The realignment of power and privilege at the summit of British politics has delighted corporate boardrooms and City bankers. For the less privileged, the coalition Government will mean hardship, social destruction and inequality. The intention to tackle the fiscal deficit by implementing the madhouse economic policies of deregulation, privatisation and massive public spending cuts will see yet more public money siphoned off to the ultra-rich.
The new Cabinet, which boasts 18 millionaires, 15 Oxbridge graduates and 13 educated at private schools, has already announced plans to axe more than £6 billion from vital civil and public services. However, despite the rhetoric about the end of “old” politics, it seems like business as usual. David Laws, charged with cutting the deficit and controlling public expenditure, had to resign as Chief Secretary to the Treasury following revelations about his own finances.
Prime Minister David Cameron delivered his line in post-modern irony when he promised austerity for all. The super-rich such as himself are rather better placed to survive. His ideologically-motivated programme of cutting spending, tax breaks for the rich and a new wave of privatisations are the coalition’s tools for plundering the public purse. This is the same unaccountable, risk-prone, profit-driven economic model that propelled us into the financial crisis in the first place.
Economists such as Nobel Prize-winner Paul Krugman and former World Bank chief economist Joseph Stiglitz argue that cutting spending now could bring on a “double dip“ recession and push Britain towards another economic crash. Slashing public spending will cause real harm, rather than the fog of lies and distortions conjured by Cameron’s coalition. In the past, the political drive focused on lowering the national debt has tended to coincide with industrial and economic decline.
Nevertheless, the political, corporate and media elite have manipulated the national deficit and cutting public expenditure into the defining political issue. The establishment has turned a global financial crisis caused by corporate greed into a virulent attack on public services. What we are seeing is the temporary triumph of corporate political action. Public relations has become a powerful tool in the struggle to subordinate political decision-making to corporate rule.
Since the introduction of universal suffrage and with it the threat that people might act against business interests, business lobbyists and their allies in government have fought a relentless battle to manipulate public opinion, trade unions and the wider labour movement. Government is simply seen as a mechanism for allocating resources to business.
The time for challenging this philosophy has never been more propitious. As unemployment rises rapidly and job insecurity increases, deficit reduction is not the priority its proponents claim. The cuts policy is not a matter of economic necessity but of political choice. There are alternatives. Latin America was a laboratory for neo-liberalism, but rapidly turned into the leading region for resistance and building alternatives.
Privatisation, deregulation, labour flexibility: these were the tools used in Latin America to facilitate a massive transfer of public wealth to private hands – and also huge private debts to the public purse. The seeds of the new Latin American socialism were sown by this disastrous experience. This is why those serious about challenging the current consensus in Britain should look to Latin America for inspiration.
Right across the continent, it was neo-liberalism’s poor economic performance which led to the defeats of the governments that pioneered it. This was most vividly seen in Argentina. After the International Monetary Fund’s unholy trinity of deregulation, privatisation and public spending cuts led to economic meltdown and the flight of capital, millions of Argentinians poured onto the streets to protest against the financial and moral bankruptcy of the political and economic rulers. Their cry “Que se vayan todos” (“All of them out”) became a global one. Trade unions called a nationwide strike against austerity plans similar to the ones being implemented by the coalition in Britain. Five governments fell in less than three weeks. Powerful bottom-up struggles developed right across the continent in the 1980s and ’90s. As a result, Latin America now has more than 420 million people living under radical social democratic or socialist governments.
Recent scenes of protests in Greece over its financial crisis appear similar to the 2001 events in Argentina. Cristina Fernández de Kirchner, the current President of Argentina, had a sense of déjà vu as she watched the Greek situation develop: “Those images that we see on the television are too much like the ones of 2001”, she noted.
Mass protests in Greece against government austerity measures unfortunately turned deadly when three activists were killed. Violence against ordinary people in Greece intensified during a general strike after Prime Minister George Papandreou announced a second set of pay cuts for public sector workers, a freeze on pensions and a second sales tax increase to secure a bailout from the European Union and the IMF. As in many countries characterised by huge inequalities of wealth, the rich in Greece tend not to pay their taxes. Now ordinary people are being forced to pay the price.
By organising mass resistance, Greek union leaders have set an example. The economic crisis and fiscal aftershocks demonstrate the damage that can be done by a political class obsequious to a financial sector which has its own reactionary agenda. We cannot let David Cameron and Nick Clegg bleed the economy for an indeterminate time while working people are mired in poverty and misery. Unfortunately, Labour has a policy of deficit reduction and job losses so similar to the Conservatives that effective opposition is muted. So we need a radical solution: democracy. We need to shift the balance of power away from the political and corporate elite towards ordinary people.
The British Government subscribes to the same economic policy being forced through in Greece: the plan is to make £80 billion of cuts in the next three years. The need for a strategy of unification, organisation and resistance is obvious. Mass mobilisation can move us towards democracy with social and economic justice. This needs to be driven by the trade union movement allied to an explosion of grassroots activism. Latin Americans have shown that constructing a better economic and political system is possible. In Greece and elsewhere, protesters are terrifying the world’s privileged with their direct action and confrontation – symbolised by the slogan “No justice, no peace”.
A sense of responsibility now rests with Britain’s labour movement to organise popular forces and join the global resistance. Events are moving fast. From a situation in which nothing seemed to be happening, suddenly anything is possible. It all depends on us now.
