Here is a paper I wrote last semester about the budget cuts where I argue that the budget cuts are inherently racist and gendered because the modern liberal nation-state is inherently gendered due to its private-public split and the way gender has been mapped onto that split.

Also, I argue that the budget cuts are raced because the state is inherently raced, but I don’t really elaborate too fully on that. My view is that capitalism, and U.S. capitalism in particular, has race woven into it, because capitalism has developed in a way that’s been structured along racial lines due to the racialized way labor has been used here.

This paper is pretty academic-ey but whatever. :) I have cut out a few sections, so it may seem choppy.

Rejecting Neoliberal Rationality: Towards a New Dialogue About Budget Cuts

California is experiencing a deep restructuring of its economy. Using the state’s massive budget deficit as a rationale, Californian politicians are making unprecedented cuts to the public sector. Public education, health care and a range of other social programs are being choked of their financial resources. I argue these budget cuts, properly named structural adjustments, are classed, raced, and gendered. However, politicians explain the political rationality behind these cuts in purely neutral economic terms.

Furthermore, I argue that the discourse of resistance to these cuts has largely continued to operate within the framework of this rationality. Within the discourse around budget cuts, there is frequent mention that these cuts affect raced, classed and gendered populations in a disproportionately negative way. However, this construes the negative raced, classed and gendered consequences of these cuts as coincidental and not as fundamental to the mechanisms of the neoliberal processes themselves.

The gendered/raced dimensions of Neoliberal Capitalism

Neoliberal rationality ideologically flattens identity, difference and inequality, and construes everyone as equal competitors for the same market shares. This has long been recognized by various feminists analyzing globalization, as Carla Freeman points out;

A gendered understanding of globalization is not one in which women’s stories or feminist movements can be tacked onto or even “stirred into” the macropicture; rather it challenges the very constitution of that macropicture such that producers, consumers, and bystanders of globalization are not generic bodies or invisible practitioners of labor and desire but are situated within social and economic processes and cultural meanings that are central to globalization itself. (1010)

Here Freeman alludes to a point which is often missed by those examining political economy and its relation to identity politics. Economic practices and policies are enacted through bodies whose social positioning is shaped by and constituted through discourses of race, gender and a myriad of other elements of identity. This makes identity central to the processes of political economy, not an addition to it.

Other feminists have pointed this out particularly clearly in the case of structural adjustments. Structural Adjustment policies (or SAPs) refer to a series of economic policies typically forced upon “developing” countries saddled with the rapidly rising debt stemming from loans taken out from IMF and World Bank. SAPs force countries to restructure their economy in a way that prioritizes the market and which maximizes its profitability. This translates to a reduction in social and infrastructure spending—seen as weights to the economy, and a redirection of those funds towards the development of industry needed to maximize the profitability of one commodity for the market. In addition, business and labor safety standards and trade protections are lowered or weakened (Desai 20).

The argument that SAPs do not just have gendered consequences but are actually gendered processes in and of themselves comes from an understanding of the gender and racial dimensions of the public/private sphere dichotomy. Carol Pateman’s groundbreaking analysis of the public/private sphere pointed out that “social contract theory, on which the constitutional democracies are based, hides a prior sexual ‘contract’ that legitimizes male dominance of women and divides public from private” (201 Jaquette).

The gendered division of public and private spheres has been imposed upon many colonized countries where western nation-states were established following decolonization (175 Pettman). Today these structural adjustments are being imposed upon the “periphery” within the “center”. Researchers of structural adjustment programs note that they affect women and children disproportionately in the following ways: first, they eliminate jobs in the public sector, where women are the majority of those employed thanks to the gendered division of labor. Secondly, it has been noted extensively that because women around the world are still primarily seen as responsible for reproductive labor, the destruction of public programs exerts a larger burden on women who are expected to pick up the slack of disappearing social and public works programs, due to gender roles which ascribe this kind of work to women (Sadasivam 636).  This observation explains a primary mechanism of structural adjustment programs, the transfer of economic “burdens” from the paid economy to the unpaid economy, or the transfer of work from the public to the private sphere, where it is assumed women will pick up the slack (Sadasivam 636).

