiser than you?
I do not affirm that what you see beyond is futile, I do not advise that you stop,
I do not say leadings you thought great are not great,
But I say that none lead to greater than these lead to.
– Walt Whitman, “A Song for Occupations,” Leaves of Grass
The Politics of Austerity – Part I
This is the first in a series of posts that look at the political implications of the ongoing global economic crisis. I begin by examining the way that crisis is being used to attack the very idea of democracy through an assertion of the political imperatives of “the market” and the violation, bending and re-writing of the law by capitalist elites. I conclude by laying out how understanding the economic crisis in political terms shapes our ability to respond to it.
In the second post I’ll look at the ethos of austerity, which justifies the pain inflicted on largely innocent people, while suggesting that an affirmative democratic response to the economic crisis must begin with its own ethos, which I suggest should be an ethos of care for the world – which can provide orientation and inspiration for political struggles seeking to address the deeper causes of our current crisis. In the third post, I turn to the structures of the economy and of politics that define the current crisis, looking at the banking crisis, the bailouts, the politics of recovery/austerity and also reflecting of the structural imperatives of capitalism that led us to crisis. This, then, leads to the question of how to respond to the politics of austerity, and of what alternative actions are available to us, which is where the fourth and final post will pick up – with an affirmation of a caring ethos that supports a radically democratic economic vision.
In a previous post I briefly highlighted Bonnie Honig’s work, Emergency Politics, to examine the way that the ethical case for austerity is made; most basically, the existence of a supreme emergency, in this case economic, justifies actions that would normally be considered unacceptable. Honig’s work looks at how the appeal to emergency is used to reassert the exceptional political power of the sovereign over and against the law, with a focus on the reassertion of sovereignty witnessed over the past ten years in response to the threat of terrorist attack in the US and Europe.
Rather than accepting the necessarily intractable conflict between the power of the sovereign and the power of the law, Honig attempts to deflate this paradox by turning her attention to the always ongoing contestation that defines democratic politics, a contest over both the content of the law and the institutional embodiment of sovereign power. She suggests, then, that attending to the ambiguities of the “people”, who are both the democratic sovereign and a diffuse multitude, as well as the political element in the law – as new laws come into being through political action – enables us to avoid thinking about emergencies as moments of exception in which the rule of law is lost to the play of political power, while also acknowledging the limits of established law in moments of profound crisis. By undermining the exceptional nature of crises and emergencies Honig alters the challenge we face when circumstances force us to make choices or carry out actions we know are harmful and wrong by asking what we (democratic publics and citizens) can do to survive an emergency with our integrity in tact.
What do we need to do to ensure our continuity as selves and/or our survival as a democracy with integrity? Our survival depends very much on how we handle ourselves in the aftermath of a wrong. We will not recover from some kinds of tragic conflict. But when faced with such situations, we must act and we must inhabit the aftermath of the situation in ways that promote our survival as a democracy.
I continue to find this a useful way to understand our current economic crisis. Appeals to austerity depend upon the exceptional state created by crisis in order to justify the pain inflicted upon masses of people and the priority given to private interests (the markets, investors and bankers) over democratic publics. So, as democratically enacted laws must bow before the sovereign power threatened by exceptional attacks, so economic justice and democratic equality must bow before the commands of market forces, of economic inevitability, in this time of crisis.
The economic version of this argument is stronger still. While the space of political contestation that remains open when we accept the framing of emergency politics is limited, it does exist in the clashing of opposing sovereigns. The prospect of a substantive alternative to neoliberal economic ideology is dim, a light flickering weakly on antiquated appeals for a return to Keynesianism or watered down triangulations of the moderate-middle that sell off dreams of a just economy bit by bit – capitalist realism in action.
Honig awakens us to an important aspects of our current crisis: that “the market” is not in fact supremely sovereign, and the move to re-establish and further neoliberal policies and push through austerity measures requires an engagement in democratic politics – albeit one that undermines the notion of the public itself and seeks to use the power of the law to subvert democracy. Recognising the current crisis in these terms not only challenges us to consider how to survive our current troubles without giving up democratic virtues, it also reinvigorates and clarifies the political challenge we face. Emergency economics – with its assertion of debtocracy over democracy – is not an inevitable response to the crisis, it is a political one that we can, and should, fight against.
