Scapegoating labour: A favourite pastime during a downturn

06/04/2011 by

Crises are the opportunists’ delight. Recall how a few minutes after the second airplane struck the World Trade Centre, a New Labour spin doctor sent a memo around encouraging various government departments to bring out ‘bad news’ stories, hoping that the fallout from New York would hide them from public view long enough to defuse their negative potential for the Blair government. And when the crisis is systemic, as the present economic downturn is, the same variety of opportunists are encouraged to roll out a series of policies which would have caused outrage during normal times. They are the policies that had been placed in storage, in anticipation of the ‘right’ moment to put on the agenda again. And no ‘moment’ is more appropriate than a time of generalised discontent, widespread pessimism and a wholesale retreat of decency. A moment like now.

Why now? Because the initial fright caused by Crash of 2008 has subsided. The captains of finance and industry find themselves in a good place: While their confidence has been restored, courtesy of oceans of taxpayer funding, that of their employees is at an all time low. Employers, and their embedded mouthpieces, find it relatively easy to bend the public to their will, with simplistic analyses according to which if there is a labour ‘glut’ it must be because its price is too high or its ‘quality’ too low. Unsurprisingly, whereas during ‘normal’ times, when jobs are not too scarce, public opinion resists the idea that labour is just another commodity (whose demand is inversely related to its price), at a time of crisis society tends to lower its head, bite its tongue and concede the point: labour must be cheapened in order to find work.

In this climate, opportunists whose income comes from other people’s labour realise that it is now or never. That they better roll up their sleeves and utilise this splendid window of opportunity (the crisis) in order to regain the ground that they had previously lost to labour during the upturn, as a result of the labour market’s tightening that curtailed their power to command labour’s fruits. With no regard for logical thinking, trampling like a pack of elephants all over the lessons of economic history, they embark on a narrative that the crisis is due to downward inflexible wages, too much government regulation, insufficient managerial rights etc. Aided and abetted by the plethora of think tanks aching to do their bidding for them (in return for much needed patronage and funding), the scene is set for a multi-pronged attack on labour’s share of national and transnational income.

In the academe, economists are highly rewarded for putting forward complicated models concurring with this labour-as-a-mere-commodity viewpoint. In the national legislatures, politicians who dare question the argument’s logic are sidelined or depicted as antiquated. In transnational unions, like the EU, the surplus countries, eager to retain a lid on their own working class’ aspirations, a cosy alliance between bankers, bureaucrats and the IMF come to a collective conclusion that the crisis (which was caused by  the bankers, the bureaucrats and the IMF) was… labour’s fault and that its resolution involves nothing more than a reduction in its remuneration.

It is in this context that national debt becomes the be-all-and-end-all problem, while the crisis in the banking sector is swept under the carpet. You see, national debt can be blamed on public expenditure which is then to be cured by reductions in public sector wages, conditions and employment, the result of which is an across the board reduction in labour’s share of national income. The strategy unfolds in parallel in multiple loci. Trades union rights are curtailed in Wisconsin, the IMF-EU travels to Greece to impose a withdrawal of union coverage, the UK Con-Dem government is cutting services and public sector jobs as a wilful policy for boosting the bosses bargaining power, Irish wages are cut as a way of diverting value from labour straight into the banking black hole, Portuguese workers are made to feel sufficiently responsible for their state’s bankruptcy so that they will accept the edicts of an ‘internal devaluation’. The list is endless.

It is, of course, natural for opportunists to do what opportunists ought-a-do. Like wolves that take advantage of the commotion caused by a storm or a bush fire, they rush in for the kill. However, unlike wolves whose preying is harmoniously linked to the ecosystem they inhabit, the metaphorical wolves prospering in our brave new bankruptocracy are helping destroy their very own habitat. By using all available means to squeeze labour for all its worth, they are writing the script of their next downfall. Why and how is, or used to be, well known to those of us on the (defeated) Left.  But because some things that were better understood long ago have now been allowed to fall by memory’s wayside, it is worth revisiting that which we once knew more confidently. I shall do so in my next post which I think I shall call ‘The Trouble with Humans’. Meanwhile, I suggest you read Keith Ewing’s excellent Guardian piece Workers rights are under threat across the world (thanks to Peter Welsh for pointing it out to me).

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