Labour Chasing Fool’s Gold: Austerity and class struggle

By admin, December 6, 2010 2:12 pm

by Ajamu Nangwaya – BASICS Issue #23 (Nov / Dec 2010)

http://basicsnews.ca/index.php?option=com_content&view=article&id=4463:labour-chasing-fools-gold&catid=1:latest-news&Itemid=69


“Hegel remarks somewhere that all facts and personages of great importance in world history occur, as it were twice. He forgot to add: the first time as tragedy, the second as farce.”

– Karl Marx, The 18th Brumaire of Louis Bonaparte

The above quotation could have been referring to the affection for Keynesian economics by the bureaucrats in Ontario’s trade unions (organized labour).

Keynesianism is a fiscal policy approach that believes the state’s management of the overall injection of spending into the economy by government, businesses and consumers is critical to achieving full employment and economic prosperity.

The government is seen as the key player in encouraging the required level of “aggregate demand.” It does so through its own spending and power over taxation, interest rate and the money supply.

Marx also said that “the tradition of all the dead generations weighs like a nightmare on the brains of the living.”

This quote captures the burden of organized labour’s post-war engagement with Keynesian economics and the way that it tries to resurrect it like old Lazarus, in the face of the current crisis in capitalism.

The brain trust at CUPE Ontario has been trumpeting an alternative economic response to the wage freeze proposal of the McGuinty Liberals.

I, for one, was looking for a transformative document that would be guided by a working-class informed position on political economy and the class struggle.

But what we got was the demand management trope that is the core of John Maynard Keynes’s approach to stabilizing the inherent boom and bust features of capitalism’s business cycle. Keynes’ book, General Theory of Employment, Interest and Money was written as a manual for maintaining the vibrancy of capitalism.

Why is it that so many labour leaders have this compulsive and inexplicable attachment to Keynesianism?

These used-to-be advocates of the working-class should remember that the post-war welfare state was a strategic bargain between organized labour, the state and the capitalist class in the West to weaken the appeal of socialism or radicalism to the working-class.

Another reason for the unholy alliance of these partners in crime was to support anti-communism at home and abroad as well as allegiance to imperialist policies in the Third World.
The state used its spending and taxation powers and control over the interest rate to manage aggregate demand in the economy. These policy tools facilitated the provision of social programmes as a means to make capitalist political economy legitimate.

However, by the mid-1970s, the capitalist class and the state were sufficiently confident that they had hegemony over the working-class and had contained the threat of socialism.
So they turned their backs on the welfare state deal with organized labour, and thus began the era of neoliberalism.

Looking back at the relentless attack of the elite on workers since the 1970s gives us an insight into the current proposed two-year wage-freeze attack on over 1 million public sector workers by the Ontario Liberals.

Many labour unions’ leaderships are hesitant to define the government’s proposed wage-freeze as part of the class struggle.

This political timidity was evident in CUPE Ontario’s presentation to Liberal government’s functionaries on August 30, 2010. It included colourful graphs and Keynesian arguments for investment in the public sector. CUPE Ontario offered Keynesian advice to a government that just recently borrowed from Keynes’ demand management playbook to prevent an economic collapse of the provincial economy.

It should have been clear to this labour organization that the Liberals didn’t need to be convinced that pumping money into the provincial economy during the Great Recession was a way to maintain an economic environment that was safe for business and maintain the legitimacy of the system in the eyes of the majority.

The preceding state of affairs strengthens our case that the quest to pick over $1.5 billion from the pockets of public sector workers is not about fighting the deficit.
It is about the class struggle and taking the fight to those “uppity” little workers who want a liveable wage.

Premier McGuinty and his group of neoliberal “bandits” must excuse us for not reading the scouting report, which specifies that only a dog-eat-dog economic nightmare befits today’s working-class.

Our bad, ‘Premier Dad’!

CUPE Ontario’s leadership was dismayed that in spite of taking advantage of the “unprecedented opportunity to share our ideas, in detail, with representatives of many government ministries…. discussions did not result in any substantive response from the government to our proposals about better ways to improve and protect public services.”

It may not have dawned on the brain trust of that labour organization that the Ontario Liberals were quite familiar with the required mix of government spending, taxation and interest rate and money supply manipulation to move the economy in the desired direction.

Evidence of how conventional CUPE Ontario’s alternative plan was may be gleaned from the manner in which its recommendation on the taxing certain levels of income dovetails with the anti-taxation message of the right.

In the presentation to the emergency meeting of its affiliated locals in August 2010, CUPE Ontario’s leadership pandered to the political right’s aversion to the taxation of income with the following statement: “High income earner taxes: new top bracket for $130K plus.”

Based on 2004 tax data, only 5 per cent of Canadians earned $89,000 and above so why is CUPE Ontario proposing such a high tax threshold? Could it be that labour leaders and some workers are now earning over $100,000 and are just interested in having others pay any tax increase?

It may not be clear to some labour organizations that a decent social wage through access to universal social programmes is very much dependent on taxation.
An anti-taxation mindset is not in the best interest of the working-class whose access to generous levels of unemployment benefits, public transportation, publicly-funded and operated childcare facilities, public education, a public pension plan and a whole host of public services is only possible when businesses and the general citizenry contribute to the tax base.

Our fight as workers and residents of Ontario against the wage-freeze, attacks on the special diet programme, rollback of spending on Metrolinx transportation programme and billions of dollars in tax cut to the business sector will not be won through Keynesian-inspired fancy power-point presentations to the Ontario Liberals.

It will be won through consistent economic and political education (from a working-class perspective) of public sectors workers and the broader working-class in this province.

It will be won through abandoning the bread-and-butter trade unionism that saw most of Ontario’s public sector unions obsessively focused on the proposed wage-freeze and not the array of policy proposals in the March 2010 budget that assaulted the economic interest of the working-class.

It will be won by working in principled alliances with social movement groups to mobilize and self-organize the working-class to challenge the government in the streets and all available political spaces.

Sucking up to the Ontario Liberals and trying to appear reasonable will not win the struggle for economic justice.

Ajamu Nangwaya is a trade union activist, member of the Canadian Union of Public Employees (CUPE) and former vice-president of CUPE Ontario.

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