The news today carried tidings of another huge setback for working people in the U.S. The legislature in New Jersey, one of the most heavily Democratic and pro-union states in the country, has passed a bill rolling back benefits such as pension plans for 750,000 state workers and retirees. Passage of this legislation, which is sure to be signed into law by New Jersey’s conservative governor, is a huge victory for the Right in the U.S.
There’s a strong thread linking this latest defeat for American public-sector workers and recent posts on the Social Text blog that I help edit concerning the campaign to dismantle unions in Wisconsin and the imposition of structural adjustment policies in exchange for a bailout in Greece. That thread is austerity.
Elites around the world have decided to deal with the fiscal crisis of the state produced by the latest downturn in the capitalist system by raiding and in effect further dismantling the tottering remnants of the social democratic state, and, along with it, the rump of the mass middle class.
As Anne McClintock explains in her blog posting on Wisconsin, this is a nationally coordinated strategy by the Right rather than an ad hoc response to conditions on the ground. And, as Costas Panayotakis’s blog on Greece demonstrates, it is a strategy common to elites across much of the Western world.
But this politics of austerity will inevitably intensify rather than ameliorate the current crisis.
First of all, public employees did not cause the current economic crisis. The crash brought on by shady dealings in subprime mortgages and the many arcane financial tools invented to facilitate rampant speculation by bond traders had absolutely nothing to do with teachers, clerks, and other state employees in places like Wisconsin, Trenton, and Athens.
And pretty much everybody knows this. So the austerity policies being imposed on public employees and their unions by the Right don’t just create moral hazard; they are also morally repugnant, and are likely to intensify the crisis, turning it into what Antonio Gramsci called an organic crisis, in which the economic contradictions of capitalism provoke thoroughgoing political and cultural crises. In this case, the organic crisis is likely to create a political landscape increasingly riven with conflict. The Right’s austerity policies perhaps gain short-term legitimation through arguments that pit workers in the insecure private sector against those in the public sector (who supposedly enjoy unfair perquisites), but such divisive ideology is guaranteed to polarize the political sphere in the long term.
In addition, these policies make no sense in economic terms. As Costas Panayotakis notes in his blog about Greece, dismantling the remnants of the middle class is a sure-fire way to produce even deeper economic problems, since it is through mass consumption that 20th and early 21st century capitalism produces the three percent compound rate of growth it needs. The Right uses the same tired arguments from the Reagan era about how we cannot raise taxes during a time of economic trouble, but it is not the rich and the mega-rich who fuel capitalism. Their purchases of luxury goods are a relatively small segment of any modern economy.
So we can expect an intensification of the economic crisis, and, in tandem, an exacerbation of the naked class warfare of the last three years.
Welcome to the organic crisis.