[Peace-discuss] Making workers pay

[C. G. Estabrook]

[Here's a better - if hardly unarguable - prognosis than Giertz' (not hard to 
do, of course).  --CGE]

IMMANUEL WALLERSTEIN
End of the Recession? Who’s Kidding Whom?
Commentary No. 296, Jan. 1, 2011

The media are telling us that the economic “crisis” is over, and that the 
world-economy is once more back to its normal mode of growth and profit. On 
December 30, Le Monde summed up this mood in one of its usual brilliant 
headlines: “The United States wants to believe in an economic upturn.” Exactly, 
they “want to believe” it, and not only people in the United States. But is it so?

First of all, as I have been saying repeatedly, we are not in a recession but in 
a depression. Most economists tend to have formal definitions of these terms, 
based primarily on rising prices in stock markets. They use these criteria to 
demonstrate growth and profit. And politicians in power are happy to exploit 
this nonsense. But neither growth nor profit is the appropriate measures.

There are always some people who are making profit, even in the worst of times. 
The question is how many people, and which people? In “good” times, most people 
are seeing an improvement in their material situation, even if there are 
considerable differences between those at the top and bottom of the economic 
ladder. A rising tide raises all ships, as the saying goes, or at least most ships.

But when the world-economy becomes stagnant, as the world-economy has been since 
the 1970s, several things happen. The numbers of people who are not gainfully 
employed and therefore receiving an income that is minimally adequate goes up 
considerably. And because this is so, countries try to export unemployment to 
each other. In addition, politicians tend to try to deprive the elderly retired 
persons and the young, pre-working-age persons of income in order to appease 
their voters in the usual working-age categories.

That is why, appraising the situation country by country, there are always some 
in which the situation looks much better than in most others. But which 
countries look better tends to shift with some rapidity, as it has been doing 
for the last forty years.

Furthermore, as the stagnation continues, the negative picture grows larger, 
which is when the media begin to talk of “crisis” and politicians look for quick 
fixes. They call for “austerity,” which means cutting pensions and education and 
child care even further. They deflate their currencies, if they can, in order 
that they reduce momentarily their unemployment rates at the expense of some 
other country’s employment rates.

Take the problem of government pensions. A small town in Alabama exhausted its 
pension fund in 2009. It declared bankruptcy and ceased paying its pensions, 
thereby violating state law which required it to do so. As the New York Times 
remarked, “It is not just the pensioners who suffer when a pension fund runs 
dry. If a city tried to follow the law and pay its pensioners with money from 
its annual operating budget, it would probably have to adopt large tax 
increases, or make huge service cuts, to come up with the money. Current city 
workers could find themselves paying into a pension plan that will not be there 
for their own retirements.”

But this is the looming problem for every state within the United States who, by 
law, must have balanced budgets, which means they cannot resort to borrowing to 
meet current budgetary needs. And there is a parallel problem for every nation 
within the euro zone who cannot deflate their currencies in order to meet their 
budgetary needs, which has meant that their ability to borrow leads to 
exorbitant unsustainable costs.

But what, you may ask, about those countries where the economy is said to be 
“booming” such as Germany and most particularly, within Germany, Bavaria – 
called by some “the planet of the happy.” Why then do Bavarians “feel a malaise” 
and seem “subdued and uncertain about their economic health”? The New York Times 
notes that “Germany’s good fortune…is widely viewed (in Bavaria) as having come 
at the expense of workers, who for the past decade have sacrificed wages and 
benefits to make their employers more competitive….In fact, part of the 
prosperity comes from people not getting the social security they should have.”

Well then, at least, there is the good example of the “emerging economies” which 
have been showing sustained growth during the last few years – especially the 
so-called BRIC countries. Look again. The Chinese government is very concerned 
about the loose lending practices of Chinese banks, which seem to be a bubble, 
and leading to the threat of inflation. One result is the sharp increase in 
layoffs in a country where the safety net for the unemployed seems to have 
disappeared. Meanwhile, the new president of Brazil, Dilma Rousseff, is said to 
be disturbed by the “overvalued” Brazilian currency amidst what she sees as the 
deflating U.S. and Chinese currencies that, together, are threatening the 
ability of Brazilian exports to be competitive. And the governments of Russia, 
India, and South Africa are all facing rumbling discontent from large parts of 
their populations who seemed to have escaped the benefits of presumed economic 
growth.

Finally, and not least, there are the sharp rises in the prices of energy, food, 
and water. This is the result of a combination of world population growth and 
increased percentages of people demanding access. This portends a struggle for 
these basic goods, a struggle that could turn deadly. There are two possible 
outcomes. One is that large numbers of people will reduce the level of their 
demand – most unlikely. The second is that the deadliness of the struggle 
results in a reduced world population and thereby fewer shortages – a most 
unpleasant Malthusian solution.

