Debt reflation, exemplary punishment and contradictions of counterpower in Britain over the last year or so, recapitulated in April-May for issue 90 (summer 2011) of German Wildcat http://www.wildcat-www.de/index.htm. Definitely NO claim to comprehensiveness intended: eg. for education sector struggles over the same period see previous Mute, Wildcat and Libcom coverage, which is not rehearsed but contextualized here. And a standpoint skewed towards London (Brixton) will require future correction by those able to speak from elsewhere magazine




1. Reflating the State


April 2011. The UK government, responding to business concern at its plan to impose a fixed limit on non-European immigration, quietly announces some concessions. Permanent residence will be open to anyone bringing £5 million into the country or able to borrow the same amount from a British bank, secured on assets held elsewhere. As an adjustment of migration policy this is insignificant, but it eloquently spells out the conception of 'national prosperity' underlying 'post'-crisis economic management. The priority in 'Britain's most pro-growth budget in a generation' is 'controlled' reflation of the pre-crisis economy of private credit circulation, appreciating asset prices and associated 'services' along a spectrum from financial to menial.



Any hope of such asset reflation depends on the approval of international credit markets, to be won through conspicuous political implementation of their standard demands: protection for creditors, 'flexible' capital and labour markets, transfer of the resulting burden of risk (i.e. liability) onto the working class. This calls for reduction of the budget deficit and public debt built up through the state's assumption in 2008-9 of an enormous private sector debt overhead.[1.] The 'savings' are supposed to be made by scaling down the state's role as employer of last resort and welfare provider to the large part of the population which the asset-boom economy was never able profitably to exploit. But cutting cash payments to the working class is by no means the same thing as 'shrinking the state'. As the present British administration is clearly aware, any government expecting to maintain order while removing millions of people's legal means of social reproduction must simultaneously prepare for massive expansion of the core state function: policing in the broadest sense. One way of stating the stakes of the current and imminent struggles would be to ask: what kinds of 'disorder' (individual-'criminal', 'racial'-sectarian, class-based?) will the state be forced to police, and how successful will the policing be? No-one can answer this question with any confidence right now, but an attempt to suggest what any answer may depend on will follow in section 2 below.



The expression 'privatisation of debt', used by some leftists to describe the general UK policy trend, is accurate provided it is understood in a double sense. On one level it refers to the transfer of the pre-crisis financial debt overhead from the private sector to the state and onward to the working class; on another, to the intended purpose of the exercise, the idea that lifting the public debt burden (or rather dumping it downwards) will somehow clear the way for renewed growth of a private sector centred on the creation, expansion and monetisation of credit, i.e. debt.




The inability of this approach to restore long-term accumulation is so clear that various marxists, shock-therapy monetarists, conservative keynesians and neokeynesian radicals are all able to prove it to their own satisfaction. But questions of long-term accumulation have little to do with the time scale on which 'policymakers' (consultants, senior civil servants and government) and businesses operate[2.]. On the 'pragmatic' level of social management and shareholder value, the disruptive potential of class struggle from more than one direction leaves little alternative to short-term reflation of the credit/service economy. Such is the existing concentration of capital in the FIRE (finance, insurance, real estate) sector and associated services that the kind of manufacturing-oriented 'rebalancing' demanded by unions and occasionally promised by ministers would wipe out much of the 'wealth' circulating through service and consumer markets, provoking international capital flight and alienating the 'aspirational' demographic groups knitted tightly into FIRE sector dependency through home and small business 'ownership', private pensions and personal financial investment, compromising years of effort to divide them from the 'feckless' proletariat singled out for attack under the present policy.



This political basis of credit reflation is one reason for the emphasis on it here; another is that the perspective of debt privatisation connects the stakes of struggle across the distinction between 'public' and 'private' sectors. This matters because official reduction of the scope of conflict to the 'public sector' – an agenda accepted by unions and many 'anti-cuts' campaigners – is an aggressive tool of class decomposition, mobilising 'aspirational' working class opinion against the supposed 'privileges' of state employees and welfare claimants. The inadequacy of 'defending the public sector' as a form of social counterpower will be ever more obvious over the coming months: the 500,000 state workers slated for redundancy will be 'inside' the private sector from the moment they encounter private welfare contractors, as well as in any future employment, which may involve selling the same labour they once performed back to state contractors on freelance or agency terms.