Debtocracy: The Public and its Problems
Debtocracy is the name of a recent film on the Greek debt crisis, but I want to appropriate the term as far as it points to the effects that austerity measures have on political life. A government being unable or unwilling to pay its debt is not uncommon and since at least the 1980s there has been a ready response from capitalist powers, whether dominant nations or international institutions, to deal with these situations.
The neoliberal response to recurrent debt crises is, at its core, quite simple: funds will be forthcoming so long as the needy state dismantles public infrastructure to reduce spending and waste (public provision is by definition always wasteful), encourages growth by liberalising the domestic economy, eliminating capital controls and opening the door to foreign direct investment (here again the formula for growth is determined from first principles), and accepts these conditions under terms that discount and disable democratic political opposition and institutions. While not part of any written neoliberal mission statement, the dominant response to debt crises (regardless of cause or circumstances) is anti-democratic, and it is anti-democratic as an inherent feature of neoliberal capitalism.
Neoliberal theorists are, however, profoundly suspicious of democracy. Governance by majority rule is seen as a potential threat to individual rights and constitutional liberties. Democracy is viewed as a luxury, only possible under conditions of relative affluence coupled with a strong middle-class presence to guarantee political stability. Neoliberals therefore tend to favour governance by experts and elites.
-David Harvey, A Brief History of Neoliberalism
Crises then become an opportunity, both domestically and internationally, to eliminate democratic opposition to the freedom of capital movement, the unequal outcomes of market transactions, and the ongoing accumulation of private wealth by the richest members of society, both through wealth transfer and through primitive accumulation. This has been an ongoing political effort for over 30 years – one that is a particular response by capitalist elites to both economic and political challenges, and one that is skeptical of democracy and advocates a very limited form of representative governance that denies the idea of a democratic public and instead advocates a competitive and self-regarding individualism.
This denial of the public, of an ethos of social responsibility, goes hand-in-hand with an opposition to a democratic politics that promotes substantive equality and popular control over economic life. In our current crisis, then, debt, or rather the demands of creditors, takes priority over the demands of the democratic public and, in many instance, the law – the neoliberal appeal to law is complex, as there is an inherent tendency to affirm the rights of capital as sacrosanct, but neoliberalism is also defined by a political drive to re-write (where possible) or violate (where necessary) the written law when it interferes with the interests of capitalist elites and their quest for profit.
So, not only are many of the debts accumulated of questionable legitimacy, but they were also accumulated in many cases as a response to an economic crisis created by exploitative, risky and criminal practices. Even when we consider longer term debts, the reason for increased public deficits is never simply about excess spending in the public sector or faulty economic policy, but as often as not it is the result of intentionally accumulated deficits, which are then put to work politically, to push through unpopular cuts and allow wealthy individuals and large corporations to avoid taxation as a tenant of supply side voodoo-economics. So, even as the stability must be maintained and the rights of owners must be protected, the law is exploited and flouted – this is possible because the law and the state are themselves ambiguous as structures that are partly capitalist while also being partly democratic/popular. The law and the identity of the state are political to the core and the neoliberal’s response to crises is to recognise and exploit this fact in order to consolidate the institutions that enable her interests.
Which raises a question: why should we allow the costs of crisis to be made public? And even where we accept the legitimacy of existing debt, a further ethical question remains: why should the livelihood and well-being of the majority of the population be threatened and worsened for the sake of paying off debt?
Honig’s warning echoes back to us as we face our ongoing economic crisis. Not only must we be wary of the usurpation of the democratic public (incomplete and imperfect as it may be) by the demands of the market, but we must also be aware of the way in which crises are used to reconstitute the public both through the exertion of political power and the rewriting of democratically enacted laws. Further, focusing on this fundamental political challenge forces us to confront the limitations and disappointments of our democracies today, which can (and should) encourage us to put forward positive visions of deeper and more profound democracy that enables greater economic justice.
