Saturday, 8 June 2013

Is there an alternative to the neoliberal regime?

We are now into the fifth year of The Great Recession. In all of the advanced capitalist countries economic growth rates lag and real unemployment remains high. Inequality of income and wealth steadily increases. This is the fallout from the neoliberal model of the free market and free trade. Margaret Thatcher insisted that There Is No Alternative (TINA). Is that true?

Great Britain, Ireland and the countries of Continental Europe show no signs of recovery. Governments all have consistently supported right-wing austerity policies. None of the major political parties have offered a different strategy. Surely, there must be a political alternative.

The new issue of Social Justice (Vol. 39, No.1) has some interesting articles on the struggles that are going on in Europe, “Conflicts within the Crisis.” There are several themes to these articles.

The European setting
First, capitalism in the advanced countries is now very much dominated by the FIRE sector: finance, insurance, and real estate. The central focus of the European governments, the European Union, the European Central Bank and the International Monetary Fund has been to prop up the banks at all cost. That is, of course, to defend the private investors in the large banks. The bad debt that the banks took on through real estate and the derivatives markets has been transferred to the governments. The socialization of private debt. Government programs must be cut to pay off this sovereign debt.

Second, the various European governments have been hindered in dealing with the crisis partly because of the loss of sovereignty. The European Union, the World Bank, the International Monetary Fund, and the World Trade Organization are strongly committed to defending the interests of capital and have significant powers over national governments. They are quite prepared to use their powers to punish governments which move to protect democracy and social justice.

Third, the social democratic parties and the leadership of the mainstream trade unions have adopted the same basic policies as the traditional right wing parties. Thus there is a monopoly of power in the hands of the ruling classes. It does not matter which of the major parties forms the government, the results are the same. Thus parliamentary government and electoral systems have lost legitimacy. This is reflected in the steady decline in voter turnout to around 50%.

Fourth, the existing governments have all adopted police state tactics, militarizing the police, using brute physical force against demonstrators, jailing dissenters, and moving to reduce historic civil rights and liberties. The same thing is happening in the United States and Canada.

The Crisis of Social Reproduction
The Great Recession has had an impact in Europe that has not reached North America. Unemployment has risen to levels not seen since the Great Depression of the 1930s. Youth unemployment is now over 25% in the European Union and around 50% in some of the southern countries.

There is a crisis of care, as wages for many have been substantially cut. Pensions have been cut. Unemployment insurance has been reduced. Social services have been cut. The welfare state is being steadily downsized. Who would have believed that this could happen? Only in the former Third World, under the impact of the Washington Consensus, known as structural adjustment.

Is there a future for social democracy?
Across Europe, beginning in Great Britain and Ireland, social democratic parties have joined with the rich and powerful to bail out the banks and impose the neoliberal package. Thus the traditional major party of the left, which was created by the organized working class, no longer offers any alternative. As Margaret Thatcher once said, her greatest achievement as Prime Minister was transforming the British Labour Party into another conservative party, i.e., a party of pro-business neoliberals.

In Greece and Italy, the social democrats went so far as to form an alliance with the traditional parties of the right and impose unelected pro-austerity technocrats to run the government! Who needs parliamentary elections?

The leadership of the mainstream trade unions have also lost their legitimacy. They refuse to cut their ties to the social democratic parties even when their parties, in government, cut the programs that were enacted to provide security for those working for a wage and a salary. In Greece, the trade union leadership declined to support a general strike against "their government." The rank and file was forced to take the lead.

Struggling to find an alternative
Given the paralysis in the economy and in representative government, it is no surprise that in Europe the disaffected have turned to extra-parliamentary opposition. As we have seen in Greece and the other southern countries, mass demonstrations and general strikes have become the political opposition.

The other main political development is the grass roots movements, begun by young people, tied together by the social media. In Europe there was strong support for the street movements of the Arab Spring. A similar movement was prominent in Greece. The massive occupation of city squares across Spain, the 15M and the indignados, were another example. The call for a "Democratic Revolution" reflects the disaffection of European citizens with mainstream politics, representative government and the priority of the free market. “They call it democracy, but it is a dictatorship!”

The rejection of the current political system has resulted in the determination of the youth in particular to construct “new democratic organizations and institutions.” But there are limits to “leaderless resistance,” as we have seen throughout North Africa. There comes a time when grassroots democratic dissent has to shift to formal political organization if there is going to be change.

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