The current crisis has acted as a catalyst for the implementation of neoliberal policies that promoted a serious humanitarian and political crisis across Europe. As elsewhere (e.g. Eastern Europe, Mexico, Latin American and African countries) the therapy proved more dangerous than the disease. Drastic welfare state retrenchment; income and class polarization and increased poverty levels have not restored economic growth (see deflation, public debt rise or increase in non-performing loans) and it is estimated that employment will not return to its pre-crisis levels in the next decade, unless people in Europe demand successfully a stop in austerity as a way out of the crisis.

Left wing parties, trade unions and social movements in Europe have a ‘real opportunity’ to fill the gap in political representation created by Europe’s discredited political and media classes. Since 2010, Governments "self-destructive dance with the Troika of foreign lenders assert and fat cats, initiated an ongoing tango of social turmoil across Europe manifested in numerous demonstrations that sometimes include spontaneous industrial action both at sectoral and local level. Those in power can not comfort themselves with beliefs that media and economic control can eradicate workers’ solidarity. Even if austerity policies are still winning the message we get is that things may kick off in the most unlikely places and involve people nobody ever expected to resist. European Left overarching task is to recompose the political unity of working class, to deliver justice and hope for ordinary workers, tax payers and communities.

It’s time to make markets pay!

The promotion of Neoliberalism in Europe is a planned effort by financial interests against the postwar Keynesian compromise.

The drift to increased inequality is not a real option for working people in Europe.

 

Agenda: the Big Issues

1. Rising Inequality – Precarity: What future for decent work opportunities?

Commodification of everyday life, as well as marketization and financialization led to an increase in inequality. Nevertheless, we need to adopt in our analysis a much more expansive definition of inequality to understand contemporary dimensions of risk, poverty, precarisation of work and social exclusion. Inequality should be understood not only in terms of rich and poor societal divisions and other material inequalities, but also in terms of economic security/ downward social mobility and dimensions of inequality related to issues of participation and influence in social institutions and institutions of political representation.

The rise of precarious employment should be considered as a continuation and extension of traditional labour market segmentations and inequalities at the expense of the most vulnerable groups of the working class (especially young people and immigrants). Precarious workers do not constitute a new, distinct, and perhaps dangerous, class driven by unprecedented in the past material conditions or individualistic, bourgeoisie even, mentalities and lifestyle choices. No one is immune to the modern complex configuration of social risk and to the dictatorship of financial institutions to ordinary workers and students.

2. Austerity: What future for Social Cohesion and Economic Progress?

European integration is an experiment in market-driven social reorganization. The EU has created new institutions that unite Europeans as citizens while pitting them against each other as competitors. Price-based competition has intensified where it already existed (e.g. manufactured goods) and been introduced where it did not (e.g. public services).  Current austerity measures aimed at reassuring investors have accelerated market failures and inequalities, while certain elites groups may be more powerful under conditions of slow economic growth and recession. Especially workers in EU member states under financial scrutiny and with a tradition of limited social protection, such as Mediterranean countries, have higher rates of precarious employment and economic inequalities.

Economic inequalities and insecure employment trajectories are structurally based on economic and social inequalities across Europe promoted by harsh austerity measures and welfare state retrenchment processes. Imposing harsh austerity measures cannot solve economic instability. Austerity policies deliver a decline in standards of living with more and more people looking for jobs and being unable to make ends meet for their families. Public goods become increasingly private and many people are struggling to pay their mortgages, electricity bills or their medical and student debts.

Europe is hit by the worst humanitarian crisis in last 60 years according to Red Cross and Oxfam. Thousands of Europeans are queuing for food in soup kitchens or shopping at specially designated charity grocery stores stocked with low-cost food and more than 25% or 120 million people across Europe suffering from social exclusion and extreme living conditions.