Greece: The Periphery Comes Home
There’s an irony in the usurpation of Greek sovereignty by international bureaucrats at the IMF, EU and ECB (through the conditions attached to their loans) and private bond holders and ratings agencies (who exert their power through the market), as Greece is the mythic signifier of democratic politics. It seems the putative “birthplace” of democracy is now the setting of an important political battle, where we must wait to see if democracy succumbs to economic imperatives that are largely external and harmful to the citizens of Greece, or if, perhaps, the ideal of popular governance can win out.
The Greek debt crisis seems to be nearing a culmination – the failure of austerity measures to improve the economy, the unmanageable scale of the debt, and the mounting opposition to the human costs of austerity all point to some form of default. This is an important moment because it seems the Greek people have an opportunity to reassert control over their lives. The joint EU and IMF “bailout” imposed conditions upon the Greek state that were not only delivered without a democratic process, but also required substantial reinterpretation and bending of existing laws – which makes clear that austerity and liberalisation, as ways of remaking the state, are no longer just for the global periphery, but will now be applied to Europe’s own peripheral economies.
While it’s likely that a Greek default will favor the interests of those holding Greek debt – mostly German and French banks, as current plans look likely to hold off default until the debt can be transferred to public institutions and therefore European taxpayers – a default holds out the promise of a fairer and more democratic response to the crisis. That democratic response, however, depends upon returning control of the Greek state to its people and giving them a voice and role in decision-making when it comes time to consider what debts will be paid and on what terms. This is a simple idea, but in our current moment it is a radical politics to suggest that the public, who is being asked to pay for debt they had little choice or say in accumulating, should have a say in how the crisis is resolved.
This is the central argument of Debtocracy, which seems to have caught the zeitgeist in Greece, but it is important to remember that there is still a very real and widespread political battle to be fought. The battle is not only being fought in Greece; opposition to neoliberal policies has come home to both Europe and the United States with urgency as their consequences become clearer for the majority of people – it seems the “West” is finally catching up to the “Rest,” in a darkly ironic role reversal, and that increasingly the fights against painful austerity measures, and the dismantling of the idea and infrastructureof the public, are recognised as not simply global but common to the majority of people in the world – to the masses, if you will.
Protestors in Madrid, Madison, Athens and London have all drawn inspiration from Egypt and other Arab nations in open revolt against their governments; Argentina’s rebuke of the IMF a decade ago has become an inspirational and educational moment; and the citizens of wealthy nations are just now taking the full measure of the what is lost when public services are dismantled, employment opportunities are scarce and precarious, and when the rising cost of living exerts a constant pressure on working people – something that much of the rest of the world is intimately familiar with after years of damaging exposure to neoliberal policies.
The “market” and its bureaucratic attendants are working hard to sell the need for urgent reform – in Greece, Italy, Portugal and Ireland the imperative is clear: cut, privatise, and do not protest against your suffering or its unfairness. Yet, what goes unexamined all too often are the political alternatives available – here I’m not concerned to offer financial alternatives, though they do exist. In place of blaming the Greeks, and other Southern Europeans, for their “cultural failings” we should look to those who benefited from the accumulation of public debt, while acknowledging that the attack on public spending, social welfare and the quality of living for the majority of people is not an accident, a natural disaster that was/is unavoidable, rather, it’s part of a political project, which we can oppose and, possibly, overcome. Further, there are ways of responding to the economic crisis that put people before banks and put democracy before private profit, which does not provide a magic spell to eliminate the crisis at hand but may help us maintain and develop democracy as an ethos of substantive equality and real economic justice.
Michigan, meet your Emergency Manager.
In a previous post I highlighted Republican plans to use the calls for debt reduction and austerity in the US to push through radical changes attacking collective bargaining rights, public services, and to re-writing state laws on municipal default, which would enable officials to declare cities bankrupt and thus able to renege on pension obligations, invalidate collective bargaining agreements, and sell off public assets.