The reflationary side of debt privatisation is visible on a headline-story, macro-policy level, while the punitive side – the downward transfer of liability – stretches from this level all the way to the pettiest micro-interventions. (The present government follows its predecessor in an obsession with Behavioural Economics, and has set up a dedicated 'Behavioural Insight Team' to propagate 'social norms', i.e. psychological reflexes of individual liability for social problems.) On the macro-level the two aspects can be seen intersecting almost everywhere, most obviously in the overall scale of fiscal spending cuts (£83 billion), their concentration in working-class 'entitlements' (welfare, education, municipally-administered services such as care for children/elderly/disabled), and the avowed reliance on monetary stimulus (a former oxymoron which officials have learned to utter earnestly) to offset the ensuing contraction of demand. Other important elements include:




-Transfer of additional tax burden onto working-class consumption through a VAT increase to 20%, as part of a general adjustment of the tax system in favour of national competitive advantage in international arbitrage. (As with the public spending cuts, the effect is supposed to be compensated for by low interest rates: i.e. offset for homeowners in particular.)


-Automatic enrolment (with a small-print 'opt-out' provision) of private sector workers in NEST, a stock market pension scheme.


-Further replacement of direct state handling of those facilities regarded as politically unfeasible to shut down altogether (eg. welfare, garbage collection, medicine) with state-funded 'commissioning' of outsourced contractors, i.e. transfer of captive proletarian markets to leverage-financed ventures. The most ambitious move in this direction may be the reconstitution of the National Health Service as a wholesale buyer of services from 'any willing provider'. Among the first 'providers' to come forward was accountancy/consultancy multinational KPMG, indicating both the scale of the prizes available and the scope for sub-sub-contracting.


-A housing reform package openly relished as the urban equivalent of 'Highland Clearances' by some plain-speaking Tories. Drastic reduction of housing benefit (rent subsidy paid through the welfare system) and the increase of 'social' (outsourced ex-public) sector rents to 80 per cent of market level must be seen as renewal of a 30-year policy drive to transfer working-class income into the private real estate market, i.e. one of the main long-term factors in the pre-crisis FIRE bubble and the crisis itself. Political determination to revive this process is evident in the relaunch of 'Enterprise Zones': the system of subsidised and unregulated urban clearance and redevelopment with which the Thatcher administration began the 30-year cycle[3.].


Other aspects of social punishment, overlapping with those already mentioned in some cases and less widely reported in others, contribute less obviously to reflation or even to fiscal savings; these can be understood as extracting 'payment for the crisis' in a disciplinary rather than a monetary sense, or more practically as cultivating the mix of personal desperation and aspiration a credit-service economy requires of its workers, i.e. the 'basic skills' or 'life skills' whose absence business lobbyists perpetually lament. Examples include:


-Massive transfer of sickness benefit claimants onto the dole and the aggressive 'workfare' programmes attached to it, substantially increasing the number of forced competitors for what all institutional forecasts agree will be a static or falling number of jobs.


-Similarly intensified competition between individual workers outside the welfare system: eg. public and private sector employers forcing all employees to reapply simultaneously and competitively for reduced numbers of jobs on downgraded terms. Among others,170,000 municipal workers across the country face an immediate ultimatum to sign new contracts or be fired. (Plus a government promise perfectly encapsulating Behavioural Economists' ideal of 'fairness': all young people will have the opportunity to work as unpaid interns.)


-Abolition of legal aid (means-tested state contribution to legal fees) for employment, welfare, housing, immigration and clinical negligence cases, i.e. exactly the kind of disputes likely to proliferate in the near future.


