Below is a guest post kindly written for EconSquare by Jim Stanford, economist with the Canadian Auto Workers, economics columnist for the Globe and Mail newspaper, and author of Economics for Everyone (Pluto Books, 2008, www.economicsforeveryone.com):
Workers face a dual threat from the global financial crisis. First, we are exposed to the immediate economic and social costs of the recession itself: lost jobs, lost incomes, lost homes, and in many cases lost lives. Second, and more permanently, this moment could actually lead to structural changes that further damage workers and their organizations. Far from conceding that there was anything wrong with the recipe they have forced down our throats, employers and pro-business governments will seize on the fear, confusion, and divisions caused by the crisis to push for still more market-oriented measures.
Indeed, the Canadian author and anti-globalization activist Naomi Klein explains in her latest book, The Shock Doctrine, that ruling elites regularly take advantage of moments of widespread fear and confusion, arising at moments of economic, social, or even natural disasters, to force painful changes that they were preparing for years – but that the masses of people would not tolerate under “normal” circumstances. The present global economic crisis will surely provide another test case for shock doctrine strategies. The best way to inoculate ourselves against shock doctrine is to push back with our own analysis: our own explanation of what happened, why it happened, what can be done to both insulate working and poor people from its effects, and how to prevent it from happening again.
In my view, economic literacy and political-economy training must be a core element of the organizing and movement-building efforts of trade unions and other progressive forces. We have to equip our supporters to identify the true culprits, resist false solutions, and fight confidently for better alternatives, and learning more about economics – from a worker’s perspective – is a crucial part of those preparations.
In short, the labor and left movements need their own “story line” about the economic crisis, its causes, and consequences. We need to prepare our members and supporters to reject claims that workers, unions, and public programs are somehow responsible for the meltdown of private finance. Of course, working and poor people are the victims of this crisis, not its cause, and tightening our belts will do nothing to solve it. That’s why it’s so important to explain exactly what did cause this crisis – the same factors that will cause the next one, too, if we don’t change the rules of the game. It wasn’t a random, negative event. It was the predictable, preventable outcome of running the world economy in a particular way, according to a particular set of rules. And unless and until the rules of the game are changed, we will continue to experience chaos like this every few years. (In fact, thanks to globalization and the lightning-quick technology of the financial sector, the crises are coming faster than ever – and deeper, too.)
Without understanding how this downturn emerged from features and forces that are “hard-wired” into the DNA of deregulated, financialized capitalism, people will be tempted to see the crisis as a “random,” negative event – an unfortunate but unavoidable challenge that everyone in society must help to overcome. At best, this leads to the conclusion that we just need to hunker down and wait out the crisis, hoping that the financial bubble eventually reinflates and things get better. At worst it underpins a willingness to accept the sacrifices and concessions that are being demanded by employers and governments – accepting the false logic that “we’re all in this together.”
In the coming tough years, therefore, the labor movement will naturally fight hard to protect workers against lay-offs, cutbacks, concessions, and the many other consequences of the recession. And all progressive forces will campaign in the political arena against regressive shifts in social and economic policies, and cutbacks in public programs, that we know will be imposed by deficit-laden governments. A crucial part of arming ourselves for those battles is ensuring that our members and supporters understand why this crisis occurred, and why it will happen again, unless we change the whole set of neoliberal economic and social policies we’ve been living under for the last three decades.
This recession was not a random event. It wasn’t inevitable. In fact, it was both predictable and preventable. It was produced by the mechanisms of private profit (especially as practiced in the financial, or “paper”, economy); irresponsible credit practices; and a profound failure of government regulation. Those same three key ingredients (greed, loose credit, and lack of oversight) will cause the next conflagration, if our only response to the collapse of this bubble is to sit back and hope that it re-inflates – as the screws are tightened on working people all the while. By building a stronger understanding of how capitalism actually works, through more extensive economic literacy and political-economy training initiatives in our own ranks, our movements can better resist the attacks that are coming, and be ready to fight for the fundamental change in direction that we all need.