The Republicans, particularly governors and state congressional representatives, have proved to be women and men of their word. Wisconsin and Ohio were ground-zero for rolling out this strategy, which is clearly intended to disable left-wing political groups (especially unions), enable capitalist elites to benefit from state budget crises and to fundamentally undermine the democratic public. To the surprise of many the opposition in Madison, WI (and Columbus, OH) proved fierce and Governor Walker has paid serious political costs as well as inadvertently exposed the bankruptcy of austerity measures, as the changes pursued in Wisconsin increased the budget deficit, increased taxes on working people, lowered taxes on corporations, cut social spending, and attacked labour rights – but did nothing to ease the pain of financial crisis, to say nothing of actually fixing the problem to hand.
While the strength of opposition, and success in Wisconsin, are among the few inspiring examples for those of us opposed to austerity as an economic policy and political project, the most disturbing story comes from Michigan, where the Republicans have successfully changed state laws and have fundamentally undermined democracy. Under new laws the governor of Michigan can appoint an unelected and unaccountable manager to oversee the budget of municipalities struggling with deficits. The appointed individual would have the ability to fire elected officials, restructure and privatise public services, cancel contracts with workers and to disincorporate towns and cities. In response to his own setbacks, Gov. Walker in Wisconsin is pursuing the same policy. Just to help all that sink in fully, here’s more from Rachel Maddow:
As is so often the case, the Republicans in the US are the cutting edge of neoliberal attacks, which combine that distinctive economic vision with a resentful and often vicious social conservatism (more on that in part II). Yet, what the push to impose austerity and remake the legal and political landscape shows us is that neoliberal politics will be applied as ruthlessly at “home” as it has been in the global south. This may not be a revelation for those who fought against the initial neoliberal push in the late 1970s, nor to those who were concerned with inequality even during the supposed “boom” years, but it remains an important political lesson and a potential source of wider solidarity in the fight against capitalist elites looking to both accumulate ever more shocking sums of wealth and rig the institutional system in their favour globally.
In their work, Winner-Take-All Politics, Jacob S. Hacker and Paul Pierson trace out the institutional and systemic changes that allowed business (capitalist) elites to overpower democratic governance, leading to the compelling conclusion that changing the fundamentals of our politics and our economics is fundamentally a battle to reclaim the democratic public, which is a lesson we ignore (and have been ignoring) at great peril.
United Auto Workers’ leader Douglas Fraser saw the stakes clearly in 1978, when he resigned his position on President Jimmy Carter’s Labor-Management group after growing frustrated with capitalist elites who were unwilling to compromise and were instead aiming to transform American politics. This early engagement focused on business opposition to the Labor Law Reform bill, which aimed to make it more difficult for businesses in the US to move jobs to anti-labor states and to limit the anti-union campaigns staged by corporations against organisers and employees seeking to unionise.
I believe leaders of the business community, with few exceptions, have chosen to wage a one-sided class war … against working people … and even many in the middle class of our society. The leaders of industry, commerce and finance in the United States have broken and discarded the fragile, unwritten compact previously existing during a past period of growth and progress … The latest breakdown in our relationship is perhaps the most serious. The fight waged by the business community against that Labor Law Reform bill stands as the most vicious, unfair attack upon the labor movement in more than 30 years … It became an extremely moderate, fair piece of legislation that only corporate outlaws would have had need to fear … At virtually every level, I discern a demand by business for docile government and unrestrained corporate individualism. Where industry once yearned for subservient unions, it now wants no unions at all … Our tax laws are a scandal, yet corporate America wants even wider inequalities … The wealthy seek not to close loopholes, but to widen them by advocating the capital gains tax rollback that will bring them a huge bonanza … For all these reasons, I have concluded that there is no point to continue sitting down at Labor-Management Group meetings and philosophizing about the future of the country and the world … I cannot sit there seeking unity with the leaders of American industry, while they try to destroy us and ruin the lives of the people I represent.
Douglas Fraser, quoted in Winner-Take-All Politics
A public no more?
As the Conservative party struggles with an economy that continues to slump and stagger rather than rebound, they have been assaulted by a number of strikes and protests that oppose a central tenet of their political ideology. Even as teachers, students and public sector employees protest specific policies that affect them, they are also fighting against the attack on the public as such. The recent teachers’ strike illustrates the point.
