Austerity today is associated with individuals, and with them the ideologies of these figures. Names like Margaret Thatcher and Ronald Reagan are seen as inherently intertwined with “neo-liberalism” or “neo-conservatism”. This characterization is made either consciously by the demagogues of social democracy or by “progressives” who, in their criticism of austerity, suggest that they could rule over capital more effectively and somehow stave off austerity; or it is done unconsciously due to a lack of theoretical understanding of capitalism and its economic foundations. By having a sober Marxist theoretical foundation, we can shift the focus of austerity away from the moralistic, social-democratic, or trade union conception of “a few bad apples”, to one which centres the economic necessity of austerity during a period of capitalist crisis, one which illuminates that no matter which politician is in power, these crises demands its pound of flesh from the working class.

Imperialist Epoch

Capitalism today operates in the imperialist epoch, the epoch which Bukharin characterized as finance capital ruling over a global market, where states and capital have become so intertwined that each state's policy is dictated completely by capital and its search for new profits and the export of capital. The imperialist epoch is the decadent epoch, not decadent in the moralistic sense, but in the strict economic sense. The capitalist system is no longer progressive. It has triumphed over the globe and stretches its blood-soaked limbs over every continent; no longer can one state stride down a path of "independent" foreign policy or growth, but rather each state, and proto-state, is enmeshed in the web of the global capitalist market. The fundamentals of capitalism, private property and profitability, inevitably lead to its own crisis. As each capitalist invests more into the means of production, they get less profit; they attempt to offset this loss of profit by investing in machines which remove workers from the production, but since workers are the ones whose surplus value the capitalist must appropriate, the capitalists end up spending more on means of production and receiving less surplus value to make up for these losses. To find new ways to offset these losses at home, each capitalist state begins exporting capital to regions where there is a lower organic composition of capital (meaning less money being put into the means of production, and therefore more profit); this is due to the fact that in the imperialist core, the organic composition of capital is too high to produce enough profits. This is the tendency of the rate of profit to fall.

The center of what causes the capitalist crisis: this same current would lead to both world wars, and is currently marching us into a third. The only way to deal with this crisis, from the capitalists' perspective, is the destruction of fixed capital (means of production, industry) and variable capital (workers, labour power); this can therefore restart the accumulation cycle. The devastated ruins of post-war Europe and Asia became dominated by undisturbed American capital in perhaps the most complete victory ever achieved in the history of economics, starting the cycle of accumulation all over again. This led to states being able to fund a large amount of welfare projects, from hospitals to state-run industries; this was due to there being enough capital to fund these low-profit industries. These industries allowed for almost full employment, class detente, and for a growth of industrial unionism to flourish. This accumulation cycle began to falter by the late 1960s and early 1970s; states began to look towards new ways to claw back some of these welfare projects, to cut back the capital being invested in low-profit industries in order to export capital to regions with a low-organic composition.

The Welfare State

The welfare initiatives that blossomed in the post-war world, of course, found their funding through the state and thus must be tied to either the profitability of the specific state or its willingness to print in excess and inflate the currency. The state, therefore, has its vested interest in the profitability of either its own state-owned enterprises or in its private business sector through taxation. Even under an economy effectively entirely controlled through a democratic state apparatus and thus entirely “socialized” the welfare of the state still depends on the profitability of its commodities upon the market and preceding the extraction of surplus value from its workers. From both extremes, laissez-faire or total state ownership, the same realities of capital must come to bear. Boom and bust cycles, the crisis of overproduction, and bailouts which increase inflation while removing the essential pillar of competition. In the reformist view, these systems are divorced from one another and the profitability of corporations does not have an impact on the ability of the state to provide welfare, nor does welfare impact the inflation which slowly poisons the banking industry upon which the rest of capital rests. The welfare systems created in Canada, England, etc., were therefore not some victory of the working class wrested from the hands of the capitalist, but merely a concession the capitalists gave, and could only give because of the destruction of capital and the restarting of the accumulation cycle following the Second World War.

Doug Ford and Austerity

The welfare state in Canada is, of course, the same, and its decline and dismantling is also bound up with the capitalist system's decline. Austerity is not new to the Canadian working class; Brian Mulroney is generally associated with austerity at the federal level throughout the mid-1980s to the 1990s. His government would have to make Canadian workers “competitive” for the global market, this meant ending unemployment benefits, family assistance programs for lower-income workers, and directly laying off federal employees. These were direct attacks on the working class, but it wouldn’t end there; the state privatized publicly owned industries and reduced federal assistance to the provinces, whilst also moving the funding of education and medical services onto the provincial level. This effectively paved the way for the provincial leaders to begin their own regional assaults on any state-funded program or business, especially if those programs yielded low profits. These early assaults are blamed, again, on the personality of Mulroney or the overreaching effects of Regan, but this reduction of economics to the level of personalities obfuscates the fact that every state, globally, had to engage in the destruction of any spending deemed “superfluous”, and with every austerity measure, the working class was the first to face the wall.

The history of austerity in Ontario today is associated with Doug Ford and conservatives, although it was the NDP under Bob Rae that was also forced by an economic recession to impose austerity measures. The first and only NDP premier imposed measures forcing workers to take unpaid days of leave in order to “achieve significant savings in public sector expenditures in a fair and equitable manner”. These “Rae days”, as they were known, were seen as a way to effectively combat a deficit. Austerity measures continued under NDP, liberal and conservative governments, with only some token union resistance, which was easily subdued. Today we face the same crisis, as the NDP and governments after were only able to kick the can of crisis further down the road. Doug Ford is engaging in a process of austerity started long before him, what is presented to us today, the privatization of healthcare, the dismantling of state funding for low profit industries (as seen with firefighting in Northern Ontario) are part of capital's assault on the welfare state it can no longer uphold. Ford may seem, due to his conservative and pro-buisness stances, to be enacting these policies out of some pure ideological reason, but as we saw above that cannot be the case. We have examples from New Brunswick, where similar to Ford, post-secondary funding was frozen, the grants that once helped students through university are seen as an easy way to cut on some government spending. From hospitals to universities, it is the working class who is targeted with austerity measures. Whether it be Doug Ford, Liberal or NDP premier, austerity will march on, as long as capitalism descends into barbarism, it will demand greater sacrifices from the working class. The state must scrape every “unprofitable” expenditure, even if it means cutting health, education, transport, etc.

Will It End?

The Ontario NDP and Liberals are championing every anti-Doug Ford battle. They show up to student rallies, picket lines, and demonstrations against austerity, they loudly proclaim that this singular man is responsible for all the workers suffering. By equating Ford with austerity, and eschewing any connection of austerity with the capitalist crisis, they are merely demagogues for their own form of capitalist management, and if they were to come to power these speeches would surely come to a halt and the tone would change to demanding workers “cooperation” in “trying times”. The only path to escape the capitalists crisis is the one that marches towards revolution. First, the working class needs a party, a party that doesn’t strive for seat in government or reform, but one that can show the working class the tactics of struggle and push the struggle out of union domination, and towards workers self-activity. A party that uplifts and attempts to expand the class struggle each step of the way. A party that is guided by the communist programme, that is, the programme towards the dictatorship of the proletariat which will lead to the abolition of class, money and the state. This party is in the distance, and we do not claim to be this party, but only a small part that wants to take part in building this party.

Towards an end to austerity and crisis! For a party that will march the class out of capitalism!