Breaking New York’s Cycle of Austerity
Since the fiscal crisis of 1975, New York has been repeatedly lashed by austerity. Now, with the latest round of post–COVID-19 cuts on the horizon, a group of socialist legislators and movement organizations are spearheading a fight to fund public services through a campaign to tax the rich.
A protester holds a "Tax the Rich" sign as he marches during a rally held by union supporters. (Mario Tama / Getty Images)
When Margaret Thatcher infamously declared “There Is No Alternative” to neoliberal capitalism in the early 1980s, she was giving name to a process of ruling class onslaught that had been underway since the early 1970s. This global project of capitalist class power sought to undermine, defund, and dismantle the institutions of social democracy, the concessions that working-class parties, movements, and unions had wrung from the bosses during the high tides of mid-century class struggle. In many respects, New York City and New York State were laboratories of this capitalist clawback.
New York City’s municipal budget free fall of 1975 produced an acute crisis, during which a coalition of Wall Street bankers, real estate bigwigs, and politicians — abetted by much of the city’s Democratic-aligned labor bureaucracy — proceeded to gut the city’s public institutions and enacted a regime of permanent austerity that in many respects still continues today.
From public hospitals to education, transportation to housing, real estate to pension funds, the fiscal crisis of 1975 and its aftermath reshaped daily life for millions of working-class New Yorkers who rely on these public institutions. But perhaps even more significantly, this crisis represented a long-term structural shift in the balance of class power in the city away from the organized working class and in favor of real estate and finance capital.
The COVID-19 crisis has pushed New York to the brink of another crushing round of austerity. Officials at both the city and state level have already announced — hemming and hawing, wringing their hands about “hard choices” — their intention to pay for the coronavirus crisis on the backs of the working class.
But a grassroots fightback has already emerged, ready to use disruptive tactics, organize both at the neighborhood level and coordinate statewide, and leverage both the legislative power and the public profile of a newly elected cohort of socialist state senators and assembly people. Groups ranging from the Democratic Socialists of America, New York Communities for Change, and Empire State Indivisible have begun to coalesce around a simple but powerful demand: tax the rich.
Tax the Rich
For decades, progressive groups and unions have focused their energy on negotiating with and pressuring the state government in Albany — including New York’s governor, Andrew Cuomo, who wields enormous influence over the budget process — for particular streams of funding toward whatever worthy cause or constituency they seek to represent. But in order to break the cycle of austerity, working-class and socialist organizations need to focus less on fighting over crumbs and more on taking a bigger slice of the pie.
New York’s current tax system is an outdated abomination, designed to serve the rich and starve social services. One of the gaping loopholes at the heart of the tax code is a personal wealth tax that only taxes real estate holdings, but not “intangible” wealth like stocks and financial assets. In New York, the beating heart of global finance capital and home to fifty-eight billionaires, this is certainly leaving a lot of ruling class wealth on the table. By closing this loophole, increasing personal income taxes on the superrich, taxing expensive “pied-à-terre” second homes, and instituting a new financial transactions tax, it is estimated that New York could raise over $50 billion in additional annual revenue for the state.
This money is sorely needed to reinvest in New York’s public infrastructure, from transportation to education, health care to housing, and alternatives to incarceration and policing. We need to fund unionized green jobs, reorganizing our energy and other infrastructure systems to be publicly controlled, zero-carbon, and climate-resilient. These particular questions around how the state will direct its new investment will require strong class struggle legislators and movement organizations fighting alongside each other to direct that funding to transformative social programs. But first and foremost, it requires a broad-based, working-class movement to set its sights on reclaiming the ill-gotten gains of the rich.
While many Democratic politicians in the New York State Legislature will oppose calls to tax the rich, the intransigence of Governor Cuomo is a crucial roadblock to enacting this agenda. Consequently, Cuomo has also emerged as the central target of the political movement beginning to coalesce around these calls to tax the rich. And with the Democrats winning a supermajority in the State Senate — much to the chagrin of Cuomo, who for years helped to engineer Republican control of the chamber — there is a new opening for socialists to spearhead this demand. With no more state-level Republican opposition to deflect blame onto, we must make Cuomo feel the brunt of the working class’ anger for the miserable state of our public services.
By matching an aggressive, confrontational, movement-centered approach with a clear demand and a straightforward legislative agenda, this movement is poised to reshape the terrain of state politics in New York.