The public/private split is not just a gendered construction, as Park and Wald argue, “the public sphere is implicitly and explicitly racialized as well as gendered— that is, normatively defined as masculine and white, and accessed via a privileged relation to patriarchal and white supremacist discourses” (271). This holds true within California as it does within the “third world”, due to the extremely racialized nature of class structure in the U.S. The power of white masculinity is intimately bound up with the ability to move freely between the private and public spheres and to not be fettered by dependency in either (Pateman 119). This construction is dependent on the immobility of the Other, (often marked by racial, ethnic and class difference). Race and class never mapped neatly onto this formation however, as black women in the U.S. worked as slaves within the homes of white women, but were rendered invisible by this devalued work (Park and Wald 271). This is also visible in the way immigration has become a central issue within the budget cuts debate. As resources grow scarce and the class divide expands in California, racist rhetoric intensifies, stemming from an anxiety over the slipping economic status of middle-class whites.

Furthermore, one needs only compare the rhetoric that surrounded the bailouts of AIG and Goldman Sachs, to the rhetoric rationalizing cuts to vital social services, to see that constructions of independence, individual self-responsibility and rationality are racialized and classed constructs. The needy person begging Schwarzenegger not to cut social services and the AIG executives who traveled to Congress to ask for a bailout, both fail to fulfill their “responsibilities” as independent subjects in the public sphere. However, one is construed as undeserving and irresponsible (feminine) and one is seen as greedy, and overly ambitious (masculine). Race figures largely in how each is interpreted because the standard of independence they are judged by is based on a race, gender and class privilege that stretches and contracts to keep white hegemonic masculinity in tact.

Conclusion

Those who are opposed to California budget cuts must resist the neoliberal political rationality of a discourse that is gender, race and class neutral. As schools located in poorer neighborhoods across California receive the disproportionate share of budget cuts, high school dropout rates rise, after-school programs are eliminated and students are pushed into a job market wherein people of color already make up a disproportionate share of the unemployed. We must be frank about the increased burden this puts on families, and in particular one-parent woman-headed households, which are especially prevalent in low-income neighborhoods given the criminalization of men of color. Privatization and the destruction of social services dramatically transfer the cost of social reproduction to women of color. In addition, these are fundamentally gendered/raced processes aimed at maximizing profit; and we must be explicit about this.

As of now, those opposed to California’s budget cuts have been stuck in a neoliberal cost-benefit discourse, which reduces the issue to a singular focus on taxes and financial priorities. This atomized approach to the cuts are symptomatic of the larger trend of atomization analyzed by Lisa Duggan, who documents the way that prior to the 1980s, social movements were tied to a “motley collection of connected issues” which were expressed in a variety of practical expressions of resistance ranging from “reformist to radical”(xvii). After the 1980’s however, “these single-issue” organizations “began to appear as the parts that replaced the wholes” (xvii).

Acknowledging the budget cuts as being inherently gendered processes, operating along race and class lines, allows for greater unity amongst social justice formations and organizers. Duggan also notes that “categories of Liberalism produce false rhetorical separations between economic, political, social, cultural and personal life” (xxi), and argues that many within the progressive-left have reproduced these separations within their own political projects. I argue that if we are to produce broad based movements we must have a holistic critique of capitalism that is rooted in a recognition of the racist, sexist inequalities and class divisions which are woven into the very fabric of its cultural notions and political institutions, such as the private/public split.

Hell yes! In the face of the immense pressure from the European Union, Greek public sector workers go on strike AGAIN!

Its interesting that early into the article on this strike, the NYTIMES quickly reiterates the slimy attack on public workers that is often used here in the U.S. against public sector workers. The charge? They accuse the public sector workers of being “privileged”.

In Greece, commentators said the economic problems had exposed a general ignorance about the harsh realities of the global economy, while laying bare the strong sense of entitlement in a country where one out of three Greeks is employed in a civil service that guarantees jobs for life.

What does that mean though? With the price of living in Greece having skyrocketed so badly with the inflation and introduction of the Euro, these wages are not liveable wages. And why shouldn’t people have guaranteed jobs for life?

“People in other countries like Germany, France and the United States learned about the workings of the economy the hard way, by seeing their jobs on the line,” said Babis Papadimitriou, an economic analyst at the Skai radio and television group. “This hasn’t been the case in Greece.”

