The much debated, and feared, double-dip recession has already arrived in the UK, threatening to become a triple-dip recession. The various measures in vogue by the economic ‘experts’ are to “free-up” the economy (especially the private sector) by slimming down the state sector. The presumption is that by reducing the so-called burden of the state sector there would be growth in the private sector. What these economist numb-skulls don’t want to recognise is that the private sector is supported, and nurtured, by the state sector. Every time the public sector is slimmed back, the unsurprising result is that the private sector stumbles towards a halt.
Various experts are talking about continuing to cut back upon the “burden” of public spending. One conclusion is that public spending is too great for the economy, whilst the opposite conclusion, that the economy is too small for state spending is also being looked at, such as the Heseltine growth plan.
The attacks upon welfare spending are well under way – there are on-going attempts to dragoon the sick and disabled into work with the introduction of Employment & Support Allowance. The whole system is clogged-up with resistance and appeals against the implementation of this change-over to making those formerly on Incapacity Benefit or Sickness Benefit available for “some work”. This state sponsored transformation of the sick and disabled into part of the labour market (planned and commenced by the last Labour Government) ignores whether many of those found “fit for some work” are actually employable as far as employers are concerned.
All this is part of the process of driving more people onto the job market, with the hope that the cost of labour can be further reduced. There is certainly a desire on the part of many capitalists to have reduced wage-costs by the use of part-time employment, with these new workers maintaining the rest of their income by state benefits.
Housing Benefits have already been drastically cut, and pegged to the average rents of the lowest cost, and therefore generally the worst, accommodation. Young people up to 35 years old will now generally only receive Housing Benefit for shared accommodation unless there are exceptional circumstances. Now a further cut is planned for those living in properties which are "underoccupied", known as the ‘Bedroom Tax’ because it envisages no longer paying benefit claimants more than the rate for an ‘appropriate’ sized property, with tenants in a property which is considered ‘too large’ for them (for instance, after a bereavement) expected either to find a smaller property, or pay the extra rent themselves.
As well as these changes cheapening the cost of maintaining the Reserve Army of Labour by warehousing them in cheaper barracks, it will also affect those in low paid work who are renting (who are eligible for the Housing Benefit on a sliding scale) by forcing them to spend more of their already low income on the extra housing costs. Another knock-on effect is that private and social landlords will see their rental income go down to adapt to the average amount of benefit being paid out, and they will aim to shift their additional costs onto housing workers by reducing their terms and conditions and forcing them to work more for less pay.
These general attacks on benefits, mainly affecting the unemployed
low earners, and culminating in the introduction of the new "Universal
Credit" next year, will also have the inevitable effect of increasing
amongst those in work, terrifying them into accepting drastic
in their terms and conditions out of fear of becoming unemployed
something in fact already well under way.
New Attacks proposed against Pensioners
Not long ago the government, sensing the increased fearfulness around benefit cuts, sought to reassure pensioners, in particularly those on Pension Credit Guarantee (a minimum state benefit level) that they would not be affected. But evidently they were just empty words.
With regard to pensions we have already extensively documented how broad sections of workers are now expected to make higher contributions for lower pensions, and work longer before they get them. This full frontal attack by the capitalist State has understandably prompted considerable anger amongst workers and has compounded all the other direct attacks on wages, welfare benefits, job security, living and working conditions.
In the ‘debate’ over pensions, once again the interests of preserving capitalism at all costs have prevailed over those of the workers. But if many of the concerns around pensions have hitherto been expressed by those still in work, now retired workers may find themselves directly in the firing line.
In England, Lord Bichard, a former head of the Benefits Agency has announced his new idea to “encourage older people not just to be a negative burden on the state but actually to be a positive part of society”. His proposal is that old people should do community work in return for their pensions and have some of their state pensions stripped if they refuse. His Lordship is sitting pretty, lording it over everyone – its alright for him! Everyone knows that older people often provide crucial financial support to their families and direct support to them in terms of child care, advice, mutual support, and that they contribute in a voluntary capacity in numerous other ways within local and community organisations.
This attack – as yet in the planning stages – is yet another example of how the ruling class divides the working class. The proletariat is the class on which the capitalists depend for their parasitic existence, and now it wants to continue sucking surplus value from workers until they literally drop dead. Now they want – in Lord Bichard’s scheme – to force elderly retired workers to care for the even more elderly retired workers – in order to reduce government expenditure on social care.
What is amazing is that the ruling class is now actually confident enough to come out with such open, ruthless and draconian attacks. But it is a sign not just a matter of a broad category of ‘the retired’ being weak as a social force – the wealthier retired will not really be affected by these measures – but a sign of a weakness in the worker’s movement; and it merely strengthens our resolve to argue for a genuine mass organisation of the working class which unites workers across different sectors; and which includesthe unemployed and retired workers.
Lord Bichard may argue that pensioners should be forced to
for their pensions – as though a lifetime’s slaving away wasn’t already
sufficient payment – but it merely reminds us of how much our elders
do, and what influence proletarian pensioners could exert if more of
were fully incorporated into the proletarian movement; and what they
achieve in strategic moments, if, in co-ordinated actions with their
brothers and sisters, they withdrew their unpaid labour…
The three thousand rock drillers of the Lomnin mine in Marikana, South Africa, with their indefinite wildcat strike for an increase in wages, have written a new glorious chapter of the proletarian class struggle with their courage and their blood.
Alone, they stood and fought against all of their enemies: the company, with its blackmail and armed guards; the strike-breaking organized by the NUM, the strongest of the regime’s unions in South Africa; the democratic bourgeois State that tried to subdue them with machine gun attacks and killed 34 of them. But not even this infamous massacre could stop them: as of today (Monday, September 3) the strike, which has lasted for three weeks, is ongoing.
In the mines of South Africa, the greatest economic power on the continent, there were 518,000 workers employed in 2008, that is, 7.8% of the workforce employed in the private and non-agricultural sector. To these should be added the same again in the ancillary industries.
Via a collection of large private companies, the major imperialist powers have held South Africa’s precious primary material reserves in their blood stained grasp since the nineteenth century. Before, during and after apartheid, the South African bourgeois state became guarantor of the exploitation of the national proletariat on behalf of global capital.
When what is at stake in the victory of the workers in a single mine, as in the Lomnin mine in Marikana, is not just a wretched increase "compatible with the rate of inflation" but a rise of as much as 300%, it becomes a threat to capitalist interests, because due to the number and concentration of mines and deep seated traditions of proletarian struggle in South Africa there is a risk that it may generate a general strike movement.
The strike at the mine in Marikana is not an isolated incident which is shattering the social harmony, nor is it abnormal in terms of the extent of its demands, the determination of the strikers, nor the violence that has resulted. Last year, the South African Chamber of Commerce and Industry expressed "concern at the violence, damage to property and intimidation that occurred in the recent wave of strikes."
Furthermore, for some years, struggling miners have increasingly often found themselves in conflict not only with the company and the State but also with what was once their union, the National Union of Mineworkers. In 2009 its President Piet Matosa attempted to stop a strike at Impala Platinum Holdings Ltd (the largest platinum mine in the world, at Rustenburg 40 km north-west of Marikana, with 30,000 employees, 20,000 of them unionised), and was stoned by the miners, and almost lost an eye.
Last year on May 17, in Karee mine, which is owned by Lonmin as well and is very near to Marikana, the miners went out on strike not against the company but against the regional leadership of the NUM, which had suspended the union leaders at the mine. Since the strike occurred without prior notice, under South African law it was therefore "unprotected", or, as it is erroneously described, "illegal": workers can strike but the company is free to fire them. Evidently the union leaders in this mine were genuine representatives of the workers, since, at risk of dismissal, they had gone out on strike to defend them... from the NUM.
Lonmin wasted no time, and, in accordance with common practice in the South African mining sector, on May 24 it dismissed the entire workforce of 9,000 miners, in order later on, after the strike was over, to rehire a large part of them. It is a process by which the company can select its staff and reduce wages as during reinstatement any minor advantages accrued due to seniority, or performance related bonuses, are removed.
The result is that most of the NUM’s members left to join the Association of Mineworkers and Construction Union, a new union created in 1998 through a split from the NUM and which, according to its leader, Joseph Mathunjwa, now counts 5,000 workers at the Karee mine among its members, making it the largest union there. Commenting on what happened, the NUM national spokesperson, Lesiba Seshoka, stated that in the mines there "is a growing culture of indiscipline and we have arrived at anarchy", attributing this mainly to "angry and impatient" younger workers. An outburst that highlights the difficulties this regime union is having keeping control of the workers.
On 20 January of this year 4300 rock drillers began an indefinite strike at Impala Platinum Holdings Ltd against a union agreement, signed in October by the NUM, which awarded a salary increase only to the higher grades. The miners requested a rise that would bring their net salary up from the current 3500 to 9000 Rand, an increase of almost 300%. On 24 January, the company dismissed all 4300 miners but on 30 January 12,500 other miners came out on strike in solidarity with their sacked comrades. The NUM however accused the rock drillers of preventing others from going to work.
Impala Platinum held the AMCU responsible for the running of the strike, and defined it "illegal". It seems however that the miners had started the strike of their own accord and that the AMCU took it over with the objective of obtaining recognition from the company of its so-called trade union rights. In 2007 the NUM had reached an agreement that reserved bargaining rights to whichever union had half plus one of the members, thus the NUM itself. Citing this agreement, the company refused to bargain with the representatives of the AMCU and any other workers’ representatives who did not belong to the NUM. The strikers responded that they no longer recognised the NUM as their representative.
On February 3 the company also dismissed the 12,500 workers who had gone out on strike in solidarity with the drillers. At this point the 17,500 newly redundant workers formed pickets near the mine to prevent the resumption of activities. The company tried to break the strikers’ front, announcing the reinstatement of about 4,600 workers. Pickets and gatherings led to violent clashes between strikers and strike-breakers, with three casualties. The February 17 strike soon turned into a riot, with the erection of barricades in the streets of Rustenburg, a police station aflame and 350 arrests. The NUM openly did everything it could to break the strike, urging the workers to return to work. On the March 21, the company claimed to have re-employed 8,368 employees, 1,074 of whom were drillers. The joint operation of the company and the NUM eventually got the better of them and on March 5, after six long weeks, the strike ended, with the diggers defeated and nearly 2,000 miners out of 12,500 out of work.
At Kroondal on August 2, nearly 200 miners who had been laid off during a previous strike in June attacked the platinum mine owned by Australia’s Aquarius Platinum, some armed with incendiary bombs. In the fighting three miners died.
The strike at Lonmin at Marikana saw a similar disposition of forces in the field. Out on strike on August 10 were the lowest paid workers, the three thousand drillers out of a total of 28,000 miners. Based on the experience accumulated over decades of struggles, and very recently at the nearby mines of Impala Platinum in Rustenburg and Karee in Marikana, the miners gathered together armed with sticks and machetes, ready to confront the police, the NUM scabs and the company guards.
The drillers are demanding a salary of 12,500 Rand, compared to their current one of around 4,500: here as well the demand is for a tripling of the wage. The company has so far not ruled on the claim, the NUM however have spoken on their behalf calling the demand "unsustainable".
After three days of strike action, August 12 saw the first violent clashes between strikers, scabs and police, resulting in ten victims. Some strikers say they saw NUM snipers and NUM members inside armoured police vans, because voices from inside were speaking fanakalo, the language of one of the miners’ ethnic groups, that the police do not know as cops are selected, in order to better convince them to open fire on the workers, from other groups. The workers did not restrict themselves simply to defending themselves: two cops were killed and possibly two security wardens as well, and among the workers killed it is not clear how many were strikers and how many were scabs.
The company, the bourgeois press, the NUM and the Communist Party of South
Africa have described these clashes as a struggle between the militants of the NUM, and those of the AMCU, pointing an accusatory finger at the latter. But, it emerged after the strike, if on the one hand the workers kicked out the NUM, they didn’t choose the AMCU or its representatives to lead them either. Certainly though, as has happened in the strike at Impala Platinum, the AMCU has earned plaudits, but it remains to be seen whether this union was unable to gain the trust of the striking miners, or whether it did not actually want to represent them, and, in the latter hypothesis, it remains to be seen whether it took that decision either because it didn’t want to stick its head too far above the parapets until it had adequate forces to withstand a fight with the NUM, the mining companies and the bourgeois state, or because, in this proletarian conflict, it has no urge to fight, but merely wants to replace the NUM in the role of the regime’s harmonious, peace-loving union. Publicly the AMCU recognizes the validity of the drillers’ demands, and its militants are an active part of the strike, but it also rejects violence and is very respectful of the law.
On August 16, after six days of striking, the police opened fire on a group of several dozen miners with machine guns, rifles and pistols. Eventually the death toll was 34. Several witnesses claim that many of them were killed afterwards, in a manhunt involving collisions with armoured cars and subsequent well aimed gun shots.
But we do not want to dwell on the atrocities carried out by the class enemy which speak for themselves, or invoke a justice that can never exist in a society divided into classes. And we do not believe that once it is revealed how barbaric the bourgeois are that indignant so-called "civil society" will lift a finger to defend the workers. Although the autopsies have proven that most of the miners were shot in the back, we are not led to call them victims or to protest their innocence: the workers are certainly guilty of the charges brought against them – of defending their lives, with the necessary means to do so, in this and a thousand battles both past and future.
The police accused the workers of having attacked them. Good, it does them honour! It is through this courage and determination, and not by portraying themselves as victims, that proletarians come ever closer to their liberation, namely to the overthrow of capitalism; of a regime that is not, and can not, be anything other than brutal and ruthless because it is based on the defence of profit.
It seems that from the very first day of the strike the drillers, who were camped out on a hill near the mine, had been surrounded and attacked with tear gas and water cannons, fired on from armoured vehicles and two helicopters, and driven towards police positions which were ever ready to open fire on them. Perhaps these workers, armed with machetes, decided to go on the offensive and break the encirclement, only to then be faced with the barrage of fire and forced to retreat with their backs to the machine guns. They didn’t flee like hunted animals, as the pietistic version of those who traffic in the opium of democratic peace between classes would have it.
The proof is that 40 dead was not enough to stop the miners. The strike continues and is totally solid two weeks after the massacre, that is, three weeks after it started. The latest figures for Friday August 31 show that 7% of staff are still at the mine, presumably the management, and therefore the blockade of productive activity is total. This shows that the workers were aware of the risk to their lives and were still prepared to face the bourgeois bullets.
The ending of apartheid and arrival of democracy have not scratched the continuity of the bourgeois state dictatorship over the proletariat, a dictatorship that is based on class, not race. It is to obfuscate this reality that the "left" government in South Africa, an alliance between the African National Congress and the Stalinist South African Communist Party, prefers to portray the massacre as an unfortunate mishap, as an anomaly that can be resolved by an investigation rather than as the inevitable consequence of capitalist exploitation.
In reality the South African bourgeoisie is now very apprehensive. After the strikes of the last years, in particular those mentioned above in which the system of controlling the workers via the regime’s puppet union has proved to be ineffective – because the workers were calling for a wage adjusted not to the needs of the national economy, that of capitalism, but to the necessities of their own lives – it was necessary for the bourgeoisie to give a signal, by shooting the miners, to reassure both national and international investors that their profits are not in danger, and that the country will continue to provide them with disciplined, extremely low cost wage-slaves.
But this is not the end of it. Even now there are reports of similar demands: at the Thembelani mine, just to the North of Marikana, which is owned by Anglo American Platinum, the largest producer in the world; at the Rasimone mine of Royal Bafokeng Platinum, near Impala Platinum; and also, in the so-called "Platinum belt", the KDC gold mine West of Johannesburg.
The miners in South Africa haven’t lost their battle, let alone
war; the same war that wage-slaves of all countries are fighting,
the colour of their skin.
For more than two months, the coal miners of several Spanish provinces – Asturias, Castile and Leon, Aragon and Palencia – have been out on indefinite strike to counter the Spanish Government’s measures designed to drastically reduce lending to the mining industry: a 63% reduction of state contributions to the mining sector equivalent to a cut of about 200 million Euros.
Please note that the “aid” from the ECB to the Spanish state and its banks, through the European fund EFSF, is around 100 billion Euros.
The loss of competitiveness of the Iberian mines endangers thousands of jobs in an area already heavily reduced in the last 30 years by previous governments.
The strike began on May 23, supported by the two main Spanish trade unions, Union General de los Trabajadores and Comisiones Obreras.
These organizations over the years have proven to be no longer useful or reclaimable to a genuine class action, being now the faithful servants of the owners and their governments of both the left and right. But these unions, which are still very strong and well rooted in those regions, are apparently supporting the protest. In some mines, in order to work, it is necessary to have the SOMA-FIA-UGT or the CCOO card.
In the 50 mines of Asturias there are also several small "independent" unions: in an interview with a local radio station one of their militants explicitly stated that the danger to workers not only comes from the executive and his ministry, but is also to be found deep inside the labour movement, in those Unions who betray the miners, acting in cahoots with the bosses and their government.
The primary objective of regime trade unions is not to defend living and working conditions, but to safeguard the national economy and to protect the "good of the country" which is nothing more than the profit of the ruling class. Even in the nominal "left", the policy of these unions does not change its timbre.
The two main Spanish trade unions tend to limit the fight, water it down and keep it weak by isolating it from the rest of the class to prevent a dangerous wildfire from breaking out amongst all workers.
This is the same union policy which was adopted in 1984 by the corrupt English Trade Unions against the epic miners’ strike; against the 165,000 workers who rebelled for almost a year against the Thatcher government’s massive attack conducted in the name of ‘restructuring’ the coal mining industry. The British miners were betrayed by these organizations, combative only in appearance, which broke the front of the miners by sowing division and taking away the indispensable solidarity with the other key categories of workers. The defeat was inevitable.
From the very outset almost all of the Iberian miners, moved to genuine proletarian anger, swept aside the defeatist directives of the union leaders and organized several marches and effective roadblocks. Some workers also occupied the pits. There have been numerous clashes with the Guardia Civile who attacked dozens of barricades on the region’s major roads.
In a short time the miners have also organised themselves from a "military" point of view, by adopting defence techniques designed to repel the attacks of the police.
Roadblocks have occurred in many parts of the country and especially in Asturias, the biggest being on the N-630 and N-632. Several barricades were built along the Mine Motorway, the AS-I and the A-66, and many other minor roads in the vicinity of Oviedo. Several barriers were placed along the railway, preventing the normal movement of trains.
During the fighting the expulsion of the apparatus of state repression has been integrated into the festivities of the local proletarian population, which has often taken an active part in the strike and the struggle. In these regions, especially among young people, the unemployment rate is among the highest in the peninsula, and thus in Europe.
In several cases, the clashes were very rough, with injuries on both sides, and in the fighting the police did not hesitate to shoot rubber bullets at the protesters. The miners built barricades to defend themselves, answering blow for blow with stones, slingshots and iron pipes used as improvised rocket launchers.
About a week after the beginning of the strike, there was a huge strike in Madrid with thousands of miners arriving from different regions: the Spanish democratic State, belonging to the equally democratic Europe, did not hesitate to react with beatings and arrests.
On June 22, what has been called the "marcha negra" began; a march of miners to Madrid, probably fuelled and supported by the central trade unions with the intention of exhausting the struggle. Several columns of workers, from various regions, have thus crossed the country.
On the night of July 10, after 19 days of walking, the march ended when about three hundred miners entered the city. The response of proletarian Madrid was surprising: thousands of people, many of them workers, escorted their entry applauding them, encouraging them, repeatedly shouting "long live the struggle of the working class!" The arrival at night was certainly due to the cold calculations of the union leaderships, frightened by the response and by the solidarity of the city of Madrid.
The next morning, while the Spanish government suddenly abolished the thirteenth, a huge demonstration led by the miners set out from Colón square heading towards the Ministry of Industry where they arrived at about two in the afternoon. Then began violent clashes; the police charged immediately, firing rubber bullets at head height. Miners and protesters tried to regroup but were dispersed by a number of attacks with horses and armoured vehicles. By the end of the day there had been numerous arrests and injuries.
Some miners interviewed after the event stated: "the march has ended, the war has begun."
* * *
Inevitably this struggle takes us back in time, to the resistance in the 80s against mine closures, and even further back to the powerful strikes of 1962, when Franco was in power, but especially to one of the major events of the struggle of the international proletariat, the Asturian Comune. We will never forget their heroic impulse, the shameful isolation in which it was buried, or the defeat and subsequent repression.
The vital necessity for workers today, same as back then is the creation of a single proletarian front that is founded purely on the basis of economic and union demands, to mobilize on the economic field the highest number of workers. It also needs a single party that is actually revolutionary, and free from compromises with other political organizations. Stalinism and reformism of every shade, which still today, wrongly, appear close to workers, are false friends and pursue one single end: to sabotage working class interests.
What clearly emerges from this struggle is the extreme necessity for the workers to finally place themselves on a class terrain in order to be able to respond to the attacks of the bourgeoisie. The ritual struggle, the small Friday strike, maybe just a few hours, which for years now, even in Spain has been promoted and supported by the trade unions of the regime, is now meaningless. The workers, instinctively, have immediately become intransigent, "us against them". No peace, no cooperation is possible.
