Either as deliberate policy or by necessity, governments and companies are almost everywhere adopting austerity measures. The stringency in spending is required for the simple reason that debts aggregating over decades cannot be sustained. As it happens, economists, politicians and chambers of commerce have focused their austerity demands on public spending, were deficits have become particularly onerous. Mostly forgotten in this rush to cut spending is any acknowledgment that the current ballooning of public expenditure was in large part caused by having to extend trillions of dollars of liquidity, bailout and stimulus support for the economic crisis unleashed by the private sector. No one has yet articulated an “ethics for austerity” that takes stock of the complex causes of our current fiscal disorder, or that envisions a framework for generating social, moral and economic possibilities out of this new reality defined by constraint.
There are indeed serious fiscal issues that need to be addressed in the public sphere relating to costs for healthcare, dealing with the social services for an aging population, and the cost of other so-called “social entitlements.” However, while we have seen already radical and disruptive spending cuts in education, social services, and public sector jobs and pensions, companies have largely refused to share in any of the sacrifices that austerity brings in its wake. Bankers have rebuffed calls to change the sector’s compensation structures, despite the evidence that distorted incentives fueled the egregious behavior that precipitated the financial meltdown. More recently, oil-company CEOs have steadfastly rejected surrendering any of their public subsidies despite enjoying quarters and years of record profits. The sugar industry, corn producers, and countless other business associations have also aggressively resisted any reduction in taking public dollars, even when the original reason for their subsidy has long since expired. Not all subsides are wrong-headed, but so too, neither are all public social programs automatically dispensable. With prudence, honesty and equity, we must be willing to prune even if painful what is redundant whether it is in the public or private sphere, while preserving also in both what is essential.
Austerity poses fundamentally moral questions about our society and consumer economy that go well beyond simply trying to recover from the latest financial downturn. While austerity seems exceptional, history may regard the last 30 years of growth as the aberration, because it is impossible to imagine a genuinely sustainable economy with a growing human population that does not involve the structural constrictions imposed by limits. We are asking: “What kind of budgets can we afford?” but our deeper question is “What kind of life-style can we afford?” Carbon emissions need a radical austerity program, as does our “oil addiction” and obesity epidemic. For several decades we have known that our levels of resource use, pollution and emissions can not be sustained. Now we’ve learned that unlimited credit to subsidize endless consumption is also unsustainable.
Cutting is easy. Cutting – and still creating community and renewing frayed solidarity – while redefining the terms of hope for future is the real challenge. This means that our turn to austerity needs to include an austerity on ideology. Wal-Mart recently disclosed to markets that growth on a per store basis was declining because its core customers are now on unable to afford even the most basic goods. Paradoxically, the last two decades of ‘austerity-in-wages’ that Wal-Mart’s lowest-price model helped engineer has now come full circle so that the consumers who rely on those low wages can no longer shop at the store. This means that austerity can also be self-fulfilling unless we have the sense and courage to also know when to cut-back on cutting-back.
The ethics of austerity need to be co-defined by the leaders and policy-makers responsible for the measures and the people who will be paying the heavy costs in lost security or lost opportunity. For my part, I would offer two inputs to what needs to be a far-reaching and widely-participative dialogue:
First, enduring ethical principles need to be refined and re-imagined to suit the risks and potential harms of our current reality. For example, in boom times we understand the principle of “fairness” as trying to ensure that opportunity is available to everyone. In times of austerity, fairness not only means sharing equally in the necessary constraints, cutbacks, or sacrifices, but also ensuring that those who are left most vulnerable from the reductions are as protected from harm and indignity as possible. Scholars have already provided evidence showing that the negative impacts of pollution and global warming disproportionately affect the world’s poor. The same pattern is repeating itself in austerity-leading countries like England. Although he was derided at the time for doing it, Franklin D. Roosevelt formulated a different approach during the Depression, understanding the parsimony required by the crisis, but also finding and funding public work projects that would provide short-term opportunities for work as well as long-term infrastructure for economic renewal. In that example, fairness was an act of hope in a situation of despair, fomenting the attitudinal spirit that in the end proved vital for social solidarity and economic re-envisioning. The lesson for us that extending a hand is not always a cost: sometimes it is an investment with long-lasting and multi-faceted returns.
Second, the new fiscal reality of austerity may be the catalyst for helping us to shift from an unsustainable consumer culture to one of opportunity and exchange based on our creativity and capacities for cooperation. In “Plentitude,” the social economist Juliet B. Schor points out that we have become defined and fearful because of scarcities in energy, resources, budgets, and consumer goods. These all too real limits obscure our appreciation for the “newly abundant resources of time, information, creativity and community” that a are creating “ novel sources of income” and “well-being.” At its core her analysis echoes the wisdom long promulgated by religious traditions across many cultures and now supported by social sciences, which is that our humanity derives its richest meaning and sustenance from how we use our personal gifts in communities of mutuality and respect.
While austerity may mean eliminating many of the consumer goods that we have gotten used to, it can also lead to rediscovering in nature, in our own creativity, and in shared purpose with others, what in the end is most satisfying and most valuable.
Tags: austerity, austerity economy, cut-backs, fairness, public sector, solidarity austerity ethics
This entry was posted on Saturday, May 28th, 2011 at 7:08 pm and is filed under In the News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