Yeah so this guy, Papadimitriou, says that Greek workers have not “learned” the workings of the economy. But this quote tells me otherwise:

But the Greek government’s proposals for deep spending cuts to rein in the deficit have met significant resistance.

“We won’t pay for their crisis!” loudspeakers blared from Klafthmonos Square, otherwise known as “the square of the crying people,” where disenchanted Greek workers have come for centuries to express their discontent. “Not one euro to be sacrificed to the bankers!”

This tells me that the Greek workers actually HAVE learned how the economy works, and that’s why they are shutting ‘ish down! What lesson haven’t they learned? That the economic crisis forces the government to cut vital services while bailing out banks to the tune of trillions of dollars? The lesson that when workers cede concessions, they only get asked to take more concessions? 

So far workers in the U.S. have largely not resisted the budget cuts and bailouts to banks. But I think that March 4th (hopefully) and the weeks after, might be the beginning of a movement that will show Papadimitriou (and the rest of the world) otherwise.

Over the past few weeks the financial pages have been filled with panic over the declining value of the Euro, which is being dragged down by a few European countries struggling from huge budget deficits. The budget woes of Greece have attracted the most attention, as Greece is in the worst financial shape of any country in Europe.

Many of us remember the way that Greece was rocked by massive protests and riots last year in response to the murder of Alexander Grigoropoulos.

Students and workers outraged at the police brutality shut down major cities across Greece. But the anger was not just about Alexander, it was also a reflection of Greeks anger and frustration at their desperate economic situation rife with massive unemployment and inflation and at corrupt politicians rocked by scandal after scandal.

In Greece, protests and strikes are fairly common, but following Alexander’s death they reached a frenzied pace, and this unrest effectively ushered out the conservative Greek government and put the Socialist party in power.

The Socialist government, while a minor improvement from the conservative government (think Obama), quickly moved to push forward dramatic and profound structural adjustment (austerity programs) gutting employee benefits and social services in ways that are undoing decades of struggle.

Last week, the Greek socialist government faced one of its biggest challenges yet, a standoff with independent Greek farmers demanding their subsidies be reinstated. Across Greece farmers stood strong in the face of harsh threats from the government condemning their actions. The farmers used their tractors to block the border with Bulgaria as well as highways and main roads.

Across the business pages, the response to this resounded incredibly clear— the global ruling class is demanding Greece take serious steps to discipline its working class and continue pushing forward the austerity programs (budget cuts to government spending).

One of the major tools business interests utilize to make sure the Greek government gets its working class under control, is the mechanism of credit ratings.

Here, we can see a striking example of the similarity between the political/economic situation in Greece and California.

Greece, like California and all other regional/federal/national governments, has a credit rating. What does that mean? It means that governments borrow money much like individuals do, based on a credit score.

How is this credit score determined? Well, its not exactly clear because there are a few companies in charge of calculating these credit scores, the primary debt rating companies are Standard & Poor (or S&P) and Moody’s. S&P issues credit ratings based on a number of factors, through which it “judges” a government’s ability to pay back loans.

Reuters has been reporting that S&P is threatening to severely downgrade Greece’s credit rating if the Greek government does not effectively stand up to protests and strikes.

Standard and Poor΄s could lower Greece΄s debt rating further if the government scales back its fiscal consolidation plans due to political and social pressures, an executive told Reuters on Tuesday.

“Political and social pressures are likely,” Mrsnik told Reuters. “If they build up and impede the government from moving on and water down the budgetary effort, leading to failure to comply with the consolidation strategy, the ratings could be lowered.”

“Political and social pressures are likely,” Mrsnik told Reuters. “If they build up and impede the government from moving on and water down the budgetary effort, leading to failure to comply with the consolidation strategy, the ratings could be lowered.”

These protests and shut downs are especially dangerous because they are contagious and could easily spread to places like Spain which is similarly dealing with a huge budget deficit and an angry working class. Last year, Greece’s protests spread across Europe.

Here’s the parallel — California is and has been going through a similar situation. Last year, during this time, it was dropped to the credit rating of ‘junk’.

When California, which is the most robust state economy in the country, is given the lowest credit rating in the country, its a big deal. Interestingly, this ‘crisis’ got very little play in the general news media but was heavily covered in the business pages. What happens when a state has that low of a credit rating? Well basically it means a few things, as far as I understand it;

• 1) It means that the state government is impeded from borrowing money that it needs to run.
• 2) It means that the state government has a harder time attracting investors to BUY its debt or its bonds, which are basically debt packages backed by the State.

Why would investors buy Californian debt to begin with? Well they buy it because it is an investment that can yield high percentages of interest. If you were to put your money in the bank it may yield you, for example, .9% interest. If you instead use your money to buy debt, you can collect 5% interest and make more money instead. How come you can collect 5% interest? California has to pay a high interest rate because its a “risky loan”, thus banks lending money to the state are able to charge more interest.

Now, for years the Californian economy has been discussed within business journals as a major problem. Pressure to cut public spending did not begin with the financial crisis. The plan to cut deeply into public sector spending in California, actually predates the financial crisis. The financial crisis provided both pretext and an increased impetus for the governance in California to push forward cuts to the public sector. As one person put it in the Wall Street Journal;

“They have realized Reagan’s vision of a smaller state and local government,” said Bruce Cain, a political-science professor at the University of California at Berkeley. “They forced [Democrats] to make very deep cuts in services, to schools and to state salaries and state benefits.”

Why? Well California does not operate in a bubble. California, like Greece, and everywhere else is subjected to pressures from capitalist business interests looking for bigger margins of profit. What happens if you raise taxes on corporations? You create a less hospitable climate for business.

In a Wall Street Journal article from last year, a business analysts sheds light on some of the logic underlying how politicians approach this crisis and proposed solutions to it,

»On paper, the state could solve its budget problems by raising taxes further. But in practice, that might backfire by weakening the economy and tax base. California scores poorly in state ratings of business climate. In a CNBC survey, it ranked 32nd overall but last in “cost of business” and 49th in “business friendliness.” Information technology (Intel, Google, Hewlett Packard) and biotechnology remain strengths, but some traditional industries are struggling. High costs, as well as tax breaks from other states, have caused movie studios to shift production from Southern California. In 1996, feature films involved 14,500 production days in the Los Angeles area, says Film L.A.; in 2008, the figure was half that.«

So State governments like California are torn between the pressure to both keep taxes down, in order to make the state hospitable for businesses (which creates a larger and larger debt load, as the state borrows to make ends meet).

The debt itself also creates a very real danger and need to cut public services. Why? Funding public services are mandated federally (state governments can lose federal funding if their spending on certain public programs falls below a certain level).

Also, and perhaps most importantly, governments are forced to spend revenue in ways that prioritize certain things (like public infrastructure, public programs, GOVERNMENT SALARIES) etc., SO basically, before they can pay back the debt they owe and the interest accruing on it, they have to pay their pressing bills.

Thus, California’s budget cuts are a way of reassuring investors and/or S&P/Moody’s that they will not have budget obligations that will get in the way of the State’s ability to pay back the loans they are taking out.

Recently S&P put out a number of warnings, basically telling California that the investing community did not have faith that California governance had the ‘will’ to deal with the ‘political cost’ of dramatically reigning in spending. The business community knows these cuts are not popular, and they want to make sure governments have the muscle to withstand pressure from angry people.

Furthermore, these credit rating companies are often in bed with the business interests that rely on them, so they are prone to using credit ratings politically, often to pressure governments to allow private business more autonomy in their dealings. As soon as Governor Schwarzenegger announced the dramatic cuts to social spending that he did, the market rallied and the credit rating got bumped up.

Cuts to the public sector, and public spending in general, are often characterized as a failure of ‘upside-down priorities’. This analogy deceives people into thinking that budget cuts are merely bad policy, and that if we only get enough pressure from below we can convince politicians that they are making hurtful decisions.

If reading anything about Greece and California has taught me anything, its that governments are not suffering from bad priorities, they are dealing with the very real pressures of a capitalist market.

Greece is a very small country. It is incredibly inspiring to see the Greek working class stand up to the pressures of global business interests and the EU. There are other countries facing major deficits besides Greece, but Greece is under the spotlight because its working class has put up the fiercest fight yet. The resistance of Greeks to the violence of this economic crisis inspired and continues to inspire people all over the world, myself included. This resistance and the way it is being considered carefully by credit agencies and regional governments alike should clue us into what kinds of resistance are actually reckoned with seriously by the capitalist class.