-Introduction of fees and access restrictions for employment tribunals (legally binding hearings on unfair dismissal, discrimination etc.); repeal of a large amount of workplace safety law, with funding cut by 35% for the body enforcing the remainder; exemption for small businesses from labour legislation. These latter measures reward years of business lobbying and are accompanied by an 'Employer's Charter' 'reminding' bosses of their 'right to ask workers to take a pay cut'.




The same deployment of punitive logic at administrative level is also visible in programmes of marginal scale and ideas yet to be fully implemented:




-A food voucher schemes (run by a Christian charity) for recalcitrant dole claimants whose money is cut off, making it easier for the 'welfare-to-work' contractors to stop the payments and hastening convergence between the general welfare system and the openly 'deterrent' voucher-based mechanism for asylum-seeking migrants.


-A gap in the all-round system of state support for real estate accumulation closed at last by legislation to criminalise squatting, disingenuously helped along by Evening Standard stories about immigrants trying to squat already inhabited buildings. Displacing an existing occupier is of course already illegal, but the image of Baltic squatters exploiting 'soft-touch' British law in their own sort of international arbitrage gave the panic a momentum of its own.


-A government-commissioned Deloitte report recommends compulsory online transactions in all personal interaction with the state (benefit claims, document applications, fee payments), on the grounds that contributing to cutting 'back-office costs' (i.e. wages of letter-openers and call centre workers) is a universal social duty. An all-online system would also help to subsidise financial reflation, in that replacement of the former clerical labour would be contracted to the overlapping financial/IT consultancy/services sector (eg. Deloitte).


-A major speech by David Cameron modifying – though by no means softening – the use of anti-imigration sentiment for purposes of class decomposition. The welfare system, he declared, is 'to blame for creating a generation of work-shy Britons, allowing migrants to take jobs'. Thus the pretence that immigration control is about protecting native labour from foreign competition is dropped altogether, at the same time as the social undesirability of foreign workers is raised to the level of a self-evident premise. Foreign proletarians are intrinsically a problem, and 'lazy' British members of the same class are to blame for it: therefore the burden of punishment must fall on both. The stakes of this shift in emphasis are high: will it deepen hostility between 'British' and 'foreign' proletarians as the former blame the latter not only for 'stealing jobs' but also for the punitive attacks of state and capital, or might the promise of punishment for all actually contribute to solidarity across the class?



2. 'Community' or counterpower?




Early April 2011. On the 30th anniversary of the1981 Brixton riot, participants interviewed by a local newspaper agree that 'it could happen again', given 'the amount of anger around'. The interviewees are less sure that 'it would be about policing this time': instead they mention debt, school expulsions, housing, welfare... These ex-rioters, who now work in local government, professional 'race relations' or NGOs, can't quite bring themselves to admit that debt, expulsions etc are forms of policing, converging with the traditional kind as a reason for anger.




Late April 2011. Fury against policing in the broad and narrow senses erupts all at once in another 1980s riot zone: Stokes Croft, a semi-gentrified working class part of Bristol. What started as a small confrontation after a violent raid on a squat gradually drew in something like1,000 local people as they saw their neighbourhood under police attack. National and international media focused on the smashing of a new Tesco supermarket – the 'anti-terrorist' pretext for the squat raid was a search for non-existent petrol bombs supposedly intended for Tesco – but the supermarket was only attacked after the work of (temporarily) driving the cops off the streets was successfully accomplished. According to firsthand accounts most rioters had nothing to do with squatting or anti-Tesco protests. A report for The Commune[4.] described the social composition of the riot this way:



My impression is that people joined the riot for different reasons: the harassment of squatters, ethical/political issue with Tesco, the commodification of Stokes Croft, the anti-cuts sentiment. And the black kids from St. Pauls probably have their own accounts they need to settle with police.




And:


After Tesco got smashed the first time, the cops were hitting us much harder, but they had to face a new crowd that recomposed during the night: all the distinct elements, all the different motivations I mentioned earlier just merged together into one whole and this, for me, was the best outcome of the first riot night in Bristol.




