Committee for the Abolition of Illegitimate Debt

Cuts are the Problem, Not the Solution

The government is planning substantial reforms – in education, healthcare, pensions, labour law, social services, and funding for science and research. However, we may also expect negative impacts in other areas, ranging from ecology to cultural policies to foreign affairs.

Many changes can be irreversible. We are facing the introduction of a two-tiered healthcare system, which effectively limits its general accessibility. Additionally, we are concerned over proposed massive cuts to social services, the increased influence of the private sector in hitherto autonomous universities, and proposed changes to the state pension program, and even to the Ministry of the Interior. In all likelihood, we can expect ever more intensive destruction of the natural environment, curbs on civic rights and further abandonment of the principle of solidarity in developmental aid policy. The planned changes are not based on consensus negotiation with either experts or with the public.

These reforms prey on fear. Purposefully invoked yet unsubstantiated threats of national bankruptcy, encapsulated in the widely publicized catchphrase of “Greek danger”, serve to justify any move whatsoever. Those threats make it possible to turn values such as health, education, nature, work, or solidarity into mere line items in the budget. In the same vein, the hugely aggrandized and outdated threat of “a return to communism” is nothing but a pre-emptive strike on any potential opposition.

The global financial and economic crisis has become a tool to intensify fear of an immediate danger. Yet silence obscures the fact that the remedies proposed to ward off this danger stem from the same neoliberal ideology that paved the way to it. The root of the crisis lies in policies that allowed market deregulation, uncontrolled financial speculation, downsizing of the public sector, and the deepening of social inequalities. The Czech government now pursues similar policies, purportedly to overcome the crisis – but in contrary to lessons learned from the past. Cuts in public spending and slashing public services have never resolved any economic crisis in a modern society. Conversely, a reinforcement of the public sector has always showed the way out.

Those who invoke the threat of “communism” have adopted yet another foreign cliché – that the private sector is always superior to the public one. This is the battle-cry of the Czech government’s onslaught against public services. Privatization of those services, however, dramatically reduces the public space where people can interact on equal terms. Moreover, privatization channels public funds into private companies, frequently those characterized by corruption and other criminal practices. Yet the true lesson to learn from the financial crisis is the same as the one we have learnt from the ecological crisis; namely, that the irresponsible and unregulated pursuit of private interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. leads to a human catastrophe.

Regressive Redistribution

We are told that “in today’s world only a society with flexible human resources can hold its own.” This is the justification for planned changes to the Labour Code that would simplify and cheapen the hiring and firing of employees. We are put in a position of competition with other people and other societies. We compete at our own disadvantage, at the expense of the reduction of social rights, salary cuts, and decreases in ecological and healthcare standards; overall, in a decline of the general quality of our lives. This logic of competition reduces our lives to economic performance and ourselves to some sort of raw material to be shaped by education and practical experience for the sake of market exploitability.

That redistribution is a “punishment for success” is another cliché. The question of why we should support various groups of people labelled as “lazy”, “abusing the social system” or “asocial” is often raised. Elimination of redistribution is one of the main objectives of the current governmental policy. As a matter of fact, at the moment the Czech government spends only 18.6% of its GDP GDP
Gross Domestic Product Gross Domestic Product is an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete; for example it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another. on public and social services – by contrast with the EU average of 26.2%.

Expenditure for unemployment benefits, made out to be a fundamental problem in the state budget prior to the recent elections, stands at 0.6% in comparison with the European average of 1.3%. The same government that in the name of “fiscal responsibility” plans further cuts in unemployment benefits, at the same time supports massive investment into the completion of two more reactors of the Temelín nuclear power plant. This investment, in multiples of annual unemployment benefits expenditures, totals up to half a trillion CZK. And this despite that the Czech Republic exports a large portion of the electricity it produces. (Last year it was 13, 643 GWh which comprises approximately 18% of total production.)

It was Miroslav Topolánek´s government which pushed through the so called “flat tax.” This package consists of measures such as a social security payment ceiling on higher incomes and the imposition of a tax system that benefits the rich and negatively impacts the middle class and the poor. Now the current government is considering a further increase in indirect tax which will yet again disadvantage middle and lower income groups. The currently planned reforms are to have an even greater impact on the most vulnerable groups – the handicapped, the sick, the unemployed, pensioners and children – than the previous ones. Redistribution continues apace, but from the poor to the rich.

