contesting austerity

The London Communities Commission: Building Local Capacity

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CURAs Ines Newman writes about the independent London Communities Commission (LCC), which is tasked with looking into how citizens and communities in London’s most deprived areas might be strengthened and supported in these times of austerity.

The LCC was set up in September 2015, with eleven Commissioners from the private, public and voluntary sectors, convened by the Paddington Development Trust and supported by London Funders and City Bridge. Its set up is in response to growing concerns that, without external support and the active engagement of local people, the quality of life there may continue to deteriorate to levels that not only destroy the well-being of tens of thousands of citizens, but pose a threat to the social and economic sustainability of the whole capital.

Local authorities are facing a challenging period with a reduction of central Government grant of 44% in London from 2010-2015. The Spending Review announced further cuts and by the end of this Parliament local authority spending capacity will be lower that of any time since 1948. Not only has this led to a decline in services and under-investment in social housing but research has shown that in areas of greatest need the public sector cuts have led to a decline in bidding for foundation funding and a decline in volunteering. This is because austerity has resulted in a decline in the number of small voluntary and community organisations as well as in a reduction in the capacity of those that survive.

The Commission has highlighted the crucial role of citizens within deprived local London communities. Without local residents being involved in designing the services, which are meant to meet their needs, unsatisfactory solutions will be developed. In this time of austerity, it is essential to draw on potential resources that local communities offer in terms of knowledge, relationships, skills, and their passion and enthusiasm about making a difference to the area in which they live. Citizens are the key assets to healthier social and economic outcomes across London.

With strong leadership, citizens in neighbourhoods can influence new ways of working which not only reduce isolation and ensure access to services but also further develop self-management skills and capacity to increase personal and collective independence. These ways of working can also deal with problems before they become severe: they are the fences on the cliff not the ambulances at the bottom. By identifying and intervening early costs can be saved later. The Commission gathered evidence around new, community-led, ways of working, illustrated in our Report of Evidence. The Commission were excited about these positive initiatives which clearly show how power can be devolved to citizens in areas where there is some sense of belonging and how effective this can be if the devolution is supported by the funders, public, private, and voluntary sector.

However, individual citizens have limited power to change the world. In order to achieve real empowerment, they need to be able to build local support structures through which they can work together and release the value of individual and collective creativity. New citizen-led ways of working also require changes in the way local communities are funded and the terms by which resources get to the acute areas of growing poverty in London.

Commissioning, for example, needs to be radically reconfigured. More than 50 per cent of council spending is on goods and services bought from the private and community and voluntary sectors. Billions of pounds are invested in procurement by councils. In an attempt to save money on commissioning, councils are joining up with other local authorities and contracts are getting bigger and more complex. The result is that only very large organisations have the capacity and financial security to enable them to bid for such contracts. Four major government suppliers – Atos, Capita, G4S and Serco – between them held government contracts worth around £4 billion in 2012-13. The voluntary sector holds only 9 per cent of local contracts by value and 5.6 per cent of central contracts.

The large companies and national voluntary groups who get these contracts sub-contract to smaller voluntary organisation with tight numeric targets on outputs and little money to cover any overheads. Money is paid to the small organisations on results creating cash flow problems and transferring risk. The small organisations have no ability to alter the contract and outputs according to local needs. The funding does not give them the opportunity to build community capacity. They inevitably seek to fulfil their targets by first dealing with cases where they know they can achieve success- picking the low hanging fruit. Those with complex needs are only offered standard services and little time is invested in addressing their needs. Trust and relationships between service providers and those whose needs they are trying to address is broken down.

But commissioning does not need to be like this and there is plenty of evidence of better practice which we discuss in our report. We have amassed a wealth of evidence and are in a position to make recommendations to various bodies and institutions to tackle priority unmet needs and disadvantage in London’s most stressed neighbourhoods. In our recommendations for the Mayoral candidates we suggest that the new Mayor sets out a clear vision and ambition for the future of London to tackle poverty, deprivation, poor health and the increasing polarisation that threatens London’s sustainability. In particular we are recommending that the Mayor, working with the London Boroughs, defines a number of priority areas on the basis of need (Community Action Neighbourhoods). In each neighbourhood, the Mayor would assist the local community in establishing a citizen-led local Joint Action Board (JAB) with partners which would agree the local priority unmet needs together with the actions and outcomes to be achieved over a 5-7 year programme; it would administer, deliver, monitor and be publicly accountable for the programme in a way that ensured the involvement of smaller voluntary organisations. The Mayor would also realise new and imaginative funding mechanisms to support this new approach. Papers for the statutory providers, the corporate sector and the voluntary and community sector itself will follow shortly.

Ines Newman is an Honorary Visiting Senior Research Associate at the Department for Politics and Public Policy at DMU and a core member of the CURA team. Ines is a leading expert in local government and public policy and a trustee of the Paddington Development Trust. Her recent book ‘Reclaiming Local Democracy‘ sets out the principles to inform a progressive future for local government.

 

Taking Power Back: Simon Parker

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We are pleased to launch our book debates series with this blog by Simon Parker. Simon sets out the argument of his recent book ‘Taking Power Back’, where he makes the case for ‘commonism’ – a radical form of democratic decentralisation. Following this post, CURA members Professor Jonathan Davies and Dr Adrian Bua will share their thoughts on Simon’s work, after which Simon will publish a reply to our team’s commentary.