3. State reform: What future for Social Justice?

The share of low-wage and insecure employment has increased and trade union membership declined in all countries of Europe. At the supra-national level, the institutions of the European Union have promoted the internationalization of markets for goods, services, capital, and labour, and national liberalization policies have been justified as the enactment of these dictates. These trends have been reinforced by other micro-level phenomena, such as the vertical disintegration of corporate structures, through outsourcing, joint ventures, and use of temporary labour agencies. In advanced economies, the debate has often centred on fiscal austerity and how to help banks –without necessarily reforming the bank practices that led to the crisis, or providing a vision for how the real economy will recover.Financialization itself is partly the result of the retreat of the state in providing certain social goods like housing, education, social insurance, and pensions.

Policymakers and regulatory bodies have come to use the market as a general-purpose policy tool, introducing price-based competition into new areas of life and ratcheted up competition where markets were already present. Although the recent financial crises have sparked protests and fueled criticisms of the capitalist system, policymakers are responding with public sector and welfare state reforms that, in fact, constitute an intensification of market relations in society.

 

The urgent task of building a Popular f against austerity

Powerful financial institutions and economic elites exercise more power over workers keeping them under control with mortgages and new power structures where social and political institutions can not influence the decision making.

In Syriza and the European Left we consider austerity as anti-democratic and extremely right way view of resolving debt crisis and achieving greater economic performance. In advanced economies, the debate has often centred on fiscal austerity and how to help banks –without necessarily reforming the bank practices that led to the crisis, or providing a vision for how the real economy will recover. In some cases, this has been accompanied by measures that have been perceived as a serious threat to social protection and workers’ rights. Market structures affect protective institutional arrangements (welfare states, industrial relations rules, political systems, and other societal arrangements) in a way that Europe is stepping back from human rightsand the burden of economic adjustment is not at all shared equally across European societies.

 

Notes:

Marketization = thechange in the governance of transactions, the most important dimensions of which are the frequency of transactions, openness to new actors, information used, and degree of standardization in what is traded. Marketization is reshaping corporate behaviour by creating new techniques for them to extract economic value.

Financialization = Great shift of profit sources from productive activities to financial activities; fundamental transformations in the relationships between banks, big business, and the working class in the context of ongoing crisis; new forms of profit emerged that came from extraction in the circulation process rather than capital accumulation in the production process.

The Financialization story:

Since the 1970s there are technological changes and neoliberal changes in institutions and politics that alter the 'channel of accumulation'. Multinational corporations become flush with cash and their dependence on bank financing decreases. Because of this, non-financial corporations are not only relying increasingly on their own retained earnings as a source of investment, but they also become involved in financial activities as a source of their profits. Banks turn increasingly to households in their lending activities. This increase is not mainly in the area of consumption, which is basically stable. The main area of increase in their lending activities is mortgages. And they are increasingly financing a lot of other areas where state provision is retreating (other than housing), including pensions, insurance, and education. So their income comes increasingly from money they extract from households in this way, rather than in providing finance for companies creating surplus value.

 

Vocabulary:  

• Extraction of profits from unproductive activities is the name of the game and the oldest game in the town

• Political change by design not by accident

• New taxonomies of social risks and new communities of risks

• From flexicurity to risk-curity, from Baroso I Europe (partly deregulated EU) to Baroso II Europe (total deregulation in EU)

• Time to redefine structures/ visions and to articulate broader collective interests, time to change the zeitgeist

• Austerity and labour market deregulation policies is a race to the bottom for all Europeans

• Real wages are increasing at a much lower pace than productivity. Income distributional issues are at the very root of the Great Recession

• People are not inputs and outputs and should not be treated as such

• Two sides of the same coin: over-consumption + under accumulation processes/ overproduction +underemployment)

• New powerful alliances between managerial and capitalist classes put at risk democracy and basic human rights

• Substitute of a social democratic state for a neoliberal one

• Welfare institutions deal with market effects and not the causes (e.g. policies to combat unemployment)

• Human perspective of improving working conditions is missing

• Ecotopia is a bet we can not refuse
  
  

  Lefteris Kretsos is a senior lecturer of the University of Greenwich, Member of the research team that drafted the "Black Bible" of austerity in Greece
  
  Read the "Black Bible" of austerity in Greece here