There is no point in ignoring the fact that a possible victory of the miners would be very ephemeral, particularly thanks to the policy of isolating unions according to professional category, as it was in the past in England. But this generous struggle will surely leave an indelible mark on the entire Spanish working class, making clear the need for a real class organization, strong and extensive. A class union today would not only be able to direct the struggle of this combative sector, but would tend to merge it into a general strike capable of uniting the demands and the will to mobilize of all sections. A class union would have, as its first objective, therefore, not the defence of the mine or factory, but the uncompromising protection of wages, by fighting against the measures the government is trying to impose and calling for full wages for unemployed workers.
An initial and partial hint of this future scenario was seen on June 18 in Leon and Asturias, when the shipyards, the transport sector and the teachers Union went on strike with the miners, demonstrating the fundamental instinct of class solidarity.
The struggle of the Spanish miners, though still fettered by false
friends and politicians, is a great and practical response, using
class methods, to the attacks by the bourgeoisie of all the nations of
Europe against the working class. May it serve as an example to all
Over the last three years, in order to safeguard the profits it derives from industry and finance, the Greek bourgeoisie in alliance with international capital has declared war, by cutting the wages of the proletariat and stealthily purloining the wealth of the middle classes. Over the last few months the regime has managed to obliterate the results of decades of workers’ struggle: it has abolished national labour contracts and reintroduced individual ones; it has cut salaries, by around 30%; and it has reduced pensions, which are amongst the lowest in Europe.
All sectors are in crisis, and although particularly bad in the building industry agriculture and services have also been badly affected. The official unemployment figures are 20%, rising to 50% among the young, and the unemployed now outnumber those in work. The government has also made a commitment to sack a further 150 thousand public sector workers by 2015.
After placing these items on the debit side of the State balance sheet, the Greek government has tried to reduce social tension by channelling it into yet another ridiculous parliamentary election.
The so-called electoral ‘trial’, which was held this 6th May, merely confirms that the majority of the population are against the so-called ‘austerity measures’ of the last few years: in fact, almost 35% of the electors didn’t bother to vote, a high percentage in a country where, following a period of military dictatorship, democratic rituals have generally been perceived as a ‘conquest’, above all by ‘left-wing’ electors.
Over recent decades two parties, Pasok (centre-left) and New Democracy (centre-right), have alternated in government, sharing the power and the kickbacks. Both are supporters of the ‘technical’ Papidimos government, and both did very badly in the election. Compared to the 2009 elections, Pasok’s share of the vote dropped from 44 to 13%, and New Democracy’s from 33 to 19%.
‘Left’ voters have switched their allegiance from Pasok to the so-called ‘radical’ coalition, Syriza, which became the second biggest party in parliament. But voting for Syriza was in fact a ‘sensible’ compromise vote, as it wants to remain in the European Union, although it is opposed to the diktat of the Troika (European Union, European central bank and International Monetary Fund). Indeed most Greeks still have something to lose, and fear the collapse of the State and exiting from the European Union.
The Communist Organisation of Greece (Koe), which is on the radical fringe of Syriza, announced that: «Today the Greek people have passed a vote of no confidence in the pro-troika parties (Fmi-UE-BCE) and triggered a veritable earthquake, shaking the entire political system. Our people have sent a thundering message to the troika (…) The road to another type of representation, another political system, the road to real democracy and a radical transition now opens before us». These lightweight communists, with their, ”thundering messages”, want to divert the movement of strikes and demonstrations, which has been spreading throughout the country for over two years, and channel its energy into the ballot boxes, with them stepping forward as the movement’s ‘mature’ political representatives. If the working class falls for this ruse it will be game, set and match to the bourgeoisie.
Syriza’s demagogic and deceitful programme responds to this requirement. Today, no government, even a ‘left-wing’ one, can implement a defence of the working class, not in Greece or in any other country. All parliaments and governments, whatever their political complexion, are organs of the bourgeois State and defend the interests of the bourgeois class. Only through struggle can the working class defend itself, and it is a struggle that needs to take place outside the confines of the irrelevant, mercenary and corrupt institution that is parliament.
The KKE, the Communist Party of Greece, is meanwhile completely integrated into the bourgeois State. Even very recently it has provided abundant proof of this through its control of the important trade union, PAME, and through its evident wish to keep the social movement tightly controlled and within the bounds of bourgeois order. Although opposed to the reconstruction of genuine class unions open to all workers, it is currently trying to appear ‘extremist’ by calling for Greece to leave the European Union. But the KKE as well is just playing a part in the parliamentary melodrama. In Italy we exposed the Italian Communist Party, the ‘party of struggle and government’ decades ago; a party which hinted to militants it was ‘playing a double game’, one involving both the electoral path and another, more subterranean one, which involved revolution. But the two ‘paths’, with the party supposedly choosing between them according to the circumstances, never actually existed. As has always been the case, it’s a matter of either preparing for the revolution, or preparing for elections. Today, looking back at the various disasters into which the international proletariat has been led by democracy and Stalinism, we have no hesitation in reaffirming that position.
On the right, the votes have passed from New Democracy to some minor parties and to the national-socialist Golden Dawn. The latter attributes the crisis to ‘Jewish usurers’, to immigrants stealing jobs off the Greeks and gypsies snatching handbags from little old ladies. They shout about the dictatorship of Europe and ‘Greece for the Greeks’; and with 7% of the votes their shaved heads will be entitled to rant and rave in the democratic menagerie of the Hellenic parliament.
As we can see, the electoral ritual is far from being the waste of money it might appear: it is still being used as an instrument to distract workers, by deluding them that ‘something good’ will come out of it; that ‘new people’, new political forces, a new government will take some kind of initiative that will protect their standard of living. The fact is, if the workers aren’t able to get organised and resist on a class basis with their own powerful organisation, fighting not with voting slips but in the streets, they will inevitably be forced to put up with increasingly bad conditions.
Moving beyond the results of the elections, the convulsions of the Greek political system and the ridiculous antics of its politicians, the central questions are still that of the economic crisis, and what the real prospects are for the proletariat.
Whether or not Greece stays in the European Community, whether it leaves because forced out by Germany or abandons it of its own volition, whether it disengages from the Euro and returns to the Drachma, whether its nationalises the property of the banks, it is these alternatives that will determine the future prospects for the proletariat and the economy rather than any particular policy of any particular government. But the bourgeois States now have very little room for manoeuvre, and the bigger and more powerful states even less. The ‘dominant’ bourgeois German State is the most constrained of all, and the big capital which has based its centre of accumulation in Germany will have the most to lose.
At a certain moment the only possible choice they can ‘freely’ make
is that of war between the imperial powers. Faced with this menacing
the salvation of the working class lies not in nationalism, already on
the increase, nor in the illusion that it can escape from the grip of
imperialism, as preached in Greece by both right and left, but rather
the international union of the workers’ movement; in the alliance
proletarians of different countries, united in a common perspective
has learned from the lethal mistake of trusting in parliamentary,
pacifist or inter-classist solutions, and is committed instead to the
revolutionary overthrow of capitalism.
Now that, in its current stage, the most violent manifestations of the general crisis of capitalism seem to be concentrated in the Eurozone (after only superficially having loosened its grip on the American imperialist centre from which it parted), we can amuse ourselves by looking at the numerous remedies for ‘saving the nation’, and the various ‘financial rescue packages’ continually being doled out to the petty bourgeois, terrified of losing its assets.
Each ‘school of thought’ has its own particular diagnosis and cure. Theoreticians and university professors, each of them extolling the brilliance and efficacy of their own proposals, squabble amongst themselves, striving to come up with new hypotheses and solutions whilst accusing their rivals of making matters worse.
In the media too we witness the same kind of confusion. Gloomy predictions of a crash – designed also to cow the proletariat – are followed by the moderate optimism of official reports, and the final declarations of high level conferences, all rapidly communicated via the regime’s press, spreading optimism one minute, a grave sense of responsibility the next. In a word, the media is just doing its job.
This profound crisis, which the entire world insists on categorising as ‘financial’ , has shown its mendacious face with the unsustainable burden of interest on the State bonds of the infamous PIGS (Portugal, Ireland, Greece and Spain), whose financial weakness was supposedly triggered – another monstrous lie – by an intolerable public debt. Then came the usual nasty, anti-proletarian theorisations about ‘low productivity of labour’, ‘overly bureaucratic and spendthrift States’, and a no longer tolerable situation of ‘living beyond one’s means’.
And the Greek workers – who “work on average 44.3 hours a week, whereas the European Union average is 41.7” (Eurostat), who “have an average wage level of 73% of that in the euro zone whilst a quarter of Greek workers earn less than 750 euros a month”, who have “golden pensions” averaging 617 per month, 55% of that in the euro zone, and with everything getting worse all the time – have had insult added to injury by being told they are partly responsible for the catastrophe.
Amidst the various ups and downs, with some events truly dramatic and some obviously staged, the most critical occurrences – so far – have taken place in the smaller theatre of Greece; and it is here, including during the recent farcical elections, that the billowing froth of the supporters of the latest fallacious, demagogic theories has been concentrated.
But, depending on the criticality of the situation, from time to time the storm fronts spread further a field, and the capitalist media is forever switching from prioritising one symptom of imminent disaster over another. The ‘criticality level’ of Greece, a country liable for a debt that isn’t actually that enormous, although the interest payable on it is, and was, in relation to the productive capacity of the country, has suddenly become secondary compared to the much more serious and substantial problem of the Spanish banking system. The latter is not being strangled by debt, as the chatterers would have it, but by credit, in enormous, unredeemable quantities; a pile of useless paper which not only doesn’t produce interest anymore, but doesn’t represent a claim on anything at all.
We see a continuous opening of fronts, of slippages in an intrinsically unstable and politically contradictory structure which is no longer financially sustainable; especially now that the pressure of the real crisis, in the realm of production, is spreading and gathering pace.
All the resources of the European Central Bank are redeployed to deal with the new, but widely predicted, storm centres shaking the European Monetary Union – Spain, Portugal, Italy… It is the same old bourgeois remedy: shift onto the ‘public’, the State and the ECB, a debt that is essentially ‘private’, derived from banking and business. Tomorrow, faced with a banking system which is ‘too big to be saved, too big to go bankrupt’, who can say what decisions the ECB will take.
For some time now the big bourgeoisie has been transferring its “assets”, its capital, to new ‘safer’ markets, where it might make a bit less but where – they hope – it won’t get swallowed up in a collapse of the European financial system. And small businessmen as well, the petty bourgeoisie and many workers are anxiously looking for some arrangement to protect their meagre savings, some way to avoid losing them if the banking system goes into meltdown.
The words public debt, private debt, currencies, devaluation, inflation, taxes, bonds, are constantly rammed home, in ever language and accent, in various different combinations embellished with various analyses, depending on the economic school from which they derive or the interest group of the commentator concerned.
But we have no intention of entering into the merits of these bold diatribes about nothing, these remedies for the madness of capitalism, these proposals and cures which the so-called left, ignoble servitor of capital, also dedicates so much time and effort to. All these remedies hold very little interest for us, and if any of them actually do end up working, we will totally oppose them. The financial disaster is a theme which needs to be dealt with specifically within the context of Marxism and in conformity with our revolutionary perspective based on the theory of capitalist collapse. We have no wish to compete with the professional theoreticians of least-bad-capitalisms, although, we have to say, not much progress seems to have been made on that front in any case!
On one, fundamental point do the economists seem to be totally agreed as they cry in passionate unison: capitalism must survive! According to them, even if it can be shown, as it can now, that capitalism can no longer be improved, reformed, “humanised” or “made moral” it must still be defended, for ever and ever, along with its infernal companion, the all-regulating, al-defining, all-seeing and all-hearing market.
We though take a totally different position. We view all the ideological distortions, all the theorisations about how to improve, adjust or make the current state of things bearable as incompatible with our vision of the world view, with our science.
As to saving the euro and the European Community, resolving the debt
problem and, above all, the question of the fate of
and their empty coffers, we simply don’t give a damn about
any of it. We are opposed to any prescription for salvaging what is
salvageable, for breathing oxygen into the markets, for building a new
society founded not on conflicting national States but on a “community
of peoples”, engaged in peaceful trade, rationally controlling fair and
equitable markets from which speculation and injustice have been
and so on and so forth. We hope they all fail. Our unique and
vision is communism, the rebellion of those rejected by this society
will destroy the bourgeois States and suppress for ever relations of
founded on capital, wages and the market.
The Years of Euphoria
In November 2009 the centre left party PASOK, having arrived in power, was astonished to discover the disastrous state of the finances left by the scandal-ridden New Democracy government. The deficit wasn’t around 6% of the GNP as the previous government had led them to believe, but around 12.7%! With a debt of 129% of the GNP, PASOK and with it the financial markets, that is to say the European and United banks, the insurance companies, the hedge Funds and so on, found they had a virtually bankrupt State on their hands. Naturally the latter proved reluctant to lend out any more money, even in the short term, despite Greece being in the European Union. The rates of interest started to rise, eventually exceeding 7% per annum!
Papandreu then called on his “European brothers” for help, and on the representatives of the French and German bourgeoisie in particular. Chancellor Merkel responded with a resounding ‘Nein’. And yet between 2000 and 2007 the French, German and U.S. banks had been clambering over each other to buy Greek government bonds and lend out money to the Greek private sector. These were the years of euphoria after the international crisis of 2001-2002 which, amongst other things, had seen the bankruptcy of the Argentine State and the consequent imposition on its creditors of a restructuring of the debt which included a hefty discount of 66%, hitting thousands of small “savers” especially hard.
The years 2002-2007 were not great for European and North American industry. Average annual growth was around 1% in the United States, 0.5% in France and 0.47% in Japan. As regards England and Italy’s growth, or rather shrinkage, it was -0.6% and -0.2% respectively. Only Germany did somewhat better at 2.3%.
Given this situation our capitalists have thrown themselves wholeheartedly into the practice of relocating to Asia, and to China in particular, and sub-contracting work to companies there, in order to lower the costs of production (which allows companies like Apple, which no longer produce anything directly, to achieve fabulous profits of up to 40%). They also indulge in frenetic speculation of every kind, whether on raw materials (oil, metals, agricultural products…), property (typical of every crisis), or on loans. Ever more complex and sophisticated financial “products” have been invented, like the famous sub-prime mortgages. Questions about the exact nature of the investment are no longer that important, the main thing is to lend the money out! Everything is fine as long as it is “invested”, never mind the risk. But such speculations, despite what the bourgeoisie would have us believe, don’t actually create any wealth; it’s a con in which wealth is transferred from one pocket to another. Speculation rests on the same principles as the mafia rackets. The latter use force to extract wealth from people by force, whereas speculators use the power of finance capital and the protection of the State to fleece the general population.
In this connection it is interesting to read what Chancellor Merkel has to say about sub-prime mortgages:
“we think the securitization operations that have developed in a very dynamic way over recent years have certainly contributed to the financing of the development of our economies but, at the same time, they have shifted banking risks onto many in the business sector. One notes, however, that the end holders of such risks are not today easily identifiable and that this ignorance is, in itself, a factor of instability” (Les Échos, 20 August 2007).What this representative of the German big bourgeoisie calls “financing of the development of our economies” is nothing other than a further development of parasitism, expressing the highly parasitic character and advanced state of purification in which contemporary capitalism finds itself in its imperialist phase.
But to go back to Greece, those capable of reading the signs could see the Greek economy was heading for bankruptcy years ago. And we won’t do bankers, insurers and underwriters the injustice of claiming they were so incompetent they didn’t see it coming.
Greece balance of trade was constantly in deficit and had been getting steadily worse for years, passing from -19 billion dollars in 1999 to -66 billion in 2008. After that it reduced gradually, due to the country’s dramatic recession.
|In billions of dollars||-2,21||-3,54||-9,82||-18,23||-29,57||-44,59||-51,31||-35,91||-30,90||-29,68|
|As % of GDP||-4,04||-3,75||-7,73||-7,59||-11,28||-14,62||-15,04||-11,16||-10,26||-13,80|
This trade deficit wasn’t offset by incoming capital or earnings from tourism. On the contrary the deficit in the balance of payments took a more and more catastrophic turn. From around 10 billion dollars in 2000, the deficit in the balance of payments has been continuously rising, hitting 51 billion in 2008. In relation to the Gross Domestic Product this corresponds to -7.73% in 2000 and -15% in 2008!
But the GDP, which is far from being a reliable measure of a country’s prosperity and economic development, then went up by an average annual rate of 4.2%, better than many other countries in Western Europe or in North America. In the resulting euphoric atmosphere, and due to the craving for profit that so torments the bourgeoisie, everybody was suddenly eager to lend to Greece, and not just to the State but to private companies as well. The bourgeoisie either couldn’t or refused to believe that a new crisis of over-production was on its way.
But at the end of 2008, as regular as clockwork, the crisis hit anyway. The alarm bells went off and the various States tried to bail out the financial system and support private enterprise, notably by investing in major infrastructure projects. Instead of “Less State – more private initiative” suddenly it was “State capitalism” again, which had never really gone away in any case.
The central banks turned on the credit tap by lowering interest rates, and the various States, already in debt, got even deeper in debt to salvage capitalism and avoid a recession combined with deflation like in 1929. Suddenly Europe, the United States and China were gulping down thousands of billions of dollars to avoid such a eventuality.
States such as Iceland, Ireland and Spain, which up to that point had not been that much in debt, suddenly found themselves on the verge of bankruptcy. Strangled by enormous loans to bail out the banks and to stimulate the economy, and by a steep drop in tax revenue due to the depth of the recession, they found themselves either actually or on the verge of bankruptcy.
Greece was already deeply in debt both in the public and private sector. What is more, the “rescue” of the Greek banks by the European Central Bank consisted in the latter taking the former’s best securities in exchange for ready cash. This operation brought about the situation in which the Greek banks find themselves today, with an enormous quantity of bonds of highly dubious value and a debt of around 106 billion euros to the ECB, a debt which they will never be able to repay.
That is what caused the explosion.
The Origin of the Crisis
Based on Eurostat data, we have plotted curves representing the
of public debt in the countries just mentioned as percentages of their
Gross Domestic Product. Before the crisis Iceland, Ireland, Spain and
all had low levels of indebtedness, less than 40%. Indeed Spain and
had actually been engaged for many years in a process of debt
Only Italy and Greece stood out from the crowd with a level of debt
was already high before the crisis at the end of 2008: 107% for Greece
and 103% for Italy.
It can be seen that the curves bend sharply upwards at the beginning of the crisis.
Only Italy – which had been engaged in a process of reducing its budget deficit since 2000 – would manage to avoid losing control of its debt, but at the cost of stagnation and a steep drop in industrial production during the crisis. In fact Italy was already in recession by the start of the new century: in 2011 it registered a -18.2% compared to the figure for 2000.
The essential point to understand is that the financial crisis in Greece and other countries like Argentina, Iceland, Ireland, Portugal, Spain and Italy, is the product of capitalism’s global crisis; a crisis which didn’t originate in the sphere of circulation (specifically, in the financial sector, as the bourgeois economists believe) but in the realm of production: the origin of the crisis lies at the heart of capitalist accumulation, where value is produced, that is, in industrial and agricultural production, where the latter is of a capitalist nature!
The source of the crisis lies in the tendency of the rate of profit to fall, which translates into a decline in the rate of accumulation of the capital which is utilized in the production of commodities. This is what clearly emerges from the table below.
Normally a cycle of accumulation is circumscribed by two peaks, followed by a recession and then a revival, with the subsequent peak higher than the previous one. In the following table we have chosen as the starting year the first year after the Second World War in which the pre-war peak was surpassed. This wasn’t the same in every country. In some it was 1950, in others 1951 or 1953. The same goes for 1973, with some countries such as France and Italy reaching their peak in 1974. To simplify the table we have treated the years of departure and arrival as the same for all countries, but as far as any calculations are concerned, the correct years are as stated.
The countries are ranked according to how old their capitalisms are. The exception is the United States, which should have been placed after Germany but has been moved up the list to reflect the massive destructiveness of the Second World War, which “rejuvenated” the organic composition of Capital in German and France.
As can be seen, the younger the capital, the higher the rate of growth, and thus the increase in the accumulation of capital. Over time the rate of growth slows down and tends towards zero. The two periods, which exhibit very different increments, correspond to two phases of capitalist accumulation.
The first period, 1950-1973, is the one which followed the massive destruction of the Second World War; destruction which permitted world capitalism to overcome the depressions of 1929 and 1938 and initiate a new cycle of accumulation. This phase of accumulation, characterised by local crises of overproduction of low intensity and short duration, and mainly concentrated in the United States and Great Britain, was ended by the 1974-5 crisis.
From 1973 a period begins which is characterised by short periods (of around 7 to 10 years) of sluggish accumulation alternating with longer and deeper international crises of over production.
This sluggish accumulation of capital, followed by recessions, means the tax yield is no longer sufficient. This situation is further aggravated by measures adopted by the bourgeoisie in the realm of political economy. Indeed, in order to try and counterbalance the fall in the rate of profit and to get the bourgeoisie to invest , the States are actually reducing taxation on the big companies, imposing less taxes on capital, reducing the direct taxes on the big bourgeoisie and favouring them with various additional tax loopholes.