The British state stands poised at a moment of profound change. Caught between the demands of an ageing population and a limited public willingness to pay more tax, public services are under pressure as never before. Institutions from local government to the NHS are finding that their existing models of provision cannot cope with the strain. Something has to give.

Despite our self-image as swashbuckling Anglo-Saxon capitalists, the British are actually fairly statist. Until recently we had a large, highly centralised government machine which we expected to deliver the same outcomes to everyone across the country. We tend to see the world in terms of the market and state, without very much in between. The fact that both of these leviathans have let us down very badly in the recent past explains our national distrust of institutions.

And yet there is something in between state and market – a space for social activity that many people call ‘the commons’. Over the past decade or so we have seen this space being steadily filled by a remarkable flourishing of cooperatives and social enterprises. In my book, Taking Power Back, I argue that this vibrant realm of do-it-yourself social justice is vital to the way we should understand the future of government. We can already see examples of it in action. In my book I describe how initiatives in the UK and beyond such as Occupy Sandy, the extraordinary people-powered disaster relief operation in post-hurricane New York, are building on, and organising, people power to meet their needs and improve lives – without relying on the market or state action

The trends which the World Economic Forum bundles together in its concept of the Fourth Industrial Revolution will turbo-charge the commons over the next decade or two. This is partly because new technology is making it easier than ever to start to up small social organisations. The overhead costs of creating a company are falling, while the potential to create innovative networked business models is rising. The increasing automation of our jobs may create a world in which we spend less time working creating increased opportunities to transfer effort out of the realm of paid work and into the creative sphere of the commons.

It seems entirely credible that the space vacated by a retreating state could be filled at least partially by a surge in the creative commons. I the book I make the case for two very big changes that can facilitate this transition. First, we will need to support the commons by introducing a universal basic income, compensating people for the automation of work and giving them the time to contribute. Second, we need to radically devolve political power so it is closer citizens, giving individuals the opportunities and capacity they need to help build the civic commons in the places where they live.

It is a huge challenge, but the prize is a radical renewal of government and democracy, in Britain and beyond.

Simon Parker is director of the New Local Government Network and a leading expert in public policy, public services and government.

Workshop on Resistance and Alternatives to Austerity

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The new Centre for Urban Research on Austerity (CURA) at De Montfort University (Leicester) is holding a workshop on Wednesday 18th May 2016 (9.30am-4.30pm) to discuss strategies for resistance and alternatives to austerity in urban settings across the globe. See registration details at the end of the post, for a copy of the programme see here.

“…our rage will be relentless…” Petros Constantinou (Guardian 12/11/15)

Across the globe the deepening of austerity has exposed urban populations across Europe, North America, Latin America, and beyond to worsening living and working conditions, reduced access to public services, and persistent insecurity. As these deleterious effects have become more apparent, so too has the functioning of austerity as a set of policies and practices aimed at deepening and consolidating the discipline of neoliberal capitalism.

This growing clarity – in academia and the public sphere – has led to the tentative emergence of various forms of resistance and alternatives. Mainstream political parties – and even some governments – have gained growing public support from Greece to the UK to Portugal through the adoption of anti-austerity platforms. Traditional trade unions, new social movements, and activists across countries most deeply affected by these new measures have begun to mobilise in new and increasingly combative ways. From mass strikes to everyday acts of refusal, the trend of urban resistance to austerity is growing. To offset the worst of its impact or as a means to overcome the entrenched power and privilege austerity supports, some involved in these resistance(s) have begun to discuss the possibilities of alternatives to austerity – and even to capitalism. How these are manifested and how effectively they can provide tools for thinking about and acting on post-austerity and “post-capitalism”.

It is the aim of our workshop to bring together cross-national comparisons on these themes focused on local urban settings, to explore the similarities and differences in acts of resistance by urban actors, to understand the power and innovativeness of these resistance(s), and to ask how these can offer potential alternative forms of urban governance challenging austerity.

Speakers: Lisa McKenzie (LSE), Phoebe Moore (Middlesex), David Bailey (Birmingham), Saori Shibata (Leiden), Nick Kiersey (Ohio), Lefteris Krestos (Greenwich), Desiree Fields (Sheffield), Lucia Pradella (Kings), Stuart Price, Heather Connolly, Adam Fishwick (DMU)

If you are interested in attending please send an email to Suzanne Walker (swalker@dmu.ac.uk) to register your place.

The Justin Trudeau Brand of Photogenic Austerity

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This week’s guest contributor John Clarke argues that the Liberal Party and Justin Trudeau’s recent electoral victory in Canada is not one to be celebrated by the anti-austerity left. Rather than pursue alternative policies, we can expect the new Canadian Government to ‘stealthily’ pursue the Austerity agenda and continue a raft of reactionary policies implemented by the Conservative Harper administration.

Having replaced the crudely reactionary and rather charmless Stephen Harper as Canadian Prime Minister, the photogenic Justin Trudeau is being presented in the media as a breath of fresh air.  However, millions of working class and poor people, impacted by an intensifying austerity agenda, have grievances that will not be solved with sound bites and selfies.

