Class, not national solutions, to the economic crisis

March 21, 2009

As the economic recession deepens across the globe, the spectres of economic regulation and nationalism, seemingly slain by the prophets of globalisation and free trade, have risen again.

In fact, with unseemly haste, many among the business class and its mouthpieces in government and the media have become born-again protectionists and regulators.

Is there something for our side in this?

To the extent that recent policy shifts and changes in mood can provide a lever to win useful public spending and better rights for workers, yes. But economic nationalist measures such as tariffs and business subsidies, and associated tighter immigration policies, are diversions from the real causes of the crisis and harmful for the majority.

The federal government has announced a range of subsidies, including $6.2 billion for "our" car industry.

On March 16, immigration minister Chris Evans announced a cut in the annual skilled migration intake of 14%, from 133,500 to 115,000.

The Australian Manufacturing Workers Union said on March 17 supports the cuts, but has also called for cuts to temporary skilled migration.

The March 16 Daily Telegraph supported this move with headlines such as "Migrant numbers slashed to save Aussie jobs" and promoted a strategy of "buy Australian" to protect employment levels.

Socialists oppose such measures. But isn't it true that there is some form of solidarity among all Australians, that we should "look after our own" first in tough times? Well, no.

"The nation" is generally seen as a natural, self-evident category. Nations are, however, complex, contradictory social formations with a quite recent history. With the development of capitalism, an emerging class of traders and manufacturers needed an expanded market.

This drove interrelated pressures to break down national trade barriers, standardise languages, formalise laws and develop new forms of communication, like the printing press.

Hence nations can generally be defined as distinct social formations sharing a common territory, economy, language and culture. But the view that nations also share common economic interests is false, a key part of the ideological glue holding capitalism together by denying the very different interests within each nation.

Take immigration. This might increase labour market competition in some sectors but also increases demand across the economy. In any case, it has far less impact on employment than the extent to which capitalists are willing to, or are forced to, give up some of their ill-gotten gains to employ people.

To ignore this and focus on immigration has long been a characteristic of union bureaucrats keen to avoid the struggle against employers.

Protectionist measures may provide a temporary respite for workers in some industries, but at a cost. They lead to working people paying more for the products of protected industries, and by thus dampening demand overall can encourage bosses to lay off workers in other sectors.

Protectionism can also only guarantee to save profits rather than jobs, a fact recently demonstrated by the spectacle of Pacific Brands grabbing $17 million of corporate welfare before sacking 1850 workers.

Further, import tariffs in particular hinder development in poorer countries and hence the living standards of workers there.

This is not to say we should support the free trade agenda of removing all protectionist measures without a positive replacement. But we have to reject the logic by which every crumb given to the working class must be paid for by the working class.

That is, we must demand that the class that lives off exploitation, and that has created the crisis, must pay.

We should open up immigration, with migrants guaranteed work and the same pay and rights as current residents, so as not to undermine anyone. We should actively support the struggles of workers in poorer countries, replacing the "race to the bottom" with global solidarity.

Rather than throwing money at capitalists, we should demand that jobs are created through massive public spending, nationalisation of any firms threatening lay-offs, and a reduction in the working week with no loss of pay to share available work.

Such measures point the way to a world in which nationality might remain a cause of cultural diversity but not of bitter competition and fear.

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