All of this, in conjunction with the crises of over-production, has produced a situation in which all States have been in debt since 1973, up to the astronomic levels they have reached today. At the same time these national debts contracted by the various States had absorbed a not inconsiderable part of overproduction. Indeed if it had been any otherwise capitalism would have already experienced another 1929 during this period.
But the State isn’t alone in getting into debt because of the crisis. Business is getting into debt, financial institutions are getting into debt, families are getting into debt, and often private debt is much, much higher than public debt.
The series of curves in the graph below show levels of debt in the United States. They were drawn up using Fed data.
The indebtedness of financial institutions isn’t shown. We have added an additional table showing the debt of the various countries as a percentage of their GDP for the year 2010. This table is drawn up using data from The Economist. We can see that countries most in debt that are not the ones most talked about. Japan’s total debt in 2010 was equivalent to 471% of its GDP! England’s was 466%, Spain’s 366%, etc, etc.
In Greece, same as elsewhere, the State, businesses, families and the financial institutions are all in debt. We don’t have a detailed breakdown of this debt as there is a lack of data about the financial institutions. We only have the total debt of non financial businesses and of families, which we have split in two equal parts although they are certainly different. However, we can see easily enough that Greece isn’t the country with the highest debt.
What differentiates nations like Greece, Iceland, Ireland and Spain
from countries like Japan, the United Kingdom and France is that the
are great imperialist States, even if they are in decline and
as powerful as they used to be.
Nevertheless, we can see straightaway that the situation in Spain,
its importance on the economic and international level, is serious: a
equivalent to 366% of their GDP!
Who Actually Pays Taxes?
In order to explain the bankruptcy of the Greek State, many commentators have accused “the Greeks” of living beyond their means and of “not paying their taxes”. The president of the International Monetary Fund, Christine Lagarde, has urged “the Greeks” to pay their taxes. Of course as far as journalists and the bourgeoisie are concerned classes don’t even exist. They lump together the worker and the bourgeois despite the fact that the latter lives off the former, possesses the means of production and appropriates for itself the product of labour. The anti-Americans reason in the same way. They make no distinction between the big industrial and financial bourgeoisie which controls America’s political economy and the worker who slaves away for his wage and has no influence at all, either on political economy or on “his” country’s diplomacy.
According to the head of the tax inspectorate under the Papandreu government, Nicolas Lekkas, interviewed by Les Échos on 21/11/2011, tax evasion in Greece has gone up to around 40 to 50 billion euros per annum. This figure seems highly exaggerated when compared to the GDP of 230 billion. Other sources give a figure of between 10 and 15 billion per annum, still a staggering figure for such a small country.
In order to fight tax evasion the Greek government is negotiating a tax agreement with Switzerland based on ones already in place with Germany and Great Britain. In the agreement the Federations’s banking secrecy will be preserved in exchange for the collection by the Greek tax authorities of tax on capital deposited in Switzerland. Nicolas Lekkas declared, using data from the Central Bank, “no-one pays taxes in Greece; we have drawn up an initial list of 720 actual people who have sent more than a million euros abroad, and some of them up to 150 million euros”.
So who isn’t paying their taxes? In all the Western countries wage-earners certainly do. Not only do they not have millions to deposit in the Swiss banks, but the tax authorities are told exactly what they are earning by their employers (for instance, the PAYE system in England). It is the bourgeois who don’t pay their taxes: the industrial, financial and landowning bourgeoisie, the self-employed, etc, etc. For instance, according to the tax declarations of the doctors of the Kolonaki district, the wealthiest in Athens, they earn around the minimum wage! “In 2008 – writes Niels Kadritzke in the March 2010 issue of La Monde Diplomatique – members of the professions (doctors, lawyers, architects) declared an annual income of 10,493 euros, businessmen and financial traders declared on average 13,236 euros, whilst the average annual income of employees and pensioners was 16, 123 euros. As far as the tax man is concerned, the workers, employees and pensioners are the wealthy ones”.
So are there any countries where the bourgeoisie pays its taxes? In France, like every other country after the 1974-75 crisis, and accelerating after 2000, every successive government has continued to lower direct taxes on the higher incomes: from around 60% on the highest tax band down to 41%. To this has been added numerous tax loopholes, which take the rate of taxation on the big bourgeoisie down to a lot less than 41%. In the United States, which was one of the most egalitarian States along with Great Britain between 1945 and 1975, the highest tax bracket, which was 70% up until 1981, has now been lowered to 30%. And this abundant generosity hasn’t prevented yet more tax evasion, often with the complicity of the administration, which knows all about ‘looking the other way’. Thus tax evasion in the United States is said to be around 330 billion dollars a year, 97 Billion pounds in England, and 40 to 50 billion euros in France! Naturally in Italy as well those who pay the taxes are mainly workers, employees and pensioners. In 2010 they were responsible for 82% of the entire tax yield whilst self-employed workers, entrepreneurs, traders, landowners, etc, paid in a derisory 18%!
And the tax cuts and allowances don’t stop there. The monopolies formed by the big companies like Danone, Carrefour, Total, BP, Shell and so on, pay very little income tax and even less VAT. To them is offered a whole range of possibilities for paying less, ranging from the abundant tax havens up to the fiscal paradises controlled by four big international banks who are well established in all the big cities.
"If the tax on corporations is officially 33.3 %, the reality is quite different. According to a study by the treasury board, the average rate – calculated from the net operating surplus – is 27.5 % for companies as a whole. But take into account the size of the company and everything changes: the rate of corporation taxation on small companies rises to 39.5 %, while for the major companies it falls to 18.6 %. But this is still only an average, and the differences get even bigger once one tackles the last decile, the CAC (-40). Same as it is with the very wealthy, the French tax system seems to be very accommodating with regard to the CAC (-40), allowing it to adjust at its leisure the exemption rules and affording it every opportunity to avoid paying the tax.Therefore Greece isn’t the only country where the bourgeoisie doesn’t pay its taxes and where tax evasion takes place with the complicity of the State – the latter of course being merely the representative of the bourgeoisie’s interests – and the tragic situation Greece finds itself in cannot be summed up as a tax question. In all the major countries, the State, financial and non-financial businesses, and families are all deep in debt. And it is a process that has got worse and worse since the 1974-75 crisis with the debt reaching truly mind-boggling proportions today. The level of indebtedness of the British banks, for example, is already 200% of the GDP!
"According to the report of the Finance Committee, the companies of the CAC (-40) have paid 13.5 billion euros of the corporation tax accumulated between 2007 and 2009. After deductions of benefits derived from various tax credits (postponement of previous deficits, employment support, etc), the balance drops to 10 billion euros over the three years. This figure is similar to that of earnings announcements. Over the same period, the companies of the CAC (-40) realized more than 230 billion euro in cumulative benefits" ( "Mediapart", 6 July 2010).
There are only two ways to solve this problem: the cancellation of
debt – which presupposes the communist Revolution – or a third world
The Liabilities of the Banks
In 2009 the Greek government announced a budget deficit of 6% of GDP. Considering that the French deficit over the same period was 7.5%, Greece seemed to be on a similar footing with other countries. However, as we later learnt from an article in the New York Times , Goldman Sachs, the Greek government’s consultant until 2009, had been helping to “cook the books”; indeed it was the practice of this bank to encourage its clients to bet on risky ‘securities’ in order to profit from their losses later on. When Papandreu became head of government in October 2009, he decided, faced with the enormity of the situation, to make the accounts public and ask Europe for help: the trade deficit now stood revealed as 12.7% of the GDP, with a debt was 298 billion euros, 112.5% of GDP!
The rest of the story is well known. Rates of interests shot up, reaching 7% on ten year loans and making any further borrowing on the financial market impossible. After much humming and hawing and rising tension between the German and the French governments, with the latter even threatening to leave the Eurozone if nothing was done, eventually intervention was seen as the only option, for if Greece was forced to freeze its payments, a veritable financial tsunami would be the result.
So what was the situation at that time? We have seen Greece had a
deficit of 12.7% of its GDP and a private debt and public debt of
284 billions and 300 billion euros. How exposed were the banks to
We don’t have data for 2009, but the 10/5/11 issue of the French
Les Echos gives us the following figures, in billions of
dollars, for the 3rd quarter of 2010:
|FRANCE||GERMANY||U. S. A.||ENGLAND||ITALY|
The situation of the banks hasn’t necessarily worsened since 2009
because of the various interventions at State level, by the IMF and to
a lesser extent by the European Central Bank. On the contrary, the
for some banks has actually improved, as in the case of the German
which foisted some of the Greek government bonds they held onto the
However these figures must however be treated with caution, because the
only people who really know what’s going on in the banks – still –
are the bankers themselves. The recent discovery by the Spanish and
bourgeoisie of the real state of the financial institutions in Spain is
another example. Apparently 80 billion euros will be needed to bail
out, whereas only a few months ago the Europe imposed ‘Stress Test’
had revealed nothing, in fact they had been declared in good health! It
was the same with the Irish banks, which were declared solvent by a
of Stress Tests and then failed a few months later!
As to how reliable the information provided by the banks actually is, here is what a Mediapart journalist writes in their 16/6/11 number, reporting on declarations by the BNP and the Societé Generale on the extent of their financial involvement in the Greek State:“These figures don’t seem to correlate with the risks highlighted by Moody. They absolutely don’t correspond to the statistics published by the Bank of International Settlements, which estimates the French bank’s exposure as 15 billion euros. Are we supposed to deduce that 7 billion dollars of Government bonds are held by the minor banks? Unless the bonds have been removed from the banks’ balance sheets along with life assurance policies and other ‘safe’ financial products sold to their clients? Everywhere we find this opacity about how indebted the banks actually are, and that includes the ECB. According to some, the Greek risk for the Central European Bank amounts to 45 Billion euros. The Wall Street Journal estimates it to be 120 Billion. Who to believe? This situation translates into something very real. Despite the crisis, despite all the promises of further regulation and control, the European banking system remains a “Chinese box”. No-one, including the ECB, really seems to know what is inside it”.In fact the banking system and the financial system in general has always been a “Chinese box” and it will remain so whatever the politicians promise. In any case, sticking with these figures and a few others provided by the press, it emerges that in mid 2011 the European banks supposedly held 162 Billion euros of Greek debt, including 52 billion in Government bonds; 85% of this debt is held by the French and German banks, a percentage which drops to 70% if Greek debt to all banks is taken into consideration, including those in the United States.
As we can see, the French banks were more deeply committed than the German ones and maybe more than these figures show. We can therefore understand Sarkozy’s nervousness. It should be noted that a few of the French banks, and it is surely the same for the German banks as well, control some Greek banks and therefore hold, albeit indirectly, a portion of the 50 billion worth of Greek Government bonds held by the banks in Greece.
In the end, compelled by events, Frau Merkel gave in, and agreed to a 110 Billion euro support package. But there are conditions and “the Greeks” will have to pay (the millionaire and the worker; the millionaire funding a few few soup kitchens and the workers with blood, sweat and tears, to pay off the debt and save the millionaire), about that all are agreed, the ECB and the French government. Indeed the latter has already turned a profit from its loans to Greece, as have the other governments. The French government lent 9 billion euros in 2011, which has already brought in around 300 million euros, and the interest in the first quarter of 2012 has already brought in 69 million into the State coffers.
The measures imposed on the Greek State can be divided into three parts.
Ferocious frontal attack against the proletariat: raising of the pension age to 65 and lowering of pensions already in payment. Dismissal of 30,000 state employees with redundancy payments of 60% of their income and 15, 000 public sector jobs abolished. Abolition of national collective agreements and introduction of individual contracts. Reduction by 25% of the wage bill in the private sector and major reduction of the minimum wage by 22%, and by 32% for the under 25s. Privatisation of the public services with a significant reduction in subsidised services, and a rise in the price of electricity, gas, transport and health costs, etc…
Attacks against the petty bourgeoisie in the form of deregulation and liberalisation of 136 professions, from taxis to Art Centres. Liberalisation of the market leads ineluctably to the concentration of capital and therefore to the proletarianization of the petty bourgeoisie and to the formation of monopolies. For us Marxists this marks progress towards revolution, and yet doesn’t prevent us from denouncing the bestial methods used by capitalism to get rid of small production.
Two opposing positions on how to tackle it arose: the German government opted for a ‘restructuring’ of the Greek debt, that is to say, a reduction in the value of the bonds held by the banks, with these devalued bonds exchanged for other long term ones. The ECB, supported by the French government would strongly oppose this. Tucked away in its vaults the ECB has 47 billion worth of Greek bonds which it bought to alleviate the suffering of the banks. This acquisition of bonds on the secondary market – that is, the market where the various financial institutions resell titles previously purchased from borrowers – has been presented relief aid for the States in difficulty. Despite 47 billions worth of bonds being no small amount – acquired for 40 however – it is not the main reason for the ECB’s rigid opposition to any devaluation. What both the directors of the ECB and the French government fear is that a partial failure of the Greek State could prompt a crisis in countries like Italy and Spain, causing the rates of interest to rise and making it more and more difficult for these States to access the capital markets, with the knock on effect of part of the European banking system failing, bringing down with it the French and German banks with heavy loan commitments in these countries.
Here is what Martin Feldstein, Reagan’s ex counsellor on the economy and professor of economics at Harvard, had to say on the matter in Les Échos of 3/10/11, an article which we cite almost in its entirety, both because it is interesting and because it confirms our vision:
“Faced with an apparently irresolvable situation, Greece only has one way out: declaring itself bankrupt. And by following this path, it should be able to devalue the most entrenched part of its debt by at least 50%. The current plan of reducing the value of the bonds held by the private sector by 20% is only one of the first steps towards this result.Instead of confronting the problem, therefore, the European bourgeoisie is trying to buy time, hoping to reinforce and disengage their own banks in order to render them capable of dealing with Greece’s bankruptcy, and above all to prevent the contagion from spreading to Spain and Italy. And in so doing, they have probably aggravated the situation.
“By exiting from the euro, Greece could put a devalued currency back in circulation, stimulating demand and thus achieving a positive balance of trade. The markets know perfectly well that Greece, already insolvent, will go bankrupt sooner or later. Why are France and Germany trying to prevent or, more precisely, delay the inevitable? There are two obvious explanations.
“Firstly, the banks and other financial institutions in Germany and France are highly exposed to the Greek public debt, both directly and through loans to banks in Greece and the Eurozone. By postponing the date of the default, the financial institutions in Germany and France are buying time to reinforce their capital base, to reduce their involvement with the Greek banks and hand over their Greek bonds to the European Central Bank.
“The risk of the bankruptcy of the Greek State spreading its contagion to other States and destabilising their banking systems, in particular in Spain and Italy, is the second, even more important, reason why the French-German alliance is trying to postpone the event. A crisis in one of these major economies would have disastrous consequences for the banks and the other financial institutions in France and Germany. If Greece can avoid bankruptcy, the European political leaders can then show that the situation in Italy and Spain is salvageable.
“But if in the weeks to come nothing is done to prevent Greece declaring itself bankrupt, the financial markets will certainly see bankruptcy in Italy and Spain as more likely. The rates of interest these States would then have to pay on the market would go sky high and their national debts would mount rapidly, rendering them effectively insolvent. By postponing Greece’s bankruptcy for a couple of years, the European political leaders hope to give Spain and Italy time to demonstrate the viability of their financial situation”.
A presentation at the January 2007 party meeting in
from the previous issue)
From Independence to Secession
The average American, in the decades after the War of Independence, was the very epitome of self-sufficiency and versatility, capable of driving a plough, fixing a wheel on his cart, repairing his own boots and weaving on the familial loom. But the famous Noah Webster, who wrote in 1785 that it would remain such “so long as there is a vast tract of fertile land to cultivate,” was wrong. Already there were the first signs of those enormous changes that would turn small holders and artisans into wage labourers.
Three interdependent forces characterise this epoch making transformation, this real industrial revolution: the market, transportation and manufacture. In the process we will witness the bourgeois revolution in the United States drawing to a close, having achieved a politico-economic transformation which would only be completed in the second half of the 19th century.
The revolution in the market, already well underway by the 1780s, would remove the incentive to produce articles for direct personal use, encouraging instead the production of commodities for sale. This meant, for the farmers with small and medium sized holdings throughout the country and for the planters in the South, transferring capital and human resources from subsistence agriculture to that of products that could be sold on the market, in other words, cereals for the small farmer and industrial scale cultivation of tobacco and cotton for the planter. For the rural artisan the commercial revolution marked the end of the age of the itinerant worker, when the norm was to visit the farms in order to exchange the articles he had made for agricultural products. The artisan in the town, meanwhile, was compelled to employ more apprentices and specialised workers in order to produce enough to sell and to keep the shelves well-stocked. At any rate the novelty was the prominent role which money was assuming as the means of effecting exchange, and as regulator of social relations.
The revolution in transportation went through several phases. First there was the development of the road network, including the toll roads which started to appear in the 1790s. Around 1820 the great canal building projects got underway, creating a network of navigable canals into the interior. And in the decade that followed, a railway network began to take shape. All these arterial routes had the effect of extending the market and of stimulating the industrial revolution. The new means of transport meant rural America was inundated with manufactured articles which had traditionally been produced in the home. Demand from the country was stimulated and this prompted the supply from the city. One consequence of this was an excess of manpower in the country: manpower that was rendered available for use in the nascent industries.
In its early days the industrial revolution can’t be identified with the rise of the factory system. In fact, even if the factory represented, then as now, the most visible manifestation of manufacture as a system of production, it still only constituted a relatively small part of the industrial scene before the Civil War. In 1860 wage-earners in small firms and workshops still outnumbered those in factories, and the vast majority still used manual tools rather than machinery powered by water, steam or other kinds of energy. The industrial revolution of smoky factories and deafening machines was still in its infancy in pre-war America.
Actually by 1860 none of the revolutions we have mentioned had yet run their course; each of them had developed in an irregular way, geographically as well, taking off much faster in the North, and later on, in the Midwest, than in the South, which never became industrialised to a significant degree.
Any reliable account must bear in mind that the independent homesteader, the cultivator of his own land was, at the turn of the 18th Century and for many years thereafter, the backbone of the Union. In 1790, nine out of ten Americans lived off the land, and even in 1860 it was still 8 out of 10. The economy of the small farmer was based on self-sufficiency: as well as tilling the soil and stock raising, and related agrarian industries, other activities such as spinning and weaving were carried out inside the family unit. Still in the 1840s the quantity of woven goods produced in the home surpassed the amount produced in the textile mills, and these woven goods were used to acquire necessary products such as objects made from metal, and tea, etc. Things were acquired by bartering for them and there was very little money in circulation: it was rare, jealously guarded, and only there to be used when there was no alternative, such as paying taxes, in some States, and acquiring land for ones children.
Pioneer tradition indeed dictated that males leaving home would be provided with a parcel of land and females with a dowry. Initially finding new land wasn’t that difficult, you just ploughed it up and got on with it; but when, at the beginning of the 19th Century, land in the Atlantic States started to run out, the solution had to be either reducing the amount of land you distributed to your sons (and a certain minimum amount was needed if they were to live off it), or finding it elsewhere, and elsewhere meant the West. Thus there was the first wave of emigration, in order to search for land beyond the Appalachians. In the North there was the populating of the States of New York, Pennsylvania and Ohio, extending up to the most northerly of the lakes; in the centre, Tennessee and Kentucky; in the South the movement was towards the Gulf, across what would become the States of Mississippi and Alabama, and as far as ex-French Louisiana.
An important consequence of agricultural development west of the Appalachians was a big increase in cereal production, partly destined, insofar as a surplus existed, for the market. But the markets were now at some distance from the new zones of production, and the need arose to equip the country with an adequate infrastructure. This was achieved in the first half of the 1800s, as we have seen, even if on the eve of the Civil War the greater part of transportation down the valleys of the Ohio to the Atlantic ports (mainly New York and Baltimore) was still carried by river down the Mississippi to New Orleans, and then by sea across the Atlantic. In the South the development of transportation was very inferior with respect to the North, and for this reason the farmers in the South were a lot poorer than their counterparts in the North; a factor which also gave rise to the ‘poor whites’ of the South.
Developments in transport also had the consequence of breaking down production in the home due to the ever lower prices of industrial goods. Barter on the other hand became increasingly difficult, and more and more farmers were forced to produce for the market. Farming was becoming mechanised, but machines cost money. Those who didn’t manage to increase their productivity to certain levels had to sell their land and move into commerce or, in many cases, become wage labourers. The most immediate effect of all this was the growth of the cities.
Between 1820 and 1860 the country’s population would increase by 230%, from under 10 million to just over 30 million, an average increase of 2.8% per annum. At the end of this period less than one American in five lived in urban centres of over 8,000 inhabitants. But the growth of cities was tumultuous, if one considers that their populations increased by 800%. But immigrants, who are generally linked to urbanisation, played a smaller role than one might in this demographic explosion. In 1860 there were only around 4 million, and considerably more than half of these had arrived between 1846 and 1857, when the urban boom was drawing to a close, and only half of them settled in the city. In actual fact the urbanisation of this period derived mostly from the natural increase of the city’s inhabitants and from internal migrations. The drift between town and country therefore maintained a kind of equilibrium until the 1850s. This was not the case with immigration, with successive waves arriving from the United Kingdom, Ireland and Germany. The main increase occurred in 1846-7, when the number of immigrants rose from 82,000 to more than 142,000. From then on there was a regular increase until a pre-war maximum of 267,000 individuals was reached in 1851. From then until 1858, despite slowing up slightly, the rate of immigration never fell below the 1847 figure; and in just those 11 years around 2 million Europeans would disembark onto American shores. In 1860 emigrants would make up a third of the inhabitants of the 40 main urban centres.
