Neoliberalism is failing

Workers around the world have been confronted in recent years with all possible variations on the same theme: neoliberalism or the organised attack on the welfare state. It is a global attack inspired by extreme capitalism and greed. The greed of a few, at the expense of many. The likes are privatised, the burdens are socialised.

As a result, all of our members face the same challenges: deregulation, privatisation, a race to the bottom in terms of wages and working
conditions, the low-cost model applied in all our sectors. It is not only workers who are seeing their rights and welfare dismantled. Neoliberalism is also bent on dismantling trade unions and union rights overall.

The capitalist organisation of our economy takes us from crisis to crisis. The 2008 financial crisis, the biggest since World War II, bankrupted banks and financial companies alike. Governments had to rescue the economy. Debts were taken over, without collectivisation. Banks were bailed out, without collectivising them. Profligacy and wild speculation led to a huge crisis and taxpayers’ hard-earned pennies were used to straighten things out. In exchange for… nothing.

Then came the coronavirus pandemic. The system was put to the test worldwide. Lockdown after lockdown had to be imposed to contain the pandemic. With enormous consequences for the economy, as well as for our workers. Transport workers were not able to work from home. It was them who kept the world moving then and who keep it moving still. Health and safety became a priority and must remain high on our agenda, including for unions.

We quickly forget now that we have extracted ourselves from the immediate stormy weather of the pandemic. Still, we should not forget how seamen were sometimes blocked on ships for months and could not go home because of the measures taken to combat Covid. We forget how platform and logistics workers – already highly vulnerable workers – were put under enormous pressure to stay at work, often exposing themselves to dangerous situations while doing their jobs. And we cannot forget how dockers and truckers had to keep working to ensure supplies in shops and supermarkets, to keep supplying pharmacies and hospital.

Many workers lost their jobs during the crisis. The aviation sector and cruise industry came to a standstill. Not to mention the immense pressure placed on care staff. They deservedly got applause. But did all those hard workers receive the respect they deserved? Clearly not. It is the workers who paid the really high price of the Covid crisis.

And then came the war in Ukraine that caused runaway inflation worldwide, with prices soaring and workers’ wages not keeping up. Of course, there were other factors involved, too. Speculation, for example, which sent grain prices soaring. Or the extraordinary margins that energy companies suddenly took.

Workers again at the centre of political discussions

In many countries, worker parties lost ties with the trade union movement. Sometimes seduced by ‘the third way’ and Blairism. They no longer fundamentally question the unfairness of the system, but only try to ‘refine’ it. More than that, they themselves believe and spread the narrative that there is no alternative.

Neoliberalism combined with the fundamental crises of the system show that the opposition between workers and capital is not a matter of history, whatever some would have us believe. We need to combat TINA (There Is No Alternative) fatalism.

Again and again we hear the same story: things are bad, so we all need to make a concerted effort. Wages must be kept under control, cuts must be made, everyone must do their bit to get us out of the depression we have sunk into. The question is: are things really that bad? Is it really hard for everyone? Or do a few have a lot, too much even? And others have little, far too little? And are there too many who have too little?

Tens of millions of people are hungry. According to the World Bank, 736 million people were living in extreme poverty in 2015, or about 10 per cent of the world’s population. At the same time, winners have emerged from these multiple crises. The very rich got dramatically richer and corporate profits reached record highs, causing an explosion in inequality.

According to Forbes, there were 2,755 dollar billionaires in 2021 – 660 more than the previous year. The ten richest people in the world had a combined $1,500 billion in wealth at the end of 2021 – enough to build 6.6 million social housing units!

In early 2023, Oxfam again published its study on global inequality. It does so every year at the time when the economic and political elite gather in the Swiss mountain village of Davos for the World Economic Forum. Its report this year shows that poverty has increased for the first time in 25 years. That should set off alarm bells worldwide!

The findings of the Oxfam report are rather shocking. Two-thirds of all wealth created since 2020 ($42,000 billion) flowed to the richest 1 per cent in the world. In Belgium, the richest one per cent holds almost a quarter of the country’s total wealth.

In 2022, the largest energy and food producers generated $306 billion in excess profits. Of this, $284 billion (84 per cent) was distributed to shareholders. Meanwhile, companies with mega-profits complain bitterly about how badly things are going for them. However, the figures say otherwise. The wealth of the top ten entrepreneurs is huge and shocking at the same time.

Bernard Arnault of LVMH has assets of $211 billion (yes, your eyes aren’t deceiving you!), Elon Musk of Tesla has $180 billion and Jeff Bezos of Amazon in turn accounts for $114 billion. And the list of billionaires is pretty long. Taking a look round Google speaks volumes. They are definitely not struggling.

What is really bad is the growing inequality. 1.7 billion people live in countries where inflation is rising faster than wages and 820 million people (1 per cent of the world’s population) suffer from hunger. In Belgium, 19 per cent of the population is at risk of ending up in poverty.

In 2022, the World Bank announced that we will fail to eliminate extreme poverty by 2030. They noted that global progress in reducing extreme poverty had come to a standstill. And that’s at a time when global inequality has never risen faster. It is perhaps the biggest setback in tackling global poverty since World War II.

