Austerity is working, for the 1%

We talk so often as socialists and the left that austerity has failed and is not working. But when we look at it from the capitalists point of view which we fall foul of not doing nearly enough in my view we’d understand things a lot better if we did see things from their point of view sometimes austerity is working very well indeed. Essentially we are seeing policy after policy being pushed that the right has always supported but has not been able to get away with them up till now such as large scale privatisation and eye watering cuts to welfare and social spending. But now in an economic crisis and telling us thing like we’re all in this together and this is for the national interest they have largely succeeded in dividing people to ram their austerity home. Those who think we have to take the medicine for a bi and we’ll then be ok are starting to look a bit worried this I’m afraid is the new norm for capitalism. Austerity is simply the latest phase of capitalism we are going through and it is working very well for the 1%. The welfare state is under attack, workers’ rights are being eroded and poverty and inequality are on the rise. This is not a new crisis. The austerity measures now being imposed in the UK and Europe have been replicated around the world for decades. Time and again, debt crises created by casino banks have been paid for through austerity measures which have fallen on the poorest in society. The global history of austerity shows us how it has been used to create an economy that is built for the benefit of the 1%. Wherever austerity has been tried people have responded with inspiring resistance and new ways to create a fairer, more equal and more democratic economy. So far this has not succeeded but for the 1% the ruling class austerity has seen a huge transfer of wealth from the poorest in society to the richest in society. The rich as they say have never had it so good. It really is high time for them. The rich see opportunities in every crisis every crisis is a possibility to make a killing and boy many have. What are the policies of austerity? They involve the cutting of public investment and services such as education, health care, and retirement insurance. In addition they also include the privatizing of existing government assets. Public employees suffer wage freezes or cuts and mass layoffs as part of austerity measures. Labour laws are revised to empower employers at the expense of employees’ job security, wages, benefits, and voice on the job. And austerity also involves increased taxes and fees on working class people. Austerity is sold as the only available means of reducing the debt. However, there is plenty of money to take care of these financial imbalances. It is in the pockets of the wealthy and big business elites whose think tanks and politicians are, not coincidentally, the architects of austerity. They want nations’ economies to be run more like the corporations and banks, prioritizing that their shareholders get paid first and foremost at the expense of everyone else. In Europe the level of debt is 87 percent of its collective GDP, necessitating a severe approach, according to their outlook. However, in the U.S., which is in the beginning stages of an austerity campaign, the level of debt is over 100 percent of GDP. Considering this level of debt and the size of the U.S. economy, the largest dose of austerity measures are yet to come, and it will be working people who will be expected to swallow them. The truth is that the world economy is not in crisis because of debt. It is because too many have too little to buy what has been created. Without a stronger consumer base the capitalists have no reason to invest in making more commodities and creating more jobs. How are they going to realize a profit if few can afford to buy what is produced? Before the Great Recession the big business elites of the world had gotten around this problem by indulging in an orgy of financial speculation, especially in the U.S. This extra cash, created out of nothing, enabled them to continue handing out dicey loans while repackaging and selling these toxic assets as good investments. As long as the cash spigot was flowing today, why worry about tomorrow, was the line of reasoning for the 1%. This created massive financial bubbles in, for instance, housing in the U.S. and several European nations. The ultimate effect of all this financial gambling was to inflate the fundamental problem with the economy, which was the crisis of overproduction. When it was no longer possible to get beyond this limit, the resulting crisis was so deep and wide that even today, four years later, there is no real end in sight. This has been greatly exacerbated by massive bailouts to the banks both in the U.S. and Europe as well as costly wars in Iraq and Afghanistan conducted by the U.S. and its allies Big business is hoarding trillions of dollars rather than investing these funds in job creating production and services. In the U.S. alone it is estimated that these funds are up to $2 trillion. (1) Without a thriving consumer base, the big business owners have no motivation to invest in goods and services. Without this investment, there will be no thriving consumer base. The economic elite sees no way out of this Catch 22, so they are looking for other ways to enrich themselves. One way they are doing this is by treating the world economy as an enormous casino. For instance, it has been estimated that the total amount of derivatives being played in the market comes to $1.2 quadrillion — 20 times the amount of money currently in the global economy. (2) While the results of such reckless investment produce impressive portfolios for a few today, everyone else is exposed to potentially disastrous risks in the future. The 1% does need to obtain real money from somewhere, however. Productive investment is out of the question for the reasons discussed above. Austerity is a weapon they can use to muscle their way towards grabbing the vast pools of social capital in government programs meant to benefit working people. Rather than acting as organizers of production, the corporation and bank owners are using austerity to act as parasites, draining the economy as a whole. Austerity also serves the business elite’s interests at the expense of everyone else in another way. Without a strong safety net, workers are left in an even more desperate competition with one another to find work. This enables those on top of the economy to depress wages, benefits, and rights since they have a larger reserve of workers to pick from who are willing to take anything. Finally, austerity is a weapon to weaken the Labour Movement, the first line of defence for working people against corporate greed. For instance, in the U.S., it is not a coincidence that austerity measures are aimed first and foremost at public employees and teachers. These are the nation’s two most heavily unionized sectors. If their unions can be broken into accepting austerity, sweeping aside the rest of Labour in the pursuit of greed will be an easier task for the 1%. In short, austerity is a program of class war. Austerity never was about bringing debt or deficits down if anything they have gone upwards not down. Its time to expose the real ideas behind austerity and that is a huge transfer of wealth from the poor to the rich. Knowing the facts is just one part fighting back to change this is another. Allowing people to know the truth is the first stage exposing the lies of the ruling class’s across the world knowing that taking a wage cut or redundancy isn’t helping you, other workers or the country only a minority of very rich individuals at the top this must be challenged and exposed for what it is. The rule of capitalism