But far from constituting a problem, the immigrants found themselves in a situation which could absorb their labour power: the development of the industrial revolution. Before the immigration explosion at the end of the ‘40s, industrial and craft activities were the prerogative of white males who had been born in the country, as much in the North as in the South. Working women were to be found mainly in domestic service or in non-specialised activities within the textile industry, as well as in a few other unskilled trades. The relatively few immigrants were divided into English and German skilled workers on the one hand, and unskilled Irish workers on the other.
The black freemen were concentrated in the ports, sometimes it seems in the skilled trades as well, and in the building trades. In the South, of course, slaves considerably outnumbered black freemen although there were some who worked as craftsmen and artisans in the cities. The Skilled labour of the slaves was essential in the tobacco industry and in the steelworks of Virginia, but they were nevertheless employed in far greater numbers in what was then contemptuously referred to as “nigger work”; in activities considered menial, dirty or unpleasant, or at least beneath the “dignity” of the white man, such as that of the barber and the butcher. Most commonly, slaves were assigned to unskilled activities of various kinds. In any case, what was “nigger work” to some might be much sought after by others, and just as the native white workers sought to exclude slaves from skilled work, so did immigrants try to exclude black freemen from unskilled work, even resorting to violence.
The heavy influx of immigrants in the middle of the century
the ethnic composition and occupational composition of the labour force
in both halves of the country. White natives held on to the better
so-called “respectable” trades. Women and immigrants found jobs in
the declining semi-skilled trades, and the Irish replaced ‘the Yankees’
in the textile industry. The Blacks and the Irish divided up the
work. What had been an ethnically homogeneous working class in the
had become a heterogeneous and polyglot mass.
Early Industrial Development
At the time of the War of Independence, only very few productive activities, such as those in the iron and steel and shipbuilding industries, were conducted on a large scale. Most manufacturing activities, such as in the woollen industry and indeed in the iron and steel industry, were held back by competition from England where there was an abundance of low cost skilled labour and appropriate infrastructures in place. Since, because of the war, trade had been paralysed, the transport infrastructure destroyed and many of the most flourishing districts laid waste, the recovery and economic reconstruction would be slow and based on agricultural activities to begin with.
On the other hand, the rapid growth in the population, which rose from 4 to 31 million between 1790 and 1860, along with improvements in transportation would enormously expand the domestic market for manufactures, and despite significant competition from English exporters it would offer significant opportunities to American entrepreneurs. In an initial phase these ventures would combine to profit from domestic labour, as in the case of shoemaking, where the capitalist was able to reduce costs and sell his shoes at low prices over a considerable area.
But as the new century dawned, it would be the textile industry, above all in New England, which first developed along the lines of the English factories, through its use of machinery powered by steam and by water. Whilst gradually bringing about the disappearance of domestic labour, it was the first industry to bring large numbers of workers together in genuine factories. The cotton industry would really start to take off in the latter years of the 18th Century in Rhode Island, and in Massachusetts to the North of Boston. The two areas were different in certain key respects; to the North of Boston the industry relied on the labour of women who came from the farms of New England. Normally they were young unmarried women who would often spend only a very brief part of their lives earning a wage, which would usually go towards funding their wedding day. They were accommodated in model lodging houses built by the Company and were subject to rigorous rules of conduct. This was the famous “Lowell System”, admired by foreign visitors for the intellectual, cultural and sanitary regime it bestowed on its workers. In Rhode Island, on the other hand, they adopted a system resembling the English one, of employing entire families, including children, without any regard for the quality of their family life. These two areas constituted the greater part of the cotton industry, although there were some factories in New Jersey and around Philadelphia as well. In the same areas a woollen industry, also mechanised, developed too, although this would develop much more slowly. We should mention, in any case, that production of cotton and woollen textiles in the home remained relatively high until the middle of the 19th Century.
Other industries which developed were those of sugar-cane processing, metallurgy, the making of metal articles and tools, and the production of other objects without any particular craft tradition. In other sectors, the growth of the factory system occurred much later on in the period currently under consideration, that is, between the end of the War of Independence and the outbreak of the Civil war.
The nascent American manufactory had the advantage of setting out from a situation in which production was highly standardised, allowing complex assemblages to be constructed using interchangeable components. Early progress in this field was made in the production of small arms, but by the middle of the century the technique was being applied to clocks, locks, agricultural machinery and equipment, and sewing machines. Many of these products, which could now be assembled by unskilled workers, were beginning to replace the imported versions of the same goods, which required highly specialised labour. At the 1851 Great Exhibition in London, American industry was in a position to exhibit a number of devices and procedures which were technically in advance of the English; and European engineers suddenly realised there was something to be learned from their trans-Atlantic rivals. And this was all the more remarkable considering the small scale of American industry at the time, both compared to England and taking into account the size of the country.
In 1860, if in New England only 1 citizen in 8 was employed in some kind of manufacturing activity (not just in factory work), elsewhere the figure was even lower: 1 in 15 in the middle states, 1 in 48 in the West, and 1 in 82 in the South. Thus one can safely say that up until the time of the Civil War the United States of America was predominantly an agricultural country.
In the major towns of Massachusetts up until the 1830s and 1840s, most of the industrial labour was therefore supplied by women. We have seen how in the South, in the iron and steel industries, slaves were also used as well, but since these had to be acquired or hired from their proprietors, they weren’t ever as competitive as the better organised “free” labour in the North.
Apart from the iron and steel industry in Richmond, most factory workers weren’t a part of the urban proletariat as the new industries were situated in small country towns, where it was easier to harness water power. But even in these towns the extent of factory production was still far from the levels that would be achieved after the Civil War. Indeed in 1860 the labour power employed in industry, in two important urban centres like Lowell (Mass.) and Lynn, was still no more than a third and a half of the total, respectively, and they were special cases. In none of the other fifteen most important cities did the level of proletarian concentration in big industry even approach that. If in Newark (New Jersey) it was as high as 25%, in cities like New York and St. Louis it was less than 10%. The era of the industrial city hadn’t yet begun.
The greater part of production still consisted of handmade goods, and was produced in small and medium sized workshops. Within this stratum of small producers, relations of labour had barely changed over the past centuries, and as in the European countries which had still not been revolutionized by big industry, there was the proprietor of the workshop (the master), the skilled worker (the journeyman) and the apprentice.
The artisan was equipped with a set of typical tools of his craft, enabling him to make the finished product. The masters were proprietors who did everything, from maintaining relations with their customers and ordering raw materials, to keeping the accounts. In addition they planned the work, supervised their young apprentices, and worked alongside their subordinates. For the most part they were ex skilled workers, expert workers formerly paid by the day or on a piece work basis, depending on the craft. These journeymen in their turn had been apprentices, who had started in the trade when still adolescents and spent from three to seven years learning the secrets of the craft under the tutelage of their master. The apprentice didn’t receive a salary, just food and lodging and little else; in general his family provided the rest. They could be punished by the master when they were insubordinate, although they could seek redress by appealing to the authorities. Between the age of 18 and 21, an apprentice was promoted to journeyman. He would receive a suit of clothes and a set of tools of the craft as recognition of his formal admission into the craft brotherhood. For the first time he had a right to a salary, even if often not very much, and not necessarily guaranteed in the long term. In the most fortunate cases journeymen were aspiring masters, who worked with alacrity to put aside money so they could set up on their own, even if it involved taking over their former boss’s concern.
The rhythms of work resembled those in rural activities. When orders were irregular, the periods of inactivity were often spent discussing a whole range of subjects. Pre-industrial revolution artisans were relatively well-read and with a rich intellectual life.
The industrial revolution in North America was preceded by a period between the 1820s and 1840s in which the craft workshop underwent major changes. The first important transformation was an increase in the number of people employed in the workshop, rising to a few dozen or so and threatening the traditional equilibrium between the three roles just described. The consequence was richer proprietors, less and less hope for the journeymen of setting up on their own (we can date the precocious death of the “American Dream” to this period, with its subsequent existence a mere mirage for the overwhelming majority of proletarians) and apprentices seen more and more as low cost labour rather than as future artisans. There then followed the transformation of the mode of working typical of the factory, whether through the introduction of machinery, or by sub-dividing the working process into a number of simple phases, allowing non-specialised, and therefore cheaper and easily replaceable, labour to be taken on such as women and children. Finally, there was a reduction in the typology of products. All these changes had as their consequence an increase in production and a lowering of the costs of production. These changes also dealt a blow to domestic production, which even if it was less costly, and symbolic of the most virulent capitalist exploitation, had nevertheless become less productive that the factory.
It is worth recalling that the initial phase of this process, that is, up to the 1850s, was extremely slow; and same was the case as regards the mechanisation of agriculture. The process, furthermore, happened in a very selective way, depending on the sector: more slowly among the blacksmiths, bakers and butchers, more quickly among the tailors, shoemakers and carpenters.
In any case, up until the outbreak of the war there were still far more craft workshops than capitalist enterprises. The issue, of course, presents itself in a very different way if the total mass of products is taken into account.
Despite everything, a lot had changed. The pre-industrial world of
peasant farmers and independent craftsmen was receding into a past that
could never return. The accelerating commercial revolution pushed
of exchange based on barter to the margins of the economy, and loosened
the bonds that had tied generations of Americans to the land. The first
stirrings of the industrial revolution created a new stratum of
who were no longer master craftsmen but entrepreneurs, determined to
money in an economy of savage and no holds barred competition. Even a
class was coming into being, and even if it wasn’t yet an army of out
and out factory slaves, its component elements were becoming
dependent on wages alone, whilst gradually losing any craft ability and
becoming subjected to a rigid pace of work and set hours. It was a
whose beginnings may be traced back to the 1820s, to that period later
known as the ‘Era of Good Feelings’. The happy age for the small, free
American producer would become an American myth.
Mechanics’ and artisans’ associations had emerged in the last quarter of the 18th Century, often as clandestine committees formed in the period of the War of Independence, or as friendly societies. The oldest was the General Society of Mechanics and Tradesmen of New York dating back to 1785. These groups reflected the consciousness of a community traditionally split across innumerable crafts, but one becoming increasingly aware of its common interests. Amongst their aims were the following: applying pressure to politicians, such as when tariffs were being set, and decisions being taken about public works; keeping members informed in writing, or by word of mouth, about markets and what commodities were around; putting unemployed members in contact with proprietors who needed manpower. The wealthier associations built their own meeting houses in the town centres, and participated with great pomp and ceremony in all the civic celebrations and grand occasions.
These institutions also tended to regulate the internal life of the craft, establishing rates and charges, salaries and codes of conduct. In Boston, for example, anyone who employed apprentices who were too young was liable to pay a fine of $10, whereas anyone who convinced an apprentice to abandon another workshop for his own had to stump up $30.
Initially the associations which lasted longest were the typographers’ and shoe makers’ societies. Other ones, although they didn’t last as long, seemed ever ready to re-emerge at the first opportunity. Their mortality was principally determined by the efforts of the bosses to have the members of these organisations condemned as ‘conspirators’, and by the preparedness of the courts to go along with them. The original scope of the craft societies was above all to maintain, rather than improve, wages and working conditions, keeping them at the point where they would still undercut other workers in order to safeguard their own members’ interests; clearly an aristocratic attitude, which would be slow to disappear from the American workers’ movement.
The revolution in the market which took place at the beginning of the 1800s – with many workshop proprietors becoming small entrepreneurs and an increase in the average number of people in each workshop, more in certain sectors than in others to begin with – also had repercussions on these associations, which would start to diversify, with some of them supporting the proprietor’s line and others, in their tone and composition, taking a more worker orientated line. Only the latter type would focus on the defence of wage levels and working conditions, rather than on upholding a generic solidarity. What is more, the former organisations began to put up their subscriptions to levels which the day labourers couldn’t afford. Above all, the workers began to realise that fellowship of the old type was no longer enough: preventing the proprietors from reducing them to poverty in the first place was as important as mutual support to deal with such poverty after the event, once the workers’ families had already been affected.
But even if this process, as always in such cases, differed from one trade to another, from one city to another and involved U-turns and brusque accelerations, the general outcome may be summed up in the experience of the New York Typographical Society. Whereas in 1809 it had approved a resolution which stated “ between employers and employed there are mutual interests”, eight years later it discovered that an employer member had been conspiring with other employers to break the union. After expelling him, the society amended their constitution and excluded employers because “Experience teaches us that the actions of men are influenced almost wholly by their interests, and that it is almost impossible that a society can be regulated and useful where its members are actuated by opposite motives and separate interests. This society is a society of journeymen printers, and as the interests of the journeymen are separate and in some respects opposite to that of the employers, we deem it improper that they should have any voice or influence in our deliberation. (…) That when any member of this society shall become an employing printer he should be considered without the limits of the Society and not to vote on any question, or pay any dues in the same.”
The craft regulations and customs were steadily eroded by the new economic environment and by the end of the 1820s we can say they were finally defunct.
Give the absence of the guilds and the relatively lack of apprentices, the first trade union organisations had an ‘aristocratic’ character, and were composed solely of skilled workers. They were merely temporary associations set up to achieve immediate ends: in 1778 the New York typographers joined together to demand a three dollar wage increase, and since their demands were met, they saw no reason to continue meeting. The first strike dates back to 1786, six years before the foundation of the first permanent trade union, and on that occasion the strikers, the Philadelphia typographers, also won. In the years that followed there were a number of other struggles, and the bourgeoisie was starting to get frightened. With the workers showing increasing determination and effectiveness the proprietors were not slow to respond, applying increasingly decisive strategies in proportion to the means at their disposal. To the workers it therefore soon became apparent that mounting a successful struggle required a permanent organisation, with regular meetings, a strike fund, and a plan of action to prepare for future battles.
The transition to a trade union structure was therefore fiercely opposed by the proprietors, who were often able to obtain court orders prohibiting union activity. But even if this approach was not formally repudiated until 1842, it never really prevented struggles from breaking out in any case, although it did put obstacles in their way and served as a means of carrying out vendettas against smaller, less well-organised proletarian organisations. As a matter of fact, new laws regarding the trade unions were never enacted. English Common Law was used instead, which defined conspiracy as when two or more people came together to damage the interests of a third, or that of the general public. After the first verdicts in the courts had been passed, these would then be used as precedents in subsequent cases. In order to control the working class, the republic, born out of a difficult and bloody struggle (fought above all by workers and peasants as we have seen) for liberty, equality and the “pursuit of happiness”, would casually appeal to a law which had been passed in hated England in 1349, the Statute of Labourers, which was enacted, in the interests of the employers, to force workers who had survived the Black Death to work for wages set by law.
But it is not until 1792 that we have what may be considered the first permanent trade union, the Philadelphia shoemakers’ organisation, which would battle on, against all the odds, until 1806. Their example was quickly followed by analogous initiatives in Boston, Philadelphia and Providence, and then by many others, to a degree, in every other city. Nevertheless, despite the advent of permanent trade unions, many organisations would disband after a strike, whether they were successful or not.
The two opposing classes meanwhile started to define themselves and clarify their respective identities from a theoretical point of view, with the rising bourgeoisie certainly much more prolific in this respect. Adam Smith was one of the principal sources of American bourgeois ideology during this period, an ideology which would eventually develop into the postulate of free labor, which even now, reduced to an empty illusion, gets between our feet today. The ideal society, supposedly, is one in which there is a minimum of political interference in the market and in production, the dynamics of which are supposed to naturally favour the attainment of economic independence on the part of the farmers and the workers, if, that is, they are sufficiently diligent and industrious. In short, it is the theory of ‘the self-made man’: everyone has the possibility of making money (how is irrelevant), after all, where there’s a will there’s a way… What is more, Free Labor is considered the founding ideology of the Republican Party, which would form as such in the mid 1850s.
Another important tendency was reformed Protestantism, which spread from the valleys of the North across the entire Union between 1790 and the 1850s. Evangelical fervour, which produced a plethora of sects which still infest the country today, claimed to exert a moralising influence, but of the sort that didn’t conflict with the ambitions of the nascent bourgeoisie, and with the requirement of efficiently run workshops.
It was phenomenon – which we won’t go into here – which had repercussions on the two national parties: the Whigs (predecessors of the Republicans) and the Democrats. Already the two parties displayed those marked differences which would characterise them in the years to come. The Whigs supported intervention from central government, to establish protective tariffs, construct infrastructures and create an efficient national banking system. Obviously they had the support of the financial and manufacturing bourgeoisie, and of the workers’ aristocracy, which welcomed the development of public education and welfare provision. The Democrats, on the other hand, detested federal intervention and were highly suspicious of it. They drew their support from the Southern planters, but were also supported by the commercial bourgeoisie of the North, by professionals, and by the poorest proletarians and immigrants. In response to the workers’ struggles of the 1830s they ended up making demands which were of interest to proletarians, such as the abolition of the militias and imprisonment for debt, but never demands that significantly favoured the working class, such as a reduction in working hours or a minimum wage.
On the contrary, both parties, when faced with the rise of the first
trade unions, sought refuge in the theory of free labor, which
into trade union terms meant every individual was equivalent to every
bosses included. A theory, incidentally, which at the time had been
with open arms by every country in Europe, and was being used to
the trade unions by law. To the Whigs, the trade unions were
to the Democrats, they were ‘monopolists’ – as were the big
true, but ‘much more dangerous’. The law of supply and demand,
to bourgeoisie theoreticians and politicians, set the level of wages
it was considered inviolable. The same went for the sacred doctrine of
‘freedom of contract’, which gave every man the right to work for as
many hours a day ‘as he chose’. The transatlantic bourgeoisie, in
workers united in trade unions as the type of association which wanted
to bend the poor entrepreneur, alone against all, to its will, was no
from its European counterpart.
The Situation of the Working Class
The dream of the Journeyman, of the skilled worker, was to live a dignified, not needlessly extravagant, life, whose professional course ran from apprentice to artisan; a life crowned with the acquisition of a house for his family, by participation in professional and civic organisations, and with the setting aside of a sufficient sum to ensure a comfortable old age. But this not unreasonable objective was not always achievable; not through any lack of industriousness on the part of the worker, but because the economic scene was becoming ever more erratic with the development of the capitalist economy. At the beginning of the 1820s shoemakers and tailors were earning between $6.00 and $8.00 per week, that is, between $2.00 and $4.00 less than the typesetters, carpenters and other craftsmen in the so-called ‘respectable’ trades. The periodic recessions in the next thirty years, the worst of them in the 1830s, had the effect of lowering wages across the board. In the 1850s there was a revival: in 1860 average wages were a third higher than in 1850, and almost back to pre-crisis levels. But there had been created a major differentiation between the different sectors, and wide wage differentials.
In the cities of the Midwest, which were developing at an unusual pace thanks to the lack of labour power keeping wages high, things were better, at least to begin with. In 1820, almost a third of the workers in Cincinnati owned their own homes, possibly the highest percentage in the country. But by 1838 the situation had changed, and the rate had fallen to 6%, falling to 5% by 1850. In the same period the wealth of the highest strata of the population went up from 70% in 1838 to 80% in 1860.
Other data also gives us an idea of the state of the working class at this historic juncture: at the beginning of the period an average family needed around $330 per annum to avoid poverty, a sum that only unskilled workers lacking work for long periods found difficult to scrape together. Thirty years later, the required sum had risen to $500 ($600 in New York), whilst wages, in the best of cases, remained unchanged. The proletarian masses in the cities were struggling to survive; very different from the dignified life to which the journeymen had aspired!
Outside the big cities, and sometimes in them, those who were able to kept a vegetable plot, hunted or fished. Others raised pigs or even cattle if possible. If they had a spare room they rented it out to a single worker, although extremely cramped conditions were the norm in the big cities. In such circumstances it was therefore not surprising that every resource was exploited, including the labour of children and adolescents; labour which, like domestic labour, was very poorly remunerated, but added to other income could make the difference between pauperism and a dignified poverty.
In the South the situation of white proletarians was invariably worse. But at the bottom of the social scale, living and working in the worst conditions of all, were the free black workers. For they, as well as having to put up with the usual exploitation by the bourgeoisie, were ostracised by white workers, who thought forcing black workers out of the productive process was the best way of getting more work for themselves. Often the workers and the proprietors in the skilled trades used their organisations to promote legislation which eliminated black competition, forcing blacks into ever more unpleasant jobs, even when they had a trade and work experience. But once having being forced into unskilled and usually temporary work, as dock hands or builder’s labourer, they still wouldn’t be left in peace: first white workers, who had lost their jobs during the depression at the beginning of the 1840s, then starving immigrants, who flocked into the cities a few years later, would spark off racially motivated revolts and engage in various forms of intimidation in the cities of both North and South. For instance, bitter struggles would take place in Philadelphia in 1841 and 1849, when even the contractors would be intimidated by the mob, composed mainly of Irishmen, until blacks were more or less banned from working in the docks. The same occurred in the South: in New Orleans the Irish would arrive and replace black people in one of their most traditional occupations, as restaurant waiters.