A riot is not a movement or even proof that one could exist.[5.] But the gradual buildup of rage across distinct but overlapping class experiences is hardly unique to Stokes Croft. This particular case where 'different motivations' met in explosive, spontaneous solidarity leads back to the question raised in the previous section: 'what kind of disorder' will the punitive-reflationary state be confronted with? How might the kind of solidarity and power seen briefly in Bristol develop other than spontaneously and under direct provocation? Can it be sustained over time and across the limits of socio-geographical 'community'? These questions can only be answered in social practice; what follows is no more than a tentative account of the conditions under which a practical 'answer' must be attempted.



The most discouraging aspects of the situation are the most obvious, but they may also be among the most misleading.




-Very little strike action since the Royal Mail and British Airways cabin crew disputes a year ago ended respectively in union-brokered climbdown and outright defeat. BA's tactic of aggressive litigation against strike ballots has since been used repeatedly by other public and private sector employers to pre-empt action. Business groups and the mayor of London are lobbying furiously for legislation making this easier to do by tightening ballot conditions further.


-In October and November strikes by London firefighters did directly confront the use of forced job reapplication to destroy working conditions, but when the action threatened to breach the limits of symbolic protest the union promptly backed out. After a series of one-day stoppages during which pickets were physically attacked by scabs[6.] and managers, serious disruption was promised by a 48-hour strike over the night of November 5, when huge numbers of fireworks are traditionally used to celebrate the execution of a 17th-century Catholic incendiary. At this point the Fire Brigades Union unilaterally cancelled the strike and accepted 'mediation', and in January all 5,600 firefighters were duly sacked and forced to reapply. The political nature of the defeat was spelled out most bluntly by a newspaper headline proclaiming 'first blood' to the government, and most tellingly by a fire service manager's economically nonsensical but industrially pugnacious claim that the new contracts would increase productivity in firefighting. (In the meantime the EADS-designed automation project providing the 'efficiency savings' rationale for shift changes had been scrapped for reasons of inefficiency.)


-By the admission of TUC General Secretary and Bank of England non-executive director Brendan Barber, the union confederation waged a 'phoney war' against austerity until its national 'March for the Alternative' on March 26. The supposed embrace of reality since then amounts to a lobbying campaign using the 500,000+ march turnout as a sort of moral bargaining chip: what they call 'winning the argument' for slightly different fiscal management (slower deficit reduction, more progressive taxation etc). The basic identity between the 'alternatives' on offer is confirmed by the TUC's careful cultivation of the Labour Party, whose administration of a 10-year credit-driven 'boom' remains the model for the present reflationary policy. Near-exclusive emphasis on 'defending public services' reinforces the separation of 'public' and 'private' sectors, with events in the latter excluded from 'political' consideration. A TUC-led strike is finally planned for June 30, over the narrow question of public sector pensions.


But there's no reason to imagine that this 'leadership' reflects the reality of social antagonism. That much was clear on the TUC march itself, where the composition, mood and activity far outran the official mandate for polite public sector protest. Despite unprecedented co-ordination between police and union stewards, thousands of people were switching back and forth throughout the afternoon and evening between the main march and so-called 'violent minority' behaviour: not much concentrated violence, but running skirmishes with police and attacks on symbolic targets (banks, luxury stores, the Ritz hotel, an egregious 'Olympic Clock') continued for hours, often simultaneously in different places. Many reports confirmed a subjective impression that the intermittently 'violent' part of the crowd was by no means dominated by activists and experienced rioters. This matches reports from last year's student protests that 'black bloc'-style action involved lot of young people unconnected to any kind of political activism.



An Anarchist Federation article argues that 'frustration' with TUC mediation has actually 'helped to build the movement at a local level':



The feeling of dismay led union activists to muck in with service users, claimants and the rest of us to get on with the job of fighting the cuts without waiting for anyone to lead us. By the time the march came around, the campaigns were in full swing, and so was the vibe on the day.[7.]




