Sunday, 2 October 2011


The austerity measures in a number of southern and Eastern European countries, as well as in advancec capitalist countries, including France as the most recent example following the informal route of austerity byb introducing massive cuts impacting middle class and working class living standards, means that labor values will be declining for at least a decade.

The credit economy currently in crisis since the Lehman Brothers collapse is not about reinventing the wheel, that is restoring confidence in the credit economy, for the reality is corporations are flooded with cash and the major banks with liquidity problems need not worry because central banks are behind them.  So what is the crisis about if at the core the credit system can be handled in different ways without negatively impacting middle class and labor values?

Why is it that workers from New York and Lisbon and across Europe and parts of Latin America, especially Chile with the issue of education at the center of the controversy, are protesting so vigorously against a regime that is intent on downward mobilization of the middle class and labor? If the issue one of credit, there are endless policy mixes that can solve the problem, but finance capital is not satisfied with preserving social and political harmony until labor values across the entire world come down and massive capital transfers from the bottom up.

Many middle class and working people across the Western World know that is exactly the problem, and this is why a small segment of the population is out in the streets protesting. People know that the state is reducing salaries/wages, cutting benefits, raising social security age and raising taxes on the middle class and workers so that it can reduce labor values that amounts to a massive transfer of wealth from the bottom 80% of the people to the top 20% who own most of the wealth and for whom government policies are intended to serve.

What does this entail for a presumably 'democratic' society? Do we live in a plutocracy operating under the veneer of democracy, and if so do the people have the right to overthrow such tyranny of the few - political and financial elites? My guess is that Western society is not yet at the juncture of engaging in revolutionary overthrow and the elites are well aware of this, so they proceed with austerity knowing the limits of non-conformity extend to more or less peaceful demonstrations and strikes without any serious consequences to the political economy and social order. How long will the middle classes and workers of the Western World tolerate continuous downward mobilization without demanding a new social contract? The conditions for revolution are in the works now, and if downward social mobility continues, the social order may not be as safe as it currently appears.

No comments: