Still dealing with symptoms rather than causes

Posted on October 19, 2012


By tomorrow afternoon (Saturday, October 20) it should become clear whether Britain is about to join the growing tide of European rebellion against economic austerity that has become particularly vociferous and violent in Greece and Spain. If, as the British Trade Union Congress (TUC) predicts, hundreds of thousands of men, women and children turn out on the streets tomorrow to demand “a future that works”, the die will be cast: a traditional stiff upper lip will have been replaced by a powerful and angry snarl.

It will be a snarl that is a reaction to high levels of joblessness, increased casualisation and the lower buying power of the minimum wage. As in South Africa, the dominant theme is opposition to the symptoms of recession rather than any attempt to analyse, let alone try to deal with, the probable causes of what the unions predict will be increasing misery for the masses.

The TUC certainly expects a massive turnout and has estimated that “several hundred thousand” people will gather along the north bank of the Thames to walk to a mass rally in Hyde Park. And there is more than a hint that a huge turnout will be the precursor of a general strike.

For the critical London march, trade unions and support groups have chartered more than 200 busses and a train from Newcastle in the far north-east of the country, with seats being offered on the internet. And it is the internet and social networks that have, until the middle of this week, been almost alone in promoting the protests.

For weeks, union websites have called on members to join protests in London, Belfast and Glasgow. Websites and networks of groups ranging from constituency labour parties to various socialist and environmental organisations and parties have also added their voices.

By Monday several union branches in outlying districts announced that all seats on their busses were booked and the prospect of a huge march in London seemed probable, with substantial turnouts in Belfast and Glasgow as well. In the wake of this news, the mass circulation and traditionally Labour Party supporting Daily Mirror came out on Wednesday in support of the protests.

The newspaper announced that it “is backing the march and we will be out in force to show our support but we are calling on the public to join in”. It also carried an interview with 20-year-old unemployed Fiona Myers who intends to march tomorrow to register her protest.

Although it is mainly the TUC that will be judged on the size of the protests, a large turnout is likely to benefit not only the circulation of the Daily Mirror, but also the opposition Labour Party, since all bar two of the TUC unions continue to support Labour. Yet this party has also agreed to a programme of austerity, an approach that has apparently led to considerable demoralisation among its members.

However, only a minority within the unions agree with transport union, RMT, that there is basically nothing to choose between the governing Conservatives, their Liberal Democrat allies, and the Labour Party. But there is widespread dissatisfaction with policies that attempt to reduce deficits by cutting public spending and social welfare benefits while raising taxes. It is this disgruntlement that the small socialist groups and the Green Party will attempt to capitalise on when they join the marches.

And a prime target for protestors across the board will be the International Monetary Fund (IMF) and other international financial institutions that proposed — at times demanded — austerity as a remedy for economic crisis. This “no gain without pain” approach was resisted by unions everywhere as they continued to demand more jobs and better pay in order to create more demand and so “stimulate the economy”.

The German and Austrian governments, largely with the support of their own unions, chose not to follow the austerity path — and have generally fared better than their their cost-cutting neighbours. Until now, that is. But the fact that Germany in particular did not slide into recession along with most of its neighbours provided some credibility to the union argument that demand should be stimulated.

Now, although the German economy appears to be faltering, and with the main debate still stuck in an either austerity or stimulation loop, the stimulation argument has received another boost. It came last week when the IMF acknowledged that austerity programmes can do more harm than good. The admission appeared in the latest World Economic Outlook publication, where the IMF’s chief economist, Olivier Blanchard, noted that efforts among wealthy countries to reduce their deficits had caused far more economic damage than had been assumed.

This analysis was supported in Paris at the weekend by IMF managing director, Christine Lagarde. After calling for Greece to be given more time to stabilise its economy, she noted that austerity measures must be “compatible with each country’s circumstances”.

For commentators with longer memories there was an element of deja vu in this backtracking by the IMF. In the 1980s, the “structural adjustment policies” imposed on Ghana by the IMF and the World Bank caused such social dislocation that the international institutions switched tack: they ordered increased public spending in that battered economy under the acronym, PAMSCAD (Programme to Mitigate the Social Costs of Adjustment).

Not that the IMF is proposing a revised PAMSCAD approach for Europe or anywhere else. But the comments seem to have resulted in increased recognition within the labour movement that both the austerity and stimulus proposals are simplistic knee-jerk reactions; a matter of trying to deal with symptoms rather than causes.

But such arguments, certainly in Britain, remain on the margins with no coherent alternatives being canvassed, let alone adopted by the TUC. Appeals that reflect wish fulfillment are the order of the day, summed up by the desperate hope for tomorrow expressed by Fiona Myers: “I want a job in retail in a shop and to be able to budget to put a bit aside for the future.”

Posted in: Uncategorized