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“Forum on Labour and the Economic Crisis: Can the Union Movement Rise to the Occasion?,”

“Forum on Labour and the Economic Crisis: Can the Union Movement Rise to the Occasion?,”

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Published by: SopikoSophia on Nov 27, 2010
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Forum on Labour and the EconomicCrisis: Can the Union Movement Rise tothe Occasion?
 Jim Stanford
M   and socialists no doubt elt mixed emotions as anover-leveraged, irresponsible, and morally bankrupt global nancial systemslipped into crisis. On one hand, at last the workers’ movement had a gloriousopportunity to expose the ailings o the current order and step up the ghtor alternatives. On the other hand, it is equally clear that workers and theirorganizations will ace earsome attacks as employers and governments lashout at anything that restrains their eforts to resolve the crisis on their ownterms. e crisis, thereore, presents the labour movement with an enormousopportunity, but also with enormous threats.e central tenets o neoliberalism are clearly more vulnerable to unda-mental critique today than at any time since the emergence o this new ordernearly three decades ago. Obviously this is true o the tough-love nancialpolicies which have been a hallmark o neoliberalism rom the beginning. Justa year or two ago there was a pompous conviction in mainstream economics
that a “new consensus” had emerged in nancial and monetary policy, accord-ing to which central banks should rigorously target the rate o ination, andall other problems o macroeconomics (unemployment, ination, and eco-nomic cycles) would then be solved. is view was the economic equivalent o Francis Fukuyama’s inamous claim about the “end o history” – arrogant, pre-mature, and unounded. Now it suddenly lies in shambles. Far rom ushering
1. Stated most amously by John B. Taylor, “Teaching Modern Macroeconomics at thePrinciples Level,”
, 90(2) (May 2000), 90–94.
Jim Stanord
, “Forum on Labour and the Economic Crisis: Can the Union Movement Riseto the Occasion?,”
64 (Fall 2009), 135–172.
136 /
in nancial stability and protecting the real value o wealth (which was acentral motivation or neoliberalism in the rst place), the practice o global-ized nancialization has destroyed wealth at an unparalleled pace and let thewhole economic system staggering.Other key planks o the neoliberal platorm are also vulnerable, not just itsmonetary and nancial vision:
: Most obviously in nance, but in other sectors too, it turns outthat the private sector does not always know best. Public-private partner-ships, the latest and most manipulative incarnation o privatization, have beenstopped in their tracks by the reezing up o private credit. More by deaultthan by design, privatizating governments around the world have suddenly reversed course to take major public ownership positions, in everything rombanks to auto manuacturers.
: World trade is collapsing (alling by as much as one-thirdduring the crisis). is is not due to long-eared “protectionism.” Rather, itreects the workings o ree markets themselves (and the crisis they createdin incomes and demand). e supposed gains in eciency rom global tradeliberalization have been dwared by the much larger negative efects o macro-economic contraction on spending and hence trade. (In economists’ lexicon,“Okun’s gaps are much larger than Haberger’s triangles.”) One symbol cap-tures ttingly the legacy o globalization: how bizarre that the nancial system(and then the government) o Iceland should collapse as the ultimate result o the meltdown in real estate prices in Florida. Far rom inevitable or ecient,globalization has proven both uncontrollable and irrational.
: In mainstream circles it was universally accepted until this yearthat scal policy was no longer suitable as a counter-cyclical measure, andthat governments should ocus on balancing their budgets. Now it is clearthat scal stimulus is essential at moments o crisis (when monetary policy becomes inefective due to rozen credit and ultra-pessimistic expectations),and that large budget decits are appropriate to counter uncertainty and col-lapsing demand. Moreover, the act that tight-sted governments paid of somuch debt in the past decade merely intensied the desperation o nancialinvestors to seek more elaborate (and, in retrospect, risky) outlets or theirportolios. It would have been better or all concerned i there had been a lotmore good old-ashioned government bonds around, to stabilize portoliosand absorb market volatility.So there is clearly plenty o intellectual and political scope, in the wake o thecrisis and its myriad o policy and political contradictions, to go on the ofen-sive against the business-dominated ramework which has governed most o world capitalism since the late 1970s – and which has contributed to so much
/ 137
human hardship since then. In this regard, the present spectacular ailure o neoliberalism presents the labour movement (and the let more generally) withan historic opportunity to challenge the long-term direction o the system.At the same time, however, there are immense threats and risks in thepresent moment. While crisis and breakdown open opportunities or dis-crediting the status quo, we cannot underestimate the determination o eliteswithin the present order not just to deend its main eatures, but to actually take advantage o a moment o crisis (even one o their
making) to pushor the deepening and extension o neoliberalism. In this way, workers ace adual threat rom the current crisis. First, they are exposed to the immediateeconomic and social costs o the recession itsel: lost jobs, lost incomes, losthomes, and in many cases lost lives. Second, and more lastingly, workers acethe risk that this moment could actually lead to structural changes that urtherdisempower workers and their organizations. In other words, ar rom conced-ing that there was anything wrong with the recipe they have been ollowing,neoliberal governments and their advocates will seize on the ear, conusion,and divisions caused by the crisis, as predicted by Klein,
to push or evenmore market-oriented measures – including more attacks on unions and col-lective bargaining. Unions will be hard-pressed to push back those regressiveattacks, let alone to make orward progress in reorming or dismantling someo neoliberalism’s worst eatures in light o its obvious ailure.Perhaps this is how to explain the strange juxtaposition whereby the labourmovement possesses a wonderul opportunity to put the guardians o neo-liberalism on the deensive or their ailures, yet it is unions themselves (notnancial speculators) acing the most intense attacks and public disapproval.Consider two recent instances in which Canadian unions were scapegoatedor economic problems that they clearly did not cause: the attacks on auto-workers unleashed during the bankruptcy restructuring o General Motorsand Chrysler, and the attacks on municipal workers in Windsor and Torontolaunched by municipal governments (who invoked budgetary pressuresresulting rom the broader economic decline to justiy their demands orconcessions). e unions in both cases were merely trying to hang onto pre- viously-negotiated compensation in the ace o the crisis; it was employer andgovernment demands or concessions that sparked the respective conronta-tions, not union demands or “more.” Yet it was the unions vilied as barriersto change, protectors o narrow special interests, and even – in wilder com-mentaries – as the very source o economic decline in the rst place. Mostworrying, this anti-union scapegoating clearly ound resonance amidst amajority segment o the wider public.Collective bargaining, o course, is never a popularity contest, and there isnothing new in the attempts o employers and governments to nger-point atunions, nor in the public expression o broader anti-union sentiment. It is a
2.Naomi Klein,
Te Shock Doctrine: Te Rise of Disaster Capitalism
(New York 2007).

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