Taxpayer Conflict and the Politics of Austerity in Europe

The turn to austerity has been the central political economic controversy in Europe in the last five years. Despite imposing losses on the poor and preserving the interests of the wealthy and being increasingly discredited intellectually, the austerity juggernaut continues to roll on. One key puzzle emerging in the literature is how austerity has been ‘performed by democratically elected governments with the backing, if not the active encouragement, of a large segment of their populations’ (Fourcade 2013: 625). This paper tackles his puzzle head on, arguing that taxpayer conflict the UK (i.e. hardworking taxpayers vs. undeserving poor) and the Eurozone (i.e. core-state taxpayers vs. periphery-state populations) has decisively impacted upon the governance of fiscal consolidation. The paper argues that taxpayer conflict unfolds in three phases. First, high profile debt crises and the subsequent promised spending cuts creates a sense of scarcity surrounding state services and benefits among taxpayers. Second, this sense of scarcity leads to conflict, as taxpayers search for the social groups responsible for the drain on public finances and therefore the sources of state indebtedness. This is shaped by existing social tensions about “undeserving” others (e.g. welfare recipients, immigrants, other populations) across different national and supranational fiscal spaces. Third, elite actors can generate acquiescence from the general population by framing and imposing the majority of losses on the “losers” from social conflict. Although announced early, these losses will be institutionalised and take years to implement – therefore softening the immediate impact. Theoretically, it builds on insights from relational economic and fiscal sociology (e.g. Zelizer 2012, Polillo 2013; Campbell 1993, Martin, et al. 2009, Martin and Prasad 2014). This paper uses historical sociological methods to theorise and trace how intensified social conflict over the fairness of redistribution has shaped the “successful” governance of austerity.