Unlike the UK, where the Liberal Party went into decline in the first part of the 20th Century, its counterpart in Canada has remained a front rank political formation up to the present day.  With social democracy here playing very much less of a role, the Liberal Party has taken turns in governing with the Conservatives over generations.  It is often said of the Liberals that they ‘campaign from the left and govern from the right’.   In these times of mounting austerity, this becomes truer than ever.  Trudeau won the election by beating back an upsurge of support for the New Democratic Party (NDP).  He did this by outflanking the decidedly Blairite NDP leadership on the left. While there leader, Thomas Mulcair, vowed to be tougher than the Tories on the deficit, Trudeau adopted a Keynesian mantle and proposed limited deficit financing to stimulate the economy.

This electoral ruse was not without irony, given that it was employed by the Liberal Party.  In 1993, austerity at the federal level in Canada, took an unprecedented leap forward at the hands of the Liberal Chretien Government.  Social housing was downloaded onto the provincial governments, transfer payments to the provinces were cut massively and the Canada Assistance Plan (CAP) was eliminated.  This had provided federal money for provincial income support systems for the unemployed and disabled, while setting national standards for these programmes.  The impact of the destruction of CAP has been enormously regressive.

There is no serious possibility that the present Trudeau Government will implement serious reforms such as a national housing programme, improvements in income support systems or reverse the decline in health care standards unless they are faced with a very serious social movement that fights for such things.  In fact, the crisis that sparked post 2008 international hyper austerity, seems to be deepening in Canada to a deeply troubling degree.  The significantly resource based economy has been hard hit by the fall in oil prices. The downtown is centred in but by no means confined to the western province of Alberta, where unemployment has skyrocketed and food banks are being overwhelmed.  Moreover, as the economy slumps, Canada has a dangerous household debt level that is the highest among G7 countries.  None of this suggests any great prospects for the Liberals rediscovering their former and very dubious progressive credentials.

Since taking power, the Trudeau regime has taken care to overturn some particularly egregious measures the Harper Tories had undertaken.  Harper, for example, had tried to prevent Muslim women from taking the oath of Canadian citizenship if they wore a niqab.  When the courts struck down this hideous requirement, the Tories launched an appeal.  Trudeau was only too happy to ostentatiously kill that appeal and ‘celebrate diversity’ at no cost.  On the more decisive question of the austerity agenda’s close relative, endless war, the Liberals have been somewhat less progressive.  Harper’s shameful $15 billion arms deal with the Saudi Arabian torture state will not be cancelled and armoured vehicles, perfectly suited to murdering protesters on the streets, will be delivered as planned.  The election pledge to end Canadian airstrikes in Syria and Iraq has not only been broken but the killing and devastation has actually been intensified.  When it comes to the implementation of austerity measures, we may expect the Trudeau Government to act more stealthily that the former Tory regime but to maintain and even intensify its regressive course.

The federal system of government in Canada makes the implementation of austerity a more collaborative effort.  Some direct federal social programmes do exist, such as unemployment insurance and the Canada Pension Plan, but for the most part, social provision is in the hands of the provinces. The federal government can cut funding but not directly implement regressive policies.  If Iain Duncan Smith lived in Canada, he’d have to impose his Work Capability Assessments on the sick and disabled in one of the ten provinces.  However, the Liberal Party is at work on the austerity project in a number of Canadian jurisdictions.  In Quebec, the government of Philippe Couillard is forging ahead with unprecedented austerity measures in the face of a huge social mobilisation.  Public services and the workers that deliver them are under enormous attack.  Despite being a Liberal, Couillard has proudly acknowledged that his greatest political role model is none other than Margaret Thatcher.

In Ontario, the Liberals have been in power since 2003. They took over from a hard right wing Tory regime and have craftily consolidated and deepened the austerity measures they inherited.  They are an object lesson in the role of the Liberal Party as a kind of political chameleon.  The present leader, Kathleen Wynne, took over the job claiming she would be the ‘Social Justice Premier’.  Since 1994, social assistance payments to unemployed and disabled people in Ontario have lost at least 55% of their spending power.  This decline continued after the Liberals came to power and despite the fact that they passed a Poverty Reduction Act that they have violated by making people poorer.

The austerity agenda in Canada will be ‘kinder and gentler’ under Trudeau and his Liberal provincial counterparts only in form but not in substance.  We are really dealing with austerity in sheep’s clothing.  The contradiction in dealing with such duplicitous regimes is that they are less hard-nosed and can be forced to retreat somewhat more easily than overtly right wing governments but, at the same time, they are far more skillful in the art of political demobilisation. Dialogue and consultation are their stock in trade. It may, however, be Justin Trudeau’s misfortune to have taken on the role of Prime Minister at a time when the intensity of the austerity agenda and the social resistance it engenders will more than his charm and photogenic qualities can deflect.  Unlike David Cameron, the present Canadian Prime Minister would never stand up in the House of Commons and refer to people in a squalid refugee camp as ‘a bunch of migrants’.  His brand of austerity, however, is every bit a vicious and harmful as Cameron’s and those impacted by have just as much reason to mobilise and fight back as do people in the UK.

John Clarke is a political activist based in Canada, and founding member of the Ontario Coalition Against Poverty. He writes regularly on political and economic issues.

