Friday, 20 January 2012

Do budget cuts or balls-ups cause social unrest?

I'm indebted to Ben Whitham for pointing me in the direction of this recent study (pdf) by Jacopo Ponticelli and Hans-Joachim Voth published by the Centre for Economic Policy Research entitled Austerity and Anarchy: Budget Cuts and Social Unrest in Europe, 1919-2009.

Apart from the fascinating insight into politicised academia I found this a remarkable and timely account of the intellectual arguments put forward to support a pre-eminent left-wing position against cuts, which is popularly cited as evidence that blame for last summers riots rests with the coalition government - as Derek Thompson argues, "Austerity breeds Anarchy'.

Closer to the mark, however, is Eric Johnson's thoughtful analysis, as he distinguishes between the triggering events and the subsequent effects: "Social disorder is contagious."

While Ponticelli and Voth show a link between fiscal retrenchment and social instability, the jump to the conclusion that austerity causes unrest is actually unsupported by their somewhat clumsily presented statistical evidence (a less generous critic would surmise they are attempting to drown out the contradictions to their prefered political theory). However hard you may try correlation does not imply causation.

The authors immediately mark their card as sympathetic to the continental left-wing anarchist tradition by promoting the Marxist-Deleonist view that "The extension of the franchise in Western societies has been interpreted as an attempt to heed off the threat of revolution."

Supporters of liberty and democracy, on the other hand, defend the position that greater participation by the people in their own government creates a more robust, responsive and reliable system of government better suited to public needs and desires.

So voting can either be a way for traditional ruling classes to appease and passify otherwise revolutionary and rebellious tendencies or an effective means to measure and follow the will of the people by holding our representatives to account.

Obscured by their clunky handling of the data Jacopelli and Voth do however provide several highly significant contributions. Firstly they conclude countries with more constraints on the executive are less likely to see unrest as a result of austerity measures, while adding that the main factor determining the level and seriousness of unrest to occur is exacerbated under circumstances where these are not applied, and that media penetration within a country is largely neutral in both regards.

In other words unrest is not caused by cuts, but unrest is intensified when it is percieved to be legitimised by the action or inaction of political opposition.

Last summers riots which targetted consumer havens were the product of a general culture of protest cultivated by opposition to the coalition, which the official opposition were unable or uninterested in preventing. Labour organised the protests, the protests spawned the riots.

Following the Arab Spring, student protests and trade union strikes, the riots were a natural progression for those who wished to express their increasing frustration and dissatisfaction. The failure to produce any end-product despite the apparent momentum built up by a slew of anti-coalition headlines only redoubled the palpable sense of anger.

The violence of the rioting was caused by a combination of both the active failure of the opposition to stymie budget cuts (because they'd created the pre-election economic crisis) and the passive failure of the opposition to restrain agitators (who they didn't wish to discourage for political reasons).

So, contrary to popular wisdom, this summer's riots cannot be blamed on coalition policy of fiscal retrenchment, but the extent of the violence should be ascribed to the manner in which the opposition conducted their strategy.

Yet with this firmly in the rear-view mirror, Labour shadow chancellor Ed Balls has clearly decided to go down the same path again.

His speech this week that 'We cannot reverse tax rises or spending cuts' was followed up with a more detailed video interview in which he criticises the current policy as failing and states his party will continue to oppose them.

Confused? You're not alone.

Although Ed Miliband's left-hand man was immediately attacked by union leader Len McLuskey for the public sector pay freeze he advocates, and some feel this tactic will suitably impress swing voters in marginal constituencies, their course has had 'a numbing predictability' about it which threatens to cause a split in their support by provoking the long-standing loyalty to Labour on the left into outright revolt.

If the combined smugness of the two Eds could be harnessed by linking them to the national grid there would be hardly any need for a green revolution, but the paucity of supportive comments seems they are intent on it come what may. One can only hope it is benign.

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