Friday, October 15, 2010

Against Budget-Cut Fatalism

One of the most damaging and conservative ideologies in circulation right now is what we might call "budget-cut fatalism". The basic (overlapping) propositions that constitute this ideology are as follows:
  • We are in a severe recession right now and sacrifices must be made.
  • Either we cut services or the government goes further into the red.
  • Although we'd like expanded services (who wouldn't?), it's unrealistic to hope for any expansion in social spending right now.
  • Since the deficit is a major problem, perhaps the most pressing problem (for reasons connected to nationalist anxieties about losing super-power status), we should focus all our energies in reducing the deficit and getting the government out of the red.
  • We must cut social services, the only question is which ones and how deep the cuts should be.
Importantly, there are a couple of tacit premises at work here, for example:
  • Since the government is in the red, the only feasible fix is to cut social spending.
  • Tax increases (on the rich) simply aren't an option.
  • The only budget-related variables we have the ability to change include things like public worker's wages and pensions, funding for schools and infrastructure, etc. Military spending, the amount of wealth appropriated by the rich, etc. all remain fixed variables in our calculations. The only "moving parts" on the table here are worker's living standards, social services, etc. The rest is fixed.
Now there are plenty false claims in the first set of propositions discussed above, but there are also many true ones as well. Ideologies are never entirely false: they often draw on plausible claims which they then distort in various ways to license political conclusions friendly to the status quo. For example, it is true that we are in a recession and sacrifices must be made. But who is to shoulder the sacrifices? And what kind of sacrifices are to be made?

This is where the ideology begins to court incoherence. Let us leave aside for the moment the patent absurdity of exempting military spending, corporate welfare, etc. from the picture. It assumed above that expanded social spending (e.g. constructing new rail systems, renovating public transit infrastructure, expanding education spending, building new hospitals, etc.) would, other things being equal, be a good thing. But yet it is concluded that our only course of action is to make cuts, the only questions being where and how deep (hence the fatalism).

This conclusion is hardly forced. It only appears natural when we accept the set of tacit premises I note above.

Here's an alternative way of thinking about the present situation that makes clear just how tendentious and conservative the ideology under examination here really is. And before discuss alternatives, let me note in passing that this budget-cut ideology is by no means confined to the followers of the Republican Party. As I've noted on this blog many times, it is every bit as much a part of the ruling doctrines in the Democratic Party as it is in the GOP. The most insidious part about this ideology is that it convinces even those progressive-minded people committed to expanded social spending that such demands are impossible right now. That is, it convinces people who want change that they are wrong to ask for it, and that they should gladly accept the austerity measures being forced upon them.

Here's the alternative story, and I'll try to keep it as accessible and succinct as possible:

Our society produces far more than it needs to reproduce every individual over time. That is, our society produces a great deal more goods, services, etc. than it needs to be maintained at subsistence. Call that the social surplus.

Now the social surplus, in order to be produced, requires the involvement of the great majority of persons in our society. Without a massive, coordinated system of labor, this surplus would not be generated. Though the rich like to pretend they're responsible for all the wealth in this society, they know as well as anyone else that if every working person simply sat down and stopped working this entire system would grind to a halt.

Yet, though the surplus is socially produced, ownership and control of the surplus is private and anti-social. A small class is in a position to appropriate the lion's share of the surplus, whereas most are not in a position to do so.

Now, a modest portion of the surplus is taxed and this is what enables the government to spend. But note that this modest chunk still leaves most of the surplus produced in our society in the hands of a rather small class of persons. We're talking about massive sums of money here. In the UK, the top 10% own nearly half the national private wealth - that's four thousand billion dollars. It's even more concentrated at the top in the US. The Bush tax-cuts have cost $2.74 Trillion dollars over 8 years. That means if tax rates for the rich had remained at the level they'd been during the Clinton years, the Federal Government would have nearly $3 Trillion more than it has at present.

So how is it that budget cuts are inevitable? Why is it that the only things up for negotiation are worker's pensions, wages, and jobs? Why do we have to cut anything at all?

The answer is that we don't. So why are discussions about the crisis dominated by budget cut fatalism? Why are ordinary people being forced to shoulder the entire crisis? Because ordinary people have no voice in our political system. The needs, wants, and desires of the vast majority simply do not register.

To be sure, we have the freedom to choose between two factions of one pro-business party, but if neither of those organizations represents our needs, what can we do? In the electoral arena there isn't much we can do at all. But that doesn't mean we can't fight back. On the contrary, fighting back only has any real content today if it means extra-electoral struggle and organization.

Both of the major parties represent the interests of the most powerful class in our society. Corporate donors flood both parties with funds every election cycle; they've been hedging their bets for a long time, this isn't new. They're trying to make us pay dearly for a crisis we weren't even allowed to have the opportunity to cause. We're barred from having a say in how the commanding heights of the economy are run, and we're frequently told that ordinary people are just too stupid to be able to run society themselves. But though the "best and the brightest" brought the entire world economy to its knees in their chaotic pursuit of short-term profits, we are being saddled with the entire cost of the crisis.

They make the mess, and we are told we have to clean it up.

And to add insult to injury, these fabulously intelligent and motivated individuals, these "fountainheads" of entrepreneurial greatness and ingenuity, are only still around because they received trillions of dollars in bailouts. In fact, the bailouts are best thought of as a transfer of toxic assets and debt from the private financial sector to the state. And as picking up the tab for global crisis, unending war and occupation, and ongoing tax-breaks for the rich weren't enough, the vast majority is asked to suffer in order to pay for the financial sector's massive credit card bill (i.e. TARP).

This is a clear case of us against them. Either we are going to be forced into austerity, living standard cuts, school closings, bridge collapses, etc. Or the rich are going to pay for the mess they created. We know whose side the entire political system is on. The only question is what ordinary people are going to to do fight it.

1 comment:

Mel said...

yet another outstanding post. People unaffiliated with the upper echelons of academia need to read things like this.
Thank You.