Nice day for a revolution: Why May Day should be a date to stand up and change the system

May Day is the occasion we celebrate the grand achievements of the workers of the world in making our world a far, far better place to live in. There is, unfortunately, not too much to celebrate these days. The past 30 years are littered with battles and skirmishes that have resulted in defeat after defeat for organised labour.

A capitalist class gone rampant has now consolidated its power to command or corrupt almost all the major institutions that regulate the body politic – the political parties (of both left and right), the media, the universities, the law, to say nothing of the repressive state apparatus and international institutions. The democracy of money power now rules. A global plutocracy exerts its will almost everywhere unchallenged.

So what is there to celebrate? We would not, of course, have what we still have now (from pensions to the remnants of reasonable health care and public education) had it not been for the labour movement. But waxing nostalgic over the undoubted achievements and heroism of the past will get us nowhere.

May Day should therefore be about relaunching a revolutionary movement to change the world. The very thought of doing that – even just saying it and writing it down – is as exhilarating as it is astonishing.

But is this, too, a relic of revolutionary rhetoric from some bygone era? Or are we at one of those curious points in human history when the only reasonable thing to do is to demand the impossible? The simultaneous stirrings of revolt from Cairo and Damascus to Wisconsin and the streets of London, from Athens to Lima, from the murderous factories in China's Pearl River Delta to the factory occupations in Argentina, from the revival of rural rebellions in India to the movements of shanty-town dwellers in South Africa, suggests something different is in the air. An unstoppable movement of global revolt, perhaps, that says: enough is enough! It is our turn, the dispossessed and deprived of the earth, to want and get more.

Alongside all the simmering protests, innumerable practical alternatives to endless capital accumulation are being explored – co-operative movements, solidarity economies and networks, food security organisations, environmental and peasant movements, worker-controlled collectives are all in motion. A decentralised but substantial movement of people across the world already exists, seeking satisfying and humane ways to reproduce an adequate social life.

This sprawling and often chaotic movement bids fair to take on the role that organised labour once played. Animated by autonomist and alternative lifestyle thinking and with marked preference for locally-based and networked organisational forms, these movements, often backed by a powerful but insidious NGO culture, have trouble combining and scaling up to translate their often fecund local schemes into a global strategy to deliver an adequate and healthy social life to the 6.8 billion people now on Planet Earth.

Where we can go depends, of course, very much on where we are now. So what are the revolutionary possibilities – and even more importantly, the revolutionary necessities – of our time?

We are, I believe, at an inflection point in the history of capitalism. The compound rates of growth that have prevailed over the past two centuries are increasingly difficult to sustain. Is continuous compound growth (at a minimum rate of 3 per cent a year) in perpetuity possible in a world that is already fully integrated into the capitalist dynamic? The environmental and social consequences are bad enough but the potentially deadly geo-economic and geopolitical competition over markets, resources, land and uses of the atmosphere is even scarier.

Zero growth is a necessity and zero growth is incompatible with capitalism. The necessity is, therefore, that we must all become anti-capitalists. Alternative ways to survive and prosper must be found. That is the imperative of our times. This is what we should commit to on this May Day.

The crisis of 2007-9 and its aftermath constituted a warning shot. That crisis, many say, constituted a game-changer for how politics and the economy might work. But nobody seems to have a clear idea of what the new game might be about, what its rules might be, and who might guide it in what direction.

The bankruptcy in creative ideas today contrasts radically with earlier crises. In the 1930s, for example, a major shift in economic thinking, Keynesianism, underpinned a radical reorient- ation of state apparatuses and policies in the core regions of capitalism. It produced relatively strong and stable economic growth from 1945 to 1968 or so, in North America and Europe.

Ironically, these were years when the top marginal tax rate in the United States was sometimes as high as 92 per cent and never less than 70 (thus giving the lie to those who claim that high marginal tax rates on the rich inhibit growth). These were also years when organised labour did reasonably well in the advanced capitalist countries.

While decolonisation throughout the rest of the world proceeded apace, the spread and, in some cases, imposition of economic development projects brought much of the globe into a tense relation with capitalist forms of development and underdevelopment (prompting a wave of revolutionary movements in the late 1960s into the 1970s, from Portugal to Mozambique). These movements were resolutely resisted, undermined and eventually rolled back through a combination of local elite power supported by US covert actions, coups and co-optations.

The crisis years of the 1970s forged another radical paradigm shift in economic thinking: neoliberalism came to town. There were frontal attacks on organised labour accompanied by a savage politics of wage repression. State involvement in the economy (particularly with respect to welfare provision and labour law) were radically rethought by Reagan and Thatcher. There were huge concessions to big capital and the result was that the rich got vastly richer and the poor relatively poorer. But, interestingly, aggregate growth rates remained low even as the consolidation of plutocratic power proceeded apace.

An entirely different world then emerged, totally hostile to organised labour and resting more and more on precarious, temporary and dis- organised labour spread-eagled across the earth. The proletariat became increasingly feminine.

The crisis of 2007-9 sparked a brief global attempt to stabilise the world's financial system using Keynesian tools. But after that the world split into two camps: one, based in North America and Europe, sees the crisis as an opportunity to complete the end-game of a vicious neoliberal project of class domination: the other cultivates Keynesian nostalgia, as if the postwar growth history of the United States can be repeated in China and in other emerging markets.

The Chinese, blessed with huge foreign exchange reserves, launched a vast stimulus programme building infrastructures, whole new cities and productive capacities to absorb labour and compensate for the crash of export markets. The state-controlled banks lent furiously to innumerable local projects. The growth rate surged to above 10 per cent and millions were put back to work. This was followed by a tepid attempt to put in motion the other pinion of a Keynesian programme: raising wages and social expenditures to bolster the internal market.

China's growth has had spillover effects. Raw material suppliers, such as Australia and Chile and much of the rest of Latin America have resumed strong growth.

The problems that attach to such a Keynesian programme are well-known. Asset bubbles, particularly in the "hot" property market in China, are forming all over the place and inflation is accelerating in classic fashion to suggest a different kind of crisis may be imminent. But also the environmental consequences are generally acknowledged, even by the Chinese government, to be disastrous, while labour and social unrest is escalating.

China contrasts markedly with the politics of austerity being visited upon the populations of North America and Europe. The neoliberal formula established in the Mexican debt crisis of 1982, is here being repeated. When the US Treasury and the IMF bailed out Mexico in order to pay off the New York investment banks they mandated austerity. The standard of living in an already poor country fell by nearly 25 per cent over five or so years. By the end of the century Mexico had more billionaires than Saudi Arabia and Carlos Slim was soon to be declared the richest person in the world in the midst of burgeoning poverty.

This is the fate, along with perpetually high rates of unemployment and stagnant wages that awaits populations in the West, unless there is sufficient political resistance and popular unrest to reverse it. It is a politics of dispossession, not only of assets but of hard-won political and civil rights.

Behind this there lies a sinister history. When Ronald Reagan assumed the Presidency in 1981, he drastically reduced the marginal top tax rate from 72 to 32 per cent while lavishing all manner of other tax advantages on the corporations and the rich. He launched a huge deficit-financed arms race with the Soviet Union. The result was a rapid increase in the debt. David Stockman, Reagan's budget director, then gave the game away. The aim was to so run up the debt as to justify gutting all the social programmes and environmental regulations that had been imposed on capital in preceding years.

When Bush Jnr came to power in 2001, his Vice-President, Dick Cheney, repeatedly asserted that "Reagan taught us that deficits do not matter". So Bush cut taxes substantially on corporations and the rich. He fought two unfunded wars (costing close to a trillion dollars) and passed a costly drug prescription law that favoured big pharma. A budget surplus under Clinton was turned into a sea of red ink under Bush. Now the Republicans and the Wall Street faction of the Democrats demand the debt be retired at the expense of social programmes and environmental regulations.

This is what plutocratic politics has been about these past 30 years: raise the rate of exploitation on labour, plunder the environment mercilessly and collapse the social wage so the plutocrats can have it all.

Yet the two greatest problems of our time, according to the millennium goals signed by almost all countries in the United Nations, are the potential for ecological collapse and burgeoning social inequalities. But in the United States there is a persistent movement to exacerbate both problems. Why?

Capital throughout its history has long sought to evade certain costs, to treat them as "externalities" as the economists like to say. Environmental costs and the costs of social reproduction (everything from who takes care of grandmother and the disabled to child rearing) are the two most important categories that capital prefers to ignore. Two hundred years of political struggle in the advanced capitalist world forced corporations to internalise some of these costs either through regulation and taxation or through the organisation of private and public welfare systems.

The early 1970s was a high watermark in the advanced capitalist world for environmental regulation (in the USA the establishment of the Environmental Protection Agency and the Occupational Safety & Health Administration, for example) and state and corporate welfare schemes (the welfare state structures of Europe).

Since the 1970s, there has been a concerted effort on the part of businesses to divest themselves of the financial and political burdens of dealing with these costs. This was what Reaganism was all about. Simultaneously, the high mobility of capital (encouraged by the deregulation of finance and capital flows) permitted capital to move to parts of the world (Asia in particular) where such costs had never been internalised and where the regulatory environment was minimalist.

Meanwhile, the preferred means for seeking solutions to the key problems of environmental degradation and global poverty – the liberalised markets, free trade and rapid growth and capital accumulation favoured by the IMF, the World Bank and leading politicians in the most powerful countries – are precisely those which produce such problems in the first place. The problem of global poverty cannot be attacked without attacking the global accumulation of wealth. Environmental issues cannot be solved by a turn to green capitalism without confronting the corporate interests and the lifestyles that perpetuate the status quo.

If capital is forced to internalise all of these costs then it will go out of business. That is the simple truth. But this defines a convenient path towards an alternative to capital. What we must demand on May Day is that capital pay its social and environmental dues and debts in full. Organised labour may lead the way. But it needs allies from among the precarious workers and the social movements. We might be surprised to find that, united, we can make our own history after all.

David Harvey is a Distinguished Professor at the Graduate Center of the City University of New York. His latest book is The Enigma of Capital: And the Crises of Capitalism is published by Profile Press