Social Exclusion and Labour Rights in the Banlieues of Paris

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The terrorist attacks in Paris have again highlighted the problem of social divisions in France and the extent to which they lead to feelings of exclusion that in some way incite violent responses. It appears that some of the terrorists grew up in or had links to the banlieues (or suburbs) of Paris, where there are high concentrations of immigrants and minority ethnic groups, as well as high levels of unemployment and poverty and a recent history of racial tensions. Many of the youth in the banlieues are unemployed, with the unemployment rate for immigrant youth above 30% according to the OECD. More generally, migrants and their children are also over-represented in low qualified jobs, with workers of North African origins experiencing the highest ethnic penalty in terms of access to employment.

France has a republican model of integration, built on the universalist values of the 1789 Revolution of secularism and equal individual rights for all. Recognition of cultural difference or ethnic communities is considered unacceptable. In contrast to the British multiculturalist model, where ‘difference’ – whether of ethnicity or religion – is tolerated or even prized, ‘difference’ in France is seen as a form of sectarianism and a threat to the republic. The French notion of laïcité, dating back to the Revolution, actively blocks religious interference in affairs of state and public manifestations of religious identity in public spaces, including workplaces. The problem for the recent generations of Muslim immigrants to France is that the proclaimed universalism of republican values – and the focus on assimilation – has meant that many Muslims feel that, if they want to be ‘French’, they must learn to be citizens of the republic first and Muslims second. This is a difficult and, for some, impossible task.

My recent research has looked at how trade unions have responded to migrant and minority workers in France. As context, it should be said that trade unions in France have one of the lowest levels of membership density among OECD countries, with only around 8% of workers being members of a union. Moreover, the union movement is divided along ideological and political lines. It also confronts ideological employers, which means that social dialogue tends to be conflictual and fairly hollow.

However, trade unions in France still have a high level of institutional embeddedness, manifest in the level of collective bargaining attained with over 90% of workers covered by some form of collective agreement. They also benefit from relatively high levels of worker turnout in workplace representative elections which are organised every 2-4 years. Elected worker representatives participate and negotiate at all levels of the organisation and enjoy a legal framework for employee representation that is the envy of trade unions in the UK, including a right to strike enshrined in the French constitution.

My previous work on French trade unions has shown that the institutional embeddedness of trade unions gives them access to resources (time, space and financing) that allows them to represent the wider interests of workers and mount campaigns to organise workers who are excluded from regulated spaces, both inside and outside the workplace. The unionisation rate among immigrant workers is only around 2%. However, this figure is based on nationality, not ethnic origin, as ethnic monitoring is not permitted in France. Migrants and their descendants are likely to be counted as ‘nationals’ as soon as they access French citizenship. This of course poses problems in terms of how we can study issues of social exclusion and discrimination, as the data needed often doesn’t exist.

What is emerging from my research in France is that trade union behaviour is still fundamentally shaped by the assimilationist model of integration. For migrants and minorities working in France this has generally meant that they have had to leave their ethnic and religious identities at the factory gates, the office door and even the picket line. One trade union activist to whom I spoke about Muslim workers taking part in a strike said that there was a ‘time for everything’ and added that he had told Muslim workers that praying on the picket line was not appropriate. There was no issue with the workers being Muslim; only the public demonstration of religious identity.

Attitudes have been changing, however, as evidenced in the debates on the wearing of headscarves. In a recent case where a woman was fired for refusing to remove the veil when asked to do so by her employer, trade unions supported the court’s decision which allowed women to wear the headscarf when working for private employers and thus not involved in providing public services. There has also been some recognition and support by trade unions for workers discriminated against on the basis of nationality and immigrant status in the past. This was the case recently when 800 Moroccan workers, working on private contracts for the public railways since the 1970s, won a case of discrimination, as they had been excluded from the benefits and status of the public-sector workers alongside whom they worked.

Even though they still approach the issue from a mainly race-blind and social rights perspective, trade unions have made attempts to integrate undocumented migrant workers who have been excluded from accessing their labour rights. Trade unions in and around Paris have done a lot of campaigning around and organising of the sans papiers workers, a large number of whom are of African origin. Ever since the 1970s trade unions have been in favour of the regularisation of undocumented workers and from the early 2000s onwards organised mass strikes of these workers to demand regularisation and respect for their labour rights. As a result, over 5,000 workers have been regularised in recent years and the campaigns continue, with greater numbers of undocumented workers organising campaigns themselves with the support of the trade unions.

This brings me back to the terrorist attacks in Paris and the subsequent discussions around social exclusion. There surely now exists a double challenge for trade unions to act as a force for integration for socially excluded members of society. Firstly, migrant and minority workers tend to work either in the margins or not at all, which means trade unions find it difficult to access and represent them. Secondly, the denial of ethnic and racial differences means that structural and institutional forms of discrimination and exclusion are ignored or not explicitly addressed, which can easily lead to a lack of engagement with the trade union movement on the part of workers who feel they have to suppress their core identities.

By contrast, the successes of the sans papiers campaign shows that trade unions can organise in sectors with high concentrations of migrants and minority workers and can demand labour rights for those working and living on the margins of society. France needs its trade unions to build on this example.

This blog is also published on Sheffield Political Economy Research Institute’s (SPERI) blog.

Dr Heather Connolly is Senior Lecturer in Leicester Business School at De Montfort University and a member of the Contemporary Research on Organisations, Work and Employment (CROWE) group and the Centre for Urban Research on Austerity (CURA).