As teachers prepared to strike in opposition to cuts and other union workers expressed solidarity, along with the possibility of coordinated public sector (or even general) strike action, the government threatened to change labour laws to undermine, if not eliminate, the ability of workers to strike. On one hand this is an old story, familiar to us since at least the 1970s – but it gets to the heart of the anti-democratic nature of austerity politics.
As David Harvey analyses neoliberalism, it is
in the first instance a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practices. The state has to guarantee, for example, the quality and integrity of money. it must also set up those military, defence, police, and legal structures and functions required to secure private property rights and to guarantee, by force if need be, the proper functioning of markets. Furthermore, if markets do not exist (in areas such as land, water, education, health care, social security, or environmental pollution) then they must be created, by state action if necessary. But beyond these tasks the state should not venture.
The democratic public has no place in this vision of politics, as society is made up of individuals whose rights to property and exchange must be protected, but who lack common interests that are public – such that one can be concerned about the poor, for example, but this is a private matter. This is a disabling view of political life, once intended to disable monarchs, it now disables democratic publics that would use their collective power to change institutional structures, alter the distribution of wealth and power in society, and create substantive forms of social equality.
The politics of austerity, and neoliberalism generally, occludes the public – as John Dewey would say, it makes it nearly impossible for the public to recognise itself. The public, then, is the democratic body politic created by the recognition of common interests that are not simply private, by the recognition that the relegation of social interaction to the private realm makes it difficult to control or alter the consequences of those interactions – this is the essence of the historic divide between liberalism and democracy, which we continue to ignore at our own peril.
Two examples. (1) The denial of the public enables domestic abuse, as violence in the home is not simply a violent interaction between two individuals, and a failure to deal with violence, and other forms of oppression, perpetuated against women publically helps preserve patriarchy as a social system. A similar problem exists with racism, where the refusal to acknowledge the reality of white supremacy as a social system (as opposed to individual cases of racism) in the US, for instance, makes it impossible to recognise the consequence of systemic racism, much less address them.
And (2) in the work place, worker and owner do not meet as two individuals on equal standing, but as deeply unequal members of different social classes with opposing interests, such that the notion that employment is simply about private contracts between equal rights bearers makes it impossible to confront the systemic negative consequence of exploitation such as unsafe working conditions, abusive treatment in the workplace, fair and equal pay, or minimal benefits such as time off, sick leave and worker’s compensation – to say nothing of enabling notions of public ownership, workers’ collectives or other alternative modes of social (re)production.
In a search for the conditions under which the inchoate public now extant may function democratically, we may proceed from a statement of the nature of the democratic idea in its generic social sense. From the standpoint of the individual, it consists in having a responsible share according to capacity in forming and directing the activities of the groups to which one belongs and in participating according to need in the values which the groups sustain. From the standpoint of the groups, it demands liberation of the potentialities of members of a group in harmony with the interests and goods which are common … Regarded as an idea, democracy is not an alternative to other principles of associated life. It is the idea of community life itself … Wherever there is conjoint activity whose consequences are appreciated as good by all singular persons who take part in it, and where the realization of the good is such as to effect an energetic desire and effort to sustain it in being just because it is a good shared by all, there is in so far a community.
-John Dewey, The Public and Its Problems
The public is a necessity for true democracy and for substantive social transformation, as it allows – at least potentially – for the disempowered individuals in a society to use their modest power in concert to improve and control their own lives. However, enabling the self-recognition of democratic publics and pursuing social transformation in our current crisis requires confronting an uncompromising adversary (neoliberal capitalist elites will do as a signifier) which is why opposition to austerity cannot be articulated or expressed through existing representative democracies, as the ongoing budget negotiations in the US demonstrate.
The Republicans are currently playing a game of chicken with the Democrats over the US deficit, as a deal is needed to raise the debt ceiling in August to avoid a US default. While it is highly likely that the Republican party would flinch if pressed on the matter, their opposition and the Democrats’ (lead by President Obama) political weakness reveals something important about the neoliberal consensus at the heart of US politics. In opposition to all evidence, the Republicans have refused to consider any deal that raises taxes on the ground that it will kill (non-existent) growth in the US economy, even as the Democrats are willing to cut spending on social entitlements, which have made a negligible contribution to the deficits that Republicans feign such resistance to. A similar dynamic persists in the UK, where a continued lack of growth provides little impetus for the government to alter their policies, and in the IMF/EU response to debt crises in Ireland, Greece, and now Italy, where austerity remains the policy of choice, despite all evidence that it makes deficits worse in many cases by stifling growth and causes great social suffering.
