September 29, 2010

European Strikes Confront the Assault of Capital

Posted in Class Struggle, Europe tagged , , , , , at 23:03 by Matthijs Krul

All throughout Europe the organized peoples have been on strikes and protest actions against the massive assault of capital against the so-called ‘welfare state’. Governments from the United Kingdom to Greece have sought to greatly reduce the meaning and scope of the variegated systems of protection that exist in Europe against the depredations of the ‘free market’, using the great financial crisis produced by that same ‘free market’ as an excuse. They seek to support private capitalists such as banks and insurance companies by aiding them with enormous loans, while at the same time using the state debt this entails as a pretext for declaring insolvency in the face of popular demands for relief against the effects of the crisis and the rising unemployment. In so doing, they have however been forced to show their true face more than in these days most liberal governments like to do: they have brazenly and openly declared the maintenance of the profit system to be of greater importance than the well-being of the citizens whom they supposedly represent. This is the true ‘dictatorship of capital’, and more and more the peoples of Europe are seeing it for what it is.

The 29th of September was in response declared an international day of protest by the alliance of the European trade unions, to be centered around protests in the formal capital of the new Europe, Bruxelles. Some 50.000 dressed in different colored union jackets demonstrated in the heart of the city. But this is not all. At least as important were the support strikes and actions in the various countries most severely affected by the current economic crisis. In Spain, there is a general strike going on, with as many as ten million in a country of fourty being on strike today in a peaceful demonstration ad oculos of how capital cannot exist without the workers, but workers can exist without capital. According to the Guardian, in Dublin, a man rammed a cement mixer into the gates of the Irish parliament, in an apparent protest at the country’s expensive bank bailout. Written across the truck’s barrel in red letters were the words: “Toxic Bank Anglo.”(1) In Slovenia, half the public workers are still on strike protesting a freeze of their already fairly low wages. But important is that in Spain in particular, but to a lesser extent also in Germany and elsewhere, the strikes are concentrated at least as much around industrial workers and others employed by capital directly, which must be the mainstay of any more general strike against the regressive policies of our governments if such a movement is to succeed. Public sector workers are everywhere being hit hardest by the government cuts, as they offload the debts from maintaining capital onto the government employees that fall under its accounts. In private industry, things are different – the main effect of the crisis there is unemployment rather than cuts. As always, mobilizing the unemployed is a difficult but essential task if this popular response is to go forward.

The folly of the ultra-liberal policies and the impossibility of a magic recipe that will make capitalism work for everyone and for the long term is shown by the areas heaviest hit by the current crisis: the Baltic states, the UK, Ireland and Spain. All are countries that built up massive economic bubbles, often based in real estate, by stimulating the influx of large amounts of very liquid international capital. Regimes of deregulation, privatization and so forth constituted effectively ‘original accumulation’ not just of state assets, but also of the capital invested in manufacturing and industry, which was abandoned almost totally in favor of financial capital. But what the governments of these countries should have known is that the primacy of financial capital over industrial capital, and more importantly a severing of the link between financial capital and real-world production, creates credit bubbles. These may cause a country’s economy to be in an upswing for a serious period of time, but in the long run always must burst and the bigger and more prolonged the bubble, the more severe the economic crisis that follows it. This harsh lesson of capitalism is now being learned by the Irish, the Latvians, and so forth.

However, the social-democratic Krugmanite response that this is all to be blamed on deregulation and that the answers can be found in a program of stricter regulations on stockjobbing and counter-cyclical state investment in the Keynesian style is just as mistaken. As shown in the 1970s, such a policy has no ability to either impede or prevent economic crisis either, especially as external shocks can be impossible for states to ‘invest against’ without piling up massive state debts and engendering high inflation. The result of this will be on the one hand a middle class revolt over the loss of value of their assets, and on the other hand a loss of capitalist investor confidence which will undermine the ability of the government in question to repay their debts. The political expression of these class forces will then be a severe ‘counteroffensive’ of capital in the form of heavy cuts in public spending, lower taxes, union breaking and so forth – in other words, nothing different than what we see now. All this has happened in the 1840s, in the 1870s-1880s, in the 1930s, and in the 1970s, and it is now happening again, with the exact same futile ‘right’ measures and alternative ‘left’ measures proposed. As the writer of Ecclesiastes puts it: The thing that hath been, it is that which shall be; and that which is done is that which shall be done: and there is no new thing under the sun.(2) Wiser than this Krugmanism is the response of the Communists: the crises created by capital endure as long as capital endures. We, as radicals, take the thing by its root: the abolition of capital is the true overcoming of crisis.

1) “European day of protests and strikes: live updates”. http://www.guardian.co.uk/world/2010/sep/29/european-protests-strikes-budget-cuts
2) Ecclesiastes 1:9.

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2 Comments »

  1. hrolfy said,

    actually the big problem with european economies isn’t “ultra-liberal policies” but rather the opposite. to take the sample case of Spain:

    “GDP growth is sluggish and a fifth of the workforce is unemployed. Two features of Spain’s jobs market share much of the blame: the high cost of firing permanent workers, and a wage system that binds firms to industry-wide pay deals.”

    “Because it is so costly to lay off workers, businesses are reluctant to hire them in the first place. ”

    http://www.economist.com/node/17173947

    • Matthijs Krul said,

      Haha well that is easily refuted. Remember how they were claiming just 5-10 years ago how the social systems of France and Germany were totally unsustainable because of insufficient free markets, as proven by their unemployment rate being so much higher than in the US? Now the US itself has more unemployment than Germany by quite a bit. In fact, the Netherlands has the exact same labor regulations as Spain does as described in that article, and Dutch unemployment is less than half that of the United States. It’s the usual ad hoc Economist bullshit.


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