The free black population certainly didn’t always suffer in silence,
but their counter-offensives were nevertheless bound to fail: as
to slaves, who could count on the influence and protection of their
there was little they could expect from their employers. In the 1850s,
thanks to the economic boom and to the antagonism which was building up
between the North and the South, the situation slightly improved in the
North, and blacks would begin to reappear in the ports and on the
sites, but the majority would still remained stuck in the most menial
a situation which, a century and a half later, hasn’t really changed
that much, although the only laws governing it now are the ineradicable
laws of capitalist economy.
The capitalist system of production, based upon the exploitation of the working class, is increasingly in crisis – it is driving countless millions across the world into increasing poverty, unemployment and despair. The consequences of capitalist over-production, in an attempt to maximise profits, places the burden of the crisis upon the world-wide working class, as well as increasingly wrecking the environment of the planet.
The emancipation of the working class (the ending of
is not only needed for the sake of the interests of the workers, but
also usher in a higher form of production which meets the needs of all
of humanity (defined by Marxism as Communism). Production for
not profit is the historical solution to all the problems of
society. The Historical Need for Communism is even higher on the
agenda than ever before!
Thank-you very much for coming today, to hear our presentation on The Historical Need for Communism.
We are the International Communist Party, and this is the first time we have held a public meeting in England. We are very pleased to welcome some Italian comrades, who have made a special journey to be here today, and they will also take questions at the end of the presentation.
So who are we? We represent the continuity of Marxism, and the need for economic organisation of the working class. Very briefly, what distinguishes us against all those who make similar claims is the line running from Marx to Lenin, to the Third International, and onward to the founding of the Communist Party of Italy at Livorno in 1921; and from there through the struggle of the Italian Communist Left against the degeneration in Moscow – forever associated with the name of Stalin and the poisonous notion of ‘Socialism in One Country’ – and against the popular fronts and coalitions of resistance groups. Our task is to restore the revolutionary doctrine and the party organisation, in contact with the working class, outside the realm of personalist politics and electoral manoeuvrings.
In a nutshell, we represent the views of the Communist Left, of intransigently revolutionary communism.
A presentation on The Historical Need for Communism was then given [see below].
We then referred to the article “Outside and Against the Existing Trade Unions”, published by the Party in 1979. Unfortunately, due to time constraints, we didn’t have time to present and fully comment on the article which, in short, sums up the lessons learnt from the formation of the new "base-trade unions" in Italy, still a component of the Italian labour movement today. These breakaway unions appeared due to the failure of the "official" unions, which are now firmly integrated into the State like the old fascist unions, and which are entirely impenetrable as far as communist organisation is concerned. We view these new "base" (or rank-and-file) unions as an expression of the need for a class trade union, necessary in order to fight the proletariat’s economic battles on a class basis, that is, at the expense of the "national" economy and the requirements of the capitalist class.
Although we didn’t have time to present the article, we distributed copies to those interested, and highlighted that, even as we spoke, thousands of members of the "base" unions had taken to the streets in Italy to declare a 24 hour General Strike. The slogan "Outside and Against the [State-controlled, patriotic] Trade unions" is therefore not something plucked out of thin air, but a response to the reality of what is unfolding before our eyes.
The meeting was then opened to questions, which became a series of contributions from those attending the meeting.
Experiences of the workers in Britain and Denmark were highlighted – but the fact that the workers seem to be quiet at the moment doesn’t mean that they will continue to be subservient in the future.
A worker who attended the meeting was clearly moved by the outlining of a clear and undiluted communist message. He expressed the hope that he would hear more of the same, and noted the difference between what we were saying and the reformist positions expounded by many so-called left-wing groups. After the meeting was over, this comrade told us about his experiences as a dockworker and the appalling working conditions, and how, entirely spontaneously, he had come to lead an unofficial dock strike and was later victimised as a result. His story, of unofficial action in the face of the stalling of the official unions, was a heartening confirmation of the potential for revolt that always exists just below the surface in any working class struggle.
Other questions posed by the attendees were: do you not think the State is getting increasingly involved in the confrontation between working class and bosses? Do you not believe that all the organisations ‘influenced by’ the Communist Left should get together and meet, with a view to uniting their forces?
It was difficult to give a short answer to either of these questions but, at any rate, our comrade replied to the first one by recalling that the State has always interfered in working class/capitalist confrontations, and always, of course, on the side of capitalists as it is the State of capitalism, not the State of all classes as they would have us believe. There may be times when its presence is not so obvious because the situation does not require it, as in the second post war period (at least in the Western democracies) but history has proved that it is always there, in all countries, ready to compensate for any shortcomings in control over the proletariat; and examples of this were given.
The second question is an old one, and goes back to the time of the separation of our party from the "Internationalists", who had failed to understand the lessons of the Left and of the counter-revolution. The rebirth, on firm and clear foundations, of the Party in 1952, after the period of elation which followed World War II, meant a neat and definitive separation from the "Internationalists" and from their positions. To talk now of mergers or joint actions is therefore deprived of any historical significance. But, of course, any revolutionary who sees in the International Communist Party the party of the revolution can join on an individual basis.
The final issue raised at the meeting was by a member of the Anti-Cuts campaigns, who talked about her experiences and the impact of the Government cuts on jobs and services, which directly and indirectly affect millions of people. It was recognised that the working class is being affected by the cuts and it was predicted that there will be more cuts to come. Affecting principally the public sector workers, the impact is being felt through unemployment, reduced job security, lower pay and reduced pension rights. In a word, the conditions of the public sector workers – historically better organised – are under attack, and the government is seeking to reduce it to the condition of the workers in the so-called "third sector", that is, mainly charity providers, to whom, with their isolated and often entirely unorganised workforce, a lot of public sector work is now being farmed out, often on very short-term contracts.
One of the speakers then went on to point out that there are millions on State benefits who are affected by the attacks upon their payments. Besides those affected by “sanctions” (having benefits stopped if they are not willing to take any job offered) there are the even worse experiences of those who had had their Sickness Benefits removed, after failing to meet the new, far stricter criteria. The procedure for forcing people onto Jobseekers Allowance (being available for work) is a particularly appalling and degrading process, and increasingly mirrors the attacks against those in work.
A Summing Up: The speaker took the opportunity to point out that the bureaucratisation and assimilation of the unions into the State, and into the service of the employers, is a process that has been going on since the 1860s. During the 1860s (the period of the First International, and the formation of the TUC) the craft union leaders preferred to be in the pay of the capitalists, to the point where Marx caustically commented that it was an honour not to be called an English trade union leader.
The 1880’s saw the emergence of the new unions, the organisation of semi-skilled and unskilled workers (the Great Dockers Strike, the Gasworkers, etc), these too would be drawn into the same processes of bureaucratisation that the skilled unions had gone through earlier. Prior to and during the First World War, the expression of revolt and organisation of the rank-and-file workers against the bureaucratisation of the new unions took the form of unofficial movements and shop stewards committees.
Since the 1920s onwards we have seen a purging of unofficial movements, and the incorporation of the shop stewards movement into the trade union structures.
How workers in Great Britain will organise in the face of current challenges, with the incorporation of the unions into the capitalist machinery becoming ever more evident, remains to be seen. We believe, however, that the formation of breakaway unions, as a matter of necessity in Italy, is the way things will also go in England, leading eventually to a class union; that is, a union that is no longer beset by illusions that workers and capitalists can "work things out", but one that understands that these two classes can never be anything other than... implacable enemies.
The meeting was then closed.
It is clear to all that we are currently going through a deepening crisis. It is steadily getting worse, and global capitalism is continuing on its downward slope, spiralling towards the inevitable collapse of this inhumane and now historically superfluous system of production.
But the true causes of this crisis do not lie in the financial sector but in the underlying laws of capitalism itself, in production, where the workers’ labour creates surplus value for the capitalist: overproduction and the tendency of the rate of profit to fall are the two unstoppable processes of the capitalist economy which make it more and more difficult for Capital to sell the enormous mass of often useless commodities that it produces. The bursting of the massive speculative bubble in the financial sphere is in fact only the consequence of the crisis: Capital’s obsession with playing the financial markets is part of its search for a remedy for its problems; a quick fix to try to make everything better. But no amount of financial regulation can resolve the causes of the crisis and save capitalism from catastrophe.
The crisis of capitalism is inevitable and irresolvable. All the bourgeoisie can do is to try and stop it getting worse. And that is what it has been trying to do since the crisis first made its appearance in the 1970s, when the thirty years of strong growth after the Second World War finally ground to a halt. In England it was the decade of the ‘Winter of Discontent’ and the Miners Strike.
The way capitalism has tried to head off the inevitable crash over the last 35 years has been by applying three main levers: extension of the global market; increasing debt; and increasing the exploitation of the working class.
The increase of the public debt, which began precisely in 1973-4, and the extension of the global market, which had gone about as far as it could by the mid 1980s, would allow the bourgeoisie to apply the third lever – increasing the exploitation of the working class – in a more careful and graduated way.
In Great Britain, since 1979, more and more legal restrictions on industrial action have been accumulating, with the first phase of the legislative attacks summed up in the Trade Union and Labour Relations (Consolidation) Act in 1992. These legal restrictions have severely curtailed the capacity of workers to engage in unofficial struggles to defend wages and standard of living. The curtailment of ‘Secondary’ industrial action and the putting in place of restrictions on picketing; making industrial action illegal without the statutorily required ballot, and thereby restricting lightning strikes and unofficial action etc, etc, mean that workers are now easily isolated in their particular sectors, and the authorities have adequate time to prepare for, and undermine the effect of, any industrial action. Meanwhile it has been made easier and easier to hire on short-term contracts, to alter already existing contracts, to hire and fire, and so on and so forth, until now we have workers being paid... nothing at all with the advent of the ethos of voluntary labour, which is particularly affecting the social sector.
All these cuts and attacks have been effectively signed off by both the employers and the union bosses – for by their inaction and lack of opposition the union bosses have effectively endorsed these changes. Always they are justified in the same way: “Better take the hit today to be better off tomorrow”. It is nevertheless clear that the opposite is the case: each new sacrifice is never the last, but just an intermediate stage on the way to even greater sacrifices. Just accepting cut-backs in wages, and working conditions, only encourages the bosses to make even more drastic attacks.
In this way capitalism has diluted the crisis and given itself a bit of respite, but it hasn’t been able to halt the crisis. Four years ago it finally exploded, and it won’t go away until the entire capitalist economic system, now inextricably bound up in an indissoluble global network, collapses.
Now that the extension of the global market is more or less complete, and the more that private and public debt becomes ever more unsustainable, all the bourgeoisie can now do is step up its exploitation of the working class. As we are sure most of those here know only too well, the attack on the working class has now become a clear and frontal attack.
The old notion that the standard of living achieved by the workers in a handful of dominant countries would eventually be achieved by the working class throughout the world is now exposed as a myth. Our celebrated high standard of living in the West is obviously just a passing phase. Over the last twenty years workers in the West have seen their standard of living deteriorate at an ever increasing rate, such that now it isn’t much better than workers in the rest of the world. The crisis is the proof of what revolutionary Marxism has said from the start, when it stated in the Communist Manifesto that the laws of capitalism entail increasing poverty for the working class.
Faced with the unstoppable advance of the crisis, the bourgeoisie, through its newspapers and television networks, bombards the workers with the slogan: “capitalism or death”! In a mainly subliminal way, and often successfully, the ruling class brainwashes the workers into believing that there is no alternative, and that their very existence depends on capitalism’s survival, as a socially neutral ‘provider of jobs’.
All the bourgeois political parties, whether ‘right’ or ‘left’, ‘moderate’ or ‘radical’, repeat the refrain: “Save the Country!”; “We must all work together to ensure a return to growth!”
But these are not working class objectives they are only achievable at the cost of its total submission, at the cost of its total sacrifice – today in peace, tomorrow in war – to the requirements of Capital and the class that owns it all and manages it all: the bourgeoisie.
But the workers needn’t go along with all this. It shouldn’t be trying to “save the country” – i.e. global capitalism in each country – but defending themselves against the attacks of this mode of production which wants to crush them into submission to ensure its own survival.
That means, at all times, mounting an intransigent defence of living standards, regardless of the interests of the national economy. But that will only be possible by mounting genuine strikes, which need to be as broad and unrestricted by time limits as possible; strikes designed, in the teeth of all the swathes of anti-union legislation, to bring “the country”, i.e. Capital, to its knees and force the bourgeoisie to stop its repeated attacks.
This objective can only be carried out by rebuilding a workers’ organisation genuinely committed to struggle: a real workers economic union prepared to fight for its class; a class union. The bourgeoisie is only able to successfully mount its attacks against the workers because the main trade unions are totally integrated into the State apparatus; a process which is bolstered by their unholy pact with the Labour Party; a system in which particularly obliging trade union leaders can even expect to sleep their way through a lucrative retirement in the House of Lords!
The idea that the famous ‘special relationship’ between the trade unions and Labour Party could be of any benefit to the working class has been well and truly exposed as a lie after the Labour Party’s three terms in power, headed by a prime minister who was a lawyer specialising in employment legislation (and his wife for that matter). ‘Victory!’ their Trotskyist cheerleaders proclaimed. But was the anti-union legislation of the so-called Thatcher years thrown out? Not a bit of it! The legislation – now shored up by the Labour Party – is still, all of it, firmly in place.
Why then did the trade union leaders not immediately threaten to remove all funding to the Labour Party? Because as far as they were concerned – for what else can we deduce from their resounding silence, and lack of leadership in campaigning against this legislation – the legislation actually rather suited them, for it served as a convenient excuse to do… nothing. They haven’t even campaigned to have the clauses in the employment legislation removed which threaten to sequester their funds if they illegally launch industrial action! Why? Because it is the most wonderful excuse NOT to break the law, and to prove how law-abiding, and obedient, they are!
The fact is the official ‘Union Jack’ trade union leaders continue to link the fate of the working class to that of the country, i.e. of capitalism, and the only campaigns they generally mount are symbolic one-day processions which invariably lead expectant workers along a carefully policed route to a depressing and disappointing rally, where a miscellaneous selection of Labour Party ‘luminaries’ guiltily assure them that voting for Labour is the only solution; or that when Labour is in power, the necessary sacrifices the workers will be asked to make will be less severe than under the Tories! No wonder less and less workers bother to vote; although this abstinence will have to eventually translate from negative rejection of al the pro-capitalism parties, to positive support of their own revolutionary party!
Although we cannot rule out that some left-leaning unions might, and it’s a big might, break entirely with the Labour Party and play their part in the formation of a class union, we believe that a genuine class union will almost certainly arise outside and against the existing state-registered trade unions. Certainly in Italy this is the conclusion our party arrived at a number of years ago, when a mass desertion from the official unions occurred and a number of new rank-and-file unions formed outside the big confederated unions (and please take a copy of the article ‘Outside and Against the Today’s Trade Unions’, which we translated from our Italian press to accompany this presentation).
In Italy, faced with many of these new organisations calling separate strikes, we declared that the rebirth of the working class trade union must set out from the building of a united front from below of all workers, with the aim of organising an all-out general strike in reply to the attacks of the bourgeoisie.
In the British isles, where the unions, with a few honourable exceptions, content themselves with merely symbolic action, or at best one day strikes, designed to head off struggle rather than co-ordinate it and make it effective, the workers will also have to build a class union to express their demands. This is what the most combative and militant workers need to fight for, and it will not be achieved by calls to ‘democratise’ the unions.
Class unity, the reconstruction of the class union, will need to be backed up with genuine class based demands. The “debt question”; the issue of whether or not to remain in the European Union; the nationalisation of the banks and enterprises, all these are political and economic options of concern to the bourgeoisie and are irrelevant to workers. Whether or not the bourgeoisie pays its debts, whether or not it stays in the European Union, whether or not its banks or enterprises are put under the control of its State, workers’ conditions will deteriorate anyway unless they are able to organise a general struggle in defence of their fundamental interest: wages.
The struggle in defence of the combined salary of the
class is the fulcrum of the defensive economic struggle. The general
movement must once again put forward the historical demands of the
- Significant wage rises, more in the worse paid sectors;
- Pay for workers who lose their jobs linked to the cost of living;
- Reduction of working hours but with wages remaining the same;
- No inequality of working conditions on grounds of sex, nationality or race;
- Rights of citizenship for immigrant workers and their families.
There is no bourgeois economic policy which can resolve the crisis. The only solution capitalism has available to it is war: in order to destroy surplus commodities, amongst which the ‘labour-power’ commodity, to subjugate the working class to a regime which exploits it to the very maximum and thus to start up a new insane cycle of growth, that is, of accumulation of capital on an even greater scale. The Great Depression of 1929 – from which the present crisis will only differ by being yet more devastating – wasn’t overcome by the State’s intervention with its ‘Keynesian’ economic policy (still invoked today by the moderate and ‘radical’ bourgeois Left); it was overcome by the Second World War. It was the war which rendered the thirty year post-war ‘boom’ possible, but only at the cost of millions of lives lost during the war, and just as many proletarian lives shattered and destroyed during the rebuilding of what the bourgeoisie had destroyed. The ‘return to growth’, the objective which all the bourgeois parties and pro-government trade unions tell us is in the common interest of workers and bosses, will only be possible at the cost of the total sacrifice of the working class total in another global imperialist war.
The economic struggle is absolutely necessary for workers, but it is only ever a fight against the effects of capitalism. The deeper the crisis gets the clearer it becomes that even fighting for immediate interests, to preserve a decent standard of living and to fight wage cuts, etc, is only possible at the expense of the ‘good of the country’, that is, the good of the local and international capitalists.
In other words, what is good for the workers is bad for capitalism, and vice versa.
And thus we come, finally, to the theme of our presentation – the historical need for communism. Now we have established that the workers’ struggles to defend their interests is incompatible with the drive to greater profits, with the national interest, with the country’s interest, in a word, with capital’s interests, we can further say that the workers’ fight for better pay and conditions is, on the contrary, compatible with the general and long-term interests of the international working class in its inexorable drive towards a revolutionary overthrow of capitalism, and the installation of a society that can manage human resources in a rational way. As the Communist Manifesto states, “now and then the workers are victorious, but only for a time. The real fruit of their battles lie, not in the immediate result, but in the ever-expanding union of the workers”. This union, as it grows, discovers the common interest of its participants and the need to express its own unique class programme, which can no longer consist of winning concessions from a capitalism no longer able to grant them, but of preparing to overthrow capitalist society’s restrictive and sclerotic structure and install a new social structure within which a new humanity, no longer divided into classes, can rediscover the human need to co-operate and work in community.
Capital has unleashed forces it can no longer control. More and more the increasing socialisation of production that is occurring in practice – in terms of the increasing interdependence of millions of individuals in vast global networks of production – is making individual ownership of the means of production an anachronism and an obstacle. Every conference of the powerful nations to address issues on the macro scale, such as protecting endangered species, prevention of global warming, regulation of population and poverty, prevention of atrocities and wars, prevention of famine, management of waste, sees its heavily watered down good intentions undermined by the ‘reality’ of capitalist competition, leaving behind merely a few bedraggled good intentions, postponed to an indefinite future. The fact is that Capital can focus on one thing and one thing alone: increasing its profit margins, and that can only be at the expense of the working class.
Thus the interests of the working class, in throwing off the burden of capitalist exploitation, coincides with the drive to establish a new form of society; a new system that can manage society in a rational way.
Let us look around us and see what we have: there is nature and natural resources; there are the results of past labour, in the form of the products of past labour and means of production, and the knowledge bequeathed from previous generations,; and there is living labour. The future task of the human species, which we call communism, can be simply conceived as making rational decisions about how to allocate those resources. The remarkable thing is that money – and therefore capital, and capitalists – will not feature at all in a vision of a future society! In fact it would be much easier to just produce what people actually need and provide them to the population without the useless financial records and systems of ownership. As Marx pointed out, a voucher system that allocated resources would be a viable means of preventing social capital, that is, society’s surplus, from falling into the hands of individuals who would try and hold the rest of society to ransom.
In any case, economic systems have come and gone. The capitalists themselves established their own power by revolutionary means, and they will be overthrown by revolutionary means. The working class will have to overthrow the bourgeoisie just as the bourgeoisie had to overthrow the feudal classes – in order to break free of social structures that, after a necessary and socially useful phase, became fetters holding back the new productive forces. In order to realise its goals – freedom from poverty and insecurity and mind-numbing repetitive and often pointless work – the working class will have to discover, and apply, its immense latent force. The slumbering giant will have to awake and establish its own unassailable bastion of power, the Dictatorship of the Proletariat, from which position of strength it can bring about the necessary changes required to finally bring about that state of affairs in which society can finally inscribe on its banner ‘from each according to their ability; to each according to their need’.
