How to Argue Against Austerity

Austerity refers to policies that lower the living standards of working people by cutting public services. In the US, as with elsewhere, this involves busting public sector unions, closing schools and libraries, laying off public employees, cutting public health care programs, reducing public transit, allowing infrastructure to crumble, cutting unemployment benefits, and so on. The two most common arguments for austerity are what we might call the "inevitability argument" and the "moral argument".

I've criticized the inevitability argument elsewhere, under the heading of "budget cut fatalism". The "moral" argument, incisively skewered many times over by Richard Seymour, typically depends on an analogy between government finances and household finances, concluding that because "we" have over-indulged and "lived beyond our means", "we" must now accept "our" just punishment in the form of austerity. Seymour correctly observes that this ideology is tantamount to "the petit-bourgeois manner of thinking, universalised – the nation imagined as a corner shop that has to balance its books and keep an eye out for thieves."

The point of this post is to offer some suggestions about how the Left might quickly and effectively defuse these damaging ideologies. Of course, argumentative strategy is not all the Left needs: there is no substitute for patient, diligent organizing, agitating and so forth. But here goes.

1. Any suggestion that austerity is the deserved punishment for "bad government" or "profligate spending" should be met by a swift, matter-of-fact explanation of why public budgets are in the tank: (a) because the global economic recession, itself caused by the internal contradictions of capitalism and reckless investing, has caused tax revenues to drop sharply; (b) because bailouts, in effect, converted enormous amounts of private debt into public debt. Toxic assets were transferred from private to public rolls. The losses were socialized, the profits were privatized. Succinctly put: bankers caused the crisis, and the crisis has devastated public finances. Of course, it doesn't help that Washington continues to spend vast sums on two, as yet unpaid-for, imperial ventures. But the crisis is the most immediate source of public financial difficulties.
   
2. Here's a reductio ad absurdum of the "profligate spending" narrative. The narrative says that "excessive public spending" is the sufficient cause of the budget crises faced by federal, state and municipal governments. That means that the only thing that can explain the sudden emergence of public budget crises is the amount of public spending that a government is involved in. But if that were true, then we should be able to look back and detect some drastic uptick in the amount of public spending around the time public budgets tanked around 2007-2008. Moreover, since the public budget crisis has manifested itself at the municipal and state levels, there would have had to have been a coordinated, nation-wide movement (involving hundreds of municipal, county and state governments far and wide) that suddenly increased spending all at the same time. Of course, I don't need to tell you that none of this happened. Public budgets were more or less fine (setting aside other internal problems owing to regressive taxation and so on) until the global economic crisis sent them into a downward spiral. The bottom line is this: The main reason that public budgets (from city to federal levels) are in very bad shape is because tax revenues have fallen off a cliff due to the economic crisis (in fact, they've reached 60-year lows). It is flatly absurd to claim that "profligate spending" is the sufficient cause.
3. Now, even though we've dispensed with the moralized, masochistic pro-austerity ideologies, there is still the claim that austerity, though regrettable, is inevitable. If "we're broke", the story goes, "tough choices will have to be made." Two points must be made here. First, "we" aren't broke. The US is the richest society in the world, and the ruling class managed to make record-breaking profits last quarter. That means the richest upper echelons of the ruling class made more money in one quarter than ever in US history. "We're broke" my ass. The working majority may be broke, but the ruling class sure isn't. They're pulling in record-breaking profits at a time when the gap between rich and poor is reaching record levels as well. The money is there- we have only to modestly increase our obscenely low marginal income tax rates, reinstate the estate tax and close corporate loopholes in order to bring all public budgets out of the red. Hell, with the amount of surplus wealth lying about in ruling class bank accounts we could even expand such programs drastically (e.g. imagine re-vamped and greatly expanded public transit, a genuine single-payer health plan, lower tuition for public universities, a nation-wide rail network, etc. etc.) Such measures would obviously be unpopular with the ruling class, but that is to be expected. Second, the amount of money spent on foreign military interventions proves, beyond the shadow of a doubt, that the funds exist to cover budget shortfalls at home. It's obvious that the money spent blowing things up in the Middle East could just as well be spent building things (like bridges, roads, hospitals, schools, libraries, etc.) right here in the US. Moreover, the amount of subsidies and spending allocated to the ruling class in the form of "corporate welfare" also prove that the funds already exist, even under the current regime of taxation, to cover the things that matter. Succinctly put: we live in a society with vast sums of wealth concentrated at the top, which could easily be tapped to ameliorate the suffering brought about by unemployment and budget cuts. And, re: the imperialist military machine, if our government can find money to kill people, why can't that money be spent helping people instead?
   