Managing Capitalism in Latin America: the Decline of the ‘Pink Tide’

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Following over a decade of relatively high growth rates wedded to redistribution, increased social spending, and the incorporation of labour and social movements into the wheels of decision making, consistent electoral success of the political Left in countries as diverse as Chile, Brazil, Ecuador, Bolivia, Argentina, and Venezuela had given the progressive ‘Pink Tide’ a growing sense of permanency. Latin America  has been heralded by many on the Left – most prominently in Manuel Riesco’s concept of the Developmental Welfare State – as a new model for development that breaks substantively with the neoliberal consensus.

But beginning with the economic and political convulsions in Brazil centred on a deepening corruption investigations linked to the ruling Workers’ Party (PT) and a widespread middle-class dissatisfaction with the government of Dilma Rousseff this is being increasingly shaken. The language and practices of austerity have begun to re-emerge in these states, with Brazil, the largest economy in the region, taking the lead in reducing social spending, unemployment protections, and taxation in a strategic re-orientation in favour of powerful business interests that began as early as Rousseff’s first government after 2012.

The unexpected electoral victory of conservative former businessman Mauricio Macri in Argentina has reinforced the growing clamour that proclaims the end of the informal progressive regional coalition. The first non-Peronist leader to gain office through democratic election since 1983, Macri has come to power with a mandate to address the “mistakes” of Kirchnerism through a new commitment to free-market economic policy. Despite assurances he will sustain some of the popular social policies previously implemented, he now represents the leading edge of the re-emergence of austerity practices.

The phrase “re-emergence” is used deliberately in these contexts as such restrictions on social spending, the rolling back of protections for labour, and the use of varied mechanisms of economic policy to promote regressive redistribution upwards to powerful firms and financial capital are all too familiar. Chile under the dictatorship of Augusto Pinochet 1973 and Argentina under the post-1976 military dictatorship and the disastrous economic stewardship of Carlos Menem in the 1990s, saw first-hand the deleterious impact of such a constellation of policy measures. IMF Structural Adjustment Programmes, most notably with Mexico in 1995, also consolidated this global counterrevolution in the region and the dramatic reversal of the “populist” redistribution and government spending strategies of the twentieth century.

The Pink Tide had ostensibly offered a peaceful interlude in these devastations, first of neoliberalism and now of emergent austerity in Latin America, as well as a return to the policies of redistribution and state support for workers. Backed by neostructuralist ideas and programmatised as strategies of neodevelopmentalism that sought to combine state-led development with an openness to international markets, progressive Latin American governments (from Lula Inácio da Silva and Dilma Rousseff in Brazil and Néstor and Cristina Fernández Kirchner in Argentina to Rafael Correa in Ecuador and Evo Morales in Bolivia) offered the possibility of growth with increasing equality, social spending to support the poor, and the genuine inclusion of the voices of workers and social movements in the politics.

Yet this distinction from the policies and practices that preceded and followed it have increasingly been shown to be deeply problematic. Alfredo Saad-Filho writing on Brazil has argued that despite the rhetoric of reform there has been little substantive change either to the political configuration of power (represented in the Constitution inherited from military rule) or in the hegemony of neoliberalism and concomitant international economic integration. On Ecuador, Jeffrey Webber goes further to argue that Rafael Correa, despite positioning himself on the radical edge of the Pink Tide alongside Bolivia and Venezuela, has deliberately demobilised the social movements that brought him to power, restoring economic power and privilege across sectors and actors that are the antithesis of his proclaimed project.

So, if not a progressive interlude contrasting the varying strategies of neoliberal and austerity capitalism, what does the Pink Tide and its neodevelopmentalist model represent? It would be too simplistic to dismiss it as a mere fraud. Evidence economic growth and redistribution in leading economies of the region does not bear this out. Declines in poverty through the famous ‘Bolsa Familia’ cash transfers to the poorest families in Brazil under Lula and the universal child support measures introduced by Cristina Kirchner (which Macri has at the moment vowed to retain) provoked a genuine redistribution of wealth towards the lower end of society. Attempts to reverse neoliberal reforms of education in Chile, the prominence of indigenous social movements in Bolivia, and environmental proposals in Ecuador also pointed to the opening up of potential new space for the redistribution of political power.

Instead, these measures must be viewed along a continuum of strategies aimed at managing capitalism. I have developed this line of argument in other areas of my research to date inasmuch as the varied progressive and regressive strategies that comprised the period of import-substitution industrialisation (ISI) during the twentieth century in Latin America represented distinct efforts to intensify exploitation and – most significantly – suppress and discipline labour to this end. The limitations and contradictions of the Pink Tide, identified elsewhere by a growing number of scholars, combined with the apparent ease at which the return to the practices and processes associated with austerity and the neoliberalism of the 1980s and 1990s, imply this progressive turn must be viewed through the same lens.

Significantly, it is by returning to the workplace, the space that at CURA’s launch event last month Phil Taylor described as the “front line” of austerity where managerial strategies seek to squeeze out maximum effort at minimum cost as the epitome of exploitation, that these contradictions can become most apparent. Alongside experience of the harsh disciplining of restrictive economic and social policies, the region has seen some of the clearest examples whereby relatively progressive developmental strategies have served to incorporate workers into intensified social organisations of production with increasing work rhythms.

