Commentary | Recovering from austerity

Beyond reformist solutions and toward anti-capitalism

Today marks the beginning of SSMU’s anti-austerity week, a series of workshops and events about austerity politics, their impact, and why they should be stopped immediately. For some of you, austerity doesn’t mean much. For others, it means student strikes that push back your graduation date and scary speeches by politicians about the financial health of the province. For most of us, it means a worsening quality of life, decreasing disposable income, and the gradual destruction of the public services that we depend on as a society. In Quebec, the Liberal government, elected in 2014, has cut healthcare by 30 per cent and imposed huge budget cuts to the education sector, $45 million at McGill alone.

This draconian slashing of public services – in Quebec and worldwide – has a clear political purpose. In fact, austerity is one of the many tools of class warfare, waged by the economic elite on the rest of the population. In order to effectively fight back against austerity, we must examine its ideological justification and dispel some of the myths that are used to legitimize both austerity and the fundamentally flawed ‘solutions’ to austerity that are enacted within the capitalist system.

The neoliberal logic of austerity goes as follows. As debt becomes ‘unsustainable,’ public economic expenditures are cut back, and wages and benefits are decreased. Corporate and financial taxes (which are currently at a historic low) can then be reduced, allowing private companies free reign to ‘stimulate economic growth.’ Governments are further pressured to privatize public services, roll back labour and environmental protection laws, and sell public land at absurdly cheap prices for resource extraction, as all this is deemed necessary for private companies to remain competitive and profitable.

We should ask who benefits from increased profits when wages are cut down, and when public services designed to, at the very least, limit an increasing level of inequality, are damaged irrevocably. It certainly is not the university student, who sees their tuition increase while their part-time job salary decreases, nor is it the new immigrant, nor the single mother, nor anybody else who fundamentally depends on public services to mitigate situations of precarity.

If we want to defeat austerity for good, we must attack its root cause: capitalism.

Those who do benefit are the owners of the profiting companies, the economic and political elites, well-secured with six-, seven-, and eight-figure salaries. Decreased labour costs and corporate taxes can lead to a sudden surge in profits, as well as highly misleading statistical indicators like a growing GDP or decreasing unemployment. They are misleading because the profits are never redistributed in any way, and remain squarely in the pockets of the bourgeoisie, and because the majority of new jobs are actually part-time, non-unionized, and provide a salary well under a living wage.

Since the 2008 economic crisis, inequalities have drastically risen, especially in countries where neoliberal ideology is well-ingrained, and where austerity policies have been in place for several years now. The International Monetary Fund (IMF) itself has stated that the policies it has implemented since the crisis were misguided and ineffective, highly reminiscent of the infamous Structural Adjustment Programs of the 1980s and 1990s – loans to countries in crisis in exchange for trade liberalization and decreased government intervention. Yet, this has not precluded the IMF from continuing to push similar policies now, irrational as this ideological thinking may be. Indeed, austerity is more than policies: it is an ideology that is entrenched in all spheres of society, from university campuses to government offices.

We must also remember that austerity is not new. The policies that accompany it have been influential for many decades, returning in times of crisis and fading into the background in times of relative stability. For example, in the U.S. recession of 1973-75, the bourgeoisie was fearful of inflation and demanded lower wages and lower government spending. The result, according to Canadian academic James Rinehart, was mass unemployment and the collapse of inflation-adjusted wages by 1985. If this sounds familiar, that’s because it is. Each time austerity is temporarily pushed back – by more ‘progressive’ capitalist policies, by mass resistance, or by a combination of both – it resurges more powerful than ever.

Bearded ghostly Marx would not be surprised. Indeed, he explained the reason for, and the potential outcome of, austerity politics more than a century ago. Marx argued that capitalist economic theories miss a fundamental point: the cause for economic crises and the systemic imperative for capitalists to push for ever more profits are fundamentally intertwined. As the rate of gains in productivity decreases, Marx argued, the general rate of profit also decreases, as capitalists are able to extract less profits from the workers’ labour. In turn, through crises and economic slowdown, capitalism restructures itself to restore profitability, but at the cost of a drop in investment and an increase in unemployment.

The historical recurrence of austerity shows that Marx’s analysis was essentially correct. This is why challenging austerity by pushing for a fairer taxation system, higher corporate taxes, and public sector investment policies is only a temporary fix, a band-aid on a severed artery. If we want to defeat austerity for good, we must attack its root cause: capitalism. The only way to ensure that austerity won’t come back is to bury the system that makes it possible in the shameful depths of history.

Alternatives to austerity within the capitalist framework inevitably tend to have a productivist mindset, which means that they emphasize growth, even though, devastatingly, continued growth requires unsustainable use of resources. Social and economic justice cannot come about through means that also exacerbate climate change and environmental destruction, which already disproportionately impact people in the disadvantaged communities through droughts, increased levels of migration, higher levels of violence over the control of resources, and increased food prices. According to Oxfam, 20 per cent of the world population will be at risk of hunger by 2050 due to expected drops in global food production. By allowing continued oil extraction from Alberta tar sands, Canada causes damage to its own environment, such as by contaminating groundwater reserves. Even more importantly, Canada is also complicit in environmental destruction worldwide, with many of its mining corporations ruthlessly extracting resources across the world, particularly in Latin America.

Thankfully, such temporary reformist solutions are not the only choices at our disposal. As university students, we have much more power than we think. Economic disruptions, departmental strikes, occupations of public and private spaces – all of these can have a real impact. As students in Quebec, we can organize along with the labour movement through a combative student federation like the Association pour une solidarité syndicale étudiante (ASSÉ). By emulating organizations such as these, we can build autonomous and direct democratic local structures that control both economic production and public decisions. This can lead to a fundamental reorganization of society, based partly in international solidarity, in a way that spells the end of economic exploitation, ecological destruction, and nationalistic thinking.

Anti-austerity is thus necessarily anti-capitalist if it is to amount to anything in the long run. It must radically disengage from mainstream politics, building alternative and direct democratic structures to prefigure the future. We must also remember that if our movements gain enough momentum to actually impact and alter electoral and parliamentary politics, then they also have enough momentum to radically change society outside of mainstream politics. So let’s help build that momentum. A good place to start is with the events scheduled throughout this week, which aim to demonstrate the real power we have as students and provide us with concrete examples of radical struggle.