Apart from the march, the reference is to the hundreds of local 'anti-cuts' groups active across the country against particular effects of the general punitive policy, campaigning to 'save' particular childcare facilities, hospitals, schools, public libraries (etc) or to protect threatened 'service users' through tactics ranging from petitions to occupations and 'direct action casework'.[8.] These are so numerous and varied that any generalisation may be misleadng, but some characteristics recur across many though not all cases:




-Defence of the immediate material interests of the subjects involved: groups are formed around geographical/social 'community' and/or dependence on particular institutions; single campaigns are gathered under broader local 'umbrella' groups (e.g. 'Lambeth Save Our Services').


-Long-established campaigns (e.g. Defend Council Housing), union branches, leftist parties and non-sectarian anarchists/communists are all involved, but activists are not necessarily dominant. Many groups are new and many participants have no political background.


-Attention is mostly concentrated on what is still perceived as the 'public sector'. The extent to which state business is already conducted by contractors makes confrontation with private capital inevitable, but in many campaigns the emphasis on 'saving public services' tends to understate this reality.


-Collective organisation by employees and users of state institutions is widespread, as in the overlapping education sector movement.[9.] But this rarely seems to extend to situations where the worker's job is to police the 'user' or claimant (welfare, housing, collection of fees and fines). Unsurprisingly given the tactic's potential effect, state workers refusing policing duty risk anything from job loss to criminal prosecution along with the claimant. Therefore such 'non-cooperation' may possibly be practised more often than is reported; even if not, perceptions of how much there is to lose may change when full implementation of the new welfare and housing rules, combined with ongoing labour market contraction, subjects enforcers and claimants to complete and common chaos. (A parliamentary committee admitted early in May that the outsourced 'welfare-to-work' programme is a 'gamble' on 'economic upturn providing enough suitable jobs'. Meanwhile dole office workers were handed instructions on 'dealing with suicide and self-harm threats'. Two recent cases show how such threats are to be dealt with if carried out: the claimants attempted suicide and survived, whereupon they were forcibly detained in mental institutions.)




The promising and the contradictory aspects of community anti-cuts activism were encapsulated in a series of actions against municipal council meetings passing austerity budgets. Unions and some community groups wanted to 'make the case' for policy reversals that the defunded councils actually had no power to implement, but in several London boroughs and northern cities, crowds much larger than the organised groups preferred to shut down the meetings and occupy council chambers. When Lambeth (South London) town hall was invaded, the local head of public sector union Unison pleaded in vain that we let the councillors back in to hear the petitioning. Of course the council simply passed its budget in a police-guarded bunker elsewhere in the building, but the rejection of mediation – i.e. of the attempt to 'win the argument' – was quite clear.


One other contradictory phenomenon that must be mentioned is UK Uncut, whose March 26 occupation of Fortnum & Mason (a high-end food store and apparent tax delinquent) led to the bulk of the day's arrests. Over several months this network has staged brief, high-profile occupations/blockades of companies accused of using tax havens to short-change the British Exchequer. The objections to this political line are too obvious to rehearse here, although it's worth noting that, like the TUC 'Alternative', it implicitly endorses not just the claims of the state but also those of bondholders: if only Vodafone and Barclays contributed their 'fair share', the public debt could be paid down and then the cuts would not be necessary. Nonetheless, the mini-blockades staged under the UK Uncut name should not be dismissed too lightly, as the aggressive police response indicates. Large numbers of people from non-activist backgrounds have been drawn into direct disruption of private sector business; it remains to be seen whether the experience of momentary collective power and confrontation with the state will prove more influential than the state-friendly ideology attached.


The Anarchist Federation article cited above also speaks of an 'overwhelming feeling' on March 26 'that this was only the beginning'. This may be true not just of the one-day protest but also of the wider social confrontation. A lot of determined antagonistic activity is already going on, fighting for disparate but overlapping working-class interests. Occasionally, as in Bristol or in the student/education worker struggles, some of these interests converge and seem to pose a real threat, but this has yet to happen in a general and sustained way. Some idea of what a sustained threat might entail is suggested in an Aufheben article contrasting the conditions under which welfare claimant activism was isolated and defeated over the last two decades with the present collapse of distinctions between secure, temp and unemployable status and the resulting necessity of a class-wide movement[10.]. More concretely, the Anarchist Federation calls for a 'general social strike', invoking some of the tactics recently used in France:



...with weak ineffectual unions and poor job security, workers can’t risk going it alone. So let’s have massive civil disorder on the part of people who can take action: walk-outs of schools and colleges and massive occupations of our city centres; creative use of facilities like libraries, parks, leisure centres to show workers there that we are behind them; economic blockades e.g. of fuel depots where the workers can’t get away with picketing, and so on.[11.]