The archetypical populist regimes of Getulio Vargas in Brazil and Juan Perón in Argentina serve as an important point of reference, offering an ostensible voice to organised labour whilst supporting a transformation of labour processes that deepened exploitative relations of contemporary capitalism – most obviously with the Peronist “Productivity Conferences” of 1954. More closely linked were the developmentalist strategies adopted by Arturo Frondizi in Argentina after 1958 and Juscelino Kubitschek after 1956, which sought to attract foreign capital through a liberalisation of trade and investment regulation that facilitated what I have referred to elsewhere as a “disciplinary modernisation” of industrial production.

In the same vein, the proclaimed progressive strategies of the Pink Tide have gone hand in hand with appeals to foreign investment across modern sectors, to the continued opening up of once-protected sectors to the rigours of international competitive pressures that reposition domestic firms in the global economy and impose regressive technological and organisational changes. It has even led to a return to ‘extractivism’ (most notably in Ecuador) associated with a bygone era of the nineteenth century widely critiqued by regional and international scholars. It is by analysing the changing relations in production of neodevelopmentalism and the Pink Tide, as well as the changes that have occurred before and after, that will make possible a comprehensive understanding of the management of capitalism and the interconnectedness of these periods of harsh restriction and ostensibly progressive social peace.

Dr Adam Fishwick is a CURA team member as well as Lecturer in International Relations at the Department of Politics and Public Policy, De Montfort University

Community Wealth Building in Preston

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By Matthew Brown

It is without doubt that much of Europe is in the grip of an austerity crisis.  However to build a genuine alternative to it we need to think deeper about its causes and ask questions about the fundamental undemocratic nature of our economy to be able to respond to what has also become a systemic crisis.

The 2008 global financial crash emerged from an unregulated financial sector under little form of democratic control.  The harsh austerity we see at present is a payback for the £5500 each family in our country had to contribute to bail out the banking sector.  This money is now being recouped in the form of public spending cuts, benefit and tax credit cuts, tax rises, pay freezes and increased student tuition fees which are increasingly hitting the middle class.

Added to this Richard Murphy calculates up to £120 billion per year is lost in tax avoidance and evasion often by large multinational corporations and rich individuals and Aditya Chakrabortty has produced evidence recently that an additional £93 billion per year is paid in corporate subsidy.  A mere drop in the ocean compared to the estimated £1 to £2 billion a year lost to the wider public purse through benefit fraud.

Despite this vast public wealth injected into the system there is a dearth of investment from corporations. The major banks are not properly lending to individuals and local businesses and reliance on “inward investment” over the last 30 years has produced an economy in which a fifth of what was once paid in wages has disappeared. As a result, the UK has become one of the most unequal countries in Europe.

We must look to produce a response in our communities to this systemic crisis.  To do this we should examine how wealth is produced and then capture and democratise the wealth at source.  Much can be done locally and regionally but a national government with an understanding of this system problem would fully complete the picture.

In Preston and Lancashire we are experimenting with part of the alternative.  It is inspired by regions and cities that have built a culture of economic democracy like Mondragon, Spain and emerging progressive thinking in parts of the USA.  What is significant is the economic crash of 2008 onwards had little effect in terms of unemployment and poverty in Mondragon but also in North Dakota with its sophisticated network of devolved public banking.

This new democratic local economy in the UK will have at it’s heart procurement with Councils and other placed based institutions like Universities, Colleges, Hospitals and Housing Associations spending hundreds of billions on goods and services every year but not always considering where they are buying goods and services from and what social and economic benefit that wealth can bring.

The Preston City Council led Community Wealth Building initiative has now identified over £1 billion per annum in spend on goods and services by participating “anchor institutions” in Lancashire.  The long term aim is to shift more of this wealth to local businesses and if there are gaps in provision, to fill them with new worker cooperatives.  The consultancy we are working with, the Centre for Local Economic Strategies (CLES) has begun to change procurement culture of Manchester City Council, increasing their purchasing to over 65% from the Manchester economy adding more than 5000 jobs.  What is unique in Lancashire is the public sector institutions involved are collectively adopting this ‘quasi planning’ strategy to maximise the social and economic impact of this collective pool of wealth to the local economy.

There are also vast swathes of wealth within communities in local authority pension funds.  Lancashire’s County Pension Fund has investments of over £5.5 billion which in reality is the deferred incomes of tens of thousands of local public sector workers.  The Preston, South Ribble and Lancashire City Deal has earmarked £100 million of pension money to be invested in commercial development in the local economy producing a sustainable return for fund members and creating a social dividend in the communities they live.  Elsewhere in the UK other creative uses of pension monies are emerging most notably in Islington who earmarked a massive 15% of its entire fund for social housing.  These investments have support from many unions who know access to affordable housing is a problem for many public sector workers as much as for anyone else.

At the heart of a democratic local economy has to be new social forms of ownership and support for local businesses.  In Preston, we are working with the Chamber of Commerce to encourage retiring business owners to sell their companies to their employees.  We have a number of new democratic firms including an artists cooperative of over 60 independent local artists, an educational psychologists worker cooperative, an employee owned transport consultancy with 25 employee owners and plans are underway to bring a “Unicorn” style grocery to the city.  This is complimented by Preston City Council earmarking a city centre investment of at least £5 million in its outdoor markets to support independently owned businesses to further capture wealth in the local economy.

Municipal enterprise can also play a key role and Preston City Council has a long term objective to generate energy from wind and solar power in municipal ownership to break the stranglehold of the Big 6 energy giants though this is under considerable threat from the cuts in renewable energy subsidy from Government.  However it is something we will look to do when it becomes viable.  Other Councils such as Nottingham have already ventured into the energy market recently having a positive impact on their local economy.