To achieve its emancipation the proletariat (a class without ownership of the means of production, or reserves) must conquer power and transform society in its interests. The working class will be impelled to make this transformation, this revolution, in order to free itself from the increasingly unbearable pressure brought to bear on it by its class enemy. It will be forced to resist the increasingly frontal attacks on its wages and living conditions and to organise in class based economic organisations, equipped with a map of the road ahead; a programme and a theory of struggle by its class party. The organisational expression of the revolutionary proletariat is that of Soviets, the workers organised territorially. In the build up to revolution the organisation of workers on a territorial basis will be crucial in bolstering class identity, opening the eyes of workers to see beyond their particular sector or particular workplace and factory. Thus have we always fought to ensure that the ‘factory cell’ form of organisation wasn’t isolated from the wider body of organised workers, pointing out that only the bourgeoisie could benefit from such isolation.
Previous revolutions, or reorganisations of society, have been based upon property ownership, and the different forms of competing property interests led to a multiplicity of parties and groupings. The proletariat, a class not owning property, has the need for only one party, because its needs and its way ahead are not open to discussion, but are determined by the tasks it has to carry out. Just as we were given no choice about being born into this ‘vale of tears’, the extinction of this global madhouse is similarly a practical task we have no choice about. We map out the road ahead, and leave it to cabals of chatterers to wander off down the cul-de-sacs of history.
The seizing of state power is the necessary prerequisite for the ‘economic’ transformation of society. Because the proletariat cannot use the bourgeoisie’s own state apparatus; as evidenced at the time of the Paris Commune, it has to smash it and displace it with its own rule.
The assumption of the working class to power – or more precisely, of its party to power, operating through territorial organisations of workers – will clear the way for the economic transformation of society. This economic transformation will involve not just cutting down on waste and unnecessary over-production, it will also examine what is produced and where and how the necessities of life are created and distributed. Society will not be determined by the factories and industries acquired from the bourgeoisie; it will have the opportunity to re-examine what society needs, how it is produced and distributed, and how the population can live for its own benefit, in tune with the environment. Communism will be the only form of society that is not contrary to the functioning of the environment. There will ‘the naturalisation of humanity, and humanisation of nature’ as Marx put it.
The transformation of society will be carried out to fulfil the needs of the whole of the working class, and will overtake any narrow “sectional” interests. We have no interest in maintaining the forms of organisation determined by the former owners of the means of production. The bourgeois factory form itself will be out-moded, and factory committees will have no veto over the reorganisations of society. The slimming (even drastic shrinking) of the means of (over)production will require a certain amount of de-industrialisation, and there will no more need to continue the mind-bending and back-straining dash to produce just to realise surplus value for its own sake. What surplus production there is will be as part of a socially-planned cycle of production, with society’s needs and interests no longer having to be mediated by the market and the profit motive.
When the proletariat has finally extended to embrace all of the population, then there will be no other classes in society. The proletariat itself will cease to be a class, and so we will have a classless population, and be able to talk about true humanity having finally been established, and the ancient dream/ memory of the ‘Golden Age’ finally realised. We can then live in a truly human way, divesting ourselves of all the burdens and immoralities of class rule. We will have, as Marx said, left the pre-history of the human race.
The crises of capitalist society, and the consequent class struggle,
are a prerequisite for the future of human society. The proletarian
is a vital necessity – we have nothing to lose but our chains, and we
have a world to win!
(from Il Partito Comunista, no. 64, 1979)
[ It is here ]
The Party’s General
29-30 May 2010 [GM107]
On the weekend of 29 and 30 May the party gathered for its regular working meeting. Almost all of our groups were represented, although a few comrades were unable to attend due to circumstances beyond their control.
The proceedings took place in a comfortable hall rented from the local authority, and comrades were accommodated in some conveniently situated hotels.
As usual we dedicated the Saturday morning session to checking that jobs have been done, planning future tasks and exchanging relevant material, reading matter, documents, etc,. Everyone appreciated the fact, in these times of looming crisis, that the party is putting a lot of effort into studying workers’ problems and workers’ struggles, helping us to make an assessment which is as comprehensive as possible and enabling us to formulate the right communist directives to give to the class.
Then we sat and listened, calmly and attentively, to the reports; the result of a quiet, unobtrusive work which stakes no claim to “originality”, apart from that of giving an accurate picture, in these dark times, of the uncorrupted approach of the Marxist left.
The Military Question (the American revolution) – Course of the Economic Crisis – Origins of the Chinese Communist Party – The Third Volume of Capital – Labour Movement in the USA – The Rearmament of the Imperialist Powers.
A Busy Working Meeting
Parma 18 – 19 September 2010 [GM108]
In line with instructions issued by the party centre we reconvened in Parma for the general meeting. A pleasant, well-lit and quiet hall had been booked where we could sit in comfort and listen to the many, often difficult, reports; the content of which had been decided beforehand according to an agreed, unitary plan, and which was entirely imbued with our aim of representing, to the best of our ability, the vast fund of communist left doctrine and experience which we have at our disposal.
Saturday morning was dedicated to confirming the meeting agenda, deciding the order of the reports, etc, and also agreeing on what future work needs to be undertaken by our highly compact team; which, small though it is, can boast of having, over the course of many decades, continued to profess the party programme and maintained its position on intervention in class struggles, and demonstrated total consistency across the whole of the organisation.
Course of the Economic Crisis – The Military Question (the American revolution) – The Labour Movement in the United States – Marxist Economic Theory (The 3rd Volume of Capital)—Communism as the Historical Negation of Democracy – Trade Union Activity.
A Determined Party Meeting
Florence, 22 and 23rd January 2011 [GM109]
As previously agreed, the party general meeting convoked by the centre was held in Florence the 22nd and 23rd of January, with representatives from most of our groups managing to attend. As usual the Friday evening and Saturday morning were dedicated to the organisational side of the meeting, conducted, as is our wont, on the basis of an exhaustive and detailed agenda prepared by the centre in which every aspect of our activity is taken into account, and the best way of moving everything forward is indicated. The goal is to amalgamate our forces around the long tradition of left communism, ensuring we remain in perfect uniformity with it both in terms of what we say and how we say it.
We updated our schedule of publications in the various languages, and discussed planned interventions outside the party, particularly important being those within the trade union movement ,where the party must present itself with clear and unequivocal directives.
On the Saturday afternoon and Sunday morning we moved on to the exposition of the reports of the working groups, which we provide short summaries of here. They are “explorations” into the past and the present by which we aim to discern the future, victorious, course of the world proletarian class.
The energy the party dedicates to studying Marxist theory and examining the ups and downs of the workers’ movement is not directed towards discovering new and unsuspected historical roads, or concocting new, original ways of interpreting history. On the contrary, we can say that our ambition, historic potential and maximum satisfaction is to attain a collective knowledge of what our movement has stated already, something far from banal or obvious, and to assimilate it to the point we can utilize it without making any serious mistakes. That is why the jitteriness of those who feel compelled to come up with something new all the time makes us smile. But if such a mania for the new were to become a general approach and were taken seriously, it would eventually disarm the party by destroying its faith in itself and in its formidable arsenal of distilled historical experience; it would be left confused and intimidated by such “ideological terrorism”. This is because we are a party fighting a difficult battle, and not a study centre, which is motivated by entirely different aims and objectives.
And yet the party has – indeed it has to have – a busy, vibrant and effective “study centre” of its own; one which requires both profound knowledge, and a capacity to use our irreverent, inexhaustable, informal, but highly resilient, communist dialectic.
Course of the Global Economy – The Revolt in Tunisia – The Military Question (the Crimean War) – The 3rd Volume of Capital – Trade Union Activity – Communism as the Historical Negation of Democracy
The excellent results that
of impersonal communist work
Genoa, 21-23 May 2011 [GM110]
On May 21st and 22nd we held the party’s Spring general meeting in our spacious editorial office in Genoa, which had been treated to a cleaning blitz by the local comrades. Representatives from almost all of our groups, from Italy and elsewhere, attended.
On Saturday morning the preliminary organizational meeting was held. This had been planned for in advance and was all the more effective due to the extended correspondence which the centre and the working groups had engaged in beforehand; out of which a centrally planned, comprehensive and detailed agenda emerged.
The afternoon and Sunday sessions were dedicated to the presentation of reports on a range of subjects, which are listed below. Although these were mainly prepared by particular comrades, they should be understood as the work of various “sections” covering the same old revolutionary programme; the eventual gravedigger of the nauseating corpse of today’s society, and herald of the completely communist society of the future. And it is our science alone which, as such, allows us to discern in the present the signs of an inevitable, and urgently needed, tomorrow.
After having listened to these numerous and sometimes challenging reports, which prompted everyone’s wholehearted admiration and approval, the meeting drew to a close. The participants nevertheless lingered a while to go over the details of the latest tasks and to say goodbye to each other, all imbued with a sense of renewed commitment to our collective, communist work; a difficult work, but one we are totally passionate about.
The Course of the World Capitalism – The Difficult Introduction of Communism into the USA – Imperialism’s war in Libya – Communist Negation of Democracy – Our Trade Union Activity – Trade Union Policy in “Il Comunista” – The Military Question – Imperialist Intrigues in Pakistan – The 3rd Volume of Capital
A condensation of the reports made
COURSE OF THE ECONOMIC CRISIS [GR109 to 113]
At each meeting we listen to an update on the progress of the world economic crisis, with detailed graphs and tables presented to illustrate the various statistical series which we keep meticulously up-to-date, and which form a sound basis for the presenter’s commentaries and explanations. Phenomena which are studied include production, foreign trade, national and private debt, and mainly relate to the United States, Germany, Japan, France, Great Britain, Italy, Russia, China, India, South Korea, Brazil, Greece, Portugal and Spain. In addition the past and recent history of gold production and gold prices was covered.
We have therefore been able to establish that a contemporaneous wave of the same shape and form can be used to describe the current crisis in all of the countries under consideration. The preceding anti-node occurred in the winter and spring of 2009. The recession was everywhere extremely serious, ranging from a -40% annual drop in Japan to a decline of between a quarter and a third in Germany, Italy, South Korea; -22% in France; and around -14% in the USA, Great Britain, Russia and Portugal.
There were already signs of recovery by the spring-summer of 2010 but the growth was sluggish and certainly didn’t compensate for the crash of the previous year.
There is then a progressive slowdown of growth expressed in annual rates. This is more marked in Germany, Italy and Spain but it affects most countries, with the exception of China.
But if we measure the 2010 recovery not in relation to the previous year, but to the maximum previously achieved by each country, as it is logical to do, we are obliged to point out that the void provoked by the crisis of 2009 hasn’t been filled by anybody, Germany excluded. The USA are still down by -5.4% compared with their 2007 peak, and France by -8.6%.
The present slump in production was also compared with the previous one in 1975, by superimposing the curves of industrial production for the major capitalisms over the two periods.
1974-1975 saw the end of what capitalism’s various propagandists like to call “the glorious thirty”, that is, the period founded on the massive destruction and massacres of the Second World War, which aone allowed capitalism to escape the consequences of the 1929 crisis and to spin out another long cycle of sustained accumulation. Meanwhile there has been growth in the sectors of production newly invaded by capital, with all those still remaining at the petty bourgeois stage (in agriculture, the crafts, in small businesses, etc.) being eliminated. Thus the contradictions typical of capitalism – the tendency of the rate of profit to fall and the overproduction of commodities – have paved the way for new more powerful crises.
Over the world today is hovering the spectre of a gigantic crisis of over-production, which is dragging it into an endless spiral of deflation of prices and massive depreciation of capital. Capital has already experienced this in the past, for example in 1848 and 1929, two dates that still cause the bourgeoisie to break out in a sweat.
To avoid this the bourgeoisie in the various industrialised countries has no option but to squeeze the proletariat ever harder, in order to increase the rate of surplus value in the hope of offsetting the fall in the rate of profit. The economic and social measures adopted by the various States (dismantling of welfare systems, reduction of wages, job insecurity) and by the bosses (transference of production to where labour costs less and a dramatic increase in work-loads) cannot eliminate the spectre of the crisis but only temporarily postpone it.
In contrast to the first great global crisis of over-production, the one in 1929, in the post Second World War period a sudden precipitous deflation and decline in production didn’t happen, but rather a succession of recessions, 4 or 5 depending on the country. Today several factors appear to indicate that this time the world bourgeoisie has played its last card and the moment is approaching when it can no longer avoid the much feared deflation.
So, we are heading into a crisis of 1929 like proportions. The various great industrial centres, China included, have only narrowly avoided such a crisis, and that has only been thanks to the intervention of the various States and their central banks, which have injected thousands of billions of dollars into the economy to save the banks and bolster production. Today some States, such as Greece and Ireland, are already on the brink of bankruptcy; others like Portugal and Spain are not far off it. All of them are making the proletariat foot the bill in the forme of austerity measures. These measures will not even prevent the major States, like France, Japan and the USA, from going bankrupt. All they can do is slightly reduce the rate at which debt is increasing, but they can’t reverse it.
From1973 onwards the average duration of the cycles of growth and crisis has been between 7 to 10 years. If world capitalism manages to emerge from the present crisis, the next maximum is due between 2014-17. And this time no State will be able to repeat what it has done because by then, whatever austerity measures they might have taken, they will be totally submerged in debt. And, what is worse, China will no longer be in a condition to acquire European and American debt. The American and European States will then be forced to declare themselves bankrupt, or be forced into a new war.
Our hypothesis is that the impending world crisis which we are expecting to happen, that is, one compounded by deflation, will in the meantime have already hit world capitalism, Russia and China included. Despite the massive injections of cash by the central banks, despite the Keynesian measures aimed at kick-starting industry through endless public works, or with so-called ‘quantitative easing’ in which the States dole out hundreds of billions of dollars, the result has been failure.
Even the Chinese State has been forced to use the same recipes as the Western bourgeoisies to postpone a deflationary crisis: a massive injection of liquidity at extremely low rates of interest; State intervention to support industry, etc., and the only difference is the Central Bank and the Chinese State are not forced to take out onerous loans like they are in the West. But the crisis will come, all the prerequisites are there: rise in the price of raw materials and agricultural products; thousands of houses unsold; inexorable rise in the rates of interest. It could also happen that the great crisis happens earlier than expected and is triggered by China. And when the crisis comes knocking at China’s door it will no longer be able to prop up the American debt by buying its treasury bonds. Then the American State will be forced to declare itself bankrupt. Or it will be forced to go to war.
All the conditions are in place for a massive global crisis of over-production to occur simultaneously in Asia, Europe and America. It will be a crisis the destructive force of which has never before been, whose deflationist spiral will spell ruin for that foul social quagmire formed by the middle classes, and a part of the big bourgeoisie. It is the petty and big bourgeoisie who are ruined by deflation rather than the proletariat. But rather than facing ruin, the bourgeoisie, to its eternal shame, still prefers war as its way out.
Alongside these objective conditions there is also maturing of the
subjective conditions. These are needed if the international communist
party is to return to the social scene and for a revival of the
class struggle; which will sweep from its path every bourgeoisie, and
MARXIST ECONOMIC THEORY
The 3rd Volume of Capital [GM107 - 108 - 109 - 110]
The propaganda of every government today is obsessed with concealing the full extent of the progress of the capitalist crisis. A constant stream of news items, denials and over-optimistic data downplays the extreme gravity of the current situation, and an asphyxiating mantra about the stabilisation of the financial system and the recovery which is “just around the corner” blasts out at us from all sides.
The present degree of instability of the capitalist world, more bloated with commodities and finance than at any time since the great crash of 1929, seems to be clearly confirming our predictions about how this present phase will end. Already our school has obtained a formidable theoretical victory, if only because the crisis was triggered, and is continuing to develop, in just the way our researches led us to believe it would. Even if the bourgeois world manages to curb the crisis this time too, we can still boast of another major empirical corroboration of Marxism.
This work which we, modest followers in a long tradition of study and struggle, stubbornly insist on pursuing, has this as its aim: to verify in a rational way the validity of our historical and economic theorems in the light of the evidence.
With that end in view, we continued our rational exposition of the 5th Section of the 3rd Volume of Marx’s Capital, as edited by Engels.
Chapter 28, “Medium of Circulation and Capital; Views of Tooke and Fullarton”, along with Chapter 26, “Accumulation of Money-Capital. Its Influence on the Interest Rate”, develops a critique of the two bourgeois schools of political economy which were battling it out in the second half of the 19th Century, a time characterised by a profound crisis of over-production and a bursting of the bubble – ‘financial’ bubble as it would be called today – which prompted the transformation of the Bank of England from a private into a central bank, as understood in the modern sense of the word.
The speaker described briefly the distinctive elements of the two schools, the ‘metalists’, who harked back to the previous ‘bullionist’ doctrine, and the ‘bankers’, represented at that time precisely by Tooke and Fullarton. What was called ‘Bullion’ was gold in the form of bars of various sizes. In the bullionist theory, derived from mercantilism, the wealth of a nation was set by the quantity of money and precious metals it possessed. Whenever the monetary foundation of the English State appeared inadequate, the solution proposed was to block imports and increase exports.
It is evident that, after over a century of crises, revivals and further crises, great theoretical ‘novelties’, upheavals and wars, birth and collapse of imperial powers , the various economic schools which guided bourgeois finance, economy and politics in the second half of the twentieth century can ultimately be traced back to the old debate about issuing money and its relationship to the paradigm of reference, the value of gold.
Like nowadays, the cause of upheavals in the economy and crises in the market, and ways of preventing them and possible remedies, were sought in the sphere of the circulation of money, that is to say in the outer, abstract sphere of the process of capitalist production.
In the second half of the nineteenth century, Marx is studying a system based on the issuing of banknotes backed by gold; nowadays arguments for the same type of thing are back in fashion, with ultra-bourgeois theories calling for a “return” to an issue and circulation of currency backed by gold. Their arguments are certainly nothing new.
Capitalists and retailers sell on credit and their commodities are alienated before being transformed back into money and as such flow back to them. On the other hand they also acquire on credit, and therefore the value of their commodities has already been retransformed for them both into productive capital and into commodity-capital before they have actually been converted into money, before the deadline for paying for the commodities has expired and price for them has been paid. Refluxes of credit stand in for refluxes of money. This is of great importance in the process of circulation, and is something of a permanent feature even in ultra developed capitalism.
The relationship between the issue of banknotes – the modern day “quantitative easing” – and the amount of money the banks lend out becomes of supreme importance. Today it is easy: the treasury issues bonds and the Central Bank buys them, with the money it printed. Somebody will pay the debt … later on. In the good old days of finance based on gold it wasn’t so simple, or so potentially catastrophic.
In Chapter 29 Marx investigates banking capital. The underlying argument put forward here is that banking capital, that is, the amount held in capital account by the banking system, consists in large part of mere symbols of value.
Interest bearing capital takes a form such that any definite and regular monetary revenue appears as the interest on a capital, whether it actually derives from a capital or not. The actual physical, logical course by which value is generated is turned upside down and mystified in this process. The formation of such fictitious capital is called capitalization. “Any regular periodic income can be capitalized by reckoning it up, on the basis of the annual rate of interest, as the sum that a capital lent out at this interest rate would yield (…). In this way, all connection with the actual process of capital’s valorization is lost, right down to the last trace, confirming the notion that capital is automatically valorized by its own powers”.
In all countries of capitalist production, there is a tremendous amount of so-called interest bearing capital, or “moneyed capital”, that takes this form. And accumulation of money capital must be taken to mean the accumulation of these claims on future production, or the accumulation, at the market price, of the illusory capital value of these claims.
A crucial point about all capital is synthesised thus: “In so far as the rise or fall in value of these securities is independent of the movement in the value of the real capital that they represent, the wealth of a nation is just as great afterwards as before”.
The banks’ reserve funds consist of deposits, money existing as a hoard, which normally consists of paper, mere drafts on gold, which have no value of their own; the greater part of the banker’s capital is therefore purely fictitious and consists of instruments of credit, government securities and shares. The money value of this paper languishing in the banker’s vaults is fictitious and is determined differently from the value of the actual capital that it, at least partially, represents.
We have followed Marx’s investigation of banking capital in the sphere of the circulation of deposits and loans, and have seen how in the credit system everything is magically duplicated and multiplied. But the same goes also for the bank’s reserve fund, which one might expect to be solid and substantial.
With the development of interest-bearing capital and the credit
each capital seems to duplicate itself as though in a hall of mirrors,
due to the various ways in which the same capital or even the same
of credit appears in different forms and in different hands. The major
part of this money capital is therefore entirely fictitious.
COMMUNISM AGAINST DEMOCRACY IN THE EARLY DAYS
Some preliminary remarks on democracy served as the introduction to a series of reports on the birth and rise of the labour movement in Italy up to the formation of the Socialist Party in 1892. Making ample use of quotations drawn from the classical texts of Marxism, the irreconcilable nature of communism and democracy, of collaboration and class struggle, was once again brought to the fore.
According to revolutionary Marxism the proletariat can only really be considered a class when it has acquired a political party, because only through the party can it gain consciousness of its general interests and historical aims. Class consciousness doesn’t reside in proletarians, either taken as individuals or as a statistical mass; a concept, this, which further negates the very notion of democracy, even of “proletarian democracy”.
The proletarian doesn’t enter the struggle because consciousness prompts him to take action. Quite the contrary. Material need forces him to struggle before he is aware of it. It is social struggle which opens proletarian minds to the point they can sense their own interests as class interests, allowing them to acquire “consciousness” through their link with the party.
