Summary of a talk War on Want gave in the space on Sat 13 October. Thanks to Murray and Rafeef!
Basic summary: the cuts are a small part of a larger problem, “neoliberalism”; it’s been around for decades and there are successful examples of resistance that we can learn from.
This article’s split into background theory, examples of resistance from the global south, and ways for us in the UK to move forward.
Part 1: the theory
It’s not just about the cuts: neoliberalism
The cuts aren’t the only problem at the moment. A lot of other changes are happening that can’t be explained just with ‘the credit crunch has caused the cuts’. The recent shares for rights crap is plain privatisation, nothing to do with debt or the deficit. The root problem, of which the cuts are a part, is neoliberalism.
Neoliberalism’s been around since the 50s, when economist Milton Friedman made up that the free market was the best way to run the economy. What neoliberalism is:
- Cut back the state.
- Selling off state-run enterprises to private companies.
- Remove laws that hold back companies (on how much they can lend and who they can trade with), to make market ‘freer’.
Where ‘neoliberalism’ came from
The idea had just been made up but Friedman and his followers hadn’t actually tested it anywhere. In Chile, loads of enterprises were state-run (e.g. heavy industry like mining), and when the Marxist Salvador Allende was elected he tried to push more, so the CIA overthrew him, replaced him with (now famous dictator) Pinochet and brought in people that loved neoliberalism to test their ideas out.
The outcome: unemployment rose from 3% to 20%, growth in Chile plummeted… the economy was destroyed, but (how coincidental!) the financial companies like banks and big lenders were massively strengthened.
Despite the epic failure of the policies – on a human level and on a big-scale economic level – the same ones were pushed by the international financial organisations (the International Monetary Fund and the World Bank) all throughout the 80s. They used the debt countries in the Global South had to strong-arm them into implementing these disastrous policies, calling it “structural adjustment”.
Why there are cuts
There will always be crises because capitalism is inherently unstable. Basically (and over-simply!) either wages rise meaning companies’ profits fall, so growth falls i.e. recession OR wages fall, so people buy less stuff, so growth falls, and so recession.
This specific crisis wasn’t accidental. The people in charge know exactly what they’re doing!
- Financial sector is huge after Thatcher took away the regulations on it in the 80s – used to be 20% of the UK’s GDP in the 70s before deregulation, and in 2006 it was 5x the GDP.
- To keep making money, companies need to take bigger and bigger risks, hence things like “derivatives speculation” and the laws on lending being relaxed (so people would spend more so companies would make more) which helped cause the recent crisis.
- It was no accident, people specifically wanted the financial crisis to happen e.g. US traders sold UK banks bad debt then bet on the stock market that UK banks would crash to make more money.
All the talk about globalisation that was happening in the 90s and early 2000s has gone down the pan, with every Global North country now mainly focusing on their own banking sector. Some effects of globalisation:
- Companies push for wages to be cut in the Global South, then they move production and jobs there because it costs less (and there’s less protection of workers’ rights)
- Countries in the Global South have to become “export zones” to survive, centring their economies around exporting people as workers to the Global North (because that’s the only place with work) as well as selling natural resources to big global companies (who force the prices to stay low, pushing them into a dependence on those big companies).
- When the financial crisis hit, neoliberal policies started being pushed in the Global North. As profits fell for the big global companies who were employing substantial portions of people in the Global South, jobs were cut and economies crumbled.
Part 2: the examples
Example 1: Cochabamba and water privatisation
Water was privatised, and people that couldn’t afford to pay for it had their water cut off.
How people resisted:
- Unions worked to get non-unionised and precarious workers involved.
- Used creative actions to engage people on the street.
- Created a coalition of workers and non-workers to resist that respected a wide range of tactics – from unions negotiating with the government, to local general assemblies, to precarious workers putting up road blocks to grind the city to a halt.
- Worked to “unprivatise society” and restore solidarity between
How it succeeded:
- Creative actions got tens of thousands of people into street demonstrations.
- Police crack-down led to locals rising up in support of the protests.
- Protests got the privatisation reversed. Winner. Momentum still around a few years later when the IMF tried to impose a new tax.
Example 2: Egypt and Tahrir
A lot of people in the Global North misunderstand the long occupation of Tahrir Square, thinking it started with an impromptu demonstration that grew via social media… that’s not true.
How people resisted:
- Big strike in the industrial export zone Mahalla (المحلة)
- Created a union independent from the government unions to fight for workers’ rights
How it succeeded:
- Years of tireless organising from unions (workers as well as non-workers and students)
- On January 25, the National Police Day in Egypt, union organised workers and non-workers organised an anti-brutality demo, which kicked off Tahrir Square
- People were well organised before Tahrir Square: youth from the independent union were a main force, as well as the Muslim Brotherhood being hyper-organised
Part 3: moving forward
What the UK can learn from the Global South, and what can be done better:
- Unions outreaching to non-unionised workers and non-workers could definitely work in the UK, unity in strength.
- Don’t fetishise tactics – just because occupying a space worked in Egypt doesn’t mean it’ll work in the UK!
- We have a tendency here to aim at our goal without the necessary building first. Workplace and community organising is tireless work, but it’s incredibly important to build long-lasting movements.
- Another important reason to put the effort into building long-term movements is to restore solidarity by working against the lack of faith and trust the system we live under creates [see Values and Frames].
- As a lot of activists in the UK are middle class, a lot of anti-cuts activists aren’t affected by the cuts. This needs to be realised and more work done to focus on which areas of the cuts are affecting people the most. Secondary to that, there needs to be a better distinction between work with other activists, and working with people that aren’t already allies [see community organising]
- We’re in a much better place than we were five or six years ago. People realise that alternatives to what we have now exist – big ideological victory – so we need to move our discourse onto pushing for specific steps away from capitalism (e.g. transitional demands).
- We need to make sure we have a clear way of getting from where we are to where we’re going, with short-term (winnable?) goals along the way. Classic planning, but often overlooked.
We’re living in a time of change and hope, so let’s get on it.
PS. Here’s Murray Worthy from War on Want, who organised the event, telling us what he thinks of Cuts Café.