Unlike Trotskyist parties who still blame the unions for failing to call a one-day general strike, these groups are aware that a socially threatening movement can't simply be called into existence through the 'right argument'. The developing struggle will be up against intensive cultivation of intra-class division (between public and private sector, national and foreign labour, respectable homeowners and 'criminal' underclass...), with hostile measures implemented slowly and confusingly to maintain the combination of misplaced individual hope and exaggerated collective fear. The extent to which an emerging counterpower is able to overcome these demoralising factors will be decisive when the desperate policy of debt reflation – ridiculed even by bourgeois economists as 'expansionary fiscal contraction' – inevitably crashes.[12.]





Footnotes


[1.] For a detailed account of the debt buildup, see:  http://www.wsws.org/articles/2011/apr2011/debt-a23.shtml


[2.] John Maynard Keynes's 'in the long run we are all dead' has been quoted often since the crisis broke out, with little overt acknowledgement that the lifespan implied in business and political strategy has contracted since the mid-20th century from human to something more like feline.


[3.] On the new Enterprise Zones plan and the system's early history, see:  http://www.wsws.org/articles/2011/apr2011/zone-a26.shtml


[4.]  http://thecommune.co.uk/2011/04/22/the-first-funky-riot-in-bristol/


[5.] Actually two riots: another in the same place the next week, after a second raid on the squat and pre-emptive riot squad occupation of surrounding streets.


[6.] Scab duty in fire strikes has traditionally been carried out by the army, using its own obsolete equipment. The arrangement this time was different: AssetCo, the ultra-leveraged 'micro-cap' PFI contractor owning all London's fire engines and renting them back to the fire service, won an additional contract in 2009 to provide scab crews. This strike was the PFI scabs' first outing, which they celebrated by using a fire engine to ram a picket line, trapping one striker underneath and refusing to reverse until ordered to do by police. AssetCo (gearing:159%) is now bankrupt and billed as a 'turnaround opportunity', with the firetrucks set to go either to creditors or to a Bahrain-owned vulture fund.


[7.]  http://www.afed.org.uk/blog/society/234-uk-unmasked-and-the-new-kids-on-the-bloc-preview-article-from-organise-76-summer-2011.html . Much of the best firsthand reporting and analysis of recent struggles comes from a broad class-struggle anarchist perspective and is collected or linked to at  http://libcom.org , which includes links to the publications of particular groups. Another useful source is The Commune:  http://thecommune.co.uk/ .


[8.] For listings and links giving some a geographical breakdown of activity, see:  http://anticuts.org.uk/ .


[9.] On education-related struggles over the last year, see  http://www.wildcat-www.de/aktuell/a086_uk_studis.htm and  http://www.metamute.org/en/articles/increased_student_fees_constitute_a_socially_progressive_graduate_tax , plus  http://www.metamute.org/en/pod/don_t_panic_organise_a_mute_special_on_struggle_in_education_today and  http://libcom.org/tags/education .


[10.] Aufheben, 'The renewed imposition of work in the era of austerity: prospects for resistance', issue 19, 2010. Not yet online: should appear when the next print issue is published later this year.


[11.]  http://www.afed.org.uk/publications/short-texts/220-everything-weve-won-they-want-it-back-march-2011.html


[12.] See: Martin Wolf, ‘Why British fiscal policy is a huge gamble’,  http://www.ft.com/cms/s/0/5f2b4b60-71c6-11e0-9adf-00144feabdc0.html#axzz1MBbNWVi6