The report then went on to discuss how the labour movement took off in Italy, how it took its first initial steps and became progressively more able to free itself from every democratic, that is inter-classist, impediment, finally arriving at the stage of the constitution of the party. The final phase in the formation of the Italian Socialist Party (1892) falls immediately after the formation of the Second International. From that point on no-one can say the Italian labour movement and its party, in terms of its political maturity, lagged behind its European brothers. But the road by which it got there was neither short nor direct, having gone through a long process whose origins take us back to when Italy didn’t yet exist as a nation and back to the years before 1848.
This is the period in which we find the first workers’ associations attempting to overcome the old organisations of a corporative type. They will go through a lively and progressive evolution which will see the old philanthropic type associations going into decline and socialist ideas starting to appear, along with, inevitably, practical class struggle.
This evolution is shaped to begin with by the struggle between the bourgeois political currents to maintain their control over the working classes: either by excluding the workers associations from politics altogether (moderate liberals) or by attempting to use them as the rank-and-file of a democratic party (Mazzinians then radicals). Then there is the battle to establish the labour movement’s political autonomy, which senses the vital necessity of freeing itself from the tutelage of the bourgeois parties.
The backward conditions in Italy meant that anarchism would represent the labour movement’s first form of rebellion against the bourgeois democracy and its State. But anarchism, which rejects the very concept of the class party, would end up rejecting the class struggle itself, and, since it even rejected any kind of organisation of its own, it would relapse into inter-classism.
The key turning point in the history of the Italian labour movement is the formation of the socialist party. Only when the class struggle has equipped itself with its own party does it declare that, more than just defending itself, it wishes to turn to emancipating itself from capital.
The essential moments in this historical process appear at the workers congresses where key decisions are sanctioned. They can be summarised in four political splits extending over four decades: 1861, the Mazzinians split from the moderates; 1871-2 the Internationalists split from the Mazzinians;1879-80, the first split of the socialists from the anarchists; 1891-92, second split of the socialists from the anarchists.
These four stages in the labour movement’s evolution towards socialism are not all of equal importance. The really decisive development happens between 1880 and 1890, when the concept of class struggle becomes firmly established. The requirements of class struggle produce profound changes in the type of organisations which the workers need to equip themselves with, determining their transformation from mutual aid societies into organisations devoted to resistance and the struggle for emancipation.
In Italy the first rudimentary forms of workers’ organisation were formed at the end of the 1840s in Piedmont and Liguria. Their formation is encouraged by the Piedmontese government, fearful of the threat of revolution.
The report shed light on the various congresses of the workers’ societies in the Kingdom of Sardinia up to the formation of the Kingdom of Italy: Asti 1853, Alexandria 1854, Genoa 1855, Vigevano 1856, Voghera 1857, Vercelli 1858, Novi 1859. Not until the 6th Congress (1858) would issues of clear interest to workers, such as the length of the working day, dangerous working conditions and child labour, come up for discussion. At the Milan labour congress in 1860 the call for universal suffrage would be proposed.
The congress commenced its proceedings on October 26, the same day as the meeting at Teano between Garibaldi and Victor Emanuele.
Garibaldi’s expedition was enthusiastically followed and described by Engels. The Piedmontese government saw to it that the revolution failed, which under Garibaldi’s leadership had conquered Sicily, prompted an uprising in Calabria, and had no intention of stopping until it reached Rome and liberated it; a revolution which, left in the people’s hands, might not only have put the throne of the Bourbons and the Pope-King in jeopardy, but also that of the Savoy. The fear of the Piedmontese government that the social revolution would graft itself on to the national revolution was certainly not without justification, for in the South the social question had just entered an extremely acute phase.
The unification of Italy wasn’t accompanied by economic improvements for the workers; in fact from one end of the new nation to the other their situation immediately got considerably worse. This provoked a general reawakening of class antagonisms. Strikes of entire categories of workers became frequent and widespread, and were violently repressed by the government of the kingdom.
The orientation of the new workers’ societies now took on a clearly democratic and republican character, and their formation was often the result of the activity of members of the Mazzinian party. Indeed Mazzini maintained that the proletariat was a formidable instrument for obtaining the goals of the national revolution. The advanced elements of the working class weren’t deaf to such appeals to begin with, and in large measure they detached themselves from the liberals and the Catholics.
After previous attempts at the congresses in Florence (1861) and Parma (1863), the statute of the workers’ associations, the Mazzinian “Act of brotherhood”, was finally approved at the Naples congress of October 1864. But at the same congress there were already the first signs of moving beyond Mazzini’s programme, with the call for Italian workers’ associations to join together with the workers’ societies of other nations. The reference to the International Working men’s Association, which had just been formed in London, is very clear.
In August 1865 Il Proletariato, a paperwhich declared
socialist, was published in Florence. It declared the proletariat to be
a social class which was distinct from other classes and with separate
interests from those of the bourgeoisie, and it carried news of the
of the International Association. Almost contemporaneously in Naples Libertà
e Giustizia came out, straightaway declaring in its first number
wish to function as an international organ to link up the Italian
with the London International.
THE MILITARY QUESTION [GM107 - 108 - 109 - 110]
The exposition of the chapter on the American war of Independence continued from the last meeting.
After the loss of New York and the retreat to Pennsylvania many considered independence to be a lost cause.
In London the War Office decided to take more resolute action. Their plan envisaged a contemporary attack by three columns. A first column, led by Burgoyne, would drop down from the South, descending the Hudson Valley from Canada and taking back control of New England, a second column, from Lake Ontario, would head east and link up with the first, while the third, from New York, would head up the Hudson to complete the encirclement of the American forces.
The American victory at Saratoga caused Paris to drop any of its remaining qualms about intervening in the conflict, which thus assumed a much broader significance. France in fact had been moving in this direction for some time, despite strong internal opposition which feared a second and harsher defeat than that recently suffered in the Seven Years War. Its aim was to expand into the territories to the West so it could compete with, if not the replace, England in the American market.
Spain then entered the conflict as well in order to recover territories in America and in the Mediterranean.
The American army, led by the bourgeoisie, was composed of a heterogeneous mix of classes and strata of the most varied sort: old colonists, and new ones in search of land to farm; Hessian deserters, artisans with entrepreneurial aspirations, liberated black slaves and escapees fearful of being handed back to their owners, and then there were the native Americans, often used against each other, who were trying to stop the invasion of their ancient lands. It was an agglomeration of interests and peoples that could only be held together by continuous victories.
London gave the order to abandon recently conquered Philadelphia and to concentrate the troops in New York and Newport, the base for all English operations, and to disembark the troops to the south in order to drive wedge through the United States troops, splitting them in two. The English held New York and Yorktown on the mouth of the Delaware in the South, and a few other strongholds like Charleston and Savannah.
The Americans’ preferred strategy remained guerrilla warfare. Most of their troops were concentrated in the siege of New York.
After winning an important naval battle the French fleet gained control of the seas, preventing the transfer of English troops. The war on the seas now shifted to the Caribbean.
Washington was insistent that New York should be attacked first, a course which would have drastically altered the outcome of the war, but the French commander Rochambeau wanted to attack Yorktown first, then transfer all of the troops to New York. The American assault on Yorktown was simple because they had considerably more artillery. The fall of Yorktown marked the last of the battles on land and the start of peace negotiations. The war on the seas however continued.
And yet the English home front was the decisive factor, where it was decided that continuing the war was simply too costly, given the ineffectiveness of the loyalists and the growing support for the Americans amongst its own troops; but above all it feared losing control of the seas, the oceanic highway for the transportation of its commodities.
With the signing of the Treaty of Paris in 1783, the United States obtained complete independence. Spain recovered Florida and Minorca in the Mediterranean but had to abandon Gibraltar once and for all. France retained the possibility of continuing its expansion into the American West, but this huge economic commitment would aggravate its own domestic crisis, smoothing the way for the bourgeois revolution six years later. In the Caribbean it had Trinidad and Tobago, in Africa Senegal, and in India a few ports, important for the conquest of Indo-China.
Despite its defeat England remained the foremost sea power of the age with a huge fleet but France was definitely snapping at its heels in terms of control of maritime traffic. The Americans, who had no navy under the old colonial contracts, took to privateering and intercepting the English convoys. The English war fleets, once disengaged from America, were moved to the Indian Ocean where they continued the maritime war for control of the trade routes, mainly after the closure of some of the Dutch bases.
The report concluded with a list of initial conclusions:
1/ as our school teaches, the causes of war were economic: unrestricted liberty of the bourgeoisie to produce and trade combined with the French Enlightenment, a potent mix.
2/ neither of the fronts ever pushed the struggle to the bitter end, both in view of eventual peace treaties and for economic reasons. England because it was already engaged on other fronts in its immense empire; the thirteen colonies because they hadn’t yet formed themselves into a State, because it was their first military experience and because they lacked absolutely everything needed to conduct a war. Prevarication and ambiguity on the part of the Governments generated contradictory orders from the military leaders. Also, according to 18th century custom, a few set battles and a certain level of attrition were usually enough to get treaty talks underway.
3/ from a historical point of view we are at the crucial moment of the passage from the feudal to the bourgeois capitalist mode of production: although this transition had already happened in the United Kingdom it had yet to spread to continental Europe. Feudal warfare, with its rules and set piece battles, aimed to contain resources and to keep military expenditure, which was often considerable for the smaller States, as low as possible. Modern warfare, based on capitalist production, throws into its conflicts a hitherto unthinkable quantity of every type of weaponry, dictated by the requirement to produce and reproduce all of its commodities on an ever increasing scale, to realise ever greater profits.
4/ on the military plane it was a battle of two asymmetric forces. The English forces were powerful, experienced, well-trained and mainly mercenaries, but they were organised, nevertheless, according to out of date precepts which were no longer suitable in the new type of conflict. The American forces were voluntary, and due to their grievous lack of resources they adopted guerrilla tactics. This asymmetry meant neither of the fronts could ever achieve a decisive victory.
5/ The conflict was only brought to a close after the French and Spanish allies had balanced out the fronts which could face each other in open battle on an equal footing. Guerrilla tactics initiated the conflict, wore down the adversary and put obstacles in its path, but they couldn’t end it, as in the vast majority of similar cases.
6/ Originally local, the conflict spread, drawing in other States on other fronts into a battle for control of colonies and distant markets as the outlets for European goods. For young and ambitious capitalisms, which have to expand their range of action so the cycle Money-Commodity-Money can be repeated in the four corners of the globe, wars are the passe-partout for opening every door.
Illustrated with maps of the theatre of operations, the report moved on to give an account of the Crimean War; a war in which diplomatic intrigues predominated over military strategy. Even the bourgeois leadership would admit that incredible errors were committed on both sides. Supported by relevant quotations from Engels’ writings, we define the Crimean War as the first imperialist war, because of its economic objectives, the control of markets and raw materials, and because of the number of States involved rather than its territorial conquests.
The Vienna Congress had redrawn the map of Europe to keep France in check. Russia, at the expense of the tottering Ottoman Empire, had extended its territory by annexing Finland to the north and Bessarabia to the south. Indeed the Sultan hadn’t even been even invited to the Congress because of the unresolved “Turkish Question”, i.e. the carving up of his European territories, that is, the entire Balkan peninsular south of the Sava and the Danube, by the major powers.
The “Principle of Intervention” was established, in other words the possibility of military intervention by foreign powers against feudal States menaced by internal rebellions. Uprisings across Europe would be drowned in blood. The clock, however, couldn’t be turned back.
England, which at the time was the major economic power in Europe, had throughout the nineteenth century been pursuing an expansionist policy centred on controlling the access routes to India: with Gibraltar in 1704, Malta in 1802, Aden in 1840, Cyprus in 1878 and Suez in 1882, the sea route to Bombay was guaranteed, whereas from Syria the caravans parted for Persia and India.
Russia, whose backward economy was predominantly agricultural and dependent on serf labour, required continuous new conquests and access to the southern seas, and its southward expansion was beginning to conflict with England’s schemes. In the Balkan Peninsular, Russia exploited the Ottoman Empire’s every weakness with a view to acquiring territory and above all controlling the Bosphorus and the Dardanelles. In Asia it was expanding as well, spreading towards Turkestan in order to access the Indian Ocean through Afghanistan. In both directions it was coming up against England.
England was, on the one hand, trying to dismember the Ottoman Empire, as in the case of its support for Greek independence of Greece, from whom it obtained the Ionian Islands and the transit of its freighters through the Black Sea; on the other hand it was supporting it in order to oppose Russia’s designs.
France would intervene in the “Eastern Question”, both to confer prestige, with a short war in the East, on the new “imperial” regime of Napoleon III, and to bolster the expansion of its young capitalist system. It then went on to form an alliance with England against Russian and the Porte.
Within this context the Crimean War was fought to prevent Russia from gaining control of the land route to the straits. The conflict got underway in 1853, the ideological cover being an old dispute over control of the holy places in Palestine! Turkey declared war on Russia and in November the Turkish fleet was destroyed by Russia off the port of Sinope on the Black Sea. This was the pretext for the French and English navies, already assembled off the Dardanelles, to send their warships in.
Engels analysed the respective strengths and weaknesses of the various armies deployed. The French army was conscripted, well-organised and well-disciplined and equipped with effective artillery. The English army was voluntary, and “like old England itself, rotten to the core”. The Russian army was numerically strong but distributed over vast territories and long frontiers. It used neither railways nor telegraphy and suffered from the effects of belonging to a society which was still feudal. The multi-ethnic Turkish army also had to be distributed over a long frontier, from the Danube to the Caucasus, and its troops, with their mountaineer traditions, were not adapted to modern warfare. Engels described the Piedmontese army as well trained and effectively led whilst the latter was not the case as far as the Prussian army was concerned.
The allies launch an attack to destroy the important Russian naval base at Sebastopol. It was an objective which Engels criticised because of its uselessness from the general strategic point of view, and because of the notorious invulnerability of the place. Also, the rest of the Russian army had withdrawn across the River Chernaya.
It was here that a new defensive system based on trenches was introduced for the first time. It would soon prove its effectiveness: with a reduced number of men it was possible to stand up to a much stronger adversary.
During the long siege of the fortress the Russian land army launched some battles in order to break the encirclement before the much feared arrival of winter. Intense cold and cholera would decimate the troops on both fronts. The Battle of Balaclava on 25 October 1854 marked the first attempt by the Russians to relieve Sebastopol. Ten days later there was the Battle of Inkerman: after an initial victory, following a nocturnal attack through thick fog, the Russian forces, five times greater than the allies, were eventually defeated and suffered enormous losses. Then winter got the upper hand.
With the death of the old tsar, his successor had to manage what would eventually become a defeat. In August 1855 the Russians crossed the Chernaya and attempted to attack the besiegers from the rear (a battle in which the Piedmontese bersagliere took part, already decimated by cholera since their arrival). Here again, after initially breaking through the Allied lines, the Russian attackers didn’t manage to withstand the counter-attack and were pushed back across the river again.
Engels made these comments about the new way of conducting warfare: “We witness no time wasting, no fighting to wear the enemy down. The fate of the battle depends on the outcome of one or two attacks. This method of fighting seems a lot more audacious than Napoleon’s (…) in reality it reveals a serious lack of strategy and leadership on both sides.”
After several days of bombardment the final assault on the fortress was set for September 8th, but during the night the Russians unexpectedly evacuated the base, removing everything they could and destroying anything that was left.
But the Fall of Sebastopol didn’t mean the war was over; it continued in the Trans Caucasus where the Russians captured, possibly with English approval, the fortress of Kars, keystone of the Asiatic trade routes.
In fact the only useful outcome was halting Russia’s advance to the Bosphorus.
Our tally sheet of this first true “world war”, which we describe as imperialist because of its economic and political characteristics, as well as its sheer destructiveness, is as follows: the Russian front consisted of 700 thousand men plus 4 thousand Bulgarian volunteers; allied front, 300 thousand Turks, 400 thousand French, 250 thousand British and 20 thousand Italian volunteers and Piedmontese troops, making a grand total of almost a million. An acknowledged and reliable estimate calculates the total death toll as a million dead, including combatants and civilians, with most of the deaths caused by typhus and cholera.
“Never, as long as there have been wars, has such brilliant bravery been thrown away for such inadequate results as in this Crimean campaign. Never have such numbers of first-rate soldiers been sacrificed, and in such a short time, too, to produce such indecisive successes.” (Engels, ‘The European War’, January 1856).
The ongoing series of reports on the Military Question moved on to examine the wars of independence in Italy.
Marx’s damning assessment of the house of Savoy, of its equivocation and its double-dealing, was read out.
The 1848 revolutionary movements in Europe prompted revolts in the big Italian cities as well. The first one is Palermo, and the whole of insurgent Sicily would drive the Bourbon army across the Strait, proclaim the republic and reintroduce the 1830 constitution. Then the cities under Habsburg domination, including Venice and Milan, rose up, and managed to expel the occupying troops by their own efforts. The serious political and military miscalculations of the newborn Venetian Republic were the reason for its defeat. Milan liberated itself after five days of uneven struggle. Radetsky opted to retreat into the complex of four fortresses know as the Quadrilatero, given the probable necessity of having to rush to the aid of Vienna, where an insurrection had also broken out.
King Carlo Alberto’s decision to rush to Milan’s aid was not due to risorgimental passion, but because he considered it the “lesser evil”; his constant concern was to stop the republican movement from gaining the upper hand, and sweeping, one by one, the various monarchies aside.
There were few actual battles. The Piedmontese army entered a liberated Milan and drove on towards the River Mincio with some minor victories such as at Goito. Major contingents were immediately sent by the Grand Duke of Tuscany, the Bourbon Kingdom and the Papal State to support the Savoy army, and there were many volunteers from each of the regions as well. However Pius IX would recall his troops, as did the Grand Duke of Tuscany and the King of the Two Sicilies immediately afterwards. Nevertheless, most of the troops, the best generals included, ignored the order and put themselves at the disposal of the Piedmontese army.
Profiting from the general confusion in the Italian camp, Radetsky launched a sudden offensive, but was stopped in time at Curtatone and Montanara by the Tuscan volunteers, paving the way for the Piedmontese to win a second time at Goito.
Profiting from an error in the disposition of the Piedmontese
Radetsky defeated them at Custoza. Defeat was transformed into a rout
the Piedmontese front completely fell apart. During the night a
Carlo Alberto, with the furious Milanese taking potshots at him,
the city, taking the bank reserves with him.
HISTORY OF THE LABOUR MOVEMENT
Between the 70s and the 80s a new organisation appeared and made significant inroads within the working class: the Knights of Labour. The organisation was formed in fact in 1869, when it adopted a sectarian structure, with initiation rites and deeply held religious convictions. Initially secret, towards the end of the 70s it started to open its ranks to broader sections of labour, including categories which had historically been discriminated against by the major trade unions such as women and black workers.
The goal of emancipation of the working classes, according to the founders, would not be attained by economic struggles so much as by co-operation and education. Therefore the strike weapon, although tolerated, wasn’t favoured. In fact, throughout its existence there would be continuous conflict within the Order between a combative rank-and-file and a pacifist, legalitarian and slightly fanatical leadership. Thus groups of workers would join, only to leave when they realised the Knights were doing little to help them obtain better wages. The way it was organised, however, gave it the appearance of an organisation with a broader, national reach just at the time the traditional trade unions were dissolving under the impact of the economic depression.
The circumstances in those years weren’t at all propitious. In1883 a new depression had begun and, despite the birth of a new rival organisation, the AFL, the class would have to come to terms with a series of trade union defeats. The real turning point came after two events in 1885, the success of the boycotts and the victorious strikes against three railway companies owned by the infamous Gould; who, along with other ‘robber barons’ and unscrupulous plutocrats such as Carnegie, Morgan and Rockefeller, was a characteristic representative of America’s rampant capitalism at the close of the 19th Century; a capitalism as rapacious as it was ruthless.
The report spoke at length about the strikes of 1885-6. Although these would be successful they would be followed shortly afterwards by searing defeats, caused not by any lack of combativity on the part of the class but by the incompetence, if not the downright betrayal, of the leadership.
The latter’s scornful attitude towards direct action and its total lack of comprehension of the real needs of the working masses laid the basis for the class to progressively abandon the Order, a good part of which went on to join more modern trade unions like the American Federation of Labour.
Maybe one of the main reasons for the success of the KL, in organising so many workers and creating so many sections with respect to the unions which had come before, was that up until then it had been difficult to bring together a sufficient number of proletarians in the same trade at the local level, due to the intrinsic nature of North American society and its capitalism. The Order overcame the problem by creating inter-professional sections, and also admitting semi-skilled, unskilled and day labourers, and women and black workers (the latter in 1886 forming 10% of the membership).
But leadership of the KL was capable, in a very short time, of destroying an organisation that was without precedent in terms of the effect it had in raising the morale and the hopes of an entire generation of proletarians, who had begun to glimpse a future very different from that preached by politicians, craft trade unionists, priests and bourgeois intellectuals. And it was this that would predispose the class to accept the doctrine of socialism which at that time, based on the European model, was once again starting to penetrate America.
