Misunderstanding Austerity

No austerity and no cuts means no capitailsm
Does the Left misunderstand austerity’s origins?

There is a lot of talk about austerity, about having less austerity, more or even none. For those on the right this is a legitimate activity, but for those on the left who continually use the rhetoric of austerity, that they want less or even no austerity, they are making a serious category error, particularly because they do not question why we have austerity in the first place: capitalism. There are many on the left who only talk of less austerity, it must be assumed that they are not questioning the supreme place that neo-liberal capitalist economy holds in contemporary Western culture. For those on the left who want to see the end of austerity and do not question austerity’s origin in capitalism, it appears that they are misunderstanding austerity.

Capitalism Is The Ideology Not Austerity

A fundamental misunderstanding of austerity is in thinking that it is an ideology. It isn’t the ideology, it is capitalism, and in these times, neo-liberal capitalism that is the ideology. Those on the right and those who are economic libertarians, have capitalist economy as their own particular ideology and (specifically as it rarely affects them) they accept austerity as a positive within this economy that requires its downturns. Capitalist economy accords with their world view, a view that sees no value in the human being in anything other than monetary and as a piece of equipment for use in the workplace.

That certain sections of the left, if not most, collude in this ideology is unfortunate. It is also self-defeating. One aspect of austerity that leads to this misunderstanding is the way austerity is used by those on the right, as evidenced by the 2010-15 government and the current Conservative administration. Austerity is used as a tool by these administrations in order to effect a particular ideology, that of decimating the State’s provisions for its citizens. So, currently, every council in England are making massive cuts to its operational budgets leaving vital services for the disabled, sport and leisure, environment, education and many other unseen provisions, being cut or got rid of completely. Or being privatised which is death by a thousand cuts (pun intended). Nationally we are seeing this happen by the proposed £12billion cuts to welfare and the perilous situation the NHS finds itself in. Witnessing all of this the confused left have concluded that austerity is ideological instead of a tool of ideology. This misunderstanding is further compounded by its rhetorical use by all parties of the left, because in arguing for less austerity or even no austerity they fail to comprehend that they should be arguing for an end to neo-liberal capitalist economy if they want to end austerity. The Chancellor, George Osborne, knows this and is making hay with this knowledge. How? Because no one is seriously disagreeing with him on the need for austerity, only on the minutia, offering sticking plasters thinking this will revive a corpse.

Neo-Liberal Capitalism, Debt And Globalisation

At the time of the latest financial collapse in 2008 the combined debt of advanced capitalist economies went into trillions of dollars. As money is the foundation of all economies, and as debt is the machination used by fiscal economy to fund said economy, it is no surprise that the downturns in capital occur frequently. The severity of the 2008 crash has been exacerbated by three factors: 1. The criminality of the banking sector, particularly in the UK but also generally; 2. The neo-liberal version of capitalism that is in vogue today which requires lax control of the financial markets, a dismantling of government laws and services along with a bigger emphasis on debt as a tool to finance the activities of business and governments. The third, and most pernicious, of the factors that is integral to this latest crash of capital markets is globalisation which is a particularly neo-liberal phenomenon. But the phenomenon of globalisation, as William Greider presciently foretold in One World, Ready Or Not, published in 1997, would swing back at the main players (or those they govern) of globalisation, those who deal in the ‘abstract’ of trading in finance and resources. The logic of globalisation will inevitably lead to reduced living standards of all but the top-tier of society by discarding “old political commitments to social equity and reduce benefit systems for pensions, health care, income support and various forms of ameliorative aid.” (Page, 285) We are clearly in the midst of this scenario now.

Those in the higher echelons of society should feel no comfort by their seeming detachment from the problems the rest of society now faces. By accepting, if not participating in the laissez-faire nature of trading in capital, they have unwittingly set in train the demise of the traditional tools of trade: industrialisation and manufacturing. So there is a trade deficit between exports (the real value of a country’s GDP) and imports (which is usually paid for though debt). Added to this are the mass unemployment caused by jobs moving to cheaper locations and the rise of technology that takes jobs away from humans. As if this was not bad enough the next catastrophe, due to the increasing toll on the planet by burning fossil fuels and by an unsustainable acquisition of resources, is climate change leading to drought, a collapse of vital resources, mass population movements, and, ultimately, unending wars. This ‘perfect storm’ of events will ensure that the elite will become engulfed just like the rest of us, though maybe not as quickly.

The Left Failure To Tackle Capitalism As The Real Cause

The left understands all of this, they have many organisations that deal with each issue above independently. The problem is that taking any issue in society, political or cultural, individually usually means missing the bigger picture. Austerity, as the left have dealt with it, is a case in point. Yes the left would like to see no cuts to vital services, especially for the weak, poor and sick; yes they would like to see no austerity; yes to real employment with good employment rights; yes for the environment to be protected and for an investment in renewable energy technology. The one thing that causes austerity, that causes societal collapse of vital services, that causes environmental degradation, is the capitalist economy. And now, due to the economic orthodoxy of neo-liberalism, contemporary capitalism is refusing to invest in the new manufacturing of renewable energy which could help ameliorate the effects of climate change and unemployment. Capitalism is eating itself and us with it.

None of the left questions the establishment of capital economy, and yet they protest against the effects of this capitalism. Labour said before the 2015 election that they agree with the Tory’s economic plan and when it comes to austerity they would cut only slightly less than the coalition government. The Greens, while being more radical than Labour, do not question the legitimacy of the capitalist economy though they do question the growth principle that is so hard to shake from contemporary economics. Other left groups, like the TUSC and Left Unity, while being specific about having full public ownership of the major utilities, transport infrastructure and vital societal services, fail to mention capitalism and certainly fail to say outright that it is the capitalist economy which is causing all of the problems mentioned above.

Maybe it’s because the left fear how the populace would respond to such a stark message, that it would be electoral suicide. Yet, in Labour’s case, sitting on the same spectrum as the Conservatives, is also electoral suicide. The Tories know this and use it to their advantage knowing that Labour have already agreed with their economic policy. But worse than that is what this acquiescence to the capitalist economy and the subsequent misunderstanding of austerity will lead to. Globalisation is the end game of neo-liberal capitalism and, soon, irrespective of State boundaries, there will be no impediment to the flow of capital and people, all for the benefit of society’s top-tier and their wish to reduce civil society. Added to this is the spectre of the trade deal, TTIP, that will end a government’s right to govern over its own people because it is in complete hock to the Company. Private wealth kills social autonomy. This is the ideology of the right, it should not be an ideology that the left accepts. Can the left find the courage of its convictions to say no to capitalism and, thereby, say no to austerity authentically and with promise? To understand austerity and its fundamental role within capitalism, one has to question capitalism itself.


One World, Ready Or Not: The Manic Logic Of Global Capitalism, William Greider, Penguin Books, 1997

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