The IMF (International Monetary Fund) predicts that a third of the global economy will be in recession by 2023. And for the first time, the UNDP (United Nations Development Programme) has found that human development is declining in nine out of ten countries. An analysis by Oxfam shows that in 2022, prices rose faster than wages for at least 1.7 billion workers worldwide. That means they were able to buy less food in real terms.

Here’s another thought-provoker: Elon Musk, one of the world’s richest men, paid a ‘real tax rate’ of just over 3 per cent from 2014 to 2018. Christine Aber, a market trader in northern Uganda, selling rice, flour and soya, makes $80 profit a month. She pays a tax rate of 40 per cent.

Tax the rich!

In Belgium, 0.15 per cent tax is levied on equity portfolios worth more than 1 million euro. So that’s 1,500 euro on every 1 million euro. An attempt to raise that amount to 0.3 per cent was shot down by the right-wing parties. Apparently those supposedly poor devils who have 1 million (!) euros in shares can’t afford the higher tax rate.

To combat even greater economic and financial inequality, higher taxes on the super-rich are necessary. Oxfam puts it like this: “For every dollar of taxes collected in the world today, only 4 cents comes from taxes on wealth. An annual wealth tax of 5 per cent for millionaires and billionaires, could raise $1,700 billion a year. That would be enough to help two billion people escape from poverty and finance a universal healthcare and social protection fund.”

Income tax rates for the very rich should also go up. Since the 1980s, these rates have been systematically reduced! However, things were once different: in the post-World War II period, the highest incomes in the US were taxed at 90 per cent.

There is a need for an alternative discourse that puts the real problems of working people on the agenda. Their purchasing power, for example. According to the Danish journalist Peter Rasmussen and photographer Søren Zeuth, 10 per cent of working Europeans live in poverty. They have work, but they are poor. They use the definition of the ‘working poor’ being that you earn less than 60 per cent of the median wage and work at least part-time. Of course, that means you’re struggling to pay your bills and your rent. According to the European Commission, there are 22 million working people living in poverty within the European Union. 35 million people can’t take a holiday and 3 million can’t pay for heating. The Bertelsmann Stiftung has calculated that one in five Germans will be poor when they retire. Hardly surprising when you realise how many people work in the gig economy.

The list of issues that really need to be talked about is long: safe working conditions, lower workloads, high-performing public services that really work for the people – and so on. In doing so, we do not have the luxury of being indifferent to the right-wing narrative, which we must refute in no uncertain terms. Not ‘yes, but…’. It must be a clear and unequivocal ‘no’.

Neoliberalism and its policies are a political choice. A choice for unfettered capitalism. A capitalism that is given free rein to exploit places and people. It is a capitalism unleashed by political actors.

Today, we can clearly see the economic, social, environmental, and political consequences of that choice. Growing inequalities, dismantled healthcare and welfare systems, climate change, precarity, the return of working poor, growth of far-right sentiments, and political alienation of workers and citizens, just to mention a few.

The conclusion is a pervasive thought that “it’s easier to imagine the end of the world” than any alternative. Indeed, as humanity faces one of its greatest existential crises presented by climate change, the lacklustre response of international political actors serves only as a reminder of their fatalistic mantra: “there is no alternative”.

This status quo serves only as an opportunity to concentrate wealth and power into fewer and fewer hands while inequalities grow. Multinational corporations (MNCs) abuse complex corporate structures and subcontracting chains to circumvent human and labour laws, as well as social and environmental standards. This situation is compounded by increased monopolisation (which was accelerated in some cases by the Covid 19 pandemic). Transport work, as a result, is impoverished, as years of corporate policies (unleashed by political policies) have undermined wages, working conditions, and the desirability of transport jobs. The ongoing worker shortage in transport is nothing more than another crisis borne from neoliberal political choices.

Certainly, this is not the world we want to leave to the next generations.

And, I am sure, there is an alternative to this present. As trade unions, we have a crucial role to play in building a different future. I truly believe one key element in shaping our future is hope. Hope allows us to dare and be brave even when we face obstacles that look difficult to overcome. People and organisations that have hope are those who dare to fight against the status quo and build alternatives. Hope is exactly what neoliberalism has tried to kill, and lack of hope led to political alienation and inactivism.

All the small and big victories that trade unions have achieved, have been reached through the collective actions of workers that decided to engage because they hoped they could win. They know that nothing is written in stone, even when the chance to lose is high.

Whenever I participate in trade union actions, big or small, I can feel we are not just protesting but we are building hope. And this is even stronger when we are able to act collectively at the international level, uniting people that would otherwise be distant from each other. And when the problem is global, the answer needs to be global as well.

Against a backdrop of decreasing engagement in political parties, it is even more important for unions to contribute and build political participation, developing knowledgeable and active workers that understand and confront the existential threats of our societies through unity, solidarity, and action, starting from the workplace up to the highest political level.

For me, there are alternatives, and it is up to us to build those, today. It is probably our most important duty, and we are not ready to give up!