But the obstacles presented by the “better dead than anarchist or socialist” attitudes, the constant attempts to win the bosses’ approval, the barely concealed antipathy towards the craft unions, who were nevertheless admitted into the Order, spelled the end of the movement. Even the movement’s positive aspects, which received a cold reception within the A.F.L. would be lost, and only recovered after many decades, the main one being its openness to all proletarians.
The report than went on to describe the revived movement for the eight hour day, which in the first half of the 80s roused and united proletarians across the whole of the United States. The movement culminated on the fateful date of May 1st, 1886, when a general strike of all categories throughout the country, was due to impose a general reduction of the working day on the bosses. Struggles had already started to spread in the months before, and virtually everywhere they met with resounding success, insofar as the bosses could hardly refuse to make concessions when faced with a movement which was so widespread and so determined. And all this, despite the passive resistance and the boycotting by the KL’s leadership. Finally the proletariat, guided by the best trade union organisations and with the support of the political movements then extant, most notably the anarchists, abandoned the attempt to obtain results by putting pressure on politicians (which had shown itself to be entire bankrupt), and passed to direct action.
Several workers’ struggles would be met with ruthless repression on the part of the bourgeois forces, which had no qualms about shedding proletarian blood in the process. One such episode was a massacre during a demonstration in Chicago on May 3rd. During a mass protest meeting held the following day in Haymarket Square, a bomb was thrown which killed a number of policemen. The bourgeois press responded by whipping up popular hysteria against the working class agitators, anarchists and socialists. In the space of two days the police raided no less than fifty alleged meetings. Of the hundreds of workers arrested, eight were eventually selected to be sent for trial; chosen because of their central role in the struggle. Then, in a trial which was truly farcical, they would be condemned to death, even if there was no proof at all that the had anything to do with the bombing incident. Four of them would eventually be hung, and a fifth died in prison, by his own hand according to the official account.
Due to the extremely harsh reaction which followed, the workers’
would suffer a temporary setback, but in less than ten years it had
Already there was a new organisation, the American Federation of
which had drawn useful lessons from the failure of the KL and which
take its place not just as a short term phenomenon, as had happened
the earlier national trade union federations, but as an organisation
to remain, for good or ill, as part of the American labour movement up
to the present day.
DIFFICULTIES IN THE FOUNDING OF THE CLASS PARTY
This study marks the initial instalment of a party work on the political tradition of the working class in the United States. It is meant to complement our other ongoing investigation of the History of the American Labour Movement (see above), which mainly concentrates on workers’ struggles and the trade union movement. The latter study has reached a more advanced stage and the early instalments have already been published in Communist Left, including in the present issue, translated from the Italian.
The report used a letter from Marx to Bolte, dated 23 November 1871, as its point of departure. In it the political movement of the class is defined, and its importance for the class. When, a year later, the General Council of the International was transferred to America, the ideas sketched out in the letter would continue to be acted on and defended by the new Secretary General, and Marx’s loyal friend and follower, Friedrich Sorge.
The position taken by the Lassallean faction, which was very influential at the time and had a significant presence within the International, was very different: economic struggles were condemned to inevitable defeat because, in their view, wage levels were imposed by immutable economic laws. For the Marxists, on the other hand, there was no such law, and no contradiction in expecting the political organisation of the working class to include defensive struggles alongside the conquest of political power.
At that time the hypothesis that this conquest might be accomplished by peaceful means, through elections, was not totally excluded, even if the definition of what constituted political struggle for Marxists was considerably broader, and included many activities which were defensive, such as the struggle for the eight hour day. In 1872, the day after the Hague Congress of the International, Marx maintained that in America and England there was a possibility that “the working people may achieve their goal by peaceful means”, although he recognised that “in most of the continental countries it is force that will have to be the lever of our revolutions; it is force that we shall some day have to resort to in order to establish the reign of labor”.
But it would be precisely in the United States, where the franchise was first extended to broad strata of the working class, that the ‘peaceful’ way to working class power would soon be shown to be impossible. The Marxists were quick to notice this change and by 1876, at the foundation congress of Workingmen’s Party of the United States, it was already noted that “The ballot box has long ago ceased to record the popular will, and only serves to falsify the same in the hands of professional politicians”. The class was invited to abstain from the ballot box and direct their efforts towards organising themselves to improve their standard of living and working conditions.
Unprepared to abide by the International’s resolutions, the Lassalleans split from the International in 1874 and established the Workingmen’s Party of Illinois in the West, and the Social-Democratic Workingmen’s Party of North America in the East. The report then went on to discuss the differences between Lassalleans and Marxists, which were directly derived from the discussions going on almost contemporaneously in the German party, and Marx’s critique of the “Iron Law of Wages”.
Whilst these discussions were continuing the great uprising of 1877 broke out, and success at the polls in the same year appeared to confirm the Lassallean perspective. Over the opposition of the former internationalists, the Lassalleans gained complete control of the party. The Socialist Labor Party was born.
The Marxists would nevertheless continue their trade union activity, eventually leading to the formation of the International Labor Union, the first effort to organize all workers, including the unskilled, into one union extending across the whole of the national territory, irrespective of nationality, sex, race, creed, colour, or political opinion.
Meanwhile the new party, now reorganised with a view to conducting ‘political’, that is, electoral campaigns, met with considerable success at the polls during the spring and fall elections in 1878. But the following year the tendency was reversed, and the Lassallean leaders, having realized that their major successes had only occurred where the trade unions were mobilised, had to recognise the importance of the labour movement.
But the road was strewn with temptations which the Lassalleans were unable to resist. One of these was an alliance with the ‘greenbackers’, supporters of currency reform, and this caused a split with elements, above all those in Chicago, who would nevertheless slide towards anarchism.
Another explanation of the split derived from the stance the Executive had taken towards the Lehr und Wehr Vereine, the ‘Educational and Defensive Societies’, workers’ militias organised by the socialists of Chicago and Cincinnati from around 1875. These organisations, originally composed of members of the SLP, became much more widespread in the wake of the repression following the Great Strike of 1877, during which the combined forces of the police, territorial militias and the federal army launched violent attacks against the workers. In Chicago the workers were the target of a particularly brutal repression due to the highly organised support they had given the strike. The national executive was opposed to these essentially military organisations, and in 1878 all members of the SLP in the clubs were ordered to leave.
In November 1880, a number of members of the New York sections of the party left the organization and formed a Social Revolutionary Club, which adopted a platform modelled in the main after the Gotha programme of the German Social Democratic Party, but interspersed with some violent anarchistic phrases. Thus the platform of the Revolutionary Socialist Party, as it soon came to be called, urged the organization of trade unions on “Communistic” principles and asserted that aid should be given only to those unions which were “progressive” in character: a classic case of the confusion of roles between economic and political organisations, a confusion which the Marxists energetically resisted. The new party’s platform also denounced the ballot as “an invention of the bourgeoisie to fool the workers” and recommended independent political action only in order to prove to workers “the iniquity of our political institutions and the futility of seeking to reconstruct society through the ballot.” The chief weapon to be used in combating the capitalist system was the “armed organizations of workingmen who stand ready with the gun to resist encroachment upon their rights”. The character of the new movement therefore remained rather indefinite, and vacillated between socialism of a more radical colour and outspoken anarchism.
The new anarchist movement, reborn on American soil with a more pro-union stance, would prove a tempting outlet for the workers’ anger and revolutionary sentiments, but, as ever, its individualist actions and violent propaganda would play into the hands of the State it so despised, and prove a useful excuse for the severe clamp down on the worker’s movement which followed the Haymarket events in 1886.
We will trace the sequence of events leading up to those events in a
subsequent chapter, and also plot the later course of the Socialist
Party as it navigated its way through these events.
THE REARMING OF THE IMPERIALIST POWERS [GM107]
The reports have highlighted that while the current crisis of over-production is currently causing a major contraction in production and foreign trade, the arms trade is one of the few branches of industry that isn’t suffering. Arms production has been steadily rising over the last decade, as has the percentage of the various national budgets devoted to ‘defence spending’.
The withdrawal of troops from Iraq [in 2010] continues but the United States are leaving behind them a formidable network of military bases and around 50,000 men; a considerable force, allowing Washington at any time to interrupt the supply of oil to other countries. On the other hand, the Iraqi State has managed to keep the oil revenue for itself, leaving only the industrial profit to the big oil companies, including American ones, while the exploitation of the major wells has been assigned, on conditions acceptable to Baghdad, mainly to Chinese, Russian and European companies.
The planned withdrawal of the troops from Iraq has been accompanied
by an increase in the military presence in Afghanistan. This “new”
strategy hasn’t however, up to now, brought any significant results as
far as territorial control is concerned, chiefly due to the
nature of American policy in the region.
THE REVOLT IN TUNISIA [GM109]
There was a brief report of the revolt in Tunisia which was underway at the time (January 2011). Following prolonged protests and demonstrations throughout the country against the price of essential foodstuffs, President Ben Ali fled the country. The riots and popular uprisings which occurred in the lead up to these events were described, as well as a brief account of the political parties and trade unions in Tunisia.
Foreign investment, mainly Italian, has contributed to the modernization of the country and the installation of numerous industries, in particular within the textile sector, and to the formation of a modern proletariat.
The party’s underlying forecast was shown to be accurate, regarding:
1) the social maturity of the countries of North Africa, where the
of the working class has rendered necessary defensive actions and
of a trade union type; 2) the similarity of the Arabic countries in the
Eastern and Southern Mediterranean, in terms of their historical,
and social conditions, that predispose their unitary organisations to a
possibly convergent movement; one which the proletariat of Israel could
also eventually get drawn into.
IMPERIALISM’S WAR IN LIBYA [GM110]
There followed a description of NATO’s military intervention in Libya. The air attacks from NATO and the attacks on the ground from the rebels were supposed to bring down the discredited regime of General Gaddafi in just a few days, but after three months of daily bombardments there still seems no end in view [as of May 2010].
This war was provoked by the global economic recession, which sparked off social revolt and weakened the Libyan regime from within. It was also given impetus by the wave of the revolts in Tunisia and Egypt. But in Libya things immediately took a different turn. For a start, a significant part of the power structure profited from the revolt by immediately betraying Gaddafi and his clan, playing on the traditional regional division between Cyrenaica and Tripolitania, and knowing they could count on the support of the United States, France and Great Britain. Thus the revolt was straightaway emptied of any class content and it immediately took on the character of a war, both on the domestic and external fronts. This caused the exodus of nearly two million proletarian immigrants, who fled the country en masse for fear of getting caught up in the fighting, but above all because there was no concrete offer of solidarity from the Libyan proletariat to persuade them to stay.
During the early days of the conflict it was easy for France, Great Britain and the United States to drive the game by focussing on military intervention, possibly already planned in advance. But, in the days that followed, it would not just be bombs exploding, but a series of contradictions between the interests of the countries involved, which never so much as on this occasion presented themselves ‘in open order’ to such a extent, each eager to grab the biggest part of the booty for themselves.
However the pickings are so tempting that everyone wants a piece of the action. The western oil companies present in Libya before the war were Eni, BP, Total, Royal Shell, Exxon Mobil, Chevron, Occidental petroleum and Statoil. There were also various Asian oil companies: Pertamina, Oil India, China National petroleum and Nippon Oil.
Germany didn’t wish to participate in the attack, thereby providing further evidence that Europe, considered as a political and military entity, is non-existent. Those who actually participated in the aerial bombings were Great Britain, France, Italy and Canada, along with the USA’s remote controlled planes. Norway, which took part in the first phase of the conflict, declared that it wanted to pull out of the war at the beginning of August.
It should be noted that counsellors, military trainers and small squads of elite troops were already working alongside the militias in Benghazi.
Keen to guarantee that their ‘humanitarian’ loans are repaid, the mean-spirited usurer-invaders have clearly stated that: “the future government of Libya will have to honour the financial obligations which the CNT have taken on. The credit provided to the CNT will be assumed by the future government”. The humanitarian war, as is ever the case, will be paid for by those who have been ‘humanized’; by those who today, in such a human way, are being targeted by bombs, amongst whom the proletariat of Libya.
Meanwhile Washington appears to have placed in the hands of its man in the CNT, Ali A. Tahouni, the management of Cyrenaic finances and oil. Indeed the first contract for the export of Libyan oil, 1.2 million barrels worth, has been concluded with a United States company, the Tesoro Corporation, and an oil tanker has already transported the first batch of crude to the USA.
Even Russian diplomacy has been stirred into action. The Russian envoy in Libya, after meeting representatives from both the CNT and the official Libyan government, couldn’t come up with a pathway to peace negotiations, but did declare that Russia wants to see Libya as one independent, sovereign and democratic state, which functions as an integral part of the Arab world and as an inalienable part of the African Union. The message is directed at the countries of the west, who may favour the separation of Cyrenaica (which possesses 80% of the petroleum deposits) from Tripolitania, which although more highly populated is poorer in terms of its natural resources. And such a separation is by no means ruled out.
China keeps a close eye on the Libyan situation. 11% of Libyan oil is exported to China and over 30,000 Chinese workers were employed in the country at the time the war broke out. Beijing is emphatic about its opposition to terrestrial military intervention and wants to be part of any eventual peace negotiations in order to defend its economic interests in Libya. But the Western coalition, above all the United States, will be aiming to utilise the crisis to reduce China’s inconvenient presence in the region.
The global proletariat, particularly in North Africa, is currently
impotent witness to the imperialist military exploits of the various
and coalitions, which, propelled by the need to react to vicelike grip
of the economic recession which is proving so lethal to capitalism, are
increasingly prepared to resort to military force to defend their
and strategic interests.
THE CHINESE COMMUNIST PARTY’S SOUND ORIGINS[GM107]
This second chapter of the report started with a general picture of China in the early 20th Century. Then the Communist International’s presence in the country, post 1919, was described, and the establishment of relations, after1917, between the Russian State and the government in Beijing (in the hands of the Warlords), and with the government in Canton (treaties with Sun Yat Sen).
We then moved on to make a critical examination of the International’s policy towards China, based on contemporary documents, some of them recently discovered and translated by ourselves.
The formation of the C.C.P, with much support from the International’s emissaries, gave rise to a young party which necessarily had little experience and whose theoretical positions were more intuitive than methodical.
Nevertheless the Chinese communists would immediately highlight the International’s devaluation of the role which the C.C.P could and should have played shortly afterwards, faced with the enormous development of the productive forces and of the proletariat. And the International would certainly overestimate the revolutionary bourgeois role of the Kuomintang, which had already shown it would betray any consequent democratic revolution.
The amount of work carried out by the minuscule Chinese Communist Party was enormous, above all in the unions, and amongst women and young people.
At the Second Congress of the C.C.P. in July 1922, both the principles and the spirit of revolutionary parliamentarism, as set out in the Theses of the Second Congress of the C.I., were accepted and rigidly applied. In the Manifesto of the Second Congress of the C.C.P. it was correctly stated that: “The proletariat has its own class interests. With the democratic revolution the proletariat will simply gain a few liberties and rights, but not complete liberation (…) Therefore the proletariat must immediately attend to the bourgeoisie, installing the «proletarian dictatorship in alliance with the poor peasantry»”.
In conclusion, attention was drawn to the C.C.P.’s resistance to the
interference and pressure on China from the Russian State, and put into
effect by the agents of the C.I. as well.
THE COMMUNIST PARTY OF ITALY’S STANCE ON THE
As first usage of our recent reproduction of the complete series of press organs issued by our current, the comrade gave a first reading from the trade union pages of Il Comunista, the P.C.d’I.’s official daily paper between 1921 and 1922. Out if the four pages in each number, one was dedicated to workers’ struggles in Italy and one to trade union matters in the rest of the world. The Italian pages included several articles on the ‘united front from below’ which, then as now, is our watchword in the trade union field.
The articles clearly state that such a stance doesn’t imply any second thoughts regarding the split from the Socialist Party. On the contrary, separation from the reformists and maximalists was the indispensable condition for achieving unity amongst proletarians on the basis of class positions. The trade union united front had precisely that aim and it was therefore opposed by the socialists, or accepted in a formal terms as in the case of the Labour Alliance, but solely with the aim of getting proletarians back behind the reformists again.
In an article published on 9 February 1922, entitled “One … Socialist Front”, the socialists’ view of unity is made clear by referring to a poster they issued in the proletarian stronghold of Piombino, and which was signed by a priest, a monk, an anarchist, 32 socialists and the secretary of the local fascist group.
In the 10 February number, in the article “The Labour Alliance”, it states that the party favours such a project of proletarian unity in the trade union field; and that is why we turned down an invitation from the Railwaymen’s Union to a meeting with the Socialist Party, Republican party and the Anarchist Union, even though it was about the Labour Alliance,. What was being attempted was an operation similar to that in 1945, when the C.G.I.L. was formed by the bourgeois parties.
In later issues, we find several articles on the Unione Sindacale Italiana, a proletarian trade union mainly composed of anarchists and revolutionary syndicalists. The class stance adopted by this union and the fact it adhered to the Red International of Labour Unions was very much approved of by us communists. However, we were obliged to harshly criticise those aspects of its ideology which turned it into a kind of party trade union controlled by the Anarchist Union, which was calling on it to leave the R.I.L.U.
We continued to support the minority, composed mainly of revolutionary syndicalists which had stuck to class positions and wanted to stay in the R.I.L.U. And we would even advise communist members to remain in this trade union and join the minority, without creating a communist fraction. In another article we also invited those communists who ended up in the U.I.L (Italian Workers’ Union), a yellow union par excellence, not to leave it, if possible, but to try and get it to join the Alleanza del Lavoro, thereby encouraging contact with the main body of the proletariat.
We continually stressed our principle that in the unions we wouldn’t demand that proletarians adhere to the communist political program, although we would continue to propagandise on its behalf, but we would demand their adherence to a class programme, without which the trade union would effectively betray its raison d’être.
There are then various articles on the struggles of the Milan and Turin metalworkers which remind us of what’s happening now. The declarations of the reformist Buozzi, who maintained that the leadership of the struggles should remain in the hands of the metalworkers’ union F.I.O.M., and not of the Alleanza del Lavoro, are condemned as at odds with the necessity of broadening them out as far as possible.
In the June 2 issue, a few lines from our paper in Turin, L’Ordine Nuovo, are quoted: “Communists hold firmly to their conviction that disputes over wages must above all be planned and resolved on the basis of the workers’ right to life. Whatever the situation in industry might be, workers must defend their sacrosanct right not to die of hunger”.
And just think, here we are, us communists, surrounded by today’s
fourth rate polemics, still repeating the same old message ninety years
TRADE UNION ACTIVITY [GM108 - 109 - 110]
At each meeting we listen to a statement, prepared by comrades involved in this crucial area of party work, which aims to give a general background to workers’ struggle and the present difficulties it faces in mounting an effective defence against the effects of the crisis; in response to the continuous deterioration of working conditions that are being imposed by capital.
In line with communist tradition, and consistently and continuously upheld in of our organisation since its reconstitution after the 2nd World War, this involves the party making a considerable effort to understand the many-sided opportunist alignment, which, from within the trade union movement, works to block or disperse the proletarian reaction and to prevent it reorganising in a new and more effective form.
The main goals of our policy in the trade unions were also set out. It is a policy we have never failed to address directly to the class, even during the most modest of its attempts to mobilise within the constraints of the regime’s trade union front.
A comrade gave us an exhaustive and incisive report on the demanding work carried out by our trade union group, a job that is thoroughly appreciated and supported by everyone in the party.
By “Communist trade union group” we mean not a generic group of “communist workers” who periodically exchange views and opinions, but rather a party organ, with a structure of its own and specific research and organisational tasks. It carries out one of the party’s central functions, it is part of the party and it observes party discipline. Its importance is difficult to exaggerate, concerned as it is to establish, defend and strengthen the main transmission belt, as envisaged in our theses, between the party and the class in motion.
The necessity for a working instrument such as this, which is far from being a novelty in the organised life of the communist party and the Left tradition (and to these precedents there will be dedicated a special historical study) derives above all from the objective difficulties involved, and the great variety and complexity of the situations which may arise, both as regards how to evaluate them in general historical terms and as regards their particular and contingent manifestations.
It is possible to master the question only by having at one’s disposal: 1) a solid theoretical framework, founded on Marxist materialism; 2) a consistent and reliable tradition of party evaluations and practical interventions in the field, that can be found in our past and present press, and coherent positions and attitudes which are known and agreed; 3) research into the present conditions within which the social struggle takes place, and the forces in play; no mean feat considering the complexity and changeability which both present.
This is an important and ongoing commitment, providing us with the necessary experience to develop the capacity, the party’s collective “sensitivity”, to the vibrations rising up from society’s subterranean depths so it can detect them in advance and predict when eruptions will happen; and to develop the party’s capacity to anticipate the effect its directives could have on the movement’s growth and maturation.
With the aim of continuing on this tried and tested path, our comrade gave us a clear and analytical description of key events in the workers’ struggle in Italy, of how difficult it is to evaluate some of the thousands of alternatives and choices which recent spontaneous battles have thrown up, and yet how it is still possible to come up with responses and directives which are coherent and unequivocal, and which the party as whole can agree on and incorporate into its propaganda.
There was a detailed report about the strikes and trade union related events that have occurred since our last meeting, and how our party described to the class the concrete situation in which its struggles are taking place and the general direction in which the movement is moving.