4. Now, some will still claim that austerity is "unavoidable" since the following suggestions, attractive though they may be, are "unrealistic" or "politically infeasible". To be sure, looked at through the narrow lens of our electoral mechanism, it is true that the above suggestions are "politically unrealistic". The Democrats have made absolutely clear that they stand firmly behind austerity, as do the Republicans. So it's true that it is completely unrealistic to expect that the Democratic Party will consider taxing the rich and ending the wars to fund the things that matter. But is that our only option? Of course not. The cul de sac of electoralist lesser-evilism only means that resistance, in order to be "realistic", must take shape outside the proper channels. It must take the form of grassroots, independent social movements which are prepared to take a confrontational, oppositional political stance vis-a-vis the traditional corporate parties and their candidates. That doesn't mean talking tough while, at the end of the day, committing to throwing in with whomever the Democrats put up for election. It means actually organizing with broader goals in mind, e.g. defending social security and medicare from attack, fighting for expanded (rather than reduced) public transportation, fighting local budget cuts of all kinds, defending teachers from savage scapegoating attacks, fighting against the privatization of public assets, etc. Moreover, these fights should be waged with the assumption that Democratic representatives will tend to contain and minimize, rather than ignite and encourage such independent struggles. This isn't some new idea: the fact that we have collective bargaining rights and the Civil Rights Act are testaments not to the progressive character of the Democrats, but to the power of independent Left social movements that had more ambitious goals than electing a Democrat to office. People power, from Greece to Spain to Egypt to Tunisia, is anything but a utopian phrase. It is the watch word of those on the frontlines of the struggle against austerity. The explosion of mass protest in Wisconsin was only the beginning. The Left needs to invest all of its energy in building ground-up struggles like Madison all over the country. Without such struggles, there will be no progress.
   
5. It's also crucial that we emphasize the following. Austerity is not new. It used to be called "Structural Adjustment" when it was imposed from above by the IMF on populations in the global South who fiercely resisted it. It's the same thing today, except that its the "advanced" capitalist countries in the US and Europe that are undergoing "Structural Adjustment" this time around.
   
6. Austerity is, at rock bottom, a matter of the ruling class forcing the working majority to pay the bill for a crisis it didn't cause. It is an externalization of culpability, a socialization of massive private losses. The state in capitalist societies, no matter what representative government is at the helm, fulfills the basic function of securing the conditions for the accumulation of profits. This falls under the heading of securing "economic growth" or "a good business climate". Any government, within the framework of capitalism, which fails to do this risks economic stagnation, a capital strike, or, in some cases, violent reaction. To say this is just to say that in capitalist societies the state is structurally dependent on capital. Right now, austerity is the policy adopted by ruling classes the world over to try to restore profitability to the system. It is both a hail-mary pass by the ruling class to insulate its assets in the short term, and a long-term strategy pedaled by neoliberal ideologues who are still convinced, despite all contrary evidence, that economic health is brought about through slashing regulations, public spending and cutting taxes. As such, it is a policy meant to serve narrow class interests. But, as always, the ruling class is obliged to legitimate such policies by speaking the language of universality and shared interests. In public spaces it will seek support for the policy by claiming that it is the best policy for the vast majority. We shouldn't be surprised that this gap between rhetoric and reality is so wide.