Building a Movement
After New York City Democratic Socialists of America’s victorious “DSA For the Many” campaign in 2020, we can look forward to the arrival of a slate of five socialists to the New York State Legislature during the first week of January. But the volunteer-driven organizing apparatus at the center of the slate’s success over the summer and fall will not demobilize. By running a full slate of candidates with coordinated fundraising, messaging, legislative goals, and volunteer bases, the DSA For the Many slate helped go beyond the “cult of the candidate” that has plagued many left-wing electoral projects, and has built up a longer-term infrastructure for organizing.
This is a key feature of a socialist approach to electoral campaigns and legislative politics. Socialists certainly run campaigns to win, but we also know that the hard work truly begins once members of our movement have entered the state as legislators. Socialist legislators, as well as a handful of progressive ones, have begun to engage in an uncommonly high level of on-the-ground organizing of their own constituents to take on the power of the billionaire class.
By running and winning class struggle electoral campaigns, and then immediately transitioning electoral operations to both issue-based legislative campaigns as well as tenant and worker organizing in those districts, socialists can start to foster and connect working-class struggle, rebuilding a mass base within our communities. Our elected officials can and must put themselves on a “permanent campaign footing,” constantly emphasizing in both rhetoric and organizational priorities the centrality of mass, coordinated pressure from below as a mechanism for winning social change both inside and outside the legislature.
By taking Bernie Sanders’s slogan of “Not Me, Us” and putting it into practice, we can begin to see the broad outlines of a political revolution arise in New York State.
During the first “Tax the Rich Week of Action” in early December, DSA members joined in coalition with NY Communities for Change, Empire State Indivisible, and members of labor unions and other grassroots organizations to hang over sixty thousand door hangers and make over one hundred thousand phone calls across the city and the state. This organizing took place both in districts with socialist representation — building connections between working-class constituents and socialist politics — as well as districts represented by corporate Democrats. These mass-oriented issue-based campaigns can help socialists lay the groundwork for future primary challenges, as well as worker and tenant organizing in those districts.
Such a broad undertaking can not by its very nature be limited to New York City. DSA chapters from Rochester to the Hudson Valley and everywhere in between are taking the fight to every corner of the state. One of the relative weaknesses of organizations like DSA is their relative lack of coordination between geographically disparate chapters, and the creation of a statewide organizing project is crucial for laying the groundwork for a more permanent statewide organizational apparatus.
While this campaign is, at its core, a clarion call to class struggle, it is not only socialist organizations that have helped form the coalition. Membership organizations from trade unions to immigrant advocacy groups to progressive electoral activists are acutely aware of the need to tax the rich. And it’s up to socialist organizers to be active in broader coalitions, constantly demonstrating that socialists are among the most dedicated, smartest, and most solidaristic organizers in the course of our concrete on-the-ground struggles.
Against Austerity Everywhere
In response to capitalist economic crises, austerity has clearly failed in its stated goals of balancing budgets and creating more efficient public administration. However, it has clearly succeeded in fulfilling its actual goals: degrading the quality of public services, lowering taxes, and opening opportunities for capitalist pillaging of the public sector. And more profoundly, austerity erodes the political confidence and material expectations of working people for winning a better life. It divides, demobilizes, and demoralizes the working class, lessening our capacity as a collective political agent with the power to transform our world. For socialists, austerity is political poison.
And the purposely fragmented governmental structure of the United States exponentially multiplies the opportunities for austerity. This, of course, is no mistake, and our division of power between state, local, and federal governments (not to mention the three branches of the federal government) was designed by our constitutional framers to obscure the locus of power and insulate the ruling class from challenges to their power and property.
Because state governments don’t have the same powers of taxation, regulation, monetary policy, or borrowing that the federal government does, they are in many respects the perfect mechanisms through which to implement austerity. So much of our social state — from education to Medicaid, unemployment to direct welfare payments — is either fully run or block-grant-administered by state governments, leaving them deeply vulnerable to economic downturn and budget cuts. Despite the massive stimulus contained in congressional COVID-19 relief bills, direct aid to state and local governments will range from inadequate to nonexistent.
Democratic socialists in all fifty states should take this opportunity to build alliances with public-sector workers, benefits recipients, and progressive issue groups in order to fight against austerity. But the structure of the American state means that, ultimately, we must also mount pressure at the national level, toward Congress and the Biden administration. The COVID-19 crisis has presented the ruling class with yet another opportunity to starve social services and lower expectations. It is the task of socialists and working people everywhere to fight back, and demand that we tax the rich to fund social programs.
After all, it’s the working class that produced all of that surplus value in the first place.