Austerity Policies in Europe: There Is No Alternative?

Why are neo-liberal economists still in charge to solve the global financial crisis, although it has been their policies, which caused the crisis in the first place? In a new article, Asbjørn Wahl (2012) emphasizes the importance of the power structure in society. Real resistance against further neo-liberal restructuring will only be possible, if left forces manage to change the balance of power in their favour.


The implications of restructuring for people are dramatic resulting in a full-scale attack on the European social model. ‘What we have seen are draconian austerity programmes’, Wahl writes, ‘massive privatisation of whatever is left to privatise and enormous attacks on public sector wages, pensions and trade union rights – particularly in the most crisis-ridden countries. Pensions have been cut by up to 15–20 percent, while the wage level in the public sector has been reduced by anything from 5 percent (Spain) to over 40 percent (in the Baltic)’ (Wahl 2012: 191).

While neo-liberal economists and financial speculators are still in the driving seat, forces of the left within trade unions and social democratic parties behave as if the class compromise of the post-war period was still in place. They continue to focus on partnership with employers, when the latter have long abandoned any commitment to consensual solutions. They continue to focus on social dialogue, while capital no longer has to listen to them considering the shift in structural power towards capital, which is increasingly organized on a transnational scale.

Hence, in order to obtain a solution to the crisis for the people rather than the interests of capital, a focus on changing the balance of power in society is required. As Wahl concludes, ‘only if the trade unions, labour and social movements are strong enough to pose a threat to the existing economic order, will the speculators and their political servants start to give in’ (Wahl 2012: 193).

I strongly recommend this article for reading.

Reference:

Wahl, Asbjørn (2012) 'Austerity Policies in Europe: There Is No Alternative', Global Labour Journal, Vol.3/1: 191-3.


Prof. Andreas Bieler
Professor of Political Economy
University of Nottingham/UK
Andreas.Bieler@nottingham.ac.uk

Personal website: http://www.andreasbieler.net
22 February 2012