It would be too easy, though very enjoyable, to attribute the faltering and inadequate neoliberal response to our current crisis to the ineptness of Mitch McConnell, George Osborne and Jean-Claude Trichet. The problem, however, goes much deeper – Obama, for example, cannot coherently explain his own position on the deficit to an American public concerned about rising unemployment and falling standards of living because he’s caught up in a political economy that is intended to produce the results we are currently suffering through.
The crisis of capitalism precipitated by the collapse of the housing market in 2007/2008 and that lead to the financial and sovereign debt crises is not the same crisis the majority of us are dealing with now. Our crisis is the one generated by the response of capital to its own contradictions. Neoliberals and neo-Keynesians can trade shots and argue over how big the deficit can get before it slows growth or how much stimulus is needed to return economies to growth, but both sides are missing the structural element of our current crises. As neoliberalism emerged to counter the growing power of labour, which undermined profits, it now faces an impoverished public that has seen stagnant and falling wages along with rising costs of living, which cannot sustain the consumption necessary for continued growth – a contradiction covered over with cheap credit for a while, but now exposed in its intractability.
Austerity, then, is a plaster on an arterial wound – it gives capital an opportunity to exploit workers a bit more effectively, to buy up public goods and sell them back to us at a profit, and to deflect attention from the combination of massive capital accumulations and falling tax burdens. It’s not clear to me how capitalism will deal with its current crisis in the long term – I leave that to sharper minds – but it is clear that our crisis, the crisis of our democratic publics, is a result of austerity and requires a political response. In a later post I turn to the ethical, structural and political aspects of fighting for and defending the democratic public, but in the next post I look to the ethos that enables austerity in order to set the table for thinking through a political response to our democratic crisis.
They Own Your Future!
Not just because of the debt but because they’ve set the rules and increasingly blocked our vision – there’s no longer a horizon to aim for, such that we can’t even imagine another way of living (the importance of moral imagination and social action is the subject of the next post).
Like debt, the future can seem inescapable. To be able to act, to move forward, requires a new horizon – a reclaimed capacity for vision. This leaves us with the difficult but pleasurable task of visualising new futures. Tom Delay summed up the spirit of neoliberal politics well: “If you want to play in our revolution, you have to live by our rules.” He’s right, but it seems the only sensible response is to be counter-revolutionary. And this is the political challenge presented to us by austerity – how to react?
As Paul rightfully pointed out in a previous post, our opposition to austerity must move beyond the spectatorial, electoral and spectacular, otherwise our energy and action can only amount to
a void where a social movement should be, and one capable of an institutional form anathema to the coordinates to which both disavowers and affimers currently assent.
Trying to move beyond this void is the goal of this series of posts and what follows will focus on ethical, structural and political aspects of crisis and response. In closing, it’s worth considering Alain Badiou’s reminder of the importance of the task before us:
What do we say when we look away, or look back? What do we see when we succeed in ridding ourselves of our slight fear of the void? After all, our masters want us to fear the void, and therefore to beg them to save the banks. We see, and this is what we call seeing, simple things that we have known for a long time: capitalism is nothing but banditry, and it is irrational in its essence and devastating in its becoming. Capitalism has always ensured that we pay the price for a few short decades of brutally inegalitarian prosperity: crises that swallow up astronomical quantities of value, bloody punitive expeditions into all the zones it regards as threatening or strategic, and world wars that allow it to recover its health. This is the dialectical power of an inverted look at the disaster movie.
Nothing could be more important than rediscovering the passion for ideas, or than contrasting the world as it is with a general hypothesis, with the certainty that we can create a very different order of things. We will contrast the wicked spectacle of capitalism with the real of peoples, with the lives of people and the movement of ideas. The theme of the emancipation of humanity has lost none of its power.
–Alain Badiou, The Communist Hypothesis