Cooking the Books – Does austerity breed extremism?

In an article entitled ‘Austerity in Europe has huge consequences for its politics’ Mehreen Khan, Economics Editor of The Times, cited research by the Massachusetts Institute of Technology which suggested a link between the severity of austerity and votes for ‘extreme’ parties:

‘An MIT study covering more than 200 European elections between 1980-2015 found that deep fiscal consolidation ‘leads to a significant increase in extreme parties’ vote share, lower voter turnout and a rise in political fragmentation’. . . The researchers noted that centre-left governments paid the highest political price for their austerity drives’ (28 November).

This has a certain logic. The mainstream political parties, especially those of the ‘centre-left’, such as the Labour Party in this country, promise that, if elected, they will make things better. Voters believe them, and when these parties fail to deliver, seek an explanation. Few accept the socialist view that, however determined or competent or honest these governments might have been, they were doomed to fail because they set themselves the impossible task of making capitalism work to serve the interest of the majority. After turning from centre-right to centre-left and back again and seeing them both repeatedly fail, it would be surprising if there wasn’t an increase in the number of voters turning against both of them.

The end of the post-war boom in the mid-1970s brought about what has been called ‘the fiscal crisis of the capitalist state’. Governments found themselves unable to maintain the same level of spending on social reforms as before without undermining the accumulation of more capital out of profits that is the driving force of the capitalist economy. Since then, during the slump phase of the boom-slump economic cycle, they try to encourage investment for profit to resume by cutting back on their spending so as to reduce the burden of taxation on profits. This ‘deep fiscal consolidation’ (aka austerity) involves cutbacks in social benefits and in the provision of public services and amenities.

It is not as if centre-left governments want to impose austerity. They are compelled to by economic forces beyond their control which dictate that priority must be given to profits and conditions for profit-making on pain of making things worse as it is the pursuit of profits that drives the capitalist economy.

When governments, inevitably due to the nature of capitalism, fail to make things better some voters blame not capitalism but the politicians who have failed to make it work for them and even see politicians as a self-serving elite. Some give up bothering to vote, saying that ‘they are all the same’ (which, actually, is essentially true). Others turn to new political parties which denounce the conventional parties as rival gangs of professional politicians who are in it for themselves (as, again, many obviously are, not that it would make any difference if they weren’t).

Unlike in the 1930s these parties don’t blame political democracy, they blame the conventional reformist politicians who currently operate within it. They are ‘extreme’ in the sense that, being xenophobic and ultra-nationalist, they are at one end of the nationalist spectrum on which the conventional parties situate themselves too.

It goes without saying that, if ever they become the government, they will no more be able to make capitalism work for everybody than the mainstream reformist parties that they denounce. It is capitalism, not self-serving politicians, that is the cause of the problem.

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