Behind the rhetoric about how social welfare is “bankrupting” the country, and how government services make people too “entitled,” there’s the implication that the poor will need to suffer more in order for capitalism to be preserved. This is because given the situation of falling profits and long-term economic contraction that global capitalism has found itself in throughout the last half-century, foisting the costs of this crisis onto the lower classes is the only option for those who want to maintain the existing hierarchy.
This is the logic from which Margaret Thatcher’s statement about how “there is no alternative” to neoliberalism came from. The severe costs of the Vietnam War, along with the oil crisis that was caused by the 1973 embargo, had put an end to the postwar era of U.S. economic growth. To maintain rising profits, and to carry forth further neo-colonial expansion, they implemented the neoliberal policies which had been explored by the Pinochet regime. Starting with the Carter era, they transferred the tax burden onto the poor, reduced social services, and carried out deregulation and privatization, all while selling these things as the only way to maintain prosperity.
And within the pro-bourgeois parameters that they had set for what constitutes a “prosperous” society, their arguments for embracing neoliberalism were correct. The recession of the 70s had faced the capitalists with a major point of contraction for global capitalism, one that made the old welfare state apparatus untenable if they wanted to continue making their own class richer. Since then, austerity has been their go-to solution whenever they get even a vague suspicion that “entitlements” will get in the way of their profits. Policies like Clinton’s welfare reforms, Obama’s food stamp cuts, and Trump’s Social Security and Medicaid reductions have all been part of the ruling class reaction to a profit rate which-following in the predictions of Karl Marx-has overall been declining.
In other words, neoliberalism and all of its destructive consequences haven’t simply been an unfortunate accident in history. They’ve been the costs that those in power have seen as necessary to keep their machine of global capital running. In 2020, when a pandemic, a global depression, a climate crisis, and the decline of U.S. hegemony are threatening to destabilize this machine, the underlying logic of neoliberal austerity is becoming clearer.
During the austerity waves of the 2010s, the fears of imperial decline and capitalist collapse which were behind the social services cuts still remained relatively well-concealed behind the language about “personal responsibility” and “entitlements.” Alarmist claims about the national debt were sometimes used, but these were distractions from the fact that the U.S. corporatocracy was increasingly feeling the pinch from post-recession economic decline and shrinking global imperialist reach. The ruling class didn’t want us to consider that they were cutting off resources to the poor in order to compensate for imperialist losses like the continued triumph of the Bolivarian Revolution in Venezuela, or the growing economic power of Russia and China, or the recession that was continuing to go in spite of all of Trump’s boasting about the stock market.
This reality behind why austerity kept increasing and workers benefits kept being stripped away-which was that the capitalists needed to save more resources and exploit more labor amid the contraction of their economic system-exposed the hidden weaknesses of the machine. So the system’s propagandists invented alternative explanations for why these policies of engineered scarcity were being put in place. Hyperbolic statements about the government deficit were a common pro-austerity talking point, as well as increasingly absurd arguments about how austerity was necessary for a “responsible budget.”
Now that the austerity policies of the Covid-19 era are in full force, with Trump cutting the unemployment benefits of millions, Latin American neoliberal countries letting people suffer during the economic crash, and austerity being imposed along with bank bailouts across Europe, it’s harder to conceal why the ruling class is depriving more and more people of resources. The explanation is as clear as the nearly one-third-large shrinkage in the second quarter of the U.S. GDP, as the increasing U.S. economic isolation from Russia and China, and as the tens of millions of jobs that have been lost this year. The system is bleeding, and all the pain is being transferred onto those with the least resources.
The attempts to blame China for the decline of America’s economy, and the old kinds of arguments about how “sacrifices need to be made,” are completely transparent excuses for the failures of the system. Now that neoliberalism has been discredited first by the 2008 crash and then by this year’s crises, all that bourgeois propaganda can rely on are appeals to culture war divisiveness, denials that Covid-19 and other problems are worth worrying about, and attempts to blame the poor for their circumstances. The system has lost its ability to provide a stable livelihood for the great majority of the masses, so the friendly facade of capitalism is giving way to fascism.
The latest Republican National Convention, with its dismissals of the climate crisis, paranoid rhetoric about the Black Lives Matter movement, and attempt to make a gun-brandishing wealthy white couple into heroes, shows how this capitalist reaction is growing more unhinged. The message from the U.S. ruling class, as demonstrated by these displays from the ultra-reactionary Trump White House, is that the underclass will have to suffer in order for the rich to keep their status. It’s part of the bipartisan consensus that going into this decade of depression, raising people’s living standards isn’t a priority. The only way the system can be preserved is through endless austerity and war.
Poor and working class people, hear this message from the ruling class and respond by mobilizing to overthrow their system. Join and build organizations that share the Marxist-Leninist goal of overthrowing the capitalist state, and replacing it with a dictatorship of the proletariat. Read and share the revolutionary theory that you’ll need for this goal. Engage in armed organizing and combat training in the event that you’ll have to fight against violence from the capitalist state in your lifetime. Don’t let them continue to destroy your livelihood while not bringing upon any consequences for themselves.
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