Credit unions and community development financial institutions (CDFI’s) are gradually expanding in Preston’s economy mirroring the growth of credit unions across the country.  The Labour administration recently fulfilled a long term commitment to establish a new city wide credit union “Guild Money” that has had over 150 members join in a very short period of time.  This is complemented by Lancashire Moneyline, a smaller credit union in Moor Nook, a number of workplace credit unions and trade unions promoting their own credit unions to members building a culture of democracy and financial inclusion.

Finally, we have insisted on quotas for affordable housing and health infrastructure as part of Preston’s Local Plan to capture community benefit from conventional development including a 30% affordable housing requirement and we have expanded the living wage by encouraging local employers to pay it through Preston City Council and its living wage partners procurement strategies.  This has seen Preston as a traditionally deprived community outperform more prosperous areas in Lancashire in terms of people receiving the living wage with a positive effect particularly on women.

With any debate about austerity and its causes we need to look to nurture creative responses and consider how we can best defend communities against it in future by making them more resilient, democratic and self-reliant.  Maybe just maybe with this new thinking emerging from Preston and elsewhere both here and abroad we are finding the answers to this system problem and uncovering the beginnings of what could become a truly democratic economy.  Time to watch this space.

Councillor Matthew Brown is Cabinet Member for Justice, Social Inclusion and Policy at Preston City Council

CURA’s Launch Conference: some reflections

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Valeria Guarneros-Meza and Adrian Bua report on CURA’s inaugural conference

Last week we held our two day launch conference. Throughout the four panels there were significant discussions that we need to consider in developing our understanding and study of austerity. Many of these ideas were circulated via twitter (@CURA2015) but we think it is worth expanding on 140 character-selling headlines. The points listed below are not exhaustive; they are our impressions of issues that drew people’s attention and therefore worth considering in developing CURA’s future events and research agenda.

Austerity and Urban Boosterism

Urban infrastructures such as Heathrow’s proposed third runway (addressed by papers delivered by David Howarth and Steven Griggs), nuclear plants (Francis Chateauraynaud), HS2 in London (Daniel Durrant) and Medellin’s Teleferico and Reyes de España Library (Kate Maclean) were the examples addressed by the speakers. In the case of London it is striking to see estate development and the type of urban infrastructures mentioned above while the great majority of the city’s population are struggling to make ends meet. In Medellin the concept of ‘social urbanism’ was developed in an era of financial extravagance. Extra spending was targeting national and foreign investment into the city while addressing  basic service needs (access to water and electricity) that marginalised neighbourhoods required. Kate Maclean argued that although the approach had succeeded in attracting investment, upgrading urban space and integrating some marginalised neighbourhoods, urban boosterism has not been enough to tackle levels of crime and violence (measured by homicide rates) in particular pockets of the city. Moreover, it also been argued, in other work by Abello-Colak and Guarneros-Meza, that  the reintegration and disarmament programmes targeting the youth tend to favour those groups that belong to gangs as opposed to building a universal and comprehensive approach to youth development.  In other words, what Medellin’s example is showing is that social urbanism, at its best, or urban boosterism, at its worst, may help the city overcome visible spatial austerity but it will not be enough to tackle the social degradation that austerity of public welfare has caused.

Getting away with it: the socialisation of risk through technical obfuscation

This topic was raised in presentations by Daniel Durrant on HS2 in London and on the political economy of adult social care provision in the UK, by Karel Williams. Daniel’s analysis was based on the balance sheets of the HS2 corporation. He demonstrated that accounts show that cost calculations are based on the benefits for business infrastructure investment and potential business travellers, while wiping out any social costs that are related to the impact that the construction of the railway has on the destruction of community life, schools and other spill overs. Karel’s work on adult social care critiqued the financialisation of care provision by private providers. He argued that optimum returns on property speculation assured by a standardised kind of adult care home (60-80 capacity) with minimum wages and a casualised workforce with high levels of staff turnover. The requirements of quality care provision, and attention to the social and health needs of residents,  takes second place to debt and management strategies that split property ownership on the one hand and home management and operation on the other. These financial innovations provide parent corporations to extract any gain from subsidiaries passing all debt responsibility to the latter; what he called ‘malign performativity’. These two examples show the ability that corporations have in covering and disguising cost-benefit analysis by using sophisticated technicisms that reduce the ability of citizens to understand the model and ability to perceive these techniques as ‘daylight robbery’.

A similar point was made with nuclear plants in France and England (Francis Chateauraynaud), where the scientific and technical discourse of the environmental impact that these generate lead to the production of confusing and competing set of facts and narratives that disempower citizens and politicians (see also Xavier Auyero’s work).

Austerity invites ‘structural violence’

Annette Hastings’ presentation on the socioeconomic costs of local government cuts in England and Scotland argued that they constituted a clear case of ‘structural violence’ – because they put those individuals less able to exercise political agency in harm’s way, and accentuate their marginalisation in public service provision.  Drawing on findings from a recent report, Annette demonstrated the cuts to tax benefits addressing housing and social care have promoted local authorities to change their administrative processes to cope with impacts of the cuts on staff salaries and dismissals.  These practices are structural because they form part of the system that puts order and discipline to the way local authorities are organised and the relationships they build with citizen-users.