As we enter this second decade of the twenty-first century, it seems improbable 
that by 2020 we shall look back on this decade as one in which the “crisis” was 
relegated to a historical memory. It is not very helpful to “wish to believe” in 
a prospect that seems remote. It does not help in trying to figure out what we 
should do about it.

http://www.iwallerstein.com/end-of-the-recession-whos-kidding-whom/

On 1/2/11 11:09 AM, C. G. Estabrook wrote:
> [The following is a good but not unusual prognosis - if you're not constrained 
> by the narrow limits of allowable debate in US political discourse. (For a 
> typical example of the latter, see Fred Giertz' awful piece on the national 
> economy in this morning's N-G, about how "the recovery is going to be much 
> more slower" [sic].) What's remarkable about it is that it appeared in 
> Australia's oldest general-circulation daily, the Sydney Morning Herald, which 
> has a generally conservative editorial stance. Can you imagine its appearing 
> in the NYT or the WaPo? I can't. --CGE]
>
> 2010: a class odyssey
> John Passant
> December 31, 2010
>
> During 2010 the third phase of the global financial crisis – making workers 
> pay – began to play itself out.
>
> Capital in Europe has used and is using its parliamentary dominance — it 
> doesn't matter whether reformists or conservatives are in power – to attack 
> their working classes. While there have been magnificent strikes and 
> demonstrations, the lack of a genuine mass revolutionary party to provide 
> guidance to the class and learn from it has allowed the reformists to 
> sidetrack the fightbacks and ultimately accept capital's attacks.
>
> It may be a holding pattern if the left begins to build out of the turmoil and 
> the attacks continue and deepen. Given the stagnant rate of profit across the 
> developed world this seems likely, especially with capital witnessing the 
> present defensive withdrawal of the European working class from the field of 
> battle.
>
> In the US, President Barack Obama, as the representative of one wing of 
> business, has continued the policies and practices of the other wing of 
> business. Official unemployment is stuck at almost 10 percent and the real 
> figure is, according to political commentator Noam Chomsky, double that. 
> <http://permaculture-media-download.blogspot.com/2010/12/noam-chomsky-on-economy-us-midterm.html>
>
> One in seven Americans — 43 million people – are on food stamps, 30 million 
> working Americans earn less that $9.80 an hour, which itself is barely enough 
> for one person to just live on. American workers and their unions have by and 
> large accepted cuts to wages and conditions under the mistaken belief this 
> will save their jobs.
>
> In Australia, the Labor Government after an election in August just held on to 
> office with the support of three independents and a Green. There was a 
> noticeable swing to the Greens in disgust at three years of the Labor's abject 
> capitulation to capital.
>
> One thing is clear. The ongoing degeneration of the Labor Party into a 
> completely neo-liberal organisation continues apace. It is arguably now just 
> another party of the bourgeoisie, irrespective of its formal links to the 
> working class through the trade union bureaucracy. Even there the situation is 
> changing as some bureaucrats in the union movement begin a hunt for "real" 
> Labor both outside and inside the ALP.
>
> The ongoing boom in Australia, courtesy of China's growth and our minerals, 
> long unpaid hours, high levels of debt and an historic shift of national 
> income going to capital at labour's expense have shielded Australian workers 
> and governments from the crises enveloping the rest of the developed world.
>
> It cannot last forever given that China is dependent on US and European 
> consumers for much of its wealth. And when circumstances do change the two 
> parties of capital – the ALP and the Liberals – stand ready to take the axe to 
> public services.
>
> The attacks on public services across Europe mark the end of the grand 
> compromise between capital and labour in Europe after WWII, social security 
> and welfare systems built on the long boom. Until now dismantling those 
> systems has been piecemeal. Today the continued profitability of capital 
> demands a full frontal attack.
>
> Australia might be shielded at the moment but it too is only a few years away 
> from this savage dismantling.
>
> Globally, 2 billion people are starving or malnourished while more than enough 
> is produced to feed every man, woman and child on the planet. What greater 
> indictment can there be of a system that has failed?
>
> The contradictions of nation-based capital in a system of global production 
> mean that real action on climate change will not and cannot occur – other than 
> perhaps individual ruling classes imposing the costs of capitals' pollution on 
> workers. Systemic imperialist rivalry between the declining US and a rising 
> China destroyed Copenhagen and allowed Cancun little.
>
> The decline of US economic dominance continued and the centre of production, 
> finance and profitability moved more clearly to Asia, in particular China. 
> With US defence spending equal to the combined total of the next 16 biggest 
> armed nations, American imperialism will try to retain global superiority and 
> contain China through military as well as diplomatic and economic means. That 
> has already been occurring with the invasions of Iraq and Afghanistan and the 
> war games off the Korean coast — all part of US imperialism's China 
> encirclement strategy.
>
> But the growing economic power of China also means that the US ruling class 
> will look to extract more and more profit out of its own workforce to 
> counterbalance China's strength. The attacks on American workers will 
> intensify even further. The "enemy" at home threatens the American ruling 
> class as much as the enemy abroad.
>
> Imperialism has met setbacks. In Central and South America popular left-wing 
> movements have challenged, or been pushed to challenge, the rule of both 
> domestic and international capital. These struggles have within them the 
> potential to destroy capitalism but the situation remains fluid and inchoate, 
> not least because of the lack of a mass revolutionary socialist organisation 
> of the working class to push the movements forward and confront if necessary 
> the populist leaders.
>
> WikiLeaks has exposed our rulers for the liars the left has always argued they 
> are. The ferocious response of power to the release of "secret" information 
> and the attempts to frame WikiLeaks head Julian Assange and calls for his 
> assassination all show that there is but a thin veneer of democracy that 
> attaches to most Western countries.
>
> Yet while the class is sullen, watching and waiting, it is not bowed. If there 
> is any hope it lies with the proles.
>
> That hope can only be built through the working class establishing its own 
> political parties to tear the head off the bourgeoisie and destroy their 
> crisis-ridden system – a system of war and poverty.
>
> In Australia you should consider joining Socialist Alternative in the fight 
> for a better world free of their system's war and poverty, free of sexism and 
> racism and homophobia, a world where production is organised democratically to 
> satisfy human need.
>
> This is an edited version of an article that first appeared in En Passant with 
> John Passant.
>
> http://www.smh.com.au/opinion/politics/2010-a-class-odyssey-20101231-19bjj.html
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