However, if we take a lesson from the Scandinavian countries, we find that properly managed redistribution is not necessarily an ineffective waste of resources, nor is it only a means to support the needy, and it does not even lead to rise in unemployment. It serves the development of every individual regardless of the circumstances into which he or she was born. Thus, it not only limits injustice and enhances freedom for many, but also cultivates the development of society as a whole.

What Kind of Debt? And to Whom?

There is discussion about a „debt“ which is necessary to reduce in order for us not to live „at the expense of the next generations.“ However, the goal of the proposed reforms is not to pay back debts but to transfer them from public budgets to private households. People will be forced to run into debt because of tuition, health care, and, in many cases, just for paying for life’s basic necessities.

The attack on environmental laws that is planned by the reformers in the name of economic revival will result in a declining quality of life for Czech citizens, as well as increasing debt in the form of a polluted and degraded natural environment. The Czech Republic already has a huge debt to its future due to the twelve tons of carbon dioxide per capita produced here, to the uneconomical management of natural resources and energy, and an ill-advised transport policy. The average Czech person consumes resources from an area of Earth twice as large as that of the average inhabitant of this planet.

A serious proposal for paying back economic and environmental debts does not demand that we restrict our social and environmental outlook. Instead, it requires that society liberate itself from the dictatorship of “growth.”

We live in a world in which the richest ten percent own eighty five percent of world’s wealth; the assets of world’s three wealthiest men exceed the combined annual gross domestic product of the eighty four poorest countries. We live in a world of deep social differences that affect the quality of life as well as life prospects and opportunities.

Employees in the Czech Republic have thus far enjoyed a certain level security in relations with their employers, as well as healthcare financed on a solidarity basis, free access to education at public universities and, until recently, a rather mild degree of social inequality that is, however, now steadily increasing. By contrast, in United States today, the richest one percent of the population takes almost one quarter of all the income. The portion of overall income earned by that narrow segment of Americans has increased by a factor of three since the 1970s, when the neoliberal policies began to be implemented. Is this really the direction in which we would like to go?

Protesting Makes Sense

We are not powerless in the face of our government. Politicians are dependent upon public opinion. When the public raises a loud enough voice of protest, politicians feel the pressure. Protests are worthwhile because they can lead to great changes. The UK poll tax riots helped to bring down Margaret Thatcher, one of the icons of neoliberals all over the world. At the turn of the 21^st century protests against economic globalization cornered its proponents, albeit temporarily. General strikes have shaken many a regime. If we become involved we can reverse the plans of this government too.

A great number of the social, economic and civic liberties that we now take for granted in the Czech Republic have come as the result of domestic civic initiatives and movements. Of course, many struggles were also won elsewhere and over the last twenty years benefits were simply imported from abroad: the fruits of political struggles we did not have to join. And now, it is not just our fate that is at stake. The time has come for us to join in the global protest movement for social justice and for saving the planet.

We have launched this popular initiative to unite citizens and to support and network with other groups who are moving in the same direction. We are ready to embrace a wide spectrum encompassing those who oppose current developments. At the same time, it is not necessary to profess allegiance to any political party. We aim at creating a platform where citizens can express their political views without having to become partisans.

We shall undertake and publish expert analyses, influence public discourse, and support and organize demonstrations and other forms of public protest. In the face of the proposed reforms we do not hesitate to defend the status quo when reforms would present a greater evil than the unsatisfactory current situation. At the same time, however, we are dedicated to seeking alternatives both to the reforms proposed as well as to the (unsatisfactory) present conditions.

In the Czech Republic, as elsewhere in the world, the solution to contemporary economic, social, and ecological problems cannot be derived from simplistic, supposedly magical formulae that only reflect the economic interests of the wealthy. We do not need any reformist „shock therapy“ but rather an open discussion about our present condition and a variety of proposals from which to select our future.

The very policies that got us into trouble are not the solution. We have to push for alternative ways based on the democratic participation of all and respect for the principles of social justice and ecological consideration. The first logical step is to block the reform agenda of the incumbent government. Public mobilization is vital. It is in our common interest to raise our voices as loud as we can: to protest and to create alternatives.