The concept of structural violence is relevant to other presentations: such as Robin Smith’s work on the role of ‘street outreach workers’ in tackling with the ambivalent pressures of caring but eradicating  homeless in cities such as Cardiff and New York, where urban boosterism is undoubtedly present as ways of ensuring urban competitiveness; and Robert Ogman’s talk on social impact bonds – another financial innovation that promote structural violence while helping local governments cope with the destabilisation of social and welfare initiatives produced by public fiscal austerity. These three presentations addressed Anglo-American cases, but it is equally interesting to see how structural violence can be found in contexts of crime and physical insecurity in cities in the United States and across different cities in Latin America (see Auyero et al ‘Violence at the Urban Margins’), whose national contexts deepen the complexity of the meaning of structural violence when enmeshed with broader debates on security and urban securitisation.  In cities, both in the north and south, the role of frontline bureaucrats was mentioned as agents caught in the cross road of the ambivalence of everyday governance practice.

Resisting and countering austerity

Both keynotes – Erik Swyngedouw and Karel Williams – addressed the need of agency by academics, insurgent social movements and organic intellectuals to enhance and speed up social innovation in the UK. Erik called for system de-stabilization through insurgency whereas Karel drew upon the concept of social innovation as a potential source of alternatives. These strategies differ in so far as one aims to engender rupture through direct confrontation, and the other pursues an agenda of interstitial change. The modality of the former is agonistic, the latter more collaborative. However, these modalities are by no means mutually exclusive. Paraphrasing Romand Coles critical social theorists should focus on the mutually enabling relationship between agonistic and collaborative forms of participation. Absent agonism, collaboration is in danger of governmentality. This much is evident, we think, in the co-optation and trivialisation of the concept by neoliberalism, resulting in constant innovation without change. On the other hand, absent collaboration, agonistic ruptures can fail to sustain the change that, in Ricardo Blaug’s words, a ‘democratic moment’ opens up opportunity for. In sum, both modalities are necessary to achieve a transformative environment. CURA has a good opportunity to start building on this through its association with the New Economics Foundation (NEF). Rachel Laurence (from the New Economies in Practice team at NEF) and Adrian Bua (NEF and CURA) explained NEF ambitions to sustain and expand activities that make the foundation a hub for research and action that delivers socio-economic change. They also highlighted some areas where CURA and NEF could join forces to shape such an agenda. This could, for example, be around current policies such as devolution and regional economic development. This is also an area which, as Matt Dykes of the Trade Unions Congress explained, is being targeted by organised Labour movements for its potential to create new government tiers that are more amenable to trade union influence. It will be important to bring in other social movements into this agenda also.

It is perhaps it is worth considering how doctoral students can become a generation of organic intellectuals as a strategy to help them find employment that academia seems increasingly incapable to provide. Building professional links between CURA and progressive policy and advocacy organisations such as NEF might be one way to proceed. This could go some way towards breaking down barriers between policy research that seeks political influence, and academic research focussed on making contributions to knowledge.

Valeria Guarneros-Meza is Lecturer in Public Policy at the Deparment of Politics and Public Policy; Adrian Bua is Research Assistant the Centre for Urban Research on Austerity

After The Corbyn Surge

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The election of Jeremy Corbyn to the Labour Party leadership is a seismic event in British politics – perhaps even more so than the SNP landslide in May 2015. For the first time, a committed socialist and anti-austerity activist leads the Labour Party at Westminster.  Many commentators were busy writing his obituary long before he became leader. Yet, serious thinkers on the right aren’t fooled. They know Corbyn taps into a popular mood, the desire for authentic opposition to the Tories, and an alternative to the right wing populism of UKIP. They fear that he really could threaten the enervating austerity consensus.  Making that threat a reality is his only chance.

Corbyn faces formidable opponents in the state, business, media and the Labour machine itself.  Can he survive as leader?  Is it remotely plausible that he could become PM?  It will be extraordinarily difficult, but it is possible whatever the psephologists might say.  Politics can change. Political activists can be agents of change.  The challenge, simply, is to make the “Corbyn surge” infectious: translate his campaigning energies to the national stage and use his position as Labour Leader to win credibility for his socialist worldview. In practice, that means he must mobilise a movement capable of stopping austerity in its tracks. To win credibility, the Corbynistas must find a way of making austerity ungovernable. Accomplish that, and they might regain credibility for socialist politics and bring millions of working class people alienated by the Blairite era back into the political and electoral fold.  Since Corbyn’s astonishing victory on Saturday, there have been stirrings within the leadership of the trade union movement – even threats of “civil disobedience”.  But we heard all that in the heady days of 2011. At the height of the Arab Spring and the Occupy Wall Street movement, we saw a trade union demonstration of more than half a million people in London, and mass strikes against cuts in public sector pensions. But the unions backed down and nothing came of it. Talking a good fight against austerity isn’t remotely the same as delivering. Jeremy Corbyn’s leadership is a huge gamble and the odds are stacked against him. If the Corbyn surge does not prove to be infectious, he will quickly be toast.  But by sticking his guns he could just lead a renaissance on the left and transform British politics.

We will be discussing this and many other issues at the inaugural conference of our Centre for Urban Research on Austerity on 18th and 19th November 2015. See http://www.dmu.ac.uk/CURA2015.

Jonathan Davies

Director – Centre for Urban Research on Austerity