The System Crashed, Change the System! Focus on Economic Rights

By Federica Russo
“Marx was right” was the title of several mainstream journals, such as such as ‘The New York Times’, ‘The Economist’ and ‘The Guardian’ a few years into the crisis. Apparently, the German thinker predicted the crisis and its consequences. Apparently, the 2008 Global Financial Crisis led many experts to question the ability of the dominant economic system, driven by neoliberal policy, to guarantee wellbeing and human rights.

And in fact, the Crisis led to austerity measures which affected many peoples’ Economic, Social and Cultural rights changing the life of the worldwide population. But what are Economic, Social and Cultural Rights (ESCRs)?

The right to work, in a good condition, with a good salary, is included within ESCRs. The right to health, namely to be cured, to have medical assistance, but also the right to house, and to education, are all there, as well as many others. The problem is that all these rights have been considered too costly by States to have immediately recognition, preferring a progressive one. This is despite the fact that it is becoming clearer that it was exactly the lack of recognition of this right that lead the system to collapse, the financial crisis.

The lack of recognition of ESCR proved its limitations in many cases, raising inequality both in developing and developed countries.

For example, in Italy austerity measures meant not only cuts to the welfare states, but also a direct attack on worker’s rights. Several labour reforms carried out with the aim of increasing the “flexibility” of the workforce in order to enhance competitiveness, resulted in proliferation of fixed-term contracts, reduction of wages, and the diminished standard of living for workers. 

“Employers demand more work to be carried out by less workers and for lower pay.”

The “right to work” has been replaced by the concept of “meritocracy”, which only resulted in weakening worker’s rights. Employers demand more work to be carried out by less workers and for lower pay. Unsurprisingly, in Italy the absolute poverty[1] increased from 4.1% in 2007 to 6.9% in 2017.[2] Perhaps more noteworthy is that the percentage of in-work poverty, namely the people who are poor even though they are employed, increased from 9.3% in 2007 to 11.7% in 2017. In Spain, where there was a similar reduction in worker’s rights, this percentage increased from 10.2% to 13.1%.

This suggests that a strong protection of the right to work, with a control on the level of wage, a strict policy on layoffs (for example banning layoffs  for enterprises in profit), the protection of work conditions and a strong social protection for the unemployed, would led to a sharp reduction of the poverty rate.  This could seem utopian within a financial crisis, due to the lack of economic resources. Indeed, the recognition of ESCR has always been linked to economic resources of the States. However, the reality is very different, and the statics demonstrate that, rather than a resource problem, we have a redistributive problem. Since the crisis, poverty and social exclusion did increase in the majority of States,[3] but what really grew was inequality: in the US the top 1% of incomes grew by 31.4% while the bottom 99% of incomes grew only by 0.4% from 2009 to 2012[4]; according to Oxfam,[5] in 2018 eight billionaires are as rich as world’s poorest half, and the wealthy collected 82% of the global wealth generated in 2017. This proves that the deregulation of the labour market and the lower recognition of socio-economic rights have been unduly justified with the lack of economic resources due to the crisis. Instead, it has been a few rich people becoming richer, taking advantage of the dismantling of ESCR.

“Only the real increase of the material condition of the majority of population can bring to real national and international economic growth.”

This suggests that radical change is necessary in the approach to the issue. ESCRs have always been seen as aspirational, and dependent on the “prosperity” of the country’s economy. I believe that the logic should be the opposite. Durable economic prosperity cannot be afforded without the implementation of ESCRs. Only the real increase of the material condition of the majority of population can bring to real national and international economic growth. Remarkably, studies reveal that economic inequality is a cause of financial crisis, not the product![6]

ESCRs, far from being “costly rights” for the States, are instead the driving force of a changing process. 

The 2008 Global Financial Crisis, and its economic and political outcomes, demonstrated that the system is not able to satisfy the necessities for the majority of the population, nor their basic human rights. Marx always put economic rights at the forefront, correctly predicting that the irrationality of capitalistic production would always lead to a crisis of the system, with a devastating impact on the majority of the population, and identified the sole solution in the change of the economic system.

Therefore, I can come to two conclusions:

  1. A real change is necessary
  2. Marx really was right.

Federica graduated in Law with full marks at Federico II University of Naples in Italy. She wrote her final thesis about the relationship between States and Human Rights. Federica has considerable experiences volunteering with various NGOs and associations and she currently also writes human rights articles for Alternativa Europea. She has a particular interest in the rights of migrants and LGBTI persons.

[1] According to ISTAT, absolute poverty means the impossibility for the family to afford a minimal monthly expense necessary to buy a basket of goods and services considered essential for a minimum acceptable quality of life.

[2] ISTAT, Poverty in Italy.

[3] OHCR, Austerity measures.

[4] Saez, Berkeley, Striking it Richer: 

[5] Oxfam, Reward work. 

[6] Kumhof, Rancière, Inequality, leverage, and Crise; see also J.P.Bohoslavsky, Economic Inequality, Debt Crises.