The Populism Chronicles: Part One

The Populism Chronicles, part one of a continuing series.

Stephen Collins is crying for you, Argentina

Stephen Collins is crying for you, Argentina

Stephen Collins’s Inside Politics column in the Irish Times bore the headline ‘Coalition needs to resist easy rush to populism‘. ‘Populism’ in this context meant, variously;

  1. A refusal to follow the Troika stipulation to impose €2bn in cuts and taxes in the upcoming budget;
  2. Joan Burton, the Minister for Social Protection, referring to those stipulating this target as “austerity hawks”, which Collins believed ‘played straight into the hands of the opposition’.
  3. The use of the word “austerity”. According to Collins, “austerity” is mere ‘prudent budgetary discipline’, a means of ‘protecting the hard-won credibility of Ireland’s capacity to follow through on budgetary commitments’.

Against this ‘populism’, Collins counsels that Labour should take pride in its role in ‘prudent budgetary discipline’, and that Fine Gael should ‘present itself as the party that can best manage the economy’.

It seems a bit quixotic, Canute-like, even, at this stage to claim that the word “austerity” is populism. But what is giving in to windmills or the tide if not populism? “Austerity” as a name for a particular set of social and economic policies is well established in the public mind, and not just in Ireland. Using the word “austerity” does require some kind of subjective judgement, but so then does ‘prudent budgetary discipline’.

The “devastating effect on public health” of such policies, as recorded by The Body Economic: Why Austerity Kills by Stuckler and Banju would not alter an iota if the full title of that book were ‘The Body Economic: Why Prudent Budgetary Discipline Kills’. One useful effect of the revised title, however, would be to expose the political interests operating behind the use of the term ‘prudence’.

The Body Populist: Why Irresponsible Book Titles Kill

The Body Populist: Why Irresponsible Book Titles Kill

Collins cited the ‘sad case’ of Argentina as a ‘salutary lesson about what inevitably follows when such irresponsible policies are followed, but that hasn’t deterred the “burn the bondholders” brigade from continuing to urge an end to “austerity” with all of the consequences that would follow from that.” Though he did not provide any evidence, or cite any consequences, other than the claim that it was sad.

Was the Argentinian government of the day irresponsible? In an Irish Times article a few days previous, Martin Wolf, the Financial Times’s chief financial correspondent, writing about Argentina’s default, said that ‘it had become impossible to service its public debt of $132 billion at tolerable cost.’

From Collins’s perspective, ‘responsibility’ equates to tolerance of what Wolf calls the intolerable. Neither writer mentions just who it is that has to do the tolerating. Collins, however, lauds the Labour Party for ‘protecting the most vulnerable in society from the worst ravages of recession’.

To understand further the political uses of ‘the most vulnerable’, you can read my Notes on ‘The Most Vulnerable’ from last year. Note that Collins does not see any ravages incurred by the imposition of ‘prudent budgetary discipline’, only the more natural phenomenon of ‘recession’.

What happened to ‘the most vulnerable’ in Argentina following its default? A recent study by the Economic Commission for Latin America and the Caribbean gives some clues. In a study last month titled ‘Pacts for Equality: Towards a Sustainable Future’, Argentina’s record over the last decade was subjected to detailed scrutiny alongside other countries. Argentina came second in the regional ranking for policies that reduced social inequality, including rises in the minimum wage, which rose by over 200% in real terms between 2003 and 2012.

Here is the unemployment rate in Argentina in the post-default years.

The Price of 'Irresponsibility': Unemployment in Argentina fails to respond to calls for prudence

The Price of ‘Irresponsibility’: Unemployment in Argentina fails to respond to calls for prudence

If only the ‘most vulnerable’ in Ireland were subjected to such irresponsible and imprudent populism.

Let us sum up. It is prudent to ignore the social costs of paying off public debt incurred in order to save the financial system. It is irresponsible to pursue policies that reduce social inequality. It is populist to say there is such a thing as austerity in Ireland.

Tomorrow: Terence Flanagan, Joan Burton, and Punitive Populism

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1 Comment

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One response to “The Populism Chronicles: Part One

  1. AK

    Where’s part 2?

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