How About Some Real “Austerity?”

In a recent BBC opinion piece, economic historian Niall Ferguson argues that “young people should welcome austerity.” Pointing to the “huge debts” accumulated by western democracies, Ferguson suggests that critics “are right to discern that something is amiss with our political institutions.”

His answer is something approximating a restoration of the social contract, a renewed fairness in the distribution of societal wealth between the generations. Recommending austerity, Ferguson says that we ought to welcome tougher regulation of ourselves, just as of politicians and bankers. But there’s something wrong with the political economy of austerity that Ferguson isn’t hitting on.

Not surprisingly, it’s always the salaries and pensions of working people that are subject to the various diminutions attending so-called “austerity.” The permanent bailout culture of western capitalism continues uninterrupted by making, in the words of anthropologist Marvin Harris, “austerity for the many, and socialism for the rich, a matter of patriotic duty.”

There is an assumption (one overhanging the entire conversation about libertarian and free market ideas) that inasmuch as teachers and public transportation workers, for instance, take their pay from governments, they are enemies of freedom and of the taxpayer. Since they work for government monopolies, the argument goes, they are by definition paid in excess of what the quality and quantity of work they’re doing would justify.

Market anarchists reckon things somewhat differently, contending that prevailing contraventions against legitimate free market principles run even deeper than many self-styled libertarians acknowledge. No doubt government monopolies, which have no need to respond to the needs and wants of communities at large, provide inferior services at excessive prices.

Still, libertarians needn’t simply accept that the existence of government monopolies means that their workers are necessarily paid more than they would be under genuine free market conditions. Market anarchists argue that arbitrary restrictions on free exchange and on homesteading create an artificially overloaded supply of wage laborers, people who might otherwise work for themselves or cooperatively with others in small enterprises.

In purchasing labor, then, the employing classes, including government agencies, are able to pay far less than they would otherwise. The under-compensated worker toils more and creates more value than she would for the same compensation if there weren’t a catalog of state-granted privileges for employers. In Greece, as elsewhere in the global realm of monopoly capitalism, large, hierarchical institutions rely for their existence on an amalgam of barriers to market entry, intellectual property “rights,” and subsidies.

Together, these legal factors create an economic paradigm in which “choice” exists only in the narrowest sense. Competition between a handful of giant corporate contenders is no competition at all. Genuine economic freedom would see these titanic firms vie with economic approaches that exist completely outside of the formal economy of cash exchange and nine-to-fives for hourly pay.

Without land monopoly and subsidies to big agribusiness, individuals could experiment with true independence, viable alternatives to favored commodities. Without professional licensure and “intellectual property” protections, they could build for themselves and do for themselves what only huge multinational corporations are allowed to build and do at present.

Once we begin to comprehend the full depth of state-founded privilege, it is absurd to imagine that the average working person is better off today than under conditions of unbridled competition — that state of affairs so wrongly understood to be the favorite form of big business.

The argument of market anarchism is indeed one for austerity. It asks for an end to needless strictures that prevent individuals from organizing an economy of genuine mutual exchange and voluntary cooperation. It asks for an end to bailouts, and corporate welfare subsidies, and patent protections to multinational companies.

These — not worker pensions and salaries — are the things pushing the globalized economic system toward a precipice overhanging the gaping void of worldwide depression. Once there’s authentic austerity for the rich and connected, the real leeches on productive society, then we can talk.

Translations for this article:

Anarchy and Democracy
Fighting Fascism
Markets Not Capitalism